Transcript Highlights:

• directly operated as part of the lessor's business.
• We licensed four site operators, and these are the groups that operate OTB, simulcast OTB centers.
• We licensed four site operators, and these are the, these are the groups that operate OTB, simulcast
• Then we have two site operators. These are the groups that operate the live racetracks.
• local level and some of the costs that are associated.

Summary: The Judiciary Interim Committee met to begin its study of charitable gaming and the ownership of alcoholic beverage establishments by licensed charitable gaming organizations, a study directed by Senate Bill 2334. Legislative Council gave an overview of the constitutional and statutory framework for charitable gaming, site authorizations, rent limits, proceeds, and recent legislative changes. The Attorney General’s Gaming Division then clarified the financial flow of gaming, explaining that in fiscal year 2025 North Dakota had about $2.5 billion in gross gaming proceeds, with roughly 88-90% paid back in prizes and about $256 million available to organizations after taxes; most of that activity came from electronic pull tabs. Members asked for more detail on winnings, replays, rent, and the breakdown of manufacturer/distributor revenues, and the AG’s office agreed to provide supplemental information. The committee also heard from the League of Cities and the Association of Counties about local site authorization. Cities said they have a limited role in approving gaming sites, can adopt policies after public hearing, may charge up to $100, and can set certain conditions, including local nexus requirements, but cannot require donations or force a specific charity or site. The League said it had worked with stakeholders on a model policy to provide more consistency, though members raised concerns that local requirements could become too restrictive for charities serving broader areas. Counties said the issue is mostly a city matter, with little county involvement beyond minimal site fees and general site approval. The North Dakota Gaming Alliance testified in support of the study and provided IRS-related material suggesting charities may use asset diversification, while emphasizing it had not taken a position on whether charities should own bars. Members questioned whether bar ownership is being used for site stability or to channel charitable gaming dollars, and whether city policies might disadvantage charities with broader missions. The committee also discussed the relationship between gaming organizations, manufacturers, and distributors, including restrictions on incentives and interference, and asked for more information on those entities and their ownership. Later in the meeting, the Racing Commission gave its regular update on live racing, pari-mutuel wagering, ADW providers, purse and promotion funds, a new TRPB contract, and concerns about cease-and-desist actions from other states. Finally, the State Hospital superintendent briefly reported on the Department of Corrections and Rehabilitation’s support services, including the SORT team, training, and security assistance for the hospital campus.

Transcript Highlights:

• These requirements include an operational plan through June 30, 2027, These requirements include an operational
• and Management Cost Share.
• Cost Share Program.
• and operational activities.
• And we have to start looking at the number one cost. Number one cost is labor.

Summary: The Emergency Board met on June 17, 2026, and approved a series of subcommittee recommendations, mostly on consent, related to federal grant applications, agency funding adjustments, and position authority. Early actions included approval of four federal grant applications from natural resources agencies, three public safety grant applications, a one-time increase for Judicial Department court security, retroactive approval for an AmeriCorps volunteer-generation grant, and a $7.5 million allocation to Southern Oregon University from a special appropriation for short-term financial stability. Members supporting the SOU item emphasized the university’s structural deficits, declining enrollment, and the need for a long-term higher education plan; several members voted no or raised concerns about sustainability, but the motion passed. The board also approved a federal apprenticeship expansion grant for the Higher Education Coordinating Commission, a school nutrition equipment grant for the Department of Education, and an Oregon Health Authority request tied to Medicaid community engagement requirements under H.R. 1. Public safety items included funding for Oregon Military Department readiness facilities, a report on the stalled juvenile justice information system modernization project with a follow-up viability report due in 2026, and a statewide evacuation planning tool for emergency management. The evacuation tool drew strong support as a wildfire preparedness measure, with members noting it could significantly reduce alert times and save lives. A major point of debate was the Department of Justice request to add 16 permanent positions and increase other funds limitation for antitrust enforcement. Supporters argued the federal government has pulled back and Oregon needs capacity to pursue active cases and protect consumers; opponents objected to the process, the size of the expansion, and the incentive structure tied to settlements and awards. Despite those concerns, the motion passed. The board also approved Water Resources Department requests for the Water Well Abandonment, Repair and Replacement program, an assistant water master position in Washington County, and federal funding for Lower Umatilla Basin groundwater data collection. The water master item prompted questions about county cost shifts, but staff said the position would remain externally funded and would not be filled without those resources.

