Finance panel trims automatic fee hikes, holds retirement changes and advances mixed HB 2 amendments

Concord — The House Finance Division I met to review House Bill 2, approving targeted amendments and votes while postponing several large policy decisions for further information or public input.

The committee voted to remove language that would have required automatic fee increases (section 12 and related paragraphs), rescinded a proposed extension of a $5 million housing appropriation (sections 72–73), and deleted a proposed Granite Place acquisition funding item (section 187). Members also advanced a series of department-level reorganizations and technical fixes and sent several items — most notably changes to Group 2 retirement benefits and detailed boathouse regulations — to subsequent meetings or public hearings for further review.

Why it matters: The panel’s changes affect the state budget (fees, transfers and appropriations) and state program implementation (permitting, rulemaking and agency reorganizations). Removing automatic fee-increase language preserves annual or legislative oversight of fee changes; the housing and Granite Place votes free up funds in the current biennium; postponing retirement changes delays a potentially large-cost benefit package that had been proposed in the governor’s version of HB 2.

What the panel did

Fee authority and indexation: The committee voted to remove proposed provisions that would have required many agency fees to increase automatically (consumer price index–linked adjustments beginning July 1, 2027). The panel’s removals apply to multiple fee sections across HB 2; proponents said automatic indexing would reduce the Legislature’s control over fee policy, opponents said indexing would prevent lengthy gaps between adjustments. Outcome: motion to remove automatic-fee language passed (vote recorded in committee: 4 yes, 3 no).

Housing grant extension (sections 72–73): The panel also removed language that would have extended the time for a $5,000,000 housing grant program from the current biennium into the next. Legislative staff said only a small portion has been spent so far and the agency expects to obligate most remaining funds by June; supporters of removal cited current general fund pressure. Vote: remove sections 72–73 carried in committee (4 yes, 3 no).

Boathouse provisions (sections 15–16 and related definitions): Members debated new statutory boathouse rules created to address a state agency interpretation and a recent court matter. The committee agreed to delay final action on detailed provisions until public hearings are held and substituted the bill’s fixed past date with HB 2’s effective date for any new restrictions. The committee approved related penalty language (section 16) but agreed to hold other boathouse-specific technical choices for public comment.

Retirement system (Group 2 tiers): Committee members extensively debated proposals that would change retirement benefits for “tier B” and “tier C” Group 2 employees (police, fire, corrections). Several members said the governor’s proposal primarily benefits already-nearing-retirement employees (tier B) while leaving newer hires (tier C) out; others argued a limited proposal would be less costly but would not meet recruitment and retention goals. The committee did not adopt final language and asked staff and the retirement system to provide: (a) an apples-to-apples fiscal cost comparison for the governor’s proposal versus alternatives that target tier C employees, and (b) the effects on unfunded liability and employer rates. The item will be revisited when those numbers are available.

Granite Place and other capital items: The committee voted to remove a proposed mechanism in HB 2 that would have directed sale proceeds from the Laconia State School to acquire the second tower of Granite Place (a mixed-use office campus in Laconia/Concord area). DAS and the governor’s office had discussed using expected proceeds to buy state office space, but the committee removed that earmark and approved follow-up questions for DAS about options, lease costs and the condition of the building.

Corrections overtime and personnel flexibility (section 82): The committee approved language allowing agencies to shift funds among object classes to cover overtime in critical operations (for example, correctional officers), but members recorded concern and affirmed they expect oversight and clarity that the change should not move funds between disparate job classes without notice.

Other approvals and technical fixes: The committee advanced multiple non‑controversial moves including transferring positions and fee authority among DNCR and DES, clarifying statutory references for the Department of Justice’s internal units, and codifying several housekeeping items. Several statute cleanups and departmental reorganization provisions were approved unanimously.

What the committee postponed or requested

- Retirement benefit revisions: detailed fiscal notes and alternatives (tier C-focused options) requested before any vote. - Boathouse policy: public hearings requested to capture lakes‑association and municipal input; effective-date language adjusted to avoid retroactivity. - Second‑injury and workers’ compensation funds: staff asked the Department of Labor to explain the operations and current balances and to return to the committee with projected impacts.

Votes at a glance (selected committee actions) - Remove automatic fee indexing language (section 12 and related): motion passed (committee tally reported: 4 yes, 3 no). - Remove extension of $5,000,000 housing appropriation (sections 72–73): motion passed (4 yes, 3 no). - Approve boathouse substantive sections (definitions and requirements) with change to effective‑date phrasing; approve penalty section (15–16): approved; final rule details set for public hearing. - Remove Granite Place appropriation language (section 187): approved (unanimous consensus in committee). - Approve corrections budget flexibility (section 82) and other agency housekeeping items: approved (various unanimous and majority votes).

Next steps: The committee scheduled further hearings and invited departmental representatives to return with requested fiscal analyses (notably from the retirement system, Department of Labor and Department of Environmental Services). The panel set a follow-up meeting for the next day to continue HB 2 debate and to review any newly available fiscal notes and proposed amendments.

Ending: The Finance Division I reconvened the HB 2 review at the committee room and on the public livestream and scheduled follow-up sessions (members cited a 10 a.m. reconvening the next day).