2026 Legislative And Regulatory Outlook

As the new legislative year approaches, organizations and stakeholders face a rapidly evolving policy landscape shaped by congressional priorities and executive branch initiatives. It's important to note that the U.S. Congress is expected to focus on Budget Reconciliation 2.0, Surface Transportation Reauthorization, annual appropriations and other matters in 2026.

This Holland & Knight alert offers a concise, sector-by-sector overview of the major legislative actions, regulatory developments and emerging trends expected to define the coming year. From health policy reform and appropriations battles to energy, agriculture, transportation, technology, education and trade, the outlook highlights the critical issues and potential changes that may impact businesses, public entities and communities. This analysis is designed to help clients anticipate challenges, identify opportunities and prepare for the shifting dynamics in Washington, D.C., and beyond.

• Health Policy Legislative Action
• Health Policy Regulatory Action
• Agriculture and Food
• Energy
• Environment
• Local Government
• Native American Law
• Emerging Technology
• Education
• Congressional Investigations
• Tax
• National Security and Defense
• International Trade
• Transportation
• Maritime
• Federal Communications Commission (FCC)

Health Policy Legislative Action

Health Reform 3.0

If Obamacare was health reform 1.0 and the Republican effort to repeal and replace it was an attempted health reform 2.0, there could be a major discussion around health reform 3.0. With Affordable Care Act (ACA) enhanced premium subsidies set to expire and Medicaid work requirements and income-verification measures taking effect, millions could lose coverage or face higher out-of-pocket costs. Democrats will have their vote in the U.S. Senate on extending the ACA-enhanced subsidies. It is unclear whether Republicans will offer an alternative or simply let them expire. There does not appear to be sufficient Republican support for continuing the subsidies as currently constructed.

Healthcare has risen to be one of the top issues of voter concern, particularly lack of affordability and access to care. Rural and safety-net hospitals, already under financial pressure, are bracing for an uptick in uncompensated care and potential service-line reductions. There does appear to be recognition from some Republicans and President Donald Trump that healthcare affordability and access are now major issues that must be addressed. It is anticipated that the Republican policy approach will be to empower consumers and direct subsidies to low-income individuals through health savings accounts (HSAs) or flexible spending accounts (FSAs). Whether that will come in the form of a debate about health reform during the election year or actual movement of health legislation (such as through a second reconciliation bill) is unclear.

Appropriations

The Labor-U.S. Department of Health and Human Services (HHS) appropriations legislation has not been completed for federal fiscal year (FY) 2026. It may be included in other smaller minibus bills or be included in the final omnibus legislation expected before Jan. 30, 2026, when the current continuing resolution (CR) expires. There is no guarantee of a final omnibus package, but it appears as of this writing to be more probable than not that Congress will seek to avoid another shutdown. Labor-HHS is always a tricky bill to pass, with cultural issues that garner political division.

FDA User Fee Program Reauthorization

Key U.S. Food and Drug Administration (FDA) user fee programs covering reviews for prescription drugs, biologics, medical devices, biosimilars and generic drugs are set to expire on Sept. 30, 2027, generally following a five-year reauthorization schedule. Congress must reauthorize the user fee programs, or FDA will lose its legal authority to collect user fees that are used to sustain key FDA employees and regulatory programs. That makes reauthorizing these key FDA user fee programs "must pass" legislation. The reauthorization process will start in 2026 to ensure that the legislation is completed in adequate time to meet the reauthorization's September 2027 deadline.

Typically, this process begins with direct negotiations between the FDA and regulated industries to establish and agree to user fee amounts and the agency's corresponding performance goals. That agreement governs the user fee amounts paid by product applicants and "performance goals" agreed to by FDA. FDA's budget relies on user fees to support product review. The agreement is published for comment in the Federal Register. In addition to providing transparency on key issues, this provides an opportunity for stakeholders to provide input. In addition, FDA often holds public meetings that coincide with the publication.

Over-the-Counter User Fee Act Implementation Oversight

Congress reauthorized the Over-the-Counter User Fee Act (OMUFA) in the legislation that reopened the government following the longest government shutdown in history. Congressional oversight activities are anticipated in 2027 to ensure that the FDA rapidly implements the reforms included in OMUFA. Congress is likely to schedule a hearing on OMUFA implementation and engage with FDA on congressional priorities from the legislation.