Transcript Highlights:

• But I do recognize that there's costs and there's ability to abuse, if I'm not mistaken, and the cost
• That is what their panels cost.
• This is costing landfill operators millions of dollars a month, a million dollars a week just for the
• costs.
• So this is going to create a no-cost drop-off for the public and for installers, No-cost drop-off for

Summary: The committee heard extensive testimony on AB 2218, which would declare state policy to recognize and address water-related inequities affecting California Native American tribes and require several state agencies to incorporate that policy into water-related decisions. The author and tribal witnesses said the bill would codify a seat at the table for tribes and build on existing consultation and equity commitments, while supporters from environmental and tribal organizations backed the measure. Opponents from municipal utilities, water agencies, cities, counties, agriculture, and business groups argued the bill was too vague, could create uncertainty for water supply and project approvals, and might invite litigation. The chair signaled support, and the author said the bill was intended as a consultation measure rather than one that would usurp agency authority. The committee then took up AB 1795, a wildfire smoke-damage bill that would establish statewide standards for inspecting, testing, and remediating smoke-damaged homes and create clearer insurance claim handling rules. The Department of Insurance supported the bill, saying it would bring consistency and accountability after major urban-interface fires, while wildfire survivors and advocates said current insurer practices leave families unable to safely return home. Insurance and local government groups opposed unless amended, warning about cost, implementation uncertainty, and the bill’s scope. Members discussed unresolved issues, including how the bill would interact with a separate wildfire health-and-safety bill, whether it would apply to existing policies, and how presumptions and testing standards should work. The committee voted AB 1795 out on a due pass as amended motion to Appropriations. AB 1642, another wildfire-related bill, was also heard and focused on setting science-based testing and clearance standards for homes, schools, and businesses after urban and wildland-urban interface fires. The author and a Caltech scientist described contamination from lead and other heavy metals in fire-affected homes and argued for a presumption that certain contaminants found after a fire came from the wildfire, to reduce costly disputes. Survivors and many advocacy groups supported the bill, while insurers and other industry groups opposed, saying the testing regime was too broad, the geographic scope was unclear, and the presumptions could function like strict liability and raise insurance costs. Senators pressed both sides on how AB 1642 would overlap with the CDI smoke-claims task force and with AB 1795, and the author said the two bills were intended to be complementary and would continue to be reconciled. The committee also briefly heard AB 1976, which would create a CEQA exemption for pedestrian malls and limit certain local procedural delays for pedestrian and traffic-calming projects. Supporters said it would make it easier to create safer, more walkable, and more livable streets, and there was no opposition testimony. The chair described it as a narrow CEQA exemption for active transportation-related projects and indicated support. The committee then moved on to AB 2026, a groundwater recharge permitting bill, with the author explaining that it would streamline permitting so more recharge projects can capture floodwater and store it for drought years; testimony on that bill began as the transcript ended.

Transcript Highlights:

• ' claim costs.
• And the removal, those two presumptions are driving all this costs that L&I is indicating.
• I mean, Amazon... ...local operations that are driving the decision-making.
• The cost of living adjustment is based on the change in the average monthly wage.
• They can't just go get a raise and keep up with rent, groceries, or medical costs.

Bills: SB5379 , SB6106 , SB6147 , SB6180 , SB5927 , SB6287

Committee: Senate Labor & Commerce

Keywords: interest arbitration, parks and recreation, public employees, labor relations, employee rights, laid-off employees act, WARN notice, mass layoff, business closure, plant closing, worker adjustment and retraining notification, employment security department, employee notice, layoff notice, worker protections, job loss, employment loss, public records exemption, privacy, employee names and addresses

Transcript Highlights:

• We utilize for search and rescue operations that go on to our aircraft. Those exceed those costs.
• I don't know what the current cost was of the armored vehicle 13 years ago, but that cost has significantly
• when we talk about the price of equipment and the operational costs for that division and the needs to
• provide those services to Missouri citizens that are on the waterways, those costs have Those costs
• And so those fees are collected, and those fees help with the operational cost of that training academy

