Transcript Highlights:

• </c> minutes this slide shows the projected minutes this slide shows the projected FY<00:02:54.120><c
• had projected in November.
• The projection for federal government employment has changed considerably in recent weeks, but is not
• Moreover, uncertainty in federal policies, coupled with the difficulty of projecting long-range economic
• , inflation is projected to go up, mortgage rates are projected to go up.

Transcript Highlights:

• projects.
• Say someone applies for four projects, um... number of projects. The number of number of projects.
• You know, whenever I think anyone that deals with federal monies and federal projects, they have to be
• <00:48:52.360><c> monies</c><00:48:53.160><c> and</c><00:48:53.480><c> federal</c><00:48:53.840><c> projects
• ,</c> federal monies and federal projects, federal monies and federal projects, they<00:48:55.400><c>

Summary: The committee met for the first interim meeting of the 2025 Budget Review Committee on Transportation and heard from Bobby Jo Lewis, commissioner of Rural and Municipal Aid at the Kentucky Transportation Cabinet. She reviewed the new County City Bridge Improvement Program, created in the 2024 regular session, reporting that phases one and two are complete, 45 bridges have been funded so far, and about $18.45 million has been authorized. She said roughly $6.549 million remains for phase three in the current fiscal year, with about $26.445 million in bridge applications still pending. For fiscal year 2026, the program will again have $25 million and will use four application phases. She also described a training resource, Local Bridges 101, and said a new executive advisor, Greg Meredith, has been brought in to help with the bridge program. Members asked how rollover applications would be handled, whether they would be re-evaluated with new applications, how the program would account for bridge longevity and load posting, and how isolated communities would be prioritized. Lewis said applicants not funded in FY25 would be contacted and could choose to roll their applications into FY26, and all applications would be evaluated together at the end of each phase. She said preservation projects are assessed for how much they extend a bridge’s life, and isolated community access bridges or closed bridges with no detour access receive priority. She also said the department aims for equitable distribution across regions and plans to produce a map showing where funds have been awarded. Lewis then turned to the County Priority Projects Program and the Local Assistance Road Program established in House Bill 546 and related resolutions. She said the application cycle opened June 1 and closes October 1, with 106 memoranda of agreement being prepared for awards in House Joint Resolution 46. She described updated application and reporting forms, a scoring matrix, and a County City Pavement Evaluation Manual used to rate projects based on preservation of assets, average daily traffic, recent improvements, safety, cost, and district priority. She said projects must be rehabilitation projects designed to restore the original condition of the road, cannot exceed $500,000, and must use local match percentages tied to the economic development grant program formula. She also reported on funding status for prior road projects, including completed, partially completed, pending, and underrun amounts that may be reauthorized. Committee members asked about photo documentation, online access to project materials, how to measure whether projects truly restore roads to original condition, and what happens when project costs exceed estimates. Lewis said the department is still working on how best to store and share the large volume of photos, and that projects are certified through district offices and local sign-off after completion. She said overages are the responsibility of the applicant because the state does not have additional money beyond the awarded amount. No formal votes were taken during the discussion.

Transcript Highlights:

• ><c> projects.
• ><c> project</c><01:25:32.400><c> and</c><01:25:32.639><c> nobody</c> this project and this project and
• </c> on federal procurement. on federal procurement.
• </c><01:43:08.480><c> labor</c> projects that have been project labor projects that have been project
• </c> federal standards. federal standards.

