While there continues to be significant activity in Washington, D.C., including legislative gridlock and Congress beginning its Independence Day recess, there are no major federal developments this week with a direct impact on special districts. House consideration of several key measures—including FY 2027 appropriations, the National Defense Authorization Act (NDAA), and the Water Resources Development Act (WRDA)—stalled amid procedural disputes, resulting in lawmakers leaving Washington until the week of July 13.

The Administration continues to advance regulatory actions, including OMB's proposed revisions to the Uniform Guidance for federal grants (comments due July 13), EPA's proposed drinking water contaminant monitoring rule, and new DOJ/DHS guidance on counter-drone authorities. NSDA continues to monitor these and other federal developments on behalf of special districts. As Congress is out of session next week, our next Washington Update will be published on July 13.

See below for the latest general overvew of inside the Beltway.

Congress:

• FY 27 Appropriations/Federal Legislation: This week, the House was expected to consider the FY 2027 National Security-State Department appropriations bill, as well as the National Defense Authorization Act (NDAA) and the Water Resources Development Act (WRDA). However, floor action and markups stalled amid the ongoing push for the SAVE America Act (H.R.7296). Fourteen Republicans voted against a procedural rule that would have started debate on the National Security-State Department appropriations and NDAA, prompting House Speaker Mike Johnson (R-LA) to send lawmakers home on Wednesday, July 1 until the week of July 13.
• Housing Package: House Speaker Mike Johnson (R-LA) formally transmitted the amended housing package to the president’s desk for signature on Monday, June 29, triggering a 10-day period for President Trump to sign or veto the housing package. If President Trump does not veto the bill, it will become law at the conclusion of the 10-day period.  

Trump Administration:

• OMB Director Testifies: On Tuesday, June 30, Office of Management and Budget (OMB) Director Russ Vought testified before the House Appropriations Financial Services and General Government Subcommittee. During the hearing, Director Vought said that community project funding (CPF) will not be subject to OMB’s proposed rule governing federal grants, and OMB will not be extending the comment period on the proposed rule. Comments are due July 13, 2026.
• EPA Proposes Sixth Unregulated Contaminant Monitoring Rule: The Environmental Protection Agency (EPA) submitted a list of chemicals it plans to test for under the Unregulated Contaminant Monitoring Rule, a mandatory testing program used to collect information about concerning chemicals in drinking water that could be harming human health. The proposed rule does not include microplastics or pharmaceuticals. Comments are due by August 31, 2026.
• DHS/DOJ Issue Counter-Drone Interim Final Rule: The Department of Justice (DOJ) and the Department of Homeland Security (DHS) issued an interim final rule, which requires only senior officials at authorized entities to approve actions against drones under an “objective, totality of the circumstances standard.” Local entities with federally approved counter-drone authorities “through mutual aid or other written arrangement” could help “small or resource-limited” bodies avoid the hassle of pursuing their own certifications by the FBI.

The Week’s News:

• House legislative priorities stall amid demands to pass the SAVE America Act (POLITICO)
• President Trump declines to renew USMCA in its current form (The Hill)
• Supreme Court releases its opinions in four cases including birthright citizenship, campaign finance (SCOTUSblog)