Committee: House Corrections and Public Institutions

Summary: The committee first met in executive session and adopted a House Committee substitute combining House Bills 2592, 2834, and 2787 into one measure. The combined substitute was then voted do pass by a unanimous roll call, recorded as 15 ayes and 0 noes after a brief correction to the tally. The committee then heard House Bill 1786, which would raise the Highway Patrol’s spending threshold for purchasing vehicles, watercraft, aircraft, and related specialized equipment without returning to the legislature from $100,000 to $500,000. The sponsor and Highway Patrol witnesses said the current cap is outdated because boats, armored vehicles, bomb trucks, and aircraft equipment now cost far more than $100,000, while members asked about inflation, the revolving fund, and whether a lower increase might be more appropriate. No opposition testimony was offered. Next, House Bill 2885 was heard. It would redirect the first $1 million in annual boat registration fee revenue away from general revenue and into the Missouri Water Patrol Division. The sponsor and Highway Patrol said registration revenue has declined while operating costs have risen, and the division needs the money to support enforcement, search and rescue, dive operations, and boating safety programs. Members asked how much revenue is collected and whether the change would affect other programs; testimony indicated the bill would mainly earmark existing revenue rather than increase overall department funding. The committee also heard House Bill 2694, which would exempt four fee-supported funds from the end-of-biennium sweep to general revenue: the Highway Patrol Academy Fund, the State Forensic Laboratory Account, the Boiler and Pressure Vessels Safety Fund, and the Elevator Safety Fund. The sponsor and Department of Public Safety witnesses said the sweeps make long-term planning difficult and can disrupt training, lab support, and safety inspection operations, though members raised concerns about excess balances, guardrails, and whether fee reductions should be considered if reserves grow too large. Finally, House Bill 1712 was heard; it would make intentionally failing to charge an electronic monitoring device a crime, closing a loophole in existing tampering law. The sponsor, a sheriff, and other witnesses said the bill addresses deliberate attempts to evade monitoring, while members discussed battery warnings, rural access to electricity, and the costs and benefits of pretrial release. No votes were taken on the later bills before the committee adjourned.

Transcript Highlights:

• For example, ramping up the cost of programs, there were hiring challenges, etc.
• We have seen estimates of workload data and potential costs to the courts.
• the cost of continuing to confine them and keep them in custody.
• Those will improve. operational efficiencies within CDCR.
• Sure, so in 2023 the county was operating two juvenile halls in the county.

Transcript Highlights:

• I'm Nucleon's Chief Operating Officer.
• Some states have adopted specialized cost-recovery mechanisms intended to address unique costs associated
• There's a saying that we have out west: 'The cost causer is the cost payer.'
• In fact, we've had the lowest cost. In fact, we're decreasing in cost.
• In fact, we've had the lowest cost. In fact, we're decreasing in cost.

Summary: The Advanced Nuclear Energy Committee met to review prior minutes and hear a series of presentations on advanced nuclear technology and state readiness. The committee approved the April 21, 2022 minutes. Nucleon’s William Bridge outlined the advanced nuclear landscape, distinguishing near-term light-water SMRs from more advanced Gen 4 reactors and microreactors, and emphasized that fuel supply, especially HALEU, remains a developing supply chain. He said light-water designs are the most deployable in the near term, while advanced reactors may be better suited for industrial heat applications and could face a 2- to 3-year delay from fuel availability. Representatives from NASEO described how other states are supporting advanced nuclear through task forces, roadmaps, pilot programs, financing tools, workforce and supply-chain efforts, and regional coordination. They highlighted the Advanced Nuclear First Mover Initiative and stressed that states are focusing early on emergency preparedness, community engagement, waste management, affordability, and consumer protections. They also noted that some states are creating nuclear-ready community programs and cost-recovery guardrails, while public utility commissions are examining long-term lifecycle costs and rate impacts. North Dakota agencies then outlined their potential roles. The Public Service Commission said it would likely be involved in public-interest review, siting, and rate regulation, but noted current statutes may not fully address long-term nuclear projects, co-location, or decommissioning. The Department of Environmental Quality said it would continue to regulate radioactive materials and likely support emergency planning, while fission reactor oversight remains federal. The Department of Emergency Services said it would serve as the lead off-site preparedness agency, needing a radiological emergency program, training, exercises, equipment, and possibly industry funding. The Department of Water Resources said North Dakota has sufficient surface water, especially from the Missouri River, but that water planning would be important; it did not recommend statutory or budget changes at this time. The committee recessed for lunch after these presentations, with no additional votes or actions taken.