Committee: House Labor, Industrial and Rehabilitative Services

Summary: The committee opened its labor hearing on SB 655 and outlined the day’s schedule, including a later working session on SB 416 and an executive session planned for 2:30 p.m. Senator Dan Innis introduced SB 655, describing it as a technical bill affecting employee leasing companies/professional employer organizations (PEOs), workers’ compensation coverage, and a Senate-added minimum wage exemption for minor league baseball players covered by a collective bargaining agreement. He said the PEO change would let either the PEO or the client business hold workers’ comp coverage, while still requiring coverage, and argued it would align New Hampshire with most other states and reduce barriers for small businesses and multi-state employers. He also said the baseball provision would clarify wage treatment for minor league players and support the Manchester team. Justin Warell of Insperity testified in support of the PEO portion, explaining that PEOs provide HR, payroll, benefits administration, and workers’ compensation administration through a co-employment model. He said the bill would preserve mandatory coverage while allowing flexibility for the client or PEO to maintain the policy, which could help clients who already have preferred coverage or who face cost or administrative issues in multiple states. He noted that most clients would still remain under the PEO’s policy and said Insperity would submit written comments. Committee members asked about how the arrangement would work, whether the client or PEO would pay, and whether the bill would affect liability insurance packaging; Warell said the employer still bears the cost and that the bill mainly gives larger clients an option. One member asked him to remain available for possible follow-up after hearing from the labor department. Stephen Gonzalez of Major League Baseball testified in support of the minor league baseball exemption. He said MLB and the MLB Players Association negotiated a collective bargaining agreement that already provides players with salary, housing, meals, per diems, health and retirement benefits, disability continuation, tuition assistance, and signing bonuses. He argued that treating players as hourly workers creates impractical time-tracking problems because players do work-related activities on their own time, and said the bill would recognize them as salaried workers and avoid litigation over what counts as hours worked. Committee members questioned why the exemption was needed if players are already salaried and whether MLB could simply amend its CBA; Gonzalez said the bill would help prevent wage-and-hour lawsuits and noted that similar exemptions have been enacted in other states. No vote was taken during the hearing, and the chair indicated the bill would be considered for executive action later that afternoon.

Transcript Highlights:

• That includes $736 million in our federal BEAD funding.
• Some projects will be able to break ground this year.
• This is just an example project, a one-mile project that's deployed along poles.
• the ability of a business to qualify for a federal program or work. ...conflict with federal law to
• The federal policies and interpretations of federal laws seem to change right now by the day and sometimes

Bills: HB2684 , HJM4012

Committee: House Technology, Economic Development, & Veterans

Keywords: social disadvantage, business certification, state guidelines, economic equity, minority-owned businesses, combat veterans, support, military service, injury compensation, veteran affairs

Transcript Highlights:

• There will be some adjustments made to federal authority for various programs to reflect updated federal
• mechanisms and project protections.
• funding for major capital projects?
• There are billions of dollars a year that come to the state from the federal government through the Federal
• It shouldn't have to just be project by project in the trailer bills.

Committee: Senate Budget and Fiscal Review

Transcript Highlights:

• </c> federal provisions. federal provisions.
• </c> advance their projects. advance their projects.
• </c> federal rebate program requirements. federal rebate program requirements.
• </c> use in future redevelopment projects. use in future redevelopment projects.
• </c> from our our portion of the project. from our our portion of the project.

Committee: Senate Energy, Utilities, Environment, and Climate

Transcript Highlights:

• to match those federal grants.
• This is a phased project.
• Projects. Great, thanks Callie.
• This happens on some projects.
• projects.

Transcript Highlights:

• We're using general funds, but for federal fund projects and Highway Fund projects and other fund projects
• For 100% federally funded projects, we're going to charge for that to recoup the cost of running a division
• </c><00:49:58.359><c> fund</c> Federal fund projects and Highway fund Federal fund projects and Highway
• </c><00:50:28.520><c> funded</c><00:50:29.000><c> project</c><00:50:29.440><c> or</c> as 100% federally
• funded project or as 100% federally funded project or we're<00:50:29.680><c> going</c><00:50:29.760>

