Legislative Council fiscal staff told Legislative Management that recent federal rescissions already have reduced North Dakota grant funding by roughly $100 million and that pending federal proposals could cut larger entitlement funding streams.

Grant Gaither, fiscal analyst, summarized two topics: first, recent federal rescissions and terminations affecting North Dakota agencies (about $100 million overall). He cited Department of Health and Human Services terminations with $75.8 million in unliquidated obligations lost — including CDC and SAMHSA funds — and FEMA rescissions of roughly $19.6 million that affected community infrastructure projects. Gaither said the Legislature already authorized a $9.7 million Bank of North Dakota line of credit to backstop two affected wastewater projects.

Second, Gaither summarized provisions in the House-passed proposal informally referred to in the briefing as the "1 Big Beautiful Bill Act," noting the Congressional Budget Office estimates a national Medicaid reduction of $793 billion over the next decade and an estimated $1.4 billion reduction in North Dakota federal Medicaid funding over the same period under the House proposal. Key elements would add an 80-hour-per-month mandatory work requirement for able-bodied adults without dependents (beginning 12/31/2026 for expansion enrollees in the House draft), increase cost sharing for Medicaid expansion enrollees, shift eligibility determinations to semiannual reviews, and prohibit coverage for undocumented immigrants. Gaither said projected North Dakota Medicaid enrollment reductions could reach 18% by the model year the bill contemplates.

Gaither also described proposed changes to SNAP in the House draft that would increase state cost sharing tied to payment error rates, raise the state share of administrative costs from 50% to 75% and otherwise tighten eligibility; he estimated an additional roughly $18 million per biennium in state administrative costs under the House draft. Committee members asked whether administrative costs to implement proposed work requirements were included; Gaither said the memo used FFY2024 administrative figures and did not model additional administrative staffing costs that states often incur to monitor work rules.

Members asked staff to continue monitoring rescissions and pending federal legislation and to coordinate with OMB to track programmatic impacts as information develops.