Transcript Highlights:

• Regarding license fees, the member said the basic operator license costs $50, and an endorsement for
• Material cost, labor cost, many costs have exceeded inflation, and what the inflation rate is, even at
• Interstate oper operation they're Interstate oper operation they're engaged<01:41:54.199><c> in</c><01
• The net is after the cost of the product, the expenses, operating overhead. Oh, okay.
• So the net one is both the cost of the goods and the expenses of operating.

Summary: The Department of Safety presented an overview of highway fund and unrestricted revenue collections, focusing on the Division of Administration, the Road Toll Bureau, and the Division of Motor Vehicles. Amy Newbery explained that the main unrestricted funding sources are highway funds and general funds, with highway fund revenue of about $263 million in FY 2024 and a FY 2025 projection of $261.2 million. She said revenue growth has been modest and has not kept pace with costs, creating structural deficits that required general fund transfers of $50 million in FY 2022-23 and another $10 million in FY 2024-25 to balance the fund. Jennifer Hall described Road Toll operations, including motor fuel tax collection at the distributor level, compliance enforcement, and licensing for fuel distributors, transporters, IFTA carriers, and oil discharge/pollution control. Members asked about IFTA, dyed-fuel enforcement, the possibility of using the state forensic lab for dyed-fuel testing, and whether audit positions had been filled; the department said it recently hired a part-time fuel enforcement officer, still uses IRS testing, could explore lab testing, and had no audit vacancies. Hall also discussed factors affecting fuel-tax revenue, including gas prices, crude oil forecasts, weather, tourism, GDP, and inflation, and said FY 2024 road toll revenue was $127.5 million, above plan, with FY 2025 projected at $127.71 million. The committee then turned to DMV-related revenues. Newbery said motor vehicle registration revenue was $93.1 million in FY 2024 and is projected at $90.4 million in FY 2025, with the state share going directly to the highway fund. Members asked about the state/town fee split, the five-year registration cycle dip, the distribution of registration revenue by vehicle weight category, and the impact of electric-vehicle surcharges; the department said the five-year dip is still occurring and will fade over time, and it would follow up on the weight-category breakdown. The presentation also noted that driver-license revenues have stabilized, inspection revenues remain steady, plea-by-mail revenue was added to the highway fund in FY 2024, and general fund revenues tied to the department are relatively small and have declined as some functions moved to OPLC. No votes or formal actions were taken.

Transcript Highlights:

• and management cost share.
• and operational activities.
• And we have to start looking at the number one cost. Number one cost is labor.
• And we have to start looking at the number one cost. Number one cost is labor.
• costs related to a new pension adjustment. project is indeterminant pending the associated costs related

Summary: The Emergency Board approved a series of consent federal grant applications from the Natural Resources and Public Safety subcommittees, along with several budget and position requests. The board approved grant applications for parks, transportation, judicial, emergency management, higher education, school nutrition, and other programs, including retroactive approvals where deadlines had passed. One member objected to the Natural Resources consent grants over concerns about future funding needs, but the motion still passed. The board also approved a one-time increase for Judicial Department court security, including digital privacy protections, circuit court security, and a statewide facilities assessment. A major discussion centered on Southern Oregon University’s financial stability. The Higher Education Coordinating Commission reported on SOU’s structural deficits, declining enrollment, and projected cash shortfall. The subcommittee recommended, and the board approved, allocating $7.5 million from the special appropriation for short-term stability, with a required update at the September 2026 Emergency Board meeting and a future request for the remaining funds. Members debated the broader crisis in higher education, with several saying SOU’s situation reflects systemwide enrollment and funding pressures and that long-term restructuring will be needed. The board also approved an AmeriCorps volunteer generation grant, an apprenticeship expansion grant, and a Department of Education nutrition equipment grant. In public safety, it approved funding for Oregon Military Department readiness facilities, a statewide evacuation planning tool, and a juvenile justice information system modernization report, while requiring a follow-up viability report. The Department of Justice received approval for additional antitrust positions and expenditure limitation, though several members raised concerns about the funding structure and incentives tied to settlement revenues; the motion passed despite objections. In natural resources, the board approved funding for the Water Resources Department’s well abandonment, repair and replacement grants, an assistant water master position in Washington County, groundwater data collection in the Lower Umatilla Basin, a wetlands remote sensing pilot, and parks-related grant applications for operations, maintenance, and capital improvements. Members generally supported the requests but raised concerns about geographic equity, long-term sustainability, and whether some county responsibilities were being shifted to the state. The meeting also included discussion of a Department of Emergency Management evacuation tool as an urgent wildfire preparedness measure, with members emphasizing its potential to save lives.

