Federal Update: Congress Approves Three-Year Secure Rural Schools Extension 

On December 9, the House of Representatives overwhelmingly approved bipartisan legislation (S. 356) to extend the Secure Rural Schools (SRS) program for an additional three years – a major victory for rural, forested counties in California and across the nation. The bill, which cleared the Senate unanimously in June, restores a vital funding stream that more than two dozen California counties depend on to support essential services, including road maintenance, public schools, emergency response, and wildfire mitigation. 

Under S. 356, counties will receive retroactive SRS payments for fiscal year (FY) 2024 and guaranteed payments for FY 2025 and FY 2026. Because SRS payments are distributed the year after they are authorized, the FY 2026 payment is expected to be issued in the spring of 2027. To expedite relief, the legislation requires both the missed FY 2024 payment and the upcoming FY 2025 payment to be made within 45 days of bill enactment, ensuring that counties receive their long-delayed support as quickly as possible. 

During the lapse in SRS, counties reverted to sharing federal timber receipts, revenue that is significantly lower than traditional SRS funding. California counties, for example, received approximately $11.8 million in timber payments earlier this year, compared to the roughly $35.8 million they would typically receive under a combination of SRS and timber receipts. Although those timber payments will be deducted from each county’s SRS allocation, overall funding will still far exceed what counties received during the lapse. 

To reduce the administrative burden and prevent further delays, S. 356 will temporarily freeze each county’s 2024 Title allocation election for both the FY 2024 and FY 2025 payments. Under the SRS structure, counties would normally select how funds are split among the program’s three titles: Title I (roads and schools), Title II (projects on federal lands), and Title III (county-led projects such as emergency services and wildfire prevention). 

Final passage of the bill reflects months of sustained advocacy from counties. For its part, CSAC played an active role throughout this effort, consistently highlighting the essential role SRS plays in stabilizing local budgets and supporting communities with large shares of federal forest land. With SRS funding restored through FY 2026, counties can again rely on a predictable and meaningful revenue stream to support core services and long-term community resilience. 

Senate Deadlocks on ACA Subsidy Proposals as Year-End Deadline Looms 
Earlier today, the Senate failed to advance two competing proposals aimed at addressing rising health care costs, leaving Congress with little time to act before the enhanced Affordable Care Act (ACA) subsidies expire at year’s end. As part of the agreement to reopen the federal government, Senate Democrats secured a vote on a “clean” three-year extension of the enhanced premium tax credits, which would have continued the current subsidy structure without any policy changes. The measure fell short of the required threshold despite support from four Republican senators. 

For their part, Senate Republicans rallied around an alternative proposal by Senators Bill Cassidy (R-LA) and Mike Crapo (R-ID), both of whom chair committees with jurisdiction over health policy. Their bill – the Health Care Freedom for Patients Act (S. 3386) – would redirect funding for the ACA’s enhanced subsidies into Health Savings Accounts (HSAs) for individuals enrolled in high-deductible plans on the ACA exchanges. It should be noted that the Cassidy–Crapo bill revives a provision that was removed from the GOP’s summer reconciliation package (H.R. 1) that sought to reduce the federal Medicaid match for states that use their own funds to cover undocumented immigrants. S. 3386 also failed to advance. 

With neither proposal attracting sufficient bipartisan support, the window for legislative action is rapidly closing. In the House, Speaker Mike Johnson (R-LA) has indicated that the chamber will vote next week on a GOP-authored health care package, which is expected to be unveiled over the weekend. House Democrats, like their Senate counterparts, continue to push for a three-year extension of the enhanced credits. 

USDA Unveils $12 Billion Aid Package for Farmers 
On December 8, President Trump announced that the U.S. Department of Agriculture (USDA) will make $12 billion in one-time bridge payments available to farmers to address ongoing trade market disruptions, increased production costs, and other financial pressures affecting the agricultural sector. The assistance will be delivered through USDA’s Commodity Credit Corporation and administered by the Farm Service Agency. 

Up to $11 billion will support a new Farmer Bridge Assistance (FBA) Program for producers of major row crops – including corn, soybeans, wheat, cotton, rice, sorghum, peanuts, chickpeas, lentils, and several oilseeds. Payments will be based on a uniform formula that accounts for planted acreage, cost-of-production estimates, modeled price impacts, and 2025 crop-year losses. Producers who qualify can expect payments by February 28, 2026, with commodity-specific payment rates set to be released later this month. 