Summary: The Department of Administrative Services presented its capital budget process and priorities, explaining that it maintains and operates 96 state buildings and uses annual facility walkthroughs, condition assessments, and rough cost estimates to rank projects for the governor’s capital budget. Officials described how requests are triaged, how the governor’s office and Public Works refine estimates, and how the resulting capital budget book serves as legislative intent for approved projects. They also noted that this year the governor’s office asked for estimates on all selected projects, which increased workload but reduced detail. The department highlighted several requested projects, including $1.5 million for the ERP system sustainability fund, which officials said is critical because the state is upgrading its core financial, HR, and budget system to the cloud. Other priorities included courthouse HVAC and boiler work, brick repointing at the State House annex/main building, window replacement at the Spalding building, and elevator replacement on the hospital campus. Officials also said the governor’s proposed capital budget included fewer DAS projects than in past years and asked the committee to consider funding closer to historic levels. The committee then reviewed lapse and reallocation items. DAS said most older projects are still in design, bid, or construction because projects now take four to six years rather than two to three, in part due to ARPA-related workload and post-COVID construction backlogs. Members discussed lapsing $81,000 from the completed Spalding roof project and redirecting small remaining balances from several 2019 projects toward the Hillsboro County South cell block project through the Capital Project Overview Committee. Officials also confirmed ARPA-funded projects are expected to be completed before the December 2026 deadline and explained that the ERP system is the main state IT exception outside DOIT’s usual centralized control, though it still requires DOIT consultation and approval.

Transcript Highlights:

• > die</c><00:04:43.400><c> they</c> project Killers When projects die they project Killers When projects
• Many of their projects as well.
• in terms of project costs.
• in terms of project costs.
• </c> projects so for instance the project projects so for instance the project that<01:28:31.520><c>

Committee: Senate Energy and Natural Resources

Transcript Highlights:

• , and our water supply projects.
• And then, if you'd mentioned one of your other projects, but is there any particular project, either
• Improvement Project.
• Those projects are chosen.
• reserves and fund balances, all for projects only, followed by the $38 million from state, federal,

Summary: The Appropriations Committee on Agriculture, Environment, and General Government heard budget presentations from the Northwest Florida, Suwannee River, St. Johns River, Southwest Florida, and South Florida water management districts for FY 2026-2027. Each district described its preliminary budget, major funding sources, staffing levels, and priorities within the four core missions of water supply, water quality, natural systems, and flood protection. Common themes included reduced budgets from the prior year due to completion of major projects, continued reliance on state appropriations and ad valorem revenue, rising construction and maintenance costs, and the need to maintain aging infrastructure while advancing alternative water supply, springs restoration, flood control, and land management projects. Committee members repeatedly asked how much of each district’s budget and personnel were devoted to the core missions, how maintenance and operating projections were developed, and how projects were selected. The districts generally said most spending was tied to core responsibilities, with administrative overhead relatively small, and explained that budgets are built through a mix of staff analysis, governing board direction, strategic basin planning, and cooperative funding with local, state, and federal partners. Several districts highlighted specific projects, including Water First North Florida, Black Creek, Taylor Creek Reservoir improvements, Crane Creek, Everglades restoration, and various springs and watershed projects. The districts also noted challenges from hurricanes, inflation, cybersecurity, and aging water control structures. South Florida Water Management District’s presentation focused on Everglades restoration and the large-scale infrastructure needed to move, store, and clean water in South Florida. The director said the district’s $1.05 billion preliminary budget is largely for flood control, water supply, ecosystem restoration, and maintenance of extensive canals, levees, pumps, and reservoirs, and emphasized that recent restoration investments are producing measurable water quality and salinity improvements. No votes were taken on the district budgets, and the committee adjourned after the presentations and questions.

Transcript Highlights:

• Well, this is specifically to get to the projects that the federal funds were cut for, such as the anti-fraud
• Do we pull down any federal dollars to help with these projects? Chair, Senator Padilla, yes.
• Project Management Office.
• A $40 million project can quickly become an $80 million project.
• The chess project is a very agile project. They are on time, and they work great together.

Transcript Highlights:

• projects, Healthy Soil projects, and Noxious Weed projects across the state.
• to support these projects.
• We have $330 million of federal grant awards attached to these projects, which means that there is a
• projects, we stand to lose $330 million in federal grant awards.
• We'll have an even flow of planned projects and ready-to-construct projects.