Transcript Highlights:

• costs.
• So for twice the amount of funding, it's going to cost to build 500 at Merced that it costs.
• It's going to cost to build 500 at Merced, that it costs at Berkeley to create a bed.
• The cost will vary dramatically. politically. The cost will vary dramatically.
• The budget also includes $2.4 million in ongoing General Fund support to support operating costs.

Summary: The Assembly Budget Subcommittee on Education Finance held an extended hearing focused primarily on University of California budget issues, enrollment, housing, and Title IX. Chair David Alvarez opened by noting the governor’s proposed 8% ongoing General Fund reduction to UC, the deferral of compact funding, and the College of the Law budget item, while emphasizing that no votes would be taken that day. Public commenters, including UC Davis employees and lecturers, urged restoration of UC funding and opposed the hiring freeze, saying cuts would worsen staffing shortages, reduce research capacity, and harm students and patients. On UC core operations, the Department of Finance said the governor’s budget maintains the compact but defers $240.8 million in ongoing support and continues a planned 7.95% reduction, while the LAO recommended rejecting the deferrals and instead making any changes in the budget year. UC San Diego’s chancellor and UC Office of the President argued the cuts and deferrals would create major campus shortfalls, force hiring freezes, larger class sizes, fewer course offerings, delayed projects, and possible layoffs. Committee members questioned whether cuts could be shifted away from students and toward administration, discussed UCOP reserves and bond debt, and noted that UC’s budget structure makes the campus-level impact larger than the headline reduction. The committee also reviewed enrollment trends and nonresident replacement. The LAO said UC resident enrollment has grown and recommended revisiting 2026-27 targets and pausing the nonresident replacement plan if state funding does not improve. UC said it has exceeded California undergraduate enrollment and nonresident replacement goals, but warned that continued growth without funding would force enrollment reductions and harm quality. Members discussed the role of nonresident and international students, tuition rates, and the value of UC as a pathway for California students and a source of talent for the state. A separate housing item covered the state’s Higher Education Student Housing Grant Program. UC reported that recent bond savings could support additional affordable beds at UC Davis and UC Santa Barbara, but the LAO and Finance noted the Legislature would need to decide how to use the $6.2 million in savings from the original projects. The committee also heard a Title IX update from UC’s systemwide civil rights office, which described campus Title IX structures, training, and policy enforcement, and said the system has been working to improve confidentiality guidance and streamline complaint processes after survey feedback showed confusion and lengthy procedures.

Transcript Highlights:

• While we have seen an increase in the cost for goods and services, we have seen an increase in the cost
• The second category is optimizing operational costs. Capacity.
• annual outgoing cost and the estimated out-year cost.
• The initial build-out of this module would cost approximately $300,000 in one-time costs and $100,000
• Is there anything else that we ought to know about their operation that's costing the state money?

Bills: SB1 , SB 1

Committee: Senate Finance

Transcript Highlights:

• You recognize that families are carrying the cost.
• You can see around 2020, 2021, 2022 a spike in cost.
• public cost of doing nothing, HAP 4 specifically is highly cost effective.
• know, the prison costs from 20 years later.
• So it's an unbearable cost to our members.

Transcript Highlights:

• They are accounts that are spent out of the operating and capital budgets.
• This is especially true for operating and capital.
• As you heard, transportation, operating, and capital, each session.
• Because costs keep going up, rates need to keep going up from the county to help fund the operation of
• Transportation costs often draw the last straw of their budget.

