Federal Advocacy Update, Dec 1, 2025
Executive Summary: Priority Issues
This weeks update is chockfull of information below, so here is a quick summary of issues most pertinent to Special Districts:
Energy, Water, Power & Infrastructure
- AI Infrastructure Cooling (S. 3269): Bill would advance liquid cooling technologies to reduce energy strain on utilities—directly affecting power, water, and infrastructure districts that must accommodate soaring data-center demand.
- DOE Major Reorganization: Significant restructuring of offices overseeing energy efficiency, grid deployment, clean energy demonstrations, community energy programs, and manufacturing supply chains. Potential transitional impacts on:
- Energy funding programs
- Grid modernization initiatives
- Local partnerships with special districts
- Interior Order to Streamline Reclamation Projects: New authority for local water and power partners to manage parts of procurement on federal Reclamation projects—intended to speed timelines and reduce costs. Early use includes the B.F. Sisk Dam Raise project.
- Cyber & Physical Grid Security Hearing: House Energy Subcommittee reviewing threats to electric utilities and critical infrastructure—relevant for power, water, and emergency service districts.
Water, Wastewater, Flood Control & Environmental
- Draft 2026–2031 Offshore Oil & Gas Leasing Plan: Up to 34 proposed offshore lease sales may affect coastal port, harbor, water/wastewater, flood control, conservation, and air quality districts. Public comment open until Jan. 23, 2026.
- Public Lands, Forests & Mining Hearing (Senate ENR): Review of wildfire mitigation and forest health bills—important for fire protection, conservation, and water districts in wildfire-prone regions.
- Wildland Firefighter Casualty Assistance (H.R. 4671): Would create a support program for families of injured or fallen wildland firefighters—direct impact on fire districts.
Rural, Agricultural & Economic Development
- IRS Rural & Agricultural Lending Exclusion: New guidance allows lenders to exclude 25% of interest from loans secured by rural/ag real property. Could reduce borrowing costs for irrigation, water, conservation, and rural utility districts supporting agricultural communities.
Emergency Services / Public Safety
- Hearing on Violence Against Law Enforcement: Oversight review of threats to officers—relevant for public safety, law enforcement, and fire protection districts.
- Veterans Workforce Hearings: May affect districts hiring veterans for firefighting, utilities, EMS, and public works roles.
Full Update:
House and Senate Action
Congress returns from its Thanksgiving break to a packed December. Both chambers are scheduled to be in session for three weeks before lawmakers head home for the holidays.
House
This week, the House is set to consider 22 bills on the suspension calendar (which requires a two-thirds majority for passage) on a range of topics.
Of particular interest to hospital districts, the chamber will consider a measure (H.R. 4313) that would extend the current hospital-at-home (H@H) waiver program through 2030. Under the H@H model, patients receive acute level care in their homes, rather than in a hospital setting. To participate, hospitals must submit an individual waiver request to CMS.
Later in the week, the House will consider a broad package of bills to standardize college athlete NIL rules, reduce federal regulatory burdens on small businesses, and block or disclose Chinese government influence in K-12 classrooms.
The full schedule is available here.
Senate
The Senate is expected to focus primarily on nominations.
Legislation Introduced to Advance Liquid Cooling for AI Infrastructure
A bipartisan group of senators recently introduced legislation (S. 3269) aimed at improving the energy efficiency and resilience of U.S. artificial intelligence infrastructure. The proposal comes amid rapidly increasing electricity demand from data centers and seeks to promote liquid cooling technologies that reduce strain on utilities and improve overall system performance – an issue with direct implications for special districts that manage power, water, and related infrastructure.
Specifically, S. 3269 would direct the Government Accountability Office to assess research and development needs related to liquid cooling, require the Department of Energy to provide recommendations to Congress, and establish an industry advisory group to help develop best practices for federal agencies.
