Federal Update: House Adjourns Until After Elections, WRDA Advances

The House completed its final legislative session before the November elections this week. Members are not expected to return for legislative business until the week of November 9, setting up what is likely to be a busy lame-duck session. 

One of the most significant county-related measures approved this week was the Water Resources Development Act (WRDA) of 2026 (H.R. 9497), which passed the House on an overwhelmingly bipartisan vote. WRDA authorizes U.S. Army Corps of Engineers projects and studies related to flood risk reduction, navigation, ecosystem restoration, water supply, drought resilience, and other water infrastructure needs. The bill also includes a number of policy changes intended to improve Corps project delivery and give nonfederal sponsors greater flexibility. 

Of particular interest to counties, the House bill includes language allowing the federal share of certain Corps environmental infrastructure projects to be provided on a reimbursement basis. Under the provision, a nonfederal sponsor could move forward with eligible project costs and later be reimbursed for the federal share, subject to federal funding being made available for the project. This could provide additional flexibility for local sponsors that have the ability to advance work rather than waiting for the Corps to directly obligate and expend federal funds. The provision applies specifically to projects receiving assistance under the Corps’ Section 219 environmental infrastructure authority. 

The House also approved the bipartisan Ratepayer Protection Act (H.R. 9340) by a 417-3 vote. The legislation seeks to prevent residential and other electricity customers from bearing the costs of major grid upgrades required primarily to serve data centers. Lawmakers also gave final approval to the legislation – the Billion Dollar Boondoggle Act (S. 766) – that would require additional public reporting on major federal projects that are more than five years behind schedule or at least $1 billion over budget. Because the Senate has already approved the measure, it now heads to the President. 

Finally, the House approved two Congressional Review Act resolutions seeking to overturn EPA approval of California emissions regulations affecting ocean-going vessels at berth and commercial harbor craft. Both measures now move to the Senate. 

Senate Ag Panel Advances Farm Bill Reauthorization 

On September 16, the Senate Agriculture Committee advanced its Farm Bill reauthorization package by a 12-11 party-line vote, sending the legislation to the full Senate. The bill was only able to advance after Senator Mitch McConnell (R-KY) returned to the Senate this week. McConnell’s absence in August had left Republicans one vote short of moving the legislation out of committee without Democratic support. 

A major disagreement continues to center on the new SNAP cost shifts enacted under H.R. 1. The Senate proposal would delay the new benefit cost-sharing requirement by one year, but it would not delay the separate reduction in the federal share of SNAP administrative costs. The one-year delay could also come with a higher long-term cost for states with the highest payment error rates. Under the proposal, states with payment error rates of 10 percent or higher would eventually be required to cover 20 percent of SNAP benefit costs, up from the 15 percent maximum established under H.R. 1. 

For its part, CSAC has continued to call for a clean, uniform two-year delay of both the administrative and benefit cost shifts. The association has also raised concerns that the Senate approach could ultimately increase California’s financial exposure rather than simply provide additional implementation time. 

Committee approval moves the Farm Bill process forward, but the legislation will still need bipartisan support to advance through the full Senate. 

HUD Wins Emergency Stay in Legal Battle over Homelessness Funding 

On September 16, a federal appeals court temporarily cleared the way for the U.S. Department of Housing and Urban Development (HUD) to move forward with major changes to its FY 2026 Continuum of Care (CoC) funding competition while the agency appeals a lower court ruling. 

Under the new funding approach, HUD would shift roughly $1.3 billion away from Permanent Supportive Housing (PSH) and toward transitional housing, supportive services-only projects, “treatment first” housing, and programs that place greater emphasis on coordination with law enforcement and first responders. According to the National Alliance to End Homelessness, approximately 15,000 Californians could lose access to permanent supportive housing under the FY 2026 funding notice. 

A coalition of states and nonprofit organizations successfully challenged the changes in August. A federal district court found that HUD had not gone through the required public notice-and-comment process before making such significant changes and vacated the funding notice. The September 16 appeals court ruling puts that decision on hold while HUD’s appeal moves forward, finding that the agency is likely to succeed on its argument that the changes did not require that process. 

Before the appeals court acted, HUD had already published a notice in the Federal Register seeking public comment on the proposed changes, suggesting the agency was preparing to revise and reissue the funding notice in response to the lower court ruling. With that ruling now on hold, HUD may instead move ahead with the FY 2026 competition while the litigation continues. 

Comments on HUD’s proposal are due on October 13, 2026. 

CMS Releases Implementing Guidance on Medi-Cal Work Requirement Exemptions 

Last week, the Centers for Medicare and Medicaid Services (CMS) released new and highly anticipated guidance on the medical frailty exemption from the Medicaid (Medi-Cal) work requirements taking effect January 1, 2027. 

The guidance largely keeps in place CMS’s narrower definition of who qualifies as medically frail, but gives states the option to use a three-tiered review process. Under that approach, some individuals could qualify automatically based on medical records or diagnosis codes, while others would need additional information or an individual review. CMS also confirmed that states may use existing claims, pharmacy, and other health data to make these determinations, which could reduce the amount of paperwork required from beneficiaries and providers. California is not required to use the tiered approach, and it is not yet clear whether the state will do so. 

Separately, California and several other states are continuing their legal challenge to CMS’s narrower medical frailty standard. 

California Challenges New Public Charge Rule 

California and a coalition of other states have sued to block a new Department of Homeland Security rule that broadens how immigration officials can decide whether someone is likely to become a “public charge.” Santa Clara County and the City and County of San Francisco are part of a separate local government challenge. 

The rule replaces the narrower 2022 policy and gives immigration officers more discretion to consider an applicant’s use of public benefits when reviewing certain applications for admission or permanent residency. The rule and its implementing guidance do not provide a set list of programs that are excluded from consideration, meaning benefits provided through state and county-funded programs may be considered as part of an applicant’s overall circumstances. DHS says the change will give officers greater flexibility to make public charge determinations, while the lawsuits argue that it exceeds federal law and could discourage eligible families from using health, nutrition, and other public programs. 

Disaster Tax Relief Bill Signed into Law 

On September 11, President Trump signed the bipartisan Doug LaMalfa Federal Disaster Tax Relief Certainty Act (H.R. 5366) into law, extending and clarifying federal tax relief for individuals recovering from federally declared disasters, including wildfires, floods, hurricanes, and other major disasters. The legislation applies the enhanced disaster-loss rules to qualifying disasters occurring before January 1, 2027. 

Under the new law, individuals with qualifying disaster-related personal property losses can deduct losses above $500 without itemizing their deductions, and the normal requirement that losses exceed 10 percent of adjusted gross income does not apply. The legislation extends these more favorable rules, which otherwise would not have applied to disasters occurring after July 4, 2025. 

The law also provides important relief for wildfire survivors who receive settlement or compensation payments. Qualified wildfire relief payments can be excluded from taxable income as long as the wildfire was federally declared before January 1, 2027. It should be noted that the exclusion is no longer tied to when the payment is actually received, addressing situations in which settlements are not paid until years after a wildfire. 

The legislation was named in honor of the late Congressman Doug LaMalfa, who had advocated for disaster-related tax relief.