Summary: The committee held public hearings on several transportation-related bills. On Substitute House Bill 2251, staff explained changes to Climate Commitment Act accounts and revenue distribution, including new operating and capital accounts and a revised split of auction proceeds among transportation, capital, operating, and air quality accounts. Members asked about the bill’s effect on CERA funding, the air quality account, and whether the bill responded to projected revenue declines. Testimony was mixed but generally supportive of the bill’s goal of clearer, more predictable budgeting; tribal testimony requested clearer protections and a dedicated tribal set-aside, while other witnesses supported the bill for its transparency and climate/transportation benefits. No action was taken on the bill during the hearing. The committee then heard House Bill 2588, which would allow county ferry districts to operate and finance vehicle ferries, not just passenger-only ferries. The prime sponsor and county officials from Whatcom and Pierce described the bill as a local option to help fund aging ferry systems without raising taxes, and public testimony from island residents, county representatives, and advocacy groups strongly supported it as a way to stabilize essential ferry service. The committee also heard House Bill 2722, which would raise the vehicle weight threshold for Transportation Benefit District fees from 6,000 to 10,000 pounds. Staff said the change would modestly increase TBD revenue statewide, and the sponsor argued the current law unfairly exempts heavier trucks while lighter vehicles pay the fee. Cities and local officials supported the bill, while the trucking association said it would support a compromise at 9,000 pounds instead of 10,000. The committee also heard House Bill 2727, creating an Educational Transit Access Grant Program for transit agencies and community and technical colleges to pilot free or reduced fares for students; the sponsor and transit advocates said it would improve affordability and access, and testimony emphasized equity and student retention benefits. In executive session, the committee considered Second Substitute House Bill 1923, which would expand who can form passenger-only ferry service districts and where they can be formed, with added intent language related to southern resident orcas and a revised effective date. After discussion, the committee voted 23-4 to pass the bill out of committee with a do pass recommendation. The chair also announced a deadline extension for amendment requests on bills heard that day and thanked staff before adjournment.

Transcript Highlights:

• can generate the revenue needed to be able to pay for those costs to ensure the ongoing operation of
• costs.
• SB 1259 does not increase the cost of doing business for refinery operators and...
• SB 1259 does not increase the cost of doing business for refinery operators and owners.
• Looking ahead to the 2031 cycle, those costs will increase due to inflation, expanded operational requirements

Transcript Highlights:

• </c><00:10:26.640><c> cost</c><00:10:27.120><c> for</c><00:10:27.440><c> that</c> 2023 and the operating
• cost for that 2023 and the operating cost for that agency<00:10:28.160><c> is</c><00:10:28.399><c> on
• They used their operating costs 104.
• They used their operating costs through<00:10:32.560><c> the</c><00:10:32.800><c> existing</c><00:10:
• </c> them in the spreadsheet their operating them in the spreadsheet their operating costs<00:10:51.120

Bills: HF2438

Committee: Senate Finance

Transcript Highlights:

• on a 247 basis and their operate on a 247 basis and their continued<00:04:17.840><c> operations</c><
• </c> they also have to remain operational they also have to remain operational even<00:04:26.720><c>
• </c> preliminary estimates indicate the cost preliminary estimates indicate the cost to<00:10:54.079>
• If you look at the project cost, the total forecasted cost is $151 million.
• ,</c><00:22:45.200><c> the</c> If you look at the project cost, the If you look at the project cost,

Summary: The committee heard capital plan presentations from the Justice and Public Safety Cabinet, the Personnel Cabinet, and the School Facilities Construction Commission. The Justice Cabinet described its large portfolio of more than 900 facilities across the state and said decades of underfunded maintenance have created a backlog of repairs. Requested projects included a high-acuity mental health treatment facility for juvenile justice youth, two female detention centers to support the regional detention model, major corrections repairs and replacements, a new kitchen at Eastern Kentucky Correctional Complex, a new dormitory at the Kentucky Correctional Institute for Women, completion of a new Eastern Kentucky prison, DOCJT training facility upgrades in Richmond and Madisonville, State Police radio system replacement and post construction, a combined Frankfort headquarters/Post 12 facility, and expanded crime lab and storage capacity. When asked about the high cost of the EKCC kitchen project, staff said construction inside an operating facility raises costs and that building a new adjacent kitchen would be more economical in the long run. The panel also asked about Fish and Wildlife officers training at DOCJT; staff said they do and that the training is funded through the CLEFT fund. The Justice Cabinet also said the recently enacted Senate Bill 4’s AI inventory and registry requirements would be part of its enterprise application and AI inventory system work. The Personnel Cabinet requested funding to replace CHRIS, the state’s human resources and payroll system, which supports payroll and benefits for about 48,000 employees and the Kentucky Employee Health Plan for roughly 192,000 members. Staff said the current SAP-based system went live in 2011, is approaching end of support in 2030, and has not received functionality enhancements since 2016. They said the replacement is estimated at $151 million, with most of the cost tied to professional services and software, and that the project would begin in July 2026, go live by July 2030, and require a stabilization period through 2032. In response to questions about outsourcing payroll or reusing existing systems, staff said the complexity of state HR, payroll, tax updates, and integrations with other agencies makes outsourcing or partial reuse impractical. The School Facilities Construction Commission introduced its role in helping all 171 school districts address unmet facility needs, focusing on core school facilities such as roofs and elementary buildings rather than athletic projects. No votes or formal actions were taken during the excerpted discussion; the meeting consisted of presentations, explanations of requested projects, and member questions.

