A key House committee unanimously approved legislation that would overhaul local pension plans for police officers and firefighters, moving closer to a Senate version but endangering support for the bill among local governments and possibly business groups.

An amendment to the proposal (HB 341) adopted by the House State Affairs Committee on Wednesday concerns how local governments can use revenue from the state's tax on insurance premiums, a major source of funding for the retirement plans relied on by police officers and firefighters.

The House and Senate bills would now essentially repeal existing restrictions in state law on how premium taxes are spent, so long as local governments and unions can come to agreement. If there is no agreement, the taxes would be sifted through a complex formula detailing how much should be spent on existing benefits and how much should be given to workers in a separate retirement account.