Appropriations committee declines House bill that would ease limits on in‑state Legacy Fund investments

The committee opened discussion on House Bill 13‑30, a measure that would alter how certain state investment authorities handle in‑state investments tied to the Legacy Fund and related programs. Committee members adopted Amendment 2003, which replaces a mandatory divestment requirement with discretionary language and moves definitional language to the appropriate section; after debate the committee issued a do‑not‑pass recommendation on the bill as amended.

Jody Smith, interim director for the Retirement and Investment Office, told the committee the in‑state investment program referenced in the bill was established with an allocation of $1.3 billion and that roughly $400 million of the initial $600 million authorized for in‑state fixed‑income investments has already been committed. Smith said the bill would allow the Legacy Fund advisory bodies more flexibility to increase allocations to in‑state managers without tapping principal: “We’re not asking to take any more funds from the principal,” Smith said.

Amendment 2003 removed a mandatory divestment clause that had been in the original bill and relocated definitions so the language creates an option for the State Investment Board and other entities to make larger concentrated investments in state infrastructure projects than the current $25 million guideline would allow. Smith explained that the amendment would permit increasing allocations to existing in‑state managers under the statutory in‑state program, and that those changes apply to previously authorized program dollars rather than to Legacy principal.

Committee members questioned how the change would interact with previously passed measures that allow limited spending from the Legacy principal (the 5 percent/principal‑spending provisions enacted by voters) and asked for clarification that this bill addresses investments, not spending of principal. Smith clarified the bill concerns investments from funds already allocated to the in‑state program and does not authorize spending Legacy principal.

On a roll call the committee approved Amendment 2003. Following further discussion, the committee voted 4‑1 to recommend a do‑not‑pass on HB13‑30 as amended; Senator Dwyer agreed to carry the bill to the full Senate for further consideration.

Members said they expect additional review of in‑state investment policy, diversification risk and how state managers deploy allocations before advancing any statutory change.