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Manatt Minute – 8.28.2026

The House is scheduled to return on Monday, August 31.

Congress:

• FY27 Appropriations: On Tuesday, September 1, the House is scheduled to vote on the Senate-passed continuing resolution (CR) under suspension of the rules, a procedure that allows for expedited passage and requires a two-thirds majority for passage.  The CR includes language that would delay the implementation of the Office of Management and Budget’s (OMB) proposed rule through December 11, 2026, and provide a clean extension of surface transportation reauthorization through the same date.
• 21st Century ROAD to Housing Implementation: On September 9, 2026, the Department of Housing and Urban Development (HUD) will notify each CDBG recipient of their housing growth improvement rate. The housing growth improvement rate is calculated as the quotient of each eligible community’s housing production trend over the last five years with its housing production trend during the prior five years. If a locality has a housing growth improvement rate at or above the median, or annual, rate of at least 4 percent, the locality would be considered an “extremely high-growth recipient” and receive bonus funding in addition to their regular allocation of CDBG funding. Conversely, recipients with a housing growth improvement rate below the median, or annual, rate for all eligible recipients other than high-growth outliers will see their allocation decreased by 10 percent.
• Coalition Urges Congress to Reject Plan to Weaken NHPA: On August 27, a coalition of more than 600 historic preservation groups, architectural associations, tribal governments, and other organizations sent a letter to Congress, urging lawmakers to reject the Advisory Council for Historic Preservation’s proposed plan to weaken Section 106 of the National Historic Preservation Act (NHPA). The coalition said that, absent congressional action to nullify the proposal, it intends to pursue litigation.
• WRDA: The House Transportation and Infrastructure (T&I) and Senate Environment and Public Works (EPW) Committees reportedly met on Thursday, August 27 to begin negotiations on a conference agreement to reconcile differences between the chambers’ respective Water Resources Development Act (WRDA) bills.
• Law Enforcement: On Monday, August 31, the House will consider the NDO Fairness Act of 2025 (H.R.6048) under suspension of the rules. The legislation would require a court to apply additional scrutiny before it could issue certain nondisclosure orders, or “gag orders,” at the request of federal, state, or local law enforcement. Such orders would be subject to time limits, require written determinations of necessity, and be contestable by the targeted service provider. While the Reform Government Surveillance coalition, whose members include Amazon, Apple, and Google, support the bill, a coalition of law enforcement groups oppose the measure, arguing it would “delay investigations, compromise sensitive cases, and ultimately harm the victims.”
• 21^st Century ROAD to Housing Implementation: On September 9, 2026, the Department of Housing and Urban Development (HUD) is scheduled to notify each CDBG recipient of their housing growth improvement rate, as mandated by the Build Now Act – the provision that will tie some localities’ CDBG funding to their rate of housing production.

Trump Administration:

• Local Governments Win Lawsuit Over Federal Grants: On August 25, the 9th Circuit Court of Appeals ruled in favor of King County and over 70 local governments in the King County v. Turner case, barring the Trump administration from requiring local governments to adopt the administration’s policy preferences on diversity, equity, and inclusion (DEI), immigration, transgender inclusivity, and abortion access to receive federal grants. The administration is expected to appeal this ruling, given that similar conditions have been incorporated across numerous federal grant programs and reflected in OMB’s proposed revisions to the Uniform Guidance.
• ED and NSF Proposed Rules on Federal Grantmaking: On August 24, the Department of Education (ED) issued a proposed rule, which would allow the Education Secretary to terminate grants “for convenience” and prioritize grant applicants who promise to charge the government lower, or zero, overhead cost rates. The proposed rule also requires states and subgrantees that receive grants to comply with the administration’s executive orders. The National Science Foundation (NSF) ended a public comment period on August 24 on a similar proposed rule, which would allow NSF to “act immediately to suspend or terminate [grants] if needed to protect government interests.” These proposed rules echo OMB’s proposed rulemaking changes to the Uniform Guidance. By advancing agency-specific rulemakings, ED and NSF are seeking to implement the OMB’s vision for their agencies, even if the OMB rule fails to take effect.
• Federal Judge Blocks HUD Fair Housing Grant Changes: On August 26, U.S. District Judge Myong Joun granted civil rights groups’ request to freeze HUD’s planned changes to the Fair Housing Initiatives Program and ordered the department to maintain the previous guidelines while litigation proceeds. HUD had planned to reallocate funding from nonprofits that carry out anti-discrimination enforcement and education toward universities, law firms, and religious liberty groups focused on religious discrimination claims.
• Tenant Rights Group Sues HUD, DHS for Immigration Data Sharing: On August 26, the tenants’ rights group National Housing Law Project filed a lawsuit against HUD and the Department of Homeland Security (DHS), seeking records related to the agencies’ coordinated immigration enforcement. The lawsuit follows HUD and DHS’ announcement that they would share information to prevent undocumented immigrants from receiving federal housing support.
• White House Plans to Announce Free Cybersecurity Services Program for Water Facilities: The White House Office of the National Cyber Director is expected to launch a program that will offer water utility providers access to free services, such as tools for scanning their networks for security vulnerabilities, to help them better protect against future attacks. The program comes as water systems across the U.S., including in Minnesota, Michigan, Georgia, and New Jersey, have experienced cyberattacks targeting both IT and operational systems.
• King County v. Turner: The 9^th Circuit Court of Appeals ruled in favor of King County and over 70 local governments in the King County v. Turner case, barring the Trump administration from requiring local governments to adopt the administration’s policy preferences on diversity, equity, and inclusion (DEI), immigration, transgender inclusivity, and abortion access to receive federal grants. This ruling applies only to the state and local governments participating in the lawsuit and only to the specific Department of Housing and Urban Development (HUD) and Department of Transportation (DOT) grant programs at issue in the lawsuit. The administration is expected to appeal this ruling, given that similar conditions have been incorporated across numerous federal grant programs and reflected in the Office of Management and Budget’s (OMB) proposed revisions to the Uniform Guidance.

Hearings and Markups:

• Sanctuary Cities: The House Judiciary Subcommittee on Immigration Integrity, Security, and Enforcement will hold a hearing on sanctuary city policies on Tuesday.
• Welfare Programs: The House Ways and Means Subcommittee on Work and Welfare will hold a hearing on reforming welfare programs on Tuesday.
• Energy: The House Oversight Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee will hold a hearing, entitled No Flame, More Pain: How State and Local Bans on Natural Gas Increase Costs, on Wednesday.
• Public Lands: The House Natural Resources Subcommittee on Federal Lands will hold a hearing on nine public lands-related pieces of legislation, including H.R.10128, which seeks to strengthen federal cooperation with communities near public lands, on Wednesday. 
• Workforce: The House Education and Workforce Subcommittee on Workforce Protections will hold a hearing, entitled Less Red Tape, More Opportunity: Unleashing American Workers and Job Creators, on Wednesday.
• Birthright Citizenship: The House Judiciary Subcommittee on the Constitution and Limited Government will hold a hearing on birthright citizenship on Wednesday.
• Water Infrastructure: The House Energy & Commerce Environment Subcommittee will hold a hearing to discuss two pieces of water infrastructure related legislation, the Safe Drinking Water Infrastructure Improvement Act of 2026 and the Water Cost Accountability Act of 2026, on Thursday.

Grant:

• DOT Releases PROTECT Grant NOFO: On August 27, the Department of Transportation’s (DOT) Federal Highway Administration (FHWA) released its Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT) Competitive Grant Program Notice of Funding Opportunity (NOFO) for fiscal years (FY) 2024 through 2026. The PROTECT program funds projects to improve the resilience of the surface transportation system, including highways, public transportation, ports, and intercity passenger rail. Applications are due by October 9, 2026.

The Week’s News:

• House Republican lawmakers consider vote on data center legislation (POLITICO)
• Federal judge issues temporary block on administration’s mail-in voting restrictions (The Hill)
• Darline Graham wins Senate primary in South Carolina (NYT)
• House returns to a crowded legislative agenda (Semafor)
• Lawmakers try to secure seats on the House Energy and Commerce Committee (POLITICO)
• U.S. and Iran exchange strikes (The Hill)