Transcript Highlights:

• federal, state, and local funds.
• The Federal Highway Administration, the Federal Transit Administration, should continue...
• The Federal Highway Administration, the Federal Transit Administration conduct reviews.
• And the North Coast projects were, in fact, not improperly putting projects there.
• federal funds.

Summary: The Joint Legislative Audit Committee met to hear new audit requests and receive a status update from the State Auditor. The auditor reported 10 JALAC audits in progress, noted that all 2025-approved audits are underway, said the first 2026 audit is focused on DMV license revocations, and described several statutory and high-risk audits already in progress. The committee also approved a consent calendar of four audit requests: UC library resources, law enforcement information sharing, EDD unemployment insurance claims, and Housing and Community Development housing development monitoring. The committee then considered Assembly Member DeMaio’s audit request on SANDAG road project management. DeMaio argued the audit was needed to examine whether transportation funds, including voter-approved and restricted revenues, were used for allowable purposes and whether past management failures warranted outside review. SANDAG’s CEO and CFO said the agency already undergoes extensive oversight and audits, that funds are tracked by multiple “colors of money,” and that internal controls have improved. Several members questioned whether the issues were already addressed in public records or existing audits, and the request failed on a roll call vote. Next, Senator Valadares presented an audit of the Board of State and Community Corrections’ Proposition 47 grant administration, arguing that more transparency is needed on outcomes, recidivism data, and oversight of grantees. The BSCC said it already has oversight mechanisms, that the State Controller conducts biennial audits, and that program data shows positive outcomes. The committee approved the audit unanimously. Senator Cortese then presented an audit of CalHR’s dental benefits procurement and Delta Dental contract, citing long-standing benefit caps, provider network concerns, and retiree out-of-pocket costs. CalHR said its network remains strong, that it recently completed an RFP adding MetLife as a second carrier starting in 2027, and that contracts include performance guarantees. Members from both parties expressed concern about access and competition, and the audit was approved unanimously. The committee then completed add-on votes on the consent calendar and adjourned.

Transcript Highlights:

• The Federal Highway Administration and the Federal Transit Administration conduct reviews.
• The Federal Highway Administration, the Federal Transit Administration, should continue.
• The Federal Highway Administration, the Federal Transit Administration conducts reviews.
• putting projects there.
• federal funds.

Committee: Senate Joint Legislative Audit

Transcript Highlights:

• Completed projects flow out and then based upon funding levels new projects will flow in while existing
• widening and deepening. projects.
• And 12 projects were awarded in September. And you all have those projects listed in your handout.
• We know that if that is a project, if that is your project, and. You may be impacted on it.
• projects, but some evaluation. evaluations, studies, and you will see some smaller projects.

Committee: House Appropriations

Transcript Highlights:

• It's federal local projects.
• design projects, they direct bill to those federal projects, and that direct billing is reflected in
• </c> those Federal Federal projects and that those Federal Federal projects and that um<02:06:04.280>
• </c> projects come from that that Federal projects come from that that Federal funding<02:19:04.359><
• federal aid revenue to support a loan to build the project.

Summary: The committee met with New Hampshire DOT Commissioner Bill Cass and Finance Director Danielle Shandra to review the agency’s FY 2026 budget. Cass gave a high-level overview of DOT’s mission, organization, funding structure, and staffing trends, noting the agency has about 650 employees across five divisions. He said the Governor’s recommended FY 2026 budget totals $95.99 million, essentially flat from FY 2025, with funding primarily from Turnpike funds, Highway funds, federal sources, and a small General Fund share for non-highway units. Members asked about how Turnpike and Highway funds are treated in state accounting, and DOT explained that while they are enterprise funds restricted to their purposes, they are considered unrestricted from the statewide perspective and are appropriated through the budget process. A major topic was staffing and budget targets. DOT said its full-time staffing level has remained relatively flat since 2014 even as vehicle miles traveled increased and vacancies rose. To meet budget targets, the department unfunded seven permanent positions and nine temporary full-time positions, and later noted additional reductions in Finance, including the elimination of two full-time positions, reduced print shop equipment purchases, and deeper cuts to overtime, temporary help, equipment, and supplies in FY 2027. DOT also explained that it shifted funding for one unmanned aerial system position from General Funds to Highway Funds, saying the change was workable because the position supports highway-related work and federal-aid-eligible activities. Members asked for clarification on the state transit operating match, and DOT explained that the Legislature had previously provided about $1.8 million annually in General Funds to help local transit agencies meet federal match requirements, but that funding was not included in this budget. DOT said that could reduce the ability to draw down some federal transit funds, though the impact may not be immediate because those funds can be used over several years. The department also described its unmanned aerial system program, saying it has been used for about five years for mapping, survey work, construction oversight, and storm damage assessment, and that it now has about five drones and two full-time positions supporting the program. DOT said it is expanding cross-training so more employees can operate drones without adding positions. No votes or formal actions were taken in the portion provided.

Transcript Highlights:

• Natural Resource Damage Settlement funded those projects. 57 natural resource projects, restoration projects
• It's a soil health project.
• Page 16, this is a project, the Burro Sienica project was on private property, a voluntary program with
• Project number, sorry, page 23 again is a project that we funded along with a number of other community
• I really have to give credit to all our project partners in getting these projects done quickly.

Transcript Highlights:

• The federal funding by itself was not sufficient to allow these projects school buses.
• The federal funding by itself was not sufficient to allow these projects to move forward, so we're able
• how their project would meet the state's electrification to indicate how their project would meet the
• The funding for the projects was scored against benefit criteria, so the funding went to the project
• That projection is over 10 years, and that's in full operation for these projects.

Committee: House Transportation

Transcript Highlights:

• Obviously, the Green Line extension and other major projects involve the total cost of a project, including
• </c> Innovative means to advance two projects Innovative means to advance two projects which<00:03:54.360
• </c> Greenland extension other major projects Greenland extension other major projects involve<00:04:
• </c> involve the total cost of a project involve the total cost of a project including<00:05:00.840><
• Funding comes from federal sources.

Committee: Senate Transportation

Transcript Highlights:

• But what has happened is the federal government has canceled three major projects in the state that were
• If we were to just pay for the projects with what the federal government's done, similar to what we did
• projects.
• Those are the three projects.
• Five projects would be a maximum $10 million per project, would be $50 million.

Bills: SB2225 , HB1619

Committee: Senate Appropriations

Summary: The Appropriations Committee met to clear several remaining bills and discussed scheduling around upcoming conference committees. The chair noted that full committee meetings would likely be held after floor session, while Thursday and Friday mornings were being reserved for conference committees. Members also discussed how conference committees would be scheduled and where they would appear on their dashboards. The committee first took up House Bill 1577, relating to wastewater facility grants. Amendments were adopted to create a loan/line-of-credit mechanism through the Bank of North Dakota and the Department of Environmental Quality to keep two canceled federal BRIC-funded projects moving: a lagoon project in Fezenden and a wastewater treatment project in Lincoln. Members emphasized the language was intended to apply only to those projects and to preserve the possibility of federal reimbursement later. The amendment passed 16-0, and the bill as amended received a 15-1 do pass recommendation. The committee then reconsidered House Bill 1009 and adopted an additional amendment transferring the remaining balance in the bioscience innovation grant fund to the general fund, rather than issuing another round of grants. That amendment passed 16-0, and the bill as amended also received a 16-0 do pass recommendation. Finally, the committee considered House Bill 1619, creating a long-term care facility loan fund and adjusting an existing medical facility loan program. After discussion, members amended the bill to reduce the long-term care fund cap to $10 million per project, set the interest rate at 2%, extend repayment to 30 years, and align the medical facility loan program to 2% with a 30-year term. The amendment passed 14-2, and the bill as amended received a 16-0 do pass recommendation.