Draft Plan Proposes New Oil & Gas Lease Sales
The Trump administration recently released the draft 2026–2031 National Outer Continental Shelf (OCS) Oil and Gas Leasing Program, which was published in the Federal Register on November 24, 2025. The proposal would replace the 2024–2029 program and outlines up to 34 potential offshore lease sales across 21 OCS planning areas, including six areas off the Pacific coast.
Publication in the Federal Register initiates a 60-day public comment period, with comments due by January 23, 2026. The draft will undergo environmental review, stakeholder input, and further administrative revisions before any leasing decisions are finalized. The program is not expected to be completed before October 2026. It should be noted that inclusion of a planning area in the draft does not guarantee it will be included in the final program or offered for lease.
For coastal communities, the draft program could directly affect a range of special districts, including port and harbor districts, water and wastewater districts, resource conservation districts, flood control districts, air quality management districts, and others.
Maps, planning documents, and additional information are available at www.boem.gov/National-Program.
IRS Issues Guidance on New Rural and Agricultural Lending Tax Exclusion
The IRS has released guidance implementing a new tax provision that allows eligible lenders to exclude 25 percent of interest earned from loans secured by rural or agricultural real property. The incentive is intended to help reduce borrowing costs for farmers, agricultural operators, and rural communities.
The 13-page guidance defines qualifying property as real estate primarily used for producing agricultural products, fishing or seafood processing operations, or aquaculture facilities within the United States. It also outlines how lenders must determine whether a loan is properly secured by such property. For example, when a loan exceeds the market value of the property, only the portion up to the property’s market value qualifies for the exclusion.
The guidance is part of a broader set of IRS regulations expected in the coming months related to tax changes enacted earlier this year.
Department of Energy Announces Organizational Realignment
The Department of Energy (DOE) recently announced a major internal reorganization that restructures several program offices and creates new divisions focused on artificial intelligence, critical minerals, fusion energy, and emerging technologies.
According to DOE, the changes are intended to streamline agency operations and better align program functions with evolving national energy and technology priorities. As part of the realignment, several existing offices will be consolidated or eliminated, including the Office of Energy Efficiency and Renewable Energy, the Office of Fossil Energy and Carbon Management, the Grid Deployment Office, the Office of Clean Energy Demonstrations, the Office of Manufacturing and Energy Supply Chains, the Office of State and Community Energy Programs, the Federal Energy Management Program, and the Office of the Ombudsman.
The Department will establish several new offices, including the Office of Critical Minerals and Energy Innovation, the Office of Fusion, the Office of Hydrocarbons and Geothermal Energy, and the Office of Artificial Intelligence and Quantum. The Loan Programs Office will also be renamed the Office of Energy Dominance Financing.
DOE has not yet released details on how specific programs will be reassigned or whether the restructuring will affect staffing levels.
Current and former DOE officials have noted that major reorganizations can take time to implement and may create transitional challenges as offices realign responsibilities. Additional information is expected as the Department finalizes the new structure.
Interior Department Issues Order to Streamline Reclamation Infrastructure Projects
The Department of the Interior has issued Secretary’s Order 3446, establishing a new process intended to accelerate federally funded construction projects at Bureau of Reclamation facilities. The order allows eligible local water and power partners to manage portions of the procurement process on certain federal projects, with Reclamation maintaining oversight. According to the Department, the goal is to reduce administrative steps, lower project costs, and shorten delivery timelines.
Reclamation will begin applying the new approach immediately. One of the first projects to use the model will be the B.F. Sisk Dam Raise and Reservoir Expansion, conducted in partnership with the San Luis and Delta-Mendota Water Authority. The project will add approximately 130,000 acre-feet of storage to the San Luis Reservoir.
The order also directs Reclamation to review its major processes – including cost-share programs, engineering design reviews, and environmental compliance – through stakeholder engagement to identify additional efficiencies. Interior will further evaluate whether the partner-led contracting model could be applied to other bureaus.
Interior Department Releases 2026 National Park Access Modernization Plan
Interior Secretary Doug Burgum recently announced a wide-ranging modernization of national park access that will take effect on January 1, 2026. The update – developed in response to a July executive order – includes fully digital America the Beautiful passes, refreshed pass designs, expanded motorcycle access, and a revised fee structure for U.S. residents and international visitors.
