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Appropriations committee debates sweeping ARPA interest into capital development fund
Summary
House Bill 4 and related budget amendments prompted extended committee debate about transferring accrued interest on ARPA funds to the Capital Development Fund and allocating remaining interest to water, wastewater, irrigation and nonpoint-source projects.
Members of the House Appropriations Committee spent an extended portion of the executive action session on House Bill 4, the federal-authority budget amendment bill, and on an amendment that would reallocate interest earned on previously appropriated ARPA funds.
Committee chair and members discussed an amendment that would transfer existing interest balances into specific infrastructure projects and then sweep any remaining balance into the Capital Development Fund. Committee staff described allocations in the amendment that included about $1,700,000 to projects in another infrastructure bill (House Bill 7), $5,000,000 for additional water and wastewater projects (House Bill 6), $224,000 for two irrigation projects, and $4,500,000 for Department of Environmental Quality nonpoint-source projects tied to new statutory standards.
Members pressed staff on timing and accounting. Representative Falk raised concerns about capturing interest earned before Dec. 30, 2024, and whether the Legislature could effectively “sweep” interest retroactively or prevent the executive branch from obligating funds that were previously awarded. Committee staff and the budget office said they would need time to draft precise language and recommended returning on Monday to finalize the amendment in writing. The chair agreed to delay final executive action to allow staff to prepare language that would maximize capture of pre-Dec. 30 interest and to ensure transfers are properly timed.
Budget office staff explained that the federal-authority bill lists awards and extensions agencies reported during the session and that dashes in the bill represent separate awards. Staff said some federal awards are continuing authority into the next fiscal year and others have specified end dates.
Why it matters: The amendment seeks to redirect interest earnings from federal ARPA-related accounts into state capital priorities. Committee members flagged legal and accounting questions about retroactivity, existing obligations and the mechanics of transferring funds mid-session — questions that could affect how much principal and interest the Legislature can appropriate.
What’s next: Committee members asked staff to draft final amendment language and to return Monday with a precise transfer mechanism. The committee withdrew the outstanding motion and postponed final action on House Bill 4 to allow for redrafting.
