87th LegislatureFederalTaxes & SpendingTexas Officials, Municipality Lobbyists Unclear on Strings Attached to Federal Coronavirus Funding

The governor and attorney general have been vague on their guidance about the ARPA funding's stipulation that recipients must comply with "applicable executive orders."
December 8, 2021
A condition of the state’s $16.3 billion in disbursed coronavirus aid may tie the state to future executive orders by the federal government.

Back in October, the state legislature appropriated its sum of funding, to be delivered in two separate tranches to each applicable non-entitled unit (NEU). NEUs are the local and state governments granted the federal aid.

Within the U.S. Treasury’s Terms & Conditions for the grants is a provision that reads, “[The] Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and [the] Recipient shall provide for such compliance by other parties in any agreements it enters into with other parties relating to this award.”

This provision has caused some localities, such as the City of Brady, to reject the funds. Should the terms and conditions of the agreement be breached, the offending locality would be responsible to repay the funds.

Reached by email, a spokesman for the Texas Department of Emergency Management (TDEM), tasked with divvying out and tracking the ARPA funding, said agency does not provide legal guidance for the funding’s parameters. According to the TDEM spokesman, that falls on the Office of the Attorney General.

The Texan Tumbler

On October 15, Attorney General Ken Paxton penned a letter to state agencies tempering worries in the context of President Joe Biden’s vaccine mandate for federal contractors.

The concern was that any entity that accepted the funds joined themselves into a contractual relationship with the U.S. Treasury and thus made federal contractors out of their employees.

When signing Senate Bill 8, Governor Greg Abbott referenced Paxton’s letter, saying, “The Texas Attorney General has advised that the State’s receipt and use of these so-called ‘ARPA Funds’ does not legally lead to a COVID-19 vaccine mandate in Texas.”

“Based on this understanding, I signed and approved this bill.”

But Paxton’s letter did not explicitly say this, just that the governor’s executive order banning public and private vaccine mandates still has “the force and effect of law.”

“[M]y office is charged with a duty to vindicate Texas’ laws and interests when the federal government intrudes on the sovereignty of our State or the liberties of the millions of people who call Texas home,” Paxton wrote.

“Accordingly, I must — and will — take legal action against the federal government to protect Texas state agencies and their employees from COVID-19 vaccination mandates.”

Texas joined the ultimately successful lawsuit against the White House’s vaccine mandate for businesses with 100 or more employees, shot down by the U.S. Fifth Circuit Court. It also filed a suit against the federal contractor vaccine order which is currently at the U.S. Southern District Court of Texas.

“In some cases,” Paxton’s letter adds, “federal money pays the salaries of your employees, and you now face the difficult decision of violating state law or potentially losing federal funding. We will defend the State of Texas and its dedicated public servants from this federal overreach, and we hope that your agency will stand with us.”

So far, nearly 70 municipalities in Texas have rejected the funds. Article I, Section 10 of the U.S. Constitution prohibits states from interfering with contracts agreed to by two parties.

In a November 5 update to its members about the funding and its stipulations, the Texas Municipal League wrote, “The Agreement is between the non-entitlement Recipient City and TDEM, and TDEM is the agency that enforces the Agreement. The Agreement does not create a contractual relationship between the non-entitlement Recipient City and any department or division of the federal government.”

But the post has since been updated to remove that provision. TML did not reply to an inquiry from The Texan.

While those opposed to these ARPA funding agreements argue this provision would preclude any state law that would annul any section of the contract, the scope is typically considered to be limited to agreements between private entities or persons.

The governor’s office did not return a request for the legal guidance provided by the attorney general’s office referenced in the legislative statement.


Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies exclusively on its readers for financial support. If you’d like to become one of the people we’re financially accountable to, click here to subscribe.

Get “KB's Hot Take”

A free bi-weekly commentary on current events by Konni Burton.

Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.