In particular, Congress passed legislation reforming the process for approval of sunscreen ingredients. As a result of the legislation, FDA is charged with promulgating new guidance within a year regarding how sunscreen active ingredients sponsors can use nonclinical testing alternatives to animal testing to meet safety and efficacy standards for topicals. The last time the FDA approved a new over-the-counter sunscreen active ingredient was 1999.

FDA and the Nation's Food Supply

As part of the FDA's initiative to Make America Healthy Again (MAHA), the agency announced a series of new measures to phase out all petroleum-based synthetic dyes from the nation's food supply, including:

• establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives
• initiating the process to revoke authorization for two synthetic food colorings – Citrus Red No. 2 and Orange B – within the coming months
• working with industry to eliminate six remaining synthetic dyes – FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1 and FD&C Blue No. 2 – from the food supply by the end of 2026
• authorizing four new natural color additives in the coming weeks and accelerating the review and approval of others
• partnering with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children's health and development
• requesting food companies to remove FD&C Red No. 3 sooner than the 2027-2028 deadline previously required

Additional Congressional FDA Reforms

Congress generally uses the reauthorization bill to address FDA-related regulatory concerns. Thus, these bills are typically the primary legislative vehicle for Congress to enact broader changes to FDA rules governing review and evaluation, distribution and marketing of products.

Under the auspices of the reauthorization debate next year, Congress is expected to consider a range of policies governing:

• regulation of artificial intelligence (AI) in medical products and other digital health technologies, including the use of software as a medical device
• changes to streamline the review process to ensure safe products reach patients sooner
• changes to rules governing importation of active pharmaceutical ingredients and other materials, particularly from China
• how to ensure the U.S. domestic manufacturing capability can keep pace with China
• issues relating to FDA rules governing cell and gene therapy
• FDA rules governing how to stimulate development of products for rare diseases
• drug compounding issues

Health Policy Regulatory Action

FDA Actions

FDA regularly sets forth regulatory expectations through published guidance and reinforces compliance through enforcement actions. In 2025, FDA issued a number of these actions, and it is likely FDA will continue its current trend. These actions include:

• warning letters, untitled letters and consent decrees to drug companies to remove "misleading ads," including issuances to telehealth and compounding companies
• defining ultra-processed foods and the continued MAHA initiative aimed at tackling diet-related chronic disease
• heightened enforcement on contamination prevention, rapid recalls and supply chain transparency
• the FDA Commissioner's National Priority Voucher pilot program

Vaccine Policy in Flux

Few issues reveal the current fault lines more clearly than vaccine policy. The Trump Administration's recent removal of Centers for Disease Control and Prevention (CDC) leadership and a wave of high-level resignations have raised concerns about the nation's ability to coordinate consistent guidance. In response, several West Coast states formed the West Coast Health Alliance to preserve science-based immunization recommendations. These parallel frameworks – federal versus regional – signal a new era of decentralized public health, where providers and payors must navigate differing vaccine schedules, reporting requirements and reimbursement standards. For manufacturers, patchwork introduces operational complexity as global outbreaks demand cohesion.

MAHA Strategy and Chronic Disease Management

The Trump Administration's MAHA strategy represents an ambitious pivot toward chronic disease prevention. The plan emphasizes early detection and longitudinal management of heart disease, diabetes and mental health conditions, coupled with digital tools and data-driven quality metrics, yet its success will hinge on a workforce already stretched thin. Policies restricting reproductive and gender-affirming care have accelerated clinician migration from certain states, creating "health professional deserts" that undermine the very access gains MAHA seeks to achieve. In 2026, the policy conversation will increasingly center on how to deploy technology, AI capabilities, remote monitoring, telehealth supervision and digital therapeutics to fill those gaps without widening disparities.

Restructuring at HHS: Promise and Peril

A more integrated architecture may speed data sharing and crisis response, but frequent leadership turnover and blurred lines of authority also risk slowing implementation. Public health departments and provider systems will need to track not only policy changes but also who within the HHS holds the pen on guidance, grants and enforcement.

Pricing Reforms with Public Health Ripples

The Inflation Reduction Act's (IRA) negotiation provisions are entering their second phase, and their effects are beginning to cascade across markets. The Centers for Medicare & Medicaid Services (CMS) will soon publish negotiated prices for the next cohort of drugs – many targeting chronic diseases at the heart of prevention efforts. These changes, combined with the forthcoming 340B rebate model and a new wave of most-favored-nation pricing proposals, could reshape formularies and access for low-income and safety-net populations. The interplay between negotiated Medicare prices and commercial average sales price benchmarks will remain one of the most consequential – and least predictable – policy experiments of 2026.

