Committee reviews cash‑fund transfers to free federal IIJA matches, move capital appropriations into draft capital bill language

House Corrections and Institutions Committee members on Feb. 18 heard Agency of Administration Chief Operating Officer Nick Kramer explain technical budget language that would move cash‑fund resources into the capital bill and free state match for federal Infrastructure Investment and Jobs Act (IIJA) grants.

Kramer told the committee the provision labeled D101.A.1.b would apply the statute’s 4% calculation to the last completed fiscal year’s general‑fund total (FY24, $2.4 billion), producing about $96 million; after subtracting an FY26 debt‑service estimate of roughly $81 million, the net transfer shown in the draft language is about $14.8 million from the general fund to the capital infrastructure subaccount (cash fund A). He also described separate actions that unreserve and reallocate money from the other infrastructure, essential investments and reserve subaccount (cash fund B): $12.5 million proposed to move to the Transportation Fund for Agency of Transportation IIJA matching and $14.5 million to be unreserved/appropriated as match for the Agency of Natural Resources (ANR).

Why it matters: the transfers and ‘‘unreserving’’ free up state match dollars that the administration and legislature originally set aside to leverage federal IIJA dollars. Committee members were told the mechanics—moving some dollars through the Transportation Fund and directly appropriating others—reflect federal program and agency accounting preferences, not a policy change to how the funds will be used.

Most important facts - The draft D101 language applies a 4% statutory calculation to FY24 general‑fund appropriations ($2.4 billion) to reach a notional $96 million figure, then subtracts an estimated $81 million in debt service to yield a roughly $14.8 million transfer into the capital infrastructure subaccount (cash fund A). Nick Kramer acknowledged a typographical error in the explanatory note that referenced FY25 instead of FY26. - A separate set of provisions would unreserve $12.5 million from cash fund B and transfer it to the Transportation Fund so AOT can use it as state match for IIJA transportation grants; Kramer said moving those dollars through the Transportation Fund matches AOT’s grant administration processes. - The draft language would also unreserve $14.5 million from cash fund B and appropriate it as match for ANR; because ANR’s federal programs do not require flow through the Transportation Fund, the administration proposes unreserving and directly appropriating that amount. - Committee staff explained the draft capital bill (Section 19, titled “Cash Fund for Capital and Essential Investments”) contains the cash‑fund capital appropriations that the committee has reviewed; those capital appropriations will also be tracked in the appropriations bill as the process continues. - Committee members were told the legislature originally established the second subaccount (cash fund B) to hold state match reserves during the multi‑year IIJA rollout and that the administration expects little further activity in that subaccount after the transfers discussed on Feb. 18. Kramer described one transfer of $1 million from cash fund B to cash fund A as part of winding down the second subaccount and reconciling prior reductions enacted during last year’s budget process.

Other details and committee questions Committee members asked for clarification about why some dollars move through the Transportation Fund while others are directly appropriated; Kramer said that is an administrative preference tied to how specific agencies and federal programs administer grants. Members also asked about line‑item detail and were directed to the draft capital bill text (Section 19) in the committee packet for the full list of cash‑fund appropriations and the related spreadsheet.

The committee discussed the legislative history of the second subaccount: funds were reserved in prior years to provide state match as IIJA grants ramped up; in earlier years the state match rates were smaller and then rose in later years, requiring the reserves to be used. Kramer said some previously reserved dollars produced very high federal leverage in prior rounds (he cited instances of 12-to‑1 leverage in ANR programs).

Next steps and oversight No formal committee vote was recorded in the transcript. Committee members and staff discussed tracking the transfers in the capital bill and the appropriations process; staff and the administration said the language will appear in the draft capital bill and in session law where appropriate so the unreserving and appropriations can be tracked. The committee also noted a typographical error in the packet (a fiscal‑year reference) and confirmed the administration will correct it in the bill language.

Ending The committee moved on after the administration finished its walkthrough of D‑section transfers and the draft Section 19 capital language. Members were directed to the draft bill language and the committee’s capital spreadsheet for further line‑by‑line review as the appropriation and capital bill process continues.