The U.S. Department of Transportation (USDOT) has released guidance for the interim final rule approved in October interpreting executive orders related to disadvantaged business enterprise (DBE) requirements for federally funded transportation projects and airport concessions.

The guidance includes expectations for when DBE plans that must be approved by USDOT and agreements for projects that have been advertised or awarded but have not yet started construction must be amended.

There are over 130 local transportation projects, planned or underway, with federal funding in Washington that may be impacted by the new guidance. If your city is among them, AWC advises you to consult your legal counsel to ensure compliance and to contact Washington State Department of Transportation Local Programs staff with questions.

Federal funding guidance continues to evolve, and the January 30, 2026, deadline for a federal budget is fast approaching. AWC’s City Action Days will include a session with the National League of Cities providing the latest updates on federal funding. For more information or to register, go to the AWC website.

Federal update: Learn about executive orders with city impacts

August 19, 2025

Washington responds to U.S. Attorney General letter on sanctuary designation

On August 19, Washington State responded to the US Attorney General’s letter regarding the state’s designation as a sanctuary jurisdiction earlier this month. Governor Ferguson’s response letter stated Washington’s policy that state officials will “not be bullied or intimidated by threats and legally baseless accusations.” The letter also affirmed that, consistent with state law, resources will not be redirected to federal immigration enforcement.

It is unclear what next steps will occur in response to the Department of Justice’s designation of sanctuary jurisdictions or what it may mean for federal funding. AWC will continue to share updates as information becomes available.

Meanwhile, on August 7, the White House released an executive order, "Improving Oversight of Federal Grantmaking, presenting a legal basis for the changes to federal grantmaking the administration has been implementing since early this year. Importantly, the new guidelines justify the administration’s authority to cancel (in full or part) grants already in process that it believes do not meet the national interest. The EO will impact active grant agreements between USDOT and state and local governments, as well as future grants.

The EO includes new considerations for discretionary awards. Federal agency staff must apply the following principles, among others, when reviewing and approving funding opportunities and awards:

• Discretionary awards must, where applicable, demonstrably advance the President’s policy priorities.
• Discretionary awards shall not be used to fund, promote, encourage, subsidize, or facilitate:
• Racial preferences or other forms of racial discrimination by the grant recipient, including activities where race or intentional proxies for race will be used as a selection criterion for employment or program participation;
• Denial by the grant recipient of the sex binary in humans or the notion that sex is a chosen or mutable characteristic;
• Illegal immigration; or
• Any other initiatives that compromise public safety or promote anti-American values.

Furthermore, the EO allows “termination for convenience, including when the award no longer advances agency priorities or the national interest." It also authorizes partial termination if the agency "determines that the remaining portion of the Federal award will not accomplish the purposes for which the Federal award was made."

With uncertainty still hanging over federal funding, we encourage local leaders to:

• Review your projects or programs that are fully or partially funded with federal dollars. Ensure that the contact information for your community is up to date with the awarding federal agency so you can receive timely communication from them.
• Communicate the impacts of potential federal funding cuts with your Congressional delegation. This information is critical as they advocate for your communities.
• Carefully review federal funding opportunities before applying. If you are unsure if your city or town complies with the terms and conditions of the programs, please consult your legal counsel.

If your community is impacted by cuts to a federal program, please contact AWC.

This article is not legal advice. Cities and towns should work with their legal counsel to address concerns.

New guidance interpreting executive orders released

August 13, 2025

Two new memos from the Department of Justice (DOJ) with guidance for federal agencies interpreting executive orders were released recently.  

On July 29, DOJ provided guidance for recipients of federal funding to federal agencies interpreting the executive order related to diversity, equity, and inclusion programs for funding decisions. The guidance gives a clearer view into what practices the Administration considers problematic – including certain hiring, training, and employment practices – as it evaluates federal funding for local governments and other entities. The memo provides the legal framework the federal government is using to evaluate compliance and includes examples of unlawful practices. The DOJ guidance also includes examples of what DOJ has identified as best practices as non-binding suggestions to help entities comply with federal antidiscrimination laws.