The remaining $1 billion will be reserved for commodities not covered under the FBA Program, including specialty crops and sugar, though USDA has not yet released timelines or program guidance for those sectors. 

House Lawmakers Introduce Clean Air Act Reform Package 
On December 10, the House Energy and Commerce Committee’s Environment Subcommittee advanced seven bills aimed at reforming the Clean Air Act’s (CAA) permitting and regulatory processes. The proposals – which moved forward on largely party-line votes – focus on reducing duplicative reviews, clarifying how foreign and wildfire-related emissions are treated under federal air quality standards, and providing additional flexibility for advanced manufacturing and critical mineral facilities, among other things. 

The first proposal – the Fire Improvement and Reforming Exceptional Events (FIRE) Act (H.R. 6387) – would overhaul how wildfire smoke, prescribed burns, and other exceptional events are treated under federal air quality determinations. The measure is intended to provide more predictable regulatory timelines for states and local air districts while preserving existing environmental protections. 

Another bill – the Air Permitting Improvements to Protect National Security Act (H.R. 6373) – would allow the president to exempt advanced manufacturing and critical mineral facilities from certain emissions offset requirements, while maintaining all other CAA permitting standards. Supporters argue the change would accelerate development of strategically important facilities without weakening core environmental safeguards. 

A third measure – the Foreign Emissions and Nonattainment Clarification for Economic Stability (FENCES) Act (H.R. 6409) – would clarify that states may account for all foreign emissions, including emissions from natural events, when determining compliance with federal air quality standards or reviewing new facility permits. The proposal is aimed at providing regulatory certainty for states affected by pollution that originates outside their borders. 

HUD Issues Updated PRWORA Interpretation 
On November 26, the U.S. Department of Housing and Urban Development (HUD) published a notice in the Federal Register expanding the agency’s interpretation of “federal public benefits” under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. The agency notice significantly broadens the HUD programs that qualify as “federal public benefits” and thus bar access by “unqualified immigrants,” and follows similar action taken by other federal agencies during the summer, some of which are currently blocked from implementation in several states (including California) due to ongoing litigation.  

Historically, PRWORA applied to core rental assistance programs such as Section 8 vouchers and public housing. Under HUD’s new interpretation, however, virtually all HUD grant programs are now considered “federal public benefits.” This includes homelessness assistance programs such as Continuum of Care and Emergency Solutions Grants, the Community Development Block Grant (CDBG) and CDBG–Disaster Recovery programs, the HOME Investment Partnerships Program, and earmarks. 

The notice also provides legal justification for HUD to require grantees to use immigration verification (e.g. Systemic Alien Verification for Entitlements (SAVE) system) for these programs. While federal law exempts nonprofit organizations from verifying immigration status of program beneficiaries, HUD indicates that it will issue guidance for situations in which states or local governments pass funds through to nongovernmental partners. That guidance is expected to draw on forthcoming Department of Homeland Security materials that have not yet been released. Since no guidance has been distributed yet, it is unclear what exact steps grantees, including counties, should be taking to stay in compliance. 

HUD Temporarily Withdraws Homelessness Grant Opportunity 
Earlier this week, the  HUD withdrew a controversial FY 2025 Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC) grant program. The NOFO, issued on November 13, proposed new conditions and significant reductions for permanent housing projects serving people experiencing homelessness. 

The move follows two lawsuits challenging the NOFO’s legality, one filed by a coalition of 20 states and the District of Columbia, and another brought by local governments (including Santa Clara County and the City and County of San Francisco) and nonprofit organizations. HUD stated that it withdrew the notice to make “technical corrections” and signaled that it still intends to reshape the program to reflect the administration’s priorities. The department did not announce a timeline for releasing a revised NOFO, stating only that it will be issued well before FY 2025 funds must be obligated. 

The withdrawal of the NOFO, which occurred shortly before a court hearing over whether to grant plaintiffs in the two lawsuits a temporary restraining order, adds confusion and uncertainty for grantees, many of whom were expecting funding renewals as early as January. The federal judge overseeing the legal challenges gave HUD until December 15 to explain its decision to rescind its notice, ahead of the next court hearing scheduled for December 19.