Cal. Sts. & Hy. Code § 824
Expenditures made from the State Highway Account, to the extent to which the United States is obligated by a project agreement to reimburse the state, shall be considered as advancements made by this state for performance on behalf of the United States and shall not be considered as expenditures of state funds.
Such advancements are not subject to any provisions of law relative to allocation of State Highway Account moneys. Such advancements shall be excluded in making the computations required by Section 11274 of the Government Code and the amount of such advancements made, and to be so excluded during any given period of time, shall be deemed to be equal to the amount received from the Government of the United States as reimbursement for street or highway projects and deposited in the State Treasury during that period of time.
Ca. Sts. and High. Code § 824