Dear Independent Living Community,
As advocacy efforts continue on Capitol Hill and across the federal government, the National Council on Independent Living (NCIL) is providing an essential community update regarding two critical policy developments: the status of the Federal Fiscal Year 2027 budget and a recent Notice of Proposed Rulemaking issued by the Office of Management and Budget regarding federal grant rule changes. These legislative and administrative shifts carry significant implications for Centers for Independent Living, Statewide Independent Living Councils, and the millions of individuals with disabilities who rely on federally supported independent living services nationwide.
The legislative landscape shifted notably when the United States House of Representatives voted by a decisive margin of 370 to 48 to approve a short-term Continuing Resolution. This legislative measure ensures that federal operations and programs remain funded past the end of the fiscal year, preventing immediate funding cliffs while lawmakers continue negotiations on long-term appropriations bills. Prior to the House vote, the United States Senate had overwhelmingly approved the same legislative package by a vote of 90 to 6, demonstrating rare bipartisan consensus to maintain continuity in government operations. Following passage in both chambers of Congress, the legislation was signed into law by the President, locking in federal funding structures temporarily.
What does this mean for Independent Living Program Funding and the FY2027 Budget?
The enactment of the Continuing Resolution means that federal funding for vital programs is maintained at Fiscal Year 2026 funding levels through December 11. Consequently, Congress faces a fast-approaching winter deadline to complete its work on the full-year appropriations legislation for Fiscal Year 2027. Until comprehensive appropriations bills are finalized and signed into law, federal agencies and the programs they oversee will continue to operate under this temporary budgetary bridge.
To fully understand the impact of these budgetary mechanisms on the disability community, it is necessary to examine how federal dollars flow through the Independent Living Program. Federal support for independent living is distributed through two primary appropriations line items authorized under the Rehabilitation Act, commonly known throughout the community as Part B and Part C funds. Each of these funding streams serves a distinct purpose within the national independent living network and operates under entirely different administrative grant cycles.
Part B funds are allocated directly to state governments to support, build, and expand independent living services across diverse geographic regions. Once the federal government awards these resources to state agencies, the funds are disbursed to local Centers for Independent Living and Statewide Independent Living Councils. These entities utilize the resources in strict alignment with the strategic objectives outlined in their respective State Plans for Independent Living, ensuring that regional service delivery addresses localized community needs.
In contrast, Part C funds support local, community-based, and consumer-controlled Centers for Independent Living that provide direct advocacy, peer support, systems change, and independent living skills training directly to people with disabilities. Unlike Part B funds, which pass through state governments, Part C funding is distributed via direct financial awards from the Administration for Community Living straight to the individual Centers for Independent Living.
Because Part B and Part C funding streams operate on distinct grant cycles, the newly enacted Continuing Resolution impacts the distribution and security of each funding category in uniquely different ways.
Part B Funding
The grant cycle for Part B funding is closely tied to the federal fiscal calendar, officially beginning on the first day of the fiscal year on October 1. Because the Continuing Resolution currently extends level funding only through December 11, the practical effect is that Part B funding for Fiscal Year 2027 has only been partially appropriated for the early months of the fiscal year.
If Congress is unable to pass comprehensive funding legislation or enact subsequent continuing resolutions before the December 11 expiration date, the independent living network could face funding disruptions, mirroring the uncertainty seen during previous federal budget stalemates and government shutdowns. Such interruptions create administrative hurdles and jeopardize the continuous delivery of community-based services that consumers depend on daily.
Part C Funding
Meanwhile, the grant cycle for Part C funding operates on a different schedule, with new grant awards traditionally beginning on September 30, which marks the final day of the federal fiscal year. The financial resources designated for the grant cycle commencing on September 30 originate from the preceding fiscal year’s appropriations framework. Consequently, the funds that would normally flow from the current Fiscal Year 2027 budget negotiations will not actually be awarded until September 30 of the following year.
As long as Congress ultimately enacts a full year of appropriations for the relevant budget cycle—whether through a comprehensive omnibus appropriations package or a strategic combination of continuing resolutions—Part C funding will remain stable and protected from immediate disruption.
In light of these complex administrative timelines, NCIL leadership and policy staff remain fully engaged in Washington, actively pushing federal agencies to ensure timely notices of awards for both the Part B funds secured under the Continuing Resolution and the upcoming Part C grant cycles. Preventing administrative delays is crucial to maintaining the operational stability of community-based organizations.
What does this mean for the recent Notice of Proposed Rulemaking (NPRM) issued by the Office of Management and Budget (OMB), titled Federal Grant Rule Changes?
Alongside federal budget developments, the independent living community has been closely monitoring administrative actions originating from the executive branch. Specifically, the Office of Management and Budget previously issued a significant Notice of Proposed Rulemaking titled Federal Grant Rule Changes, a policy proposal that has generated widespread discussion and concern across the nonprofit and human services sectors. For a comprehensive breakdown of the background and implications of this regulatory proposal, stakeholders can review NCIL’s previously published policy explainer on the matter.
Importantly, the newly enacted Continuing Resolution includes provisions that temporarily block the implementation of this controversial Proposed Rule. Under the terms of the CR, the Office of Management and Budget is legally prohibited from issuing or finalizing the proposed rule through the duration of the extension on December 11. Furthermore, any version of the rule that might have been finalized prior to this legislative action is legally barred from taking effect during this protected period.
This legislative delay provides a vital window of opportunity for the broader disability advocacy community. The pause allows stakeholders additional time to engage in targeted advocacy efforts, educate policymakers on the potential operational impacts of the regulatory changes, and give Congress ample opportunity to thoroughly evaluate the proposal and its consequences for federally assisted programs.
As these budgetary and regulatory matters continue to evolve, the National Council on Independent Living remains dedicated to keeping the independent living community informed and mobilized. Organizations and advocates with specific questions or seeking further details regarding these policy updates are encouraged to reach out directly to NCIL Director of Advocacy and Public Policy Jessica Podesva via email at [email protected].
