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NWC Members,

The Fiscal Year 2026 appropriations process is picking up speed in the House ahead of the August recess. This week, action moved forward on three bills with key implications for water infrastructure:

  • Transportation, Housing and Urban Development Appropriations Act, FY2026
    • Status: July 17, passed House Appropriations Committee, heads to House floor
    • What it funds: Department of Transportation (including infrastructure for roads, bridges, rail, transit, and maritime), Maritime Commission (FMC), Department of Housing and Urban Development (HUD), and regional development programs such as the Economic Development Administration (EDA)
    • Status: July 15, passed House subcommittee, heads to full committee
    • Funds: Environmental Protection Agency (EPA) and the Department of the Interior, including the U.S. Forest Service, Bureau of Land Management, National Park Service, U.S. Fish and Wildlife Service, and other land and resource management agencies

Why these appropriation bills matter to NWC: These appropriations bills fund the federal agencies that shape the future of America’s water resources. The Energy and Water bill supports critical Corps projects and Bureau of Reclamation initiatives that impact navigation, flood control, and water supply. The T-HUD bill funds port and maritime infrastructure through MARAD and PIDP, supporting freight mobility and economic development. The Interior bill covers EPA programs that affect permitting and environmental reviews, as well as federal land management policies that intersect with infrastructure planning and delivery. NWC tracks these bills closely to ensure our members are aware of funding levels, policy direction, and implications for project delivery.

ENERGY AND WATER DEVELOPMENT APPROPRIATIONS BILL HEADS TO HOUSE FLOOR

This week, the House Appropriations Committee approved the fiscal year 2026 Energy & Water Development and Related Agencies appropriations bill, advancing it out of committee after markup stages in both the subcommittee (July 14) and full committee (July 17). The bill provides $9.88 billion for the USACE – Civil Works and $1.89 billion for the Bureau of Reclamation and Department of the Interior. The bill, committee summary, and the accompanying committee report (which includes several provisions championed by NWC and other directives of interest to project sponsors) are now available. Please reference a July 14 NWC News Alert to learn more about what is in the bill. The bill now heads to the House floor for a vote; timing yet to be determined.

Several Key Provisions Drafted by NWC Included in Committee Report. The FY 2026 Energy and Water Development committee report includes several provisions drafted and submitted by NWC, reflecting direct input from our members and strong engagement with House Appropriations Committee staff. These directives respond to longstanding concerns raised by NWC about sponsor engagement, staffing capacity, and the delivery of water resources projects. Specifically, the Committee affirms that partnerships are foundational to the Civil Works program and that project sponsors must be meaningfully consulted when the Corps proposes changes to project delivery or policies that impose new or different expectations.

This language includes:

  • Directs the Corps to provide a briefing within 90 days of enactment on opportunities to improve collaboration with sponsors
  • Instructs the Corps to work with other federal agencies to establish best stakeholder communication practices, specifically referencing the EPA’s process under Executive Order 13132 as a model of cooperative federalism
  • Acknowledges that staffing constraints and travel restrictions have disrupted sponsor relationships and calls for steps to restore in-person engagement while also identifying where virtual options are effective
  • States clearly: “The Committee expects more, not less, collaboration with sponsors and stakeholders.”

Staffing Capacity and Safe Project Delivery. The Committee also addresses concerns – also raised directly by NWC – about the Corps’ ability to maintain safe operations and effective sponsor engagement under current staffing levels. It notes that in many cases, Corps personnel are partially or fully supported by non-federal partners, not just federal dollars.

The report directs the Corps to:

  • Deliver a briefing within 30 days of enactment on how staffing limitations are affecting project delivery
  • Outline steps being taken to ensure the Corps can operate projects safely and maintain stakeholder engagement throughout the fiscal year

Other House Committee Report Directives of Interest to NWC Members in the Energy and Water Development Appropriations Bill

  • Class 3 Cost Estimates and Authorized but Unconstructed Projects (AUBs). The Committee ties together two long-standing issues in Corps project delivery: flawed cost estimating and a growing backlog of authorized but inactive projects. The report directs the Corps to stop locking in project budgets before designs and site data reach true Class 3 maturity. It calls for the use of quantifiable metrics, regular reviews of cost and schedule risk, and deeper involvement from the Mandatory Center of Expertise.The goal is to reduce the recurring cycle of underestimated project costs that force the Corps to return to Congress for additional funding – often due to inflation and design changes that were not captured up front. At the same time, the Committee highlights that more than 120 project authorizations remain unconstructed. It instructs the Corps to inventory those projects within 180 days, update their cost estimates, and reach out to communities to determine whether a willing non-federal sponsor still exists.This combined directive addresses two major breakdown points in Corps project delivery. It pushes for more accurate cost estimating before budgets are locked in, and it requires the Corps to take a fresh look at its long list of inactive project authorizations. By contacting communities directly, the Corps may identify projects that still have local support and are worth reactivating, but only if a willing sponsor steps forward.
  • Inland Waterways Cost Share Implementation. The Committee reaffirms the 75 percent General Fund and 25 percent Inland Waterways Trust Fund cost share enacted in WRDA 2024. It notes that the President’s FY 2026 budget once again includes no construction funding for any inland waterways projects, marking the third consecutive year without such a request. The report urges the Corps to make progress using the WRDA-established cost share and to prioritize inland navigation projects accordingly.
  • Levee Safety and Stakeholder Engagement. The Committee responds to levee district concerns about changes to inspection and accreditation procedures. It instructs the Corps to work directly with levee districts when revising guidance and to consider the economic impact of those changes. It also directs the Corps to establish a Levee Owners Board comprised of non-federal sponsors, separate from the Corps’ internal Levee Safety Committee. A briefing on the board’s structure and implementation is required within 180 days. If implemented, this gives levee sponsors a formal seat at the table when future policy decisions are made, and it improves transparency and accountability to the levee community.
  • New Start Policy for FY 2026. The bill allows two new starts in the Investigations account for FY 2026. No new starts are approved in the Construction or other accounts.
  • Work Plan Transparency and Account Structure. The Committee rejects the President’s FY 2026 proposal to restructure Corps budget accounts, including the creation of separate Harbor Maintenance Trust Fund and Inland Waterways Trust Fund accounts, the reclassification of projects across business lines, and the consolidation of several program elements. It maintains the traditional account structure and provides direction on how specific activities should be funded. The Committee also directs the Corps to submit a complete Work Plan within 60 days of enactment and to include a list of all eligible items that were not funded, along with a justification for each exclusion. For any future fiscal year, if the Corps proposes structural changes to its budget, the request must include a display comparing the proposed structure to the traditional format.