Under the revised system, Annual, Military, Senior, 4th Grade, and Access passes will be available digitally through Recreation.gov. The Annual Pass will remain $80 for U.S. residents, while the nonresident price will increase to $250. Nonresident visitors without an annual pass will pay a $100 per-person surcharge at 11 of the most visited national parks (Yosemite, Yellowstone, Grand Canyon, Zion, Sequoia & Kings Canyon, Glacier, Grand Teton, Rocky Mountain, Everglades, Bryce Canyon, and Acadia). Interior reports that additional revenue from nonresident fees will support park maintenance, facility improvements, and visitor services.
All passes will feature updated artwork and will cover access for up to two motorcycles. The Department also announced eight resident-only fee-free days in 2026 tied to national observances and the nation’s semiquincentennial, while several previous fee-free days will be discontinued.
More information on digital passes and upcoming changes is available at nps.gov/planyourvisit/passes.htm or Recreation.gov.
Relevant Hearings and Markups
House Oversight
Tuesday, December 2 | 10:15 a.m. ET | The panel will consider a slate of bills, including one (H.R. 151) that would add a citizenship question to the decennial census. It also would exclude noncitizens from the apportionment base. Another bill (H.R. 143) on the docket would phase out programs that receive an annual appropriation despite an expired authorization.
House Education and Workforce
Wednesday, December 3 | 2:00 p.m. ET | The Subcommittee on Childhood, Elementary, and Secondary Education will hold a hearing on safeguarding student privacy and parental rights.
House Energy and Commerce
Tuesday, December 2 | 10:15 a.m. ET | The Subcommittee on Commerce, Manufacturing, and Trade will hold a legislative hearing on proposals to protect children and teens online.
Tuesday, December 2 | 10:30 a.m. ET | The Subcommittee on Energy will hold a hearing entitled, "Securing America's Energy Infrastructure: Addressing Cyber and Physical Threats to the Grid. The hearing will review how electric utilities and other energy entities, in coordination with the federal government, prepare and respond to cyber and physical threats to the electric grid, as well as threats to other critical energy infrastructure.
House Homeland Security
Wednesday, December 3 | 10:00 a.m. ET | The full committee will conduct an oversight hearing entitled, "When Badges Become Targets: How Anti-Law Enforcement Rhetoric Fuels Violence Against Officers."
House Natural Resources
Tuesday, December 2 | 10:15 a.m. ET | The Subcommittee on Federal Lands will hold a legislative hearing on several bills within the panel's jurisdiction, including legislation (H.R. 4671) that would establish a casualty assistance program for wildland firefighters. This program would provide support for the families of wildland firefighters who are injured, become critically ill, or are killed in the line of duty.
Wednesday, December 3 | 2:00 p.m. ET | The Subcommittee on Oversight and Investigations will hold an oversight hearing entitled, "Unleashing American Energy Dominance and Exploring New Frontiers.”
House Veterans Affairs
Tuesday, December 2 | 10:30 a.m. ET | The Subcommittee on Economic Opportunity will hold an oversight hearing on "Strengthening the Workforce of Veterans in America."
Wednesday, December 3 | 10:15 a.m. ET | The full committee will hold a legislative hearing on two proposals that would expand health care benefits for veterans.
Senate Judiciary
Wednesday, December 3 | 2:30 p.m. ET | The Subcommittee on Federal Courts hearing entitled, "Impeachment: Holding Rogue Judges Accountable."
Senate Energy and Natural Resources
Tuesday, December 2 | 3:00 p.m. ET | The Subcommittee on Public Lands, Forests, and Mining will review a series of bills focused on wildfire mitigation, forest health, and various proposals to expand federal land protections.
Senate Health, Education, Labor and Pensions
Wednesday, December 3 | 10:00 a.m. ET | The full committee hearing entitled, "Making Health Care Affordable Again: Healing a Broken System."