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The committee heard from a florist who was sued for refusing to take part in a same-sex wedding.
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The bill would restrict how KU spends some funding.
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The series of recommendations claims the state could save $2 billion over five years.
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A series of efficiency recommendations says schools should spend down their cash reserves.
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The committee had pointed questions but ultimately advanced the nomination to the full Senate.
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Lawmakers will have to decide how they want to respond to a court ruling that says there are unconstitutional funding disparities between school districts.
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Both chambers approved budget bills this week, but the spending plans don't take into account the school funding ruling.
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One plan would have allowed universities to ban concealed guns longer, while the other would have allowed guns on campus sooner.
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The court says lawmakers need to reduce disparities between school districts by June or public schools could be closed.
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The consternation from lawmakers comes after KU sought out bonds for a large construction project.