Federal Update: House Floor Stalls Ahead of Independence Day Recess

The House ended its week earlier than planned after a procedural vote tied to the Fiscal Year (FY) 2027 National Defense Authorization Act (NDAA) failed amid internal Republican disagreements over how to advance the SAVE America Act, a partisan election integrity proposal. The NDAA is the annual defense policy bill that authorizes programs, policies, and priorities for the Department of Defense and related national security activities. Speaker Mike Johnson (R-LA) sought to address concerns from conservatives by linking the SAVE America Act to the defense bill, but that approach, along with other internal disagreements, did not secure enough support to advance the rule.

As a result, the House left for the July 4 recess two days early, and lawmakers are not scheduled to return until the week of July 13. In addition to delaying action on the NDAA, the failed rule also stalled consideration of several FY 2027 appropriations bills and discussions around a potential third party-line reconciliation package. It should be noted that CSAC will continue to closely monitor reconciliation discussions and push back against any efforts to further erode key safety-net programs or shift additional costs onto counties.

The House’s early departure also affected committee work. The Transportation and Infrastructure Committee postponed its scheduled consideration of a bipartisan, biennial water resources measure – the Water Resources Development Act (WRDA), which authorizes U.S. Army Corps of Engineers water infrastructure, flood control, navigation, ecosystem restoration, and related projects.

Treasury Opens New Opportunity Zone Designation Cycle

The Treasury Department has opened the next nomination period for Qualified Opportunity Zones, giving states a new opportunity to designate economically distressed census tracts for a 10-year cycle beginning in 2027 and running through 2036. The program, made permanent under H.R. 1, is intended to attract private investment into underserved communities by offering federal tax benefits to investors who reinvest capital gains in designated areas.

Governors may nominate up to 25 percent of a state’s eligible census tracts between July 1 and September 28. If certified by Treasury, the new zones will be eligible for investment beginning January 1, 2027. Because designations occur only once every 10 years, this window is important for counties seeking to position priority communities for future investment.

The second round includes more targeted eligibility criteria and enhanced incentives for certain rural investments, which could be particularly relevant for California counties with distressed rural communities, infrastructure needs, and shovel-ready economic development opportunities. Counties may want to work with cities, regional partners, developers, and the Governor’s Office to identify eligible tracts that are well-positioned for investment, including areas with infrastructure capacity, site readiness, transportation access, housing or industrial potential, and alignment with existing local or state economic development strategies.

While the first round attracted significant private investment nationally, investment was uneven across eligible tracts. As a result, counties should view the new designation cycle as one tool in a broader economic development strategy. CSAC will continue to monitor the nomination process and highlight opportunities for counties to engage.

Interior Department Distributes FY 2026 PILT Funds

The Department of the Interior recently announced the release of FY 2026 payments under the Payments in Lieu of Taxes (PILT) program. The PILT program provides payments that help local governments offset losses in property taxes due to the existence of nontaxable Federal lands within their boundaries. Payments are calculated based on the number of acres of Federal land within each county and the population of that area.

In all, the Department will distribute approximately $733 million to over 1,900 local governments, with California counties set to receive nearly $79.9 million this year, up from $66.2 million. It should be noted that the increase was primarily driven by adjustments reflecting the one-year lapse of the Secure Rural Schools (SRS) program.

A full list of payments to counties can be accessed here.

Looking ahead, the House version of the FY 2027 Interior spending bill includes another year of full funding for PILT. The Senate has yet to release its funding bill, but it’s anticipated that the upper chamber will include the extension in their version of the bill as well.

House Panel Reviews Federal Forest Management Partnerships

Last week, the House Agriculture Subcommittee on Forestry and Horticulture held a hearing on partnerships to improve management of the National Forest System, with members examining how counties, states, and other partners can help address forest health, wildfire resilience, workforce, and capacity challenges.

Modoc County Supervisor Ned Coe testified on behalf of NACo, urging Congress to strengthen federal-county coordination and enact a long-term or permanent reauthorization of the Secure Rural Schools program before it expires at the end of FY 2026. SRS provides payments to forested counties to help support schools, roads, emergency services, and other local priorities in communities with large amounts of tax-exempt federal land.

Coe also called on Congress to fully fund all three SRS titles, support shared stewardship and workforce partnerships between federal agencies, counties, and university extension programs, and direct the U.S. Forest Service to formalize regular coordination with county governments as part of national forest management planning. He emphasized that stronger federal-state-local partnerships are essential to improving forest and rangeland health, reducing wildfire risk, expanding workforce capacity, and supporting rural communities.

The hearing, as well as Supervisor Coe’s testimony, can be accessed here.

Interior Releases First Federal Recreation Visitation Report

The Department of the Interior has released the first-ever unified report on recreation visitation across federal lands and waters, as required by the EXPLORE Act. The report standardizes visitation data across agencies, including the National Park Service, Bureau of Land Management, U.S. Forest Service, Bureau of Reclamation, Army Corps, and others.

Interior also announced 40 proposed pilot projects to test new ways of measuring recreation use, including mobile device data, automated counters, GPS units, questionnaires, and on-site observations. Of particular interest to counties, the effort could help federal agencies better understand recreation demand, improve visitor services, and direct resources to high-use areas.