Agriculture and Food

Farm Bill

Though the Farm Bill was extended through FY 2026, several titles have not been updated since 2018. The U.S. House of Representatives Committee on Agriculture chair has reiterated his commitment to pass a Farm Bil 2.0 this year, but with midterms looming, the window is closing – the first quarter of 2026 is the last opportunity for any Farm Bill 2.0 legislation to advance. While tax legislation addressed crop insurance, reference prices and nutrition assistance, other titles – including those for the Conservation Reserve Program, specialty crops insurance and hemp production – are outdated. There is also bipartisan support for precision agriculture initiatives, although funding remains a concern. The Farm Bill is the acknowledged vehicle for a national standard for livestock production, in response to California Prop 12, so a Prop 12 fix is unlikely unless momentum builds quickly for a Farm Bill 2.0.

Cryptocurrency

The Senate Committee on Agriculture in November 2025 released a discussion draft of its cryptocurrency legislation, which builds on legislation passed in the House (the CLARITY Act, H.R.3633). A markup date is likely in early 2026, and the expectation is that the Agriculture Committee language will be conferenced with language advancing in the Senate Committee on Banking, which is set to be marked up in December 2025.

Nutrition

The coming year will be pivotal for U.S. nutrition standards, with 1) updates to the Dietary Guidelines for Americans (DGA) expected late this year or in early 2026, 2) a definition of ultra-processed foods, 3) potential regulation of seed oils in the marketplace and 4) potential changes to country of origin labeling for meats. The DGA, which is informed by the MAHA Commission report and recommendations and influenced by HHS Secretary Robert F. Kennedy's pronouncements on American nutrition, will determine eligibility for many foods in federal nutrition assistance and school lunch programs. U.S. Department of Agriculture (USDA) Secretary Brooke Rollins is expected to continue approving waiver requests submitted by states, allowing them to modify the nutrition assistance programs they administer.

Farm Labor Bill

House Agriculture Committee Chair Glenn "GT" Thompson (R-Pa.) expressed his intent to release draft legislation that essentially codifies a working group report with recommendations for changes to farm labor regulations, including updates to the H-2A visa – specifically, the creation of a year-round visa under the program. There is bipartisan support for such changes in the House. Action from the Senate will come after House passage. Clients and stakeholders should be ready to weigh in with concerns and express support for this legislation, as appropriate, to ensure meaningful farm labor reform is enacted in the coming months. The Trump 'Administration's changes to federal wage guidelines for seasonal agricultural workers under the H-2A program will also require attention from agriculture and food stakeholders. These guidelines already face legal challenges from groups representing farm laborers.

Tariffs

Agriculture and food stakeholders continue to face retaliation from trading partners in response to Trump Administration tariffs. Animal and plant agriculture producers are eagerly awaiting details of bilateral frameworks that should reduce tariffs for U.S. exports. The U.S. Supreme Court ruling on the president's authority to levy tariffs under the International Emergency Economic Powers Act (IEEPA) is expected later this year or in early 2026. The Supreme Court is likely to limit the president's authority under IEEPA, but the Trump Administration is already preparing other tariff measures to replace any IEEPA tariffs that must be withdrawn. U.S. agriculture and food stakeholders will be watching this decision and other Trump Administration tariff measures closely.

Appropriations

With prospects dimming for a Farm Bill 2.0 this Congress, the FY 2027 appropriations process is the likely next best opportunity for many agriculture and food stakeholders to advance report language and/or funding for key priorities. Legislators' appropriations request windows will open in the first quarter of 2026 for the FY 2027 budget year. Stakeholders should prepare to submit their requests and meet with key legislative and committee officials to line up support for these priorities quickly in the New Year.

Federal Workforce

Cuts to the USDA workforce (20 percent) and the prolonged federal government shutdown severely impacted USDA's ability to provide services related to loans and disaster assistance, conservation programs, animal inspections and rural development. As 2026 approaches, agriculture and food stakeholders will need to ensure legislators prioritize USDA finding for critical programs and ensure, as much as possible, that there is no funding lapse during the remainder of FY 2026, which runs through Sept. 30, 2026.

