Cal. Sts. & Hy. Code § 823
In addition to the purposes for which the moneys in, and to be received in, the State Highway Account have been appropriated, all of the moneys, or so much thereof as may be necessary, is hereby appropriated to, and may be expended by the department for, the performance of such street or highway construction or improvement projects as are agreed upon with the properly authorized officers of the United States, including projects on public or military highways in the State of California which are not a part of the state highway system.
As to such projects on streets or highways which are not a part of the state highway system, such expenditures shall be limited to those items for which the Government of the United States has agreed, and is obligated, to reimburse the state in full, except that the general administrative and administrative engineering expense for which the Federal Government will not repay the state is properly chargeable to the general administration of the department.
Ca. Sts. and High. Code § 823