Transcript Highlights:

• Their safe operating capacity is 112 with the current footprint of their living units in operation.
• Echo Glen has operated closer to their safe operating capacity, which is good.
• costs, there is sort of an increase.
• programs and campus operating budgets.
• costs.

Committee: House Appropriations

Summary: The House Appropriations Committee held a work session covering juvenile rehabilitation system capacity, behavioral health capacity, federal funding changes, and a 2026 budget overview. DCYF officials said the juvenile rehabilitation population is older, includes more adult-sentenced youth and post-25 residents, and is projected to keep growing, creating crowding at Green Hill School and placement limits across the system. They described safe operating capacity concerns, staffing turnover, mental health acuity, and the need for additional medium-security and specialized mental health beds, including a proposed Parkland facility and continued development of Harbor Heights. Committee members were told to follow up separately with questions, and the presentation moved on due to time. Behavioral health officials from DSHS and HCA then reviewed forensic and civil capacity. DSHS described expanding state hospital and civil treatment capacity through Olympic Heritage, Maple Lane, Brockman Campus, and a new 350-bed forensic hospital at Western State, while noting ongoing construction, staffing, and funding issues. HCA outlined its strategy to move long-term civil commitment care into community settings through contracted long-term civil commitment beds, intensive behavioral health treatment facilities, PACT teams, and intensive residential treatment teams. Members asked about out-of-state placements, Medicaid funding, and the differences among facility types; officials said the goal is to right-size inpatient capacity while expanding community-based supports. OFM then presented an update on federal funding and the effects of H.R. 1 and H.R. 5371. Agency staff said H.R. 1 would tighten SNAP work requirements, reduce exemptions, shift some lawful immigrants to state-funded food assistance, increase state administrative and benefit costs, and affect Medicaid eligibility, redeterminations, cost sharing, and state-directed payments. HCA estimated major Medicaid caseload reductions and significant future fiscal impacts, while OFM also noted marketplace subsidy changes and higher education and K-12 downstream effects. H.R. 5371 was described as a short-term federal funding extension through January 30, 2026, with some full-year appropriations and a change affecting hemp producers. Finally, Mary Monroe gave a 2026 supplemental budget preview, citing declining NGFO revenue forecasts, reversions, vetoes, and the added uncertainty from H.R. 1, with the projected ending fund balance moving from positive amounts to a negative outlook over the four-year period.

Transcript Highlights:

• <00:02:27.959><c> budget</c><00:02:28.280><c> overview</c> operations budget overview operations budget
• </c><00:04:22.880><c> for</c> year so I will be tracking a cost for year so I will be tracking a cost
• </c> occur and that we need to track costs occur and that we need to track costs would<00:04:32.400><
• You think about government operations historically.
• </c> traditionally is a government operations traditionally is a government operations function<00:25

Transcript Highlights:

• But you don't think that... and other operators.
• They're relatively broad for operating expenditures.
• Was that the operational fiscal difficulties right now?
• costs that we are not hearing about.
• And then for certain operators, the fare revenue is a significant portion.