Energy

Energy and Water (E&W) Appropriations

• Bringing FY 2026 to a Close: Given House passage of the E&W bill in September 2025 and the recent posting of the Senate E&W bill, the final FY 2026 E&W bill is being closely watched, which could hopefully be part of a January 2026 package. The future of funding for several key U.S. Department of Energy (DOE) offices – such as the Office of Clean Energy Demonstrations (OCED) and Loan Programs Office (LPO) – is at stake under the FY 2026 E&W appropriations process.
• Kicking Off FY 2027: House Committee on Appropriations Chair Tom Cole (R-Okla.) has signaled that anything that does not make it into the January appropriations package for FY 2026 will likely need to be a full-year continuing resolution, because he is eager to begin looking to FY 2027 appropriations. The Trump Administration has a year under its belt, including announcing the reorganization of the DOE, and the Energy Dominance agenda is expected to be reflected in future appropriations.

Permitting Reform

The House is expected to pass three permitting bills before the end of 2025 to tee up action in the Senate next year:

• The Standardizing Permitting and Expediting Economic Development (SPEED) Act (H.R.4776) streamlines National Environmental Policy Act (NEPA) reviews by clarifying the scope and timing of judicial challenges to federal agencies' environmental reviews.
• The Promoting Efficient Review for Modern Infrastructure Today (PERMIT) Act (H.R.3898) limits states' authority under Section 401 of the Clean Water Act to block infrastructure projects.
• The Improving Interagency Coordination for Pipeline Reviews Act (H.R.3668) expands 'the Federal Energy Regulatory Commission's (FERC) role in permitting reviews for natural gas pipelines.

Congress has been close to passing permitting reform legislation in the past. Once the House passes these bills, all eyes will be on the Senate – and particularly on the Senate Committee on Energy and Natural Resources – to take action.

DOE in 2026

• Grant Terminations: DOE's detailed review of all grant projects issued under the Biden Administration will continue in the coming year. For grantees, possible outcomes of the review process include 1) approval to move forward with the grant as planned, 2) approval to proceed with a revised project that aligns with Trump Administration energy priorities or 3) termination.
• New Grant Funding: Building on numerous requests for information issued in the second half of 2025, DOE is expected to issue significant grant funding that remains from the Infrastructure Investment and Jobs Act (IIJA) for critical minerals and materials and grid infrastructure to support data center development.
• Office of Energy Dominance Financing (EDF): DOE LPO has been officially renamed and rebranded to support financing of American energy and manufacturing projects that "meaningfully contribute to the U.S. energy security, grid reliability, and lowering costs for all Americans." The program has more than $200 billion to provide low-cost financing to a broad array of energy projects, with a focus on nuclear energy and other baseload energy solutions that will help win the AI race and restore American energy dominance.

FERC

• FERC will take up a rulemaking proposal from the Energy secretary aimed at accelerating the interconnection of large loads (e.g., data centers) to the electric grid. To date, FERC has received comments on an advanced notice of proposed rulemaking (RM26-4) regarding the Energy secretary's proposal and likely will issue a formal notice of proposed rulemaking in the near future that should spark substantive and jurisdictional debates well into 2026.
• FERC will examine whether – and if so, how – to revise its regulations to establish streamlined procedures for authorizing activities at liquefied natural gas plants without case-specific authorization orders under Section 3 or Section 7 of the Natural Gas Act. The commission has issued an initial notice of inquiry (RM26-2-000) that seeks information and stakeholder perspectives on these potential regulatory streamlining efforts.
• FERC will establish the five-year oil pipeline price index for the period July 1, 2026, through June 30, 2031. FERC has initiated a rulemaking (RM26-6) that proposes using the Producer Price Index for Finished Goods (PPI-FG) minus 1.42 percent (PPI-FG – 1.42 percent) as the new index level.

Nuclear Energy

The U.S. is placing renewed emphasis on nuclear power as a cornerstone of its energy security policy. Recent landmark legislation (2021-2024) and executive actions have unleashed billions in funding and incentives for nuclear energy. Federal policies now include production and investment tax credits for nuclear plants, research and development funding for advanced reactors, streamlined licensing processes and programs to sustain the existing reactor fleet.