TRANSPORTATION, HOUSING, AND URBAN DEVELOPMENT APPROPRIATIONS BILL PASSES HOUSE COMMITTEE

On Thursday, July 18, the House Appropriations Committee approved the FY 2026 Transportation, Housing and Urban Development, and Related Agencies (T-HUD) appropriations bill by a vote of 35–28.  Six amendments were adopted by voice vote during the markup.

The bill includes funding provisions for the Maritime Administration, the Port Infrastructure Development Program, and the Federal Maritime Commission.  Relevant numbers from the final markup bill markup are highlighted below for NWC members to review, which includes FY 2025 enacted level funding.

The bill, committee summary and committee report are available. A high-level summary is below.

FY2026 Transportation, Housing, and Urban Development Mark-Up

Total Funding: $89.9 billion (FY 2026) | ~$94.36 billion (FY 2025 Enacted)

Department of Transportation: The bill provides $22.09 billion to the Department of Transportation. Taken together with $83.285 billion in obligation limitation for highway and airport trust fund programs, the bill provides $105.078 billion in total budgetary resources to improve the safety and efficiency of our nation’s transportation system.

Why this matters to NWC members: DOT plays a broader role in supporting freight movement through investments in highways, bridges, rail, maritime, and intermodal systems. These programs help ensure that goods moving through ports and inland waterways can reach markets efficiently and reliably.

Highlights:

  • Maritime Administration (MARAD): $828 million | $ 900 million (FY 2025 Enacted)
    • Assistance to Small Shipyard Program: $30 million | $8.75 million (FY 2025 Enacted)
    • Maritime Security Program (MSP): $380 million dollars, provided the prior un-used $27 million from FY 25 appropriations are rescinded | $318 million (FY 2025 enacted)
  • Port Infrastructure Development Program (PIDP): $123 million | $50 million FY 2025 Enacted)
  • Pipeline and Hazardous Materials Safety Administration (PHMSA): $28.6 million | $31.6 million (FY 2025 Enacted)
    • Pipeline Safety Information Grants: $ 2 million
    • Emergency Response Grants: $2.5 million
    • Hazardous Materials Safety Account: $68.5 million | $74.5 million (FY 2025 Enacted)
    • Pipeline Safety Fund: $218.2 million | $218.2 million (FY 2025 Enacted)
  • Highway Trust Fund Programs: $63.36 billion
  • Federal Railroad Administration: $265 million | $267 million (FY 2025 Enacted)

Federal Maritime Commission: $40 million | $40 million (FY 2025 Enacted)

Department of Housing and Urban Development: $67.75 billion | $68.59 billion (FY 2025 Enacted)

  • Community Development Block Grant Program: $3.3 billion

 SUBCOMMITTEE MARKUP FOR FY 2026 INTERIOR, ENVIRONMENT, AND RELATED AGENCIES.

 The House subcommittee on the Interior, Environment, and Related Agencies held its subcommittee markup on Tuesday, July 15 and passed the bill out of subcommittee.  The date for the full committee mark-up has not been scheduled at this time.  The bill and subcommittee summary of the bill are available.

FY2026 Interior, Environment, and Related Agencies Mark-Up

Total Funding: $37.97 billion (FY 2026 Draft) | $38.48 billion (FY 2025 Enacted)

Notable figures from the bill:

  • Council on Environmental Quality: $4.63 million | $4.63 million (FY 2025 Enacted)
  • Environmental Protection Agency: $7.01 billion | $9.13 billion (FY 2025 Enacted)
    • State Revolving Fund Program: $1.208 billion, broken down Drinking Water State Revolving Fund: $894.7 million and Clean Water State Revolving Fund: $559.4 million
    • EPA Hazardous Substance Superfund: $282.75 million | $537.6 million (FY 2025 Enacted)
    • Water Infrastructure Finance and Innovation Act (WIFIA): $64.6 million
    • Leaking Underground Storage Tank Trust Fund: $29.885 million
  • Department of the Interior: $14.77 billion (FY 2026 Draft) | $14.81 billion (FY 2025 Enacted)
  • U.S. Fish and Wildlife Service: $1.37 billion | $1.45 billion (FY 2025 Enacted)
  • U.S. Geological Survey: $1.36 billion | $1.45 billion (FY 2025 Enacted)