The second is a DOJ press release on August 5, with information related to the administration’s definition and interpretation of sanctuary jurisdictions in response to the April 28 executive order. Unlike the Department of Homeland Security guidance released and then revoked in May, the list is shorter and only two Washington jurisdictions are listed: the State of Washington and Seattle.

Overall the DOJ list includes 13 states, 4 counties, and 19 cities that have enacted policies or regulations that DOJ has determined hinder federal immigration enforcement. The DOJ's criteria for identifying sanctuary jurisdictions include the following:

1. Public declarations: Jurisdictions that publicly declare themselves as sanctuary areas or equivalent, intending to undermine federal immigration enforcement.
2. Laws, ordinances, executive directives: Jurisdictions with laws, ordinances, regulations, resolutions, policies, or other formalized practices that obstruct or limit cooperation with U.S. Immigration and Customs Enforcement (ICE).
3. Restrictions on information sharing: Jurisdictions that limit how local agencies share information about immigration status with federal authorities.
4. Funding restrictions: Jurisdictions that prohibit the use of local funds or resources for federal immigration enforcement.
5. Non-cooperation with federal immigration enforcement: Jurisdictions that train city employees and law enforcement on enforcing sanctuary policies and decline to respond to ICE requests for information.
6. Limits on ICE detainers: Jurisdictions that refuse to honor ICE detainer requests unless there is a warrant signed by a judge.
7. Jail access restrictions: Jurisdictions that restrict ICE agents' access to detainees absent detainee consent.
8. Immigrant community affairs offices: Jurisdictions that create dedicated offices to engage and advise illegal immigrant communities on evading federal law enforcement.
9. Federal benefit programs: Jurisdictions that provide illegal immigrants with access to federal benefits, circumventing laws prohibiting such assistance.

The impact of this DOJ guidance on federal funding decisions is unclear at this time, but federal agencies are likely to use it as agencies moves forward with future funding and enforcement decisions for states and local governments.

This article is not legal advice. Cities and towns should work with their legal counsel to address concerns.

New executive order enforcing federal immigration law

April 29, 2025

On Monday, April 28, Pres. Trump signed an executive order reiterating the federal government's role in enforcing immigration law and detailing penalties to state and local jurisdictions labeled as being in violation of federal immigration and criminal law.

Two parts of the executive order are of most consequence to local governments:

1. The order establishes the process that the federal government will use to designate ‘sanctuary’ jurisdictions. Under the order, the Attorney General and the Secretary of Homeland Security have 30 days to publish a list of states and local jurisdictions that obstruct federal immigration laws. The list will be updated as deemed necessary. After the list is published or updated, both agencies will be required to notify the governments added to the list.
2. The order also details the penalties that will be levied on governments labeled as ‘sanctuary’ jurisdictions by the federal government. Once a government has been labeled as a ‘sanctuary’ jurisdiction, the head of each federal executive agency in coordination with the Director of the Office of Management and Budget will identify federal contracts and grants for suspension or termination. In addition, governments on the list of ‘sanctuary’ jurisdictions who remain in violation of this executive order will be subject to legal action from the federal government.

The White House published a fact sheet on the executive order that can be viewed here.

AWC will update this article as more information becomes available.

Understanding the impacts of federal directives on local funding

April 28, 2025

The last several weeks have caused concern and confusion regarding the impacts of recently published federal guidelines on Washington communities. This article provides a current snapshot of where things stand, but the status is evolving in response to legal challenges, agency review and clarifications, and Congressional funding decisions.

This article is not legal advice. Cities and towns should work with their legal counsel to address concerns.

Recent communications from federal agencies

AWC is aware of several federal agencies and programs that have issued agency-wide directives or program-specific directives. These include:

FEMA Building Resilient Infrastructure and Communities (BRIC) Funding: On April 16, FEMA issued an advisory that the agency would officially end the Building Resilient Infrastructure and Communities (BRIC) Program. In a previous communication, the agency stated that the BRIC Program was not consistent with executive orders issued by the current administration. In Washington, nine cities with nearly $100 million in federal funding were impacted by the announcement.

Department of Justice (DOJ): On April 22, DOJ sent award termination notices to awardees of Office of Justice grant funding. In total, the DOJ terminated $811 million in federal funding. It is unclear how many Washington communities are impacted; however, the cuts hit a wide variety of programs, including those focused on community courts, violence prevention, mental health, substance use, and hate crimes.