Summary: The Senate Budget Committee heard two bills: AB 107, a budget bill junior making largely technical changes to the 2023, 2024, and 2025 Budget Acts, and AB 117, a trailer bill authorizing a regional transit loan package for Bay Area agencies. Department of Finance staff said AB 107 contains no new state money or new policy items, but makes adjustments such as extending encumbrance periods, updating federal authority, moving $20 million in tourism promotion funding from Visit California to GoBiz, and adding an APA exemption for certain climate bond program guidelines. AB 117 would allow CalSTA to loan up to $590 million from unallocated Transit and Intercity Rail Capital Program funds to MTC, which would then lend to BART, Muni, Caltrain, and AC Transit; the loans would run 12 years with two years interest-only, and the state said the structure is intended to be cost-neutral and protected by repayment safeguards. Committee discussion focused heavily on transparency, oversight, and whether the transit loan could jeopardize future projects or become a de facto bailout if a Bay Area sales tax measure fails. Several senators questioned the need for the APA exemption in AB 107, arguing that emergency or existing public processes might provide better oversight, while supporters said the exemption was needed to get voter-approved climate bond funds out the door and that the language had already been agreed to in the budget process. On AB 117, senators raised concerns about declining ridership, fare evasion, safety, post-pandemic travel patterns, repayment sources, and the impact on other TIRCP projects such as BART Phase 2. Finance staff and transit representatives responded that ridership changes were driven by COVID-era shifts, labor and safety issues, and changing commute patterns, and that the loan would be secured against existing state transit assistance streams rather than general fund dollars. Public comment was largely supportive of both bills. Water, natural resources, and environmental groups backed the APA exemption in AB 107, saying it would speed implementation of Proposition 4 funding for water recycling, wildfire, coastal resilience, and related projects. Transit agencies and labor groups supported AB 117, saying the loan is needed to stabilize operations and preserve service while local revenue measures and efficiency efforts are pursued; San Francisco, Caltrain, BART, and AC Transit all testified in favor, though San Jose asked for stronger protections for previously approved TIRCP-funded projects. The committee first passed AB 107 and AB 117 on 8-4 and 9-4 votes, placed them on call, then later lifted the calls and both bills ultimately passed with 11 votes each and were sent out of committee.

Transcript Highlights:

• For administrative costs if we're allowed to charge administrative costs to it.
• and why do other locations cost... ...cost X amount of dollars, and why do other locations cost X amount
• There's a lot of operational changes. There's a lot. There's a lot of operational changes.
• implementation costs.
• , and staffing costs.

Summary: The committee approved the March 26 minutes and then received a quarterly update on major IT projects from NDIT. Staff reported the portfolio included 116 major projects totaling about $546 million, with the overall portfolio under budget but slightly behind schedule. They reviewed projects over the 20% variance threshold, including an Industrial Commission grants management system and DOT’s roadway pre-construction replacement, and then heard startup and closeout reports from HHS, OMB, DPI, and DOT. Several previously troubled projects were closed, including HHS bed management, vital records modernization, and DOT roadway capital planning; some projects finished under budget and ahead of schedule, while others were significantly behind schedule or over budget but were now closed or being remediated. The committee also reviewed NDIT’s annual report, including service-fund financials, peer-state rate comparisons, records management, and customer satisfaction efforts. Members asked about how service-fund revenue and grant administrative charges are accounted for, how chargebacks work, and whether NDIT tracks customer satisfaction scores. NDIT said it does track CSAT-type measures in some service areas and has survey data, but it is not planning another customer survey this summer. Members encouraged more regular reporting of customer satisfaction, service-level metrics, and performance data to help guide future improvements. A major portion of the meeting focused on the state’s mainframe modernization effort. NDIT said the overall effort is still targeting about 2030, with multiple HHS and DOT projects underway and a $15 million tech-debt appropriation already removing some components. Staff described the main obstacles as data cleanup, complex integrations, limited staff capacity, retirements, and vendor constraints, and said they are seeking a vendor with modernization support in the next contract cycle. Members pressed for clearer accountability and faster progress, and NDIT and HHS emphasized that they are working jointly but need continued support and better tools. The committee then heard a cybersecurity update on NDIT’s statewide services and maturity assessments. NDIT explained that it provides vulnerability scanning, endpoint protection, security awareness training, threat briefings, and penetration testing, and that these services are tied to a cybersecurity maturity assessment based on CIS controls. Members questioned the sharp drop in participation since 2020 and whether the self-assessment should be mandatory or tied more strongly to StageNet access or insurance incentives. NDIT said participation is voluntary, but Enderf is now requiring annual assessments to keep a 4% insurance discount, and members discussed whether stronger requirements or audit authority may be needed. The meeting ended as the committee began a follow-up discussion on BEAD broadband connection costs and why some locations are much more expensive to connect than others.