In May 2025, Executive Order (EO) 14300 accelerated this push – from modernizing the Nuclear Regulatory Commission (NRC) to jumpstarting reactor construction and fuel supply infrastructure. The NRC is expected to release its rulemaking on these modernization reforms in the first quarter of 2026. Major items expected in the rulemaking include:

• fixed deadlines for licensing decisions
• streamlined licensing to avoid duplication of efforts for reactors previously approved by DOE
• revisions to the NRC's NEPA regulations to comply with the 2023 amendments to NEPA
• changes to radiation safety standards

Fuels

• Renewable Fuel Standard (RFS) blending mandates for 2026 and 2027 are expected from the U.S. Environmental Protection Agency (EPA) in early 2026, with issues to watch being topline numbers, potential Renewable Identification Numbers (RIN) reduction for foreign renewable fuel or feedstocks, and removal of eligibility of renewable electricity "(eRINs") from the program.
• Long-awaited guidance from the U.S. Department of the Treasury on implementation of the Section 45Z Clean Fuels Credit could be released before year's end; industry has lobbied hard on treatment of qualified fuel sales through third-party intermediaries and accompanying guidance from the USDA on treatment and scoring of climate-smart agriculture practices.
• The drive for year-round E15 fuel is once again heating up, with proponents lobbying the White House to push EPA for a pathway while also attempting to tack legislative language onto year-end must-pass legislation, including the National Defense Authorization Act – or, potentially, an omnibus negotiated in January 2026.

Environment

Endangered Species Act (ESA)

A comprehensive overhaul of ESA regulations is expected, including a narrower definition of "take" (excluding habitat modification) and changes to the process for determining endangered species status. Many revisions would restore Trump-era rules previously rescinded by the Biden Administration.

The SPEED Act

The Standardizing Permitting and Expediting Economic Development (SPEED) Act (H.R.4776) – bipartisan legislation to reform NEPA – is expected to advance in 2026. Key provisions include streamlining environmental reviews, clarifying what constitutes a "major federal action" and imposing a 150-day limit on legal challenges. These changes aim to accelerate permitting for infrastructure and energy projects, reducing delays and litigation risk.

EPA Regulatory Actions

Several major EPA actions are anticipated in 2026, including:

• Endangerment Finding. Reconsideration of the 2009 finding and related regulations
• Vehicle Standards. Review of light-, medium- and heavy-duty vehicle emissions rules
• Power Plant Regulations. Potential revisions to rules under Clean Power Plan 2.0
• Methane Standards. Reconsideration of oil and gas industry requirements (Subparts OOOO b/c)
• Greenhouse Gas Reporting Program. Possible changes to mandatory reporting requirements that impose significant costs on energy producers
• Waters of the United States (WOTUS) Rule. Further review of the WOTUS definition.
• Chemical Accident Protection. Reconsideration of the Risk Management Program (RMP) requirements related to cross-agency coordination in the chemical transportation industry

Toxic Substances Control Act (TSCA) Fees Reauthorization

The Lautenberg Chemical Safety Act's fee authority expires after 10 years. Both chambers are working on legislation to extend this authority, with discussions on substantive improvements and clarifications to current law.

Per- and Polyfluoroalkyl Substances (PFAS)

PFAS will remain a high-profile issue. Though comprehensive legislation is unlikely, provisions could appear in must-pass bills such as the National Defense Authorization Act (NDAA) or appropriations measures. Following EPA's designation of two PFAS chemicals as hazardous under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), expect continued debate over liability and potential exemptions for "passive receivers."

Local Government

State Revolving Fund (SRF) and Water Infrastructure Finance and Innovation Act (WIFIA) Reauthorization

Both the Senate Committee on Environment and Public Works (EPW) and House Committee on Transportation and Infrastructure (T&I) held hearings in 2025 on ways to strengthen federal water infrastructure investments. Several estimates indicate that hundreds of billions of dollars are required to repair and replace clean water and wastewater infrastructure over the next several decades.

The Clean Water SRF and WIFIA programs provide financing for water and wastewater projects. The Clean Water SRF has provided $172 billion through almost 50,000 low-interest loans to communities, mainly for wastewater infrastructure facilities and upgrades. For 40 years, the CWSRF program has been a successful partnership between the federal government and states, where states manage the process and select projects to receive SRF financing. The newer EPA WIFIA program and U.S. Army Corps Water Infrastructure Financing Program (CWIFP) were authorized in 2014 and are instead administered on the federal level. Both programs are important tools needed to maintain affordable interest rates and provide principal forgiveness and funding to many communities that could not afford to pay for large projects, which directly impact household water affordability.

The Senate EPW and House T&I Committees are expected to begin drafting reauthorization bill for these programs early in 2026. The last rounds of SRF funding from the previous authorization in the Bipartisan Infrastructure Law will be next year. Communities should continue to participate in this reauthorization process and stay apprised of potential changes to both programs.

FEMA Reform

In 2026, congressional leaders will attempt to move the Fixing Emergency Management for Americans Act of 2025 (H.R.4669). This bipartisan legislation was introduced by House T&I Committee Chair Sam Graves (R-Mo.), Ranking Member Rick Larsen (D-Wash.), former Subcommittee on Railroads, Pipelines, and Hazardous Materials Chair Daniel Webster (R-Fla.) and Subcommittee on Economic Development, Public Buildings and Emergency Management Ranking Member Greg Stanton (D-Ariz.). H.R.4669 represents a major overhaul to federal disaster management law. It would reorganize the Federal Emergency Management Agency (FEMA), modernize disaster assistance programs and change how aid is delivered to communities by in part directing states to take a more active role in disaster preparedness, recovery and insurance costs. On a parallel track, the Trump Administration is also attempting to reform FEMA in an effort led by the FEMA Review Council, under U.S. Department of Homeland Security (DHS) Secretary Kristi Noem and U.S. Department of War (DOW) Secretary Pete Hegseth. According to a Nov. 26, 2025, notice published in the Federal Register, the FEMA Review Council will present their draft final report on Dec. 11, 2025. In 2026, local governments will need to prepare for potential changes in disaster response that will affect how quickly funding arrives and how residents access support.

Tariffs

In 2025, President Trump instituted an aggressive new tariff regime on nearly every country in the world. From a local government perspective, this has the potential to create both indirect and direct fiscal impacts. Indirectly, local governments are heavily dependent on sales tax, income tax and property tax revenue. Historically, when the cost of consumer goods increases, it causes pressure on household incomes, which can decrease consumer and home improvement spending and, therefore, negatively impact sales and property tax revenue. Directly, tariffs increase operating expenses for governments. Construction and equipment will cost more, therefore driving up the cost of local capital projects, which can upend long-term capital improvement plans.

The impact of tariffs comes at the same time as additional restrictions on federal funding generally to local governments under the new administration. Congress is currently considering legislation that would curtail a president's ability to use national emergencies as a justification for impose tariffs. Additionally, the Supreme Court could issue tariff-related decisions in the current term on the validity of tariffs imposed using the IEEPA as a justification. During 2026, local governments should continue to monitor the evolving tariff landscape to forecast the short-term and long-term impacts to budgets.

Native American Law

A number of so-called "prediction markets" are offering online sports wagering – even in states where gambling is illegal – by rebranding "sports betting" as "event contracts" and claiming oversight by the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act (CEA), thereby bypassing state, local and tribal laws. The CFTC allows companies to self-certify compliance and has not independently reviewed these contracts, despite clear prohibitions in the CEA and CFTC regulations against offering futures contracts that would make gaming contracts unlawful under federal or state law.

This regulatory gap has triggered at least 21 court cases and united a broad coalition of stakeholders – including 36 bipartisan attorneys general, Tribes, commercial gaming operators and responsible gambling organizations – calling for action.

There is likely to be a concerted effort among these stakeholders to urge Congress to amend the CEA to prohibit sporting events and casino-style games from being listed as event contracts and clarifying that such contracts are not "excluded commodities," making self-certification no longer permissible.

Emerging Technology

AI Legislation/Regulation

Mounting industry pressure to avoid a fragmented 50-state patchwork (mirroring privacy and cybersecurity challenges) could drive Congress to consider AI legislation, as multiple state AI laws take effect in 2026, including Colorado's AI Act, Texas's Responsible AI Governance Act, California's AI Transparency Act, alongside the European Union (EU) AI Act. The Trump Administration could also lead efforts to preempt state AI laws, including by using executive authorities and working with congressional Republicans to create a legislative framework.

Cyber Reporting Regulation

The Cybersecurity and Infrastructure Security Agency (CISA) is expected to issue a final rule in May 2026 that will implement the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA). CIRCIA requires certain critical infrastructure owners and operators to report cyber incidents within 72 hours and ransomware payments within 24 hours. Businesses should prepare for this mandatory reporting requirement as part of their incident response planning.

CHIPS Act Implementation

As the U.S. Department of Commerce accelerates implementation of the CHIPS and Science Act, the CHIPS Program Office (CPO) and CHIPS Research and Development Office (CRDO) are moving forward with grant negotiations and awards at an increasing pace. In 2026, CPO will continue to focus on negotiating and finalizing awards – largely under the amended Facilities for Semiconductor Materials and Manufacturing Equipment funding opportunity – and deploying the remaining unallocated money to incentivize other critical supply chain segments, likely including critical minerals, underscoring the Trump Administration's push for rapid semiconductor onshoring. In 2026, companies can expect CPO and CRDO to maintain an aggressive pace, driving timely grant negotiations and pressing companies to deepen their U.S. investments across manufacturing and critical supply chain segments.

Export Control

The Export Control Reform Act of 2018 (ECRA) mandates regulation of "emerging and foundational technologies," and the Commerce Department's Bureau of Industry and Security (BIS) has already issued multiple rounds of AI-chip, advanced-compute, semiconductor and quantum-related controls (most recently in late 2023 and 2024). BIS has publicly signaled additional rulemakings for 2025 and 2026 as the U.S. coordinates with allies through Wassenaar and related multilateral frameworks. Companies in advanced tech should expect continued tightening in AI, computing and quantum export controls in 2026.

Supply Chain Security

Congress is considering expansions of Foreign Investment Risk Review Modernization Act (FIRRMA), including bipartisan proposals such as the National Critical Capabilities Defense Act and the Outbound Investment Transparency Act, both aimed at tightening oversight of technology-supply-chain risks. The Treasury Department is simultaneously developing regulations to implement the 2023 Outbound Investment Executive Order (EO 14105), which targets U.S. investment in AI, quantum and advanced semiconductors. These combined congressional and executive actions indicate a meaningful shift toward broader inbound and outbound investment screening in 2026.

Defense Industrial Base Resilience

The FY 2026 National Defense Authorization Act (NDAA) drafts under consideration in both the House and Senate include multiple provisions to strengthen the defense industrial base, with a particular emphasis on domestic production of critical materials, components and advanced technologies. The House draft (H.R.3838) includes updates to procurement requirements for rare earth elements, critical minerals and other strategic inputs, as well as new directives to recycle and recover key materials to reduce foreign reliance. The Senate draft (S.2296) similarly prioritizes industrial base resilience by directing the DOW to address supply chain vulnerabilities and expand domestic capacity in areas such as microelectronics, energetics and critical manufacturing. Together, these provisions signal that Congress intends to make supply chain security and onshoring a central focus of defense policy in 2026.

Space Legislation/Regulation

The NASA Reauthorization bill will likely include a comprehensive NASA policy update, including a revised scope and schedule for the Artemis lunar program. Both House and Senate drafts for the FY 2026 NDAA include new directions to the U.S. Space Force and provide funding for National Security Space Launch and Golden Dome initiatives. FY 2026 appropriations generally could impact resource levels and priorities for NASA, Space Force, Commerce Department, U.S. Department of Transportation (DOT) and Federal Aviation Administration (FAA).

On the regulatory side, several proposed and final rules will impact commercial space operators in 2026. In August 2025, the Trump Administration directed the Commerce Department to develop a new process for authorizing "novel space activities" by January 2026. As part of an FAA streamlining initiative, all commercial launch and reentry operators must transition from legacy licenses to Part 450 regulations by March 10, 2026. The Federal Communications Commission (FCC) will begin its review of comments on its proposed licensing overhaul of its Part 25 rules for earth/space station licensing. BIS expects to finalize rules passed in October 2024 to overhaul U.S. export controls for space-related items in early 2026 after public comment and review.

Quantum Legislation

Congress may update the National Quantum Initiative in 2026, given significant interest in both the House and Senate. A National Quantum Initiative Reauthorization Bill will include agencies like the DOE, National Science Foundation (NSF) and National Institute of Standards and Technology (NIST). The initiative may also include agencies such as DHS and NASA. The Trump Administration is expected to release one or more EOs, as well as a national quantum plan similar to "America's AI Action Plan" released in July 2025. Topics may include quantum trade promotion and export controls. The Trump Administration expressed interest in taking equity stakes in U.S. quantum companies.

Education

Rulemaking at U.S. Department of Education

The U.S. Department of Education (Department) is continuing to implement the education provisions included in the One Big Beautiful Bill Act (OBBB), which were aimed at reforming the student loan system and enhancing institutional accountability.

• The Department is conducting two rulemaking committees to issue regulations under OBBB. The Reimagining and Improving Student Education (RISE) Committee concluded its work last month and reached consensus on the final day of negotiations. A proposed rule is anticipated in the coming weeks. Following what is likely to be a 30-day comment period, the Department will issue a final rule.
• The Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee meets for the first time next week and again the week of Jan. 5, 2026.
• The RISE Committee focused on the definition of graduate versus professional programs for new caps on student borrowing and streamlining repayment systems, while AHEAD negotiators will discuss expanding the Pell Grant program to include short-term workforce programs and revising the gainful employment and accountability regulations.

For 2026, the Department identified several topics for reimagining, updating and simplifying the student loan programs, accreditation reform, change in control and ownership regulation, student privacy rules and civil rights enforcement.

Dismantling of the Department

Education Secretary Linda McMahon reiterated her commitment to the president's campaign promise and DO to dismantle the Department she oversees. Acknowledging that Congress created the Department and only Congress can close its doors, Secretary McMahon has begun moving functions to other agencies via use of interagency agreements (IAA). Though the transfer of funding and personnel is temporary, expect the secretary to ask Congress to make the moves permanent.

• In a recent op ed the secretary penned following the federal government shutdown, she suggested the Department won't be missed if shuttered and that funds allocated for its operations would be best managed at the state level.
• She pointed to students who are not reading or doing math on grade level, test scores that are behind those of other nations in math and science, and students with student loan debt as reasons for her to continue moving forward with dismantling the Department.
• Anticipate further efforts by the secretary and her team in the new year to identify new pathways/other agencies to fulfill statutory functions currently handled by the Department, including what to do about the massive student loan portfolio.

Scrutinizing Higher Education, Identifying Drivers of Cost, Increasing Affordability and Access, and China-Related Matters

Though it is not anticipated that Congress will pass a major reauthorization of the Higher Education Act (HEA), a measure long overdue for an update, expect Republicans on Capitol Hill to keep the pressure on institutions of higher education (IHE) to lower tuition costs and remove programs of study that are not producing positive outcomes for students or leading to a promising career and saddling student loan borrowers with debt. In an effort to better understand what is driving high tuition costs, policymakers will continue to utilize hearings and other tools to push for greater transparency around cost and advance policy changes that would provide students and families better information to make informed decisions about post-secondary education pursuits. Also expect continued interest in China-related matters such as joint programs between American universities and Chinese institutions.

Congressional Investigations

With Republicans controlling both houses of Congress by slim margins, limited opportunities for major legislation and an eye on midterm elections, congressional committees are expected to increase not only the breadth of investigations, but also along expedited timelines. Knowing that the timeline between voluntary requests to subpoenas or hearings to contempt votes can be long, expect inquiries to advance at a much more rapid pace than usual. With both houses of Congress arguably up for grabs, congressional Democrats will also have the incentive to use investigations with increased power given the possibility of control in the 120th Congress. For a wide range of industries and sectors, this suggests a tumultuous 2026 with congressional oversight pressure from both houses of Congress and both sides of the aisle.

From Republican chairs, expect an intensified and ongoing focus on, among other areas:

• large nonprofits, including private foundations and universities over matters such as ties with China, along with diversity, equity and inclusion (DEI) matters, and investment and funding decisions
• tech platforms and social media companies on data privacy issues, including heightened scrutiny around child online safety and other privacy issues
• green energy and sectors that benefited from Biden-era programs
• continued focus on the Biden Administration, including former administration officials and Biden family dealings

From Democratic ranking members and individual senators, expect efforts to set the stage on issues that committee chairs might exercise the full weight of congressional investigations power on, including, among others:

• alleged conflicts of interest during service in the first year of the Trump Administration
• investigations of U.S. companies and foreign entities that received beneficial treatment in the first year of the Trump Administration
• numerous inquiries related to media consolidation, drug pricing, the effects of tariffs on small businesses and other matters

Tax

• Follow Up to OBBB: Another reconciliation bill that tackles tax policy, among other areas, is an option that will continue to be on the table. This year or next a decision will need to be made on what to do – if anything – about the expired, enhanced Affordable Care Act tax subsidies.
• OBBB Rulemaking: The Treasury Department