Department of Transportation (DOT): On April 24, DOT sent a notice to all recipients of DOT funding. The letter reiterated the expectation that grant recipients comply with the administration’s DEI and immigration priorities for DOT funding.

Department of Homeland Security (DHS): On April 18, DHS published updated terms and conditions for grants, cooperative agreements, and other awards issued by the agency. Similar to those of the DOT notice, the terms and conditions require that recipients comply with the administration’s DEI and immigration priorities and future executive orders.

The Keep Washington Working Act (KWWA) – Impact of state law

The Washington Legislature passed the KWWA in 2019 with bipartisan support. The Act made numerous changes to state law for the purpose of “ensuring the state of Washington remains a place where the rights and dignity of all residents are maintained and protected in order to keep Washington working.” Among those changes, the KWWA restricts the extent of local law enforcement agencies’ enforcement of federal immigration laws.

One provision of the KWWA limits information local governments can share with federal immigration authorities. At the same time, the KWWA requires that local law enforcement adhere to both state and federal law.

The Attorney General’s Office made the following statement regarding information sharing between local law enforcement and federal immigration authorities:

Under [the KWWA], local [law enforcement agencies] must comply with federal law, including the provisions set forth in 8 U.S.C. § 1373. That statute prohibits state and local governments from placing restrictions on the ability of governmental agencies to share ‘information regarding citizenship or immigration status’ with federal immigration authorities. As many federal courts have held, this federal law applies only to information regarding ‘citizenship or immigration status,’ and does not prevent state and local government from implementing restrictions on sharing other types of information with federal immigration authorities, such as a person’s release date, hearing date, or home address. [The KWWA] defines ‘immigration or citizenship status’ as a person’s established status under federal immigration law. While state and local government agencies, including local [law enforcement agencies], may not prohibit officers from sharing this information, 8 U.S.C. § 1373 also does not require local officials to share citizenship or immigration status with federal immigration authorities. Thus, local [law enforcement agencies] do not violate federal law if they decline to share information beyond immigration and citizenship status to federal immigration authorities absent a judicial warrant or subpoena.

Additional guidance on the KWWA can be found in the Keep Washington Working Guidance.

Does the KWWA impact a community’s ability to apply for and receive federal funding? The answer appears to be “no.” Per the Attorney General’s Office, the KWWA complies with current federal law. However, cities and towns should consult with their legal counsel to determine if the terms and conditions of grant opportunities contain requirements that the KWWA prohibits.

Federal funding and DEI programs

Both the letter from DOT and the terms and conditions published by DHS include provisions related to hiring practices, boycotts, and aiding undocumented individuals.

Cities and towns with existing federal funds or looking to apply for federal funds should review their current hiring practices and DEI programs with legal counsel to determine their applicability to terms and conditions of those federal programs and compliance with current caselaw. Because federal law has not changed, policies that previously complied with recent cases likely comply with these directives.

Recent court ruling

On Thursday, April 24, a federal judge in California barred the current administration from denying or conditioning the use of federal funds to “sanctuary jurisdictions.” The ruling impacts two executive orders directing federal agencies to withhold federal money from sanctuary jurisdictions.

Currently, there is no federal definition for the terms “sanctuary policy” or “sanctuary jurisdiction.” However, these terms are generally used to describe policies or jurisdictions that limit assistance to federal immigration authorities.

Next steps

With uncertainty hanging over federal funding, there are several things local leaders can do to keep up with the rapidly evolving environment:

• Review your projects or programs that are fully or partially funded with federal dollars. Ensure that the contact information for your community is up to date with the awarding federal agency so you can receive timely communication from them.
• Communicate the impacts of potential federal funding cuts with your Congressional delegation. This information is critical as they advocate for your communities.
• Carefully review federal funding opportunities before applying. If you are unsure if your city or town complies with the terms and conditions of the programs, please consult your legal counsel.

Remember: steady, measured, and consistent leadership is essential during times of uncertainty. Good advice we recently heard: “Be the barge” in navigating these issues.

If your community is impacted by cuts to a federal program, please contact AWC.