Chairman Bosch opened the conference committee on House Bill 1022 and members agreed to remove sections 4 and 5 of the bill while keeping $25,000 for training related to the Retirement and Investment Office’s software.

The change follows discussion about whether an amendment to section 4 unintentionally shifted $50 million from the Legacy Fund principal into the in‑state investment program and about statutory reporting duplicates in section 5. Senator Davison said the apparent effect of the amendment was not the committee’s intention and that members had sought instead to shift internal allocations within the in‑state investment “sleeve.” Representative Meyer and other members expressed reluctance to accept the switch in allocations because of lost earnings.

The dispute centered on how the in‑state investment program is structured and on tradeoffs in expected returns. Senator Davison described the program’s rough makeup as a $1.3 billion in‑state investment pool, of which $600 million is allocated to equity investments and the remaining roughly $700 million split among other in‑state programs. Under current statutory allocations he said about $150 million is available for infrastructure and roughly $550 million for the certificate of deposit (CD) match program. He said the amendment’s language as drafted would raise the CD match portion to $500 million and increase the infrastructure revolving loan fund to $200 million by moving funds between those internal “sleeves.”

Representative Kempenick and others raised the fiscal tradeoffs: the committee’s analysis, presented during the meeting, estimated the change would reduce Legacy Fund earnings by about $2.5 million per biennium because the infrastructure revolving loan fund typically yields about 1.5% while the CD match program yields about 3.7%.

Committee members also debated section 5, which would add reporting requirements about the state’s move to internal investing. Jody Smith, interim executive director for the Retirement and Investment Office, told the committee the office is already required by statute to report on the in‑state investment program. Smith read the citation into the record: "Each interim the state retirement and investment office shall provide at least 1 report to the legislative management regarding the status of the referring to the in state investment program, or the internal investment program, including the provisions of the program, the total amount of incentives paid out to employees each year and the minimum, maximum and average payout per eligible full time equivalent position." She also said the office is currently managing about 15% of assets under management internally and that, since going live on April 1, it has invested about $285 million to $300 million internally to date.

After discussion, Senator Davison moved to remove sections 4 and 5 and retain the $25,000 item for training; the motion was seconded. The committee conducted a voice/roll call and all members present voted yes. Chairman Bosch declared the replacement amendment approved and the conference committee closed.

Votes at a glance: Motion to remove sections 4 and 5 and leave $25,000 for training — motion made by Senator Davison; seconded (transcript lists Representative Kempenick and at one point "Representative Kevin Aik" as second); outcome: approved (unanimous recorded yes votes by members present).