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Administration seeks wider authority to ‘cure’ ARPA risks and to broaden disaster-match funding
Summary
Administration officials told the House Appropriations Committee they seek authority to reapply remaining ERA II federal funds (up to $14.3 million) to lower‑risk eligible uses to reduce exposure to potential U.S. Treasury recoupments, and to broaden a $30 million disaster-match appropriation to cover non‑federal shares for 2023 and 2024 events.
Agency witnesses told the House Appropriations Committee on Feb. 26 that the administration seeks increased authority to reapply remaining ERA II federal grant funds to lower‑risk, eligible expenses in order to reduce the state’s exposure to future U.S. Treasury demand letters.
Douglas Farnham described a program the administration initially sought with $5 million in authority that would permit the state to “cure” identified ineligible expenditures by applying ERA II funds to eligible activities and returning state general funds to other uses. Farnham said about $14.3 million remains available in ERA II and that the administration has identified roughly $4 million of known risk; staff recommended additional authority up to the remaining balance to address other potential issues and to lower the state’s risk profile in federal reviews.
Farnham also described language to expand a prior $30 million appropriation, originally targeted as state match for the 2023 flooding, so it may be used as non‑federal share for disaster spending tied to both 2023 and 2024 events and to cover eligible FHWA cost‑share for road repairs when appropriate. He said the administration prefers to use unobligated dollars first and that the T‑fund (transportation fund) could absorb some needs but would prefer not to be tapped before existing appropriations are exhausted.
Committee members asked whether the ERA II authority would remove the Sept. 30, 2025 obligation deadline; administration witnesses said the ERA II period of performance remains fixed but that allowing swaps would preserve lower‑risk documentation and could reduce future Treasury recoupment demand letters. Members requested further documentation of the $4 million in identified risk and of proposed swap scenarios.
No committee appropriation vote was taken that day; staff said the requests would be incorporated into FY 2026 deliberations and that the administration would provide detailed risk analysis and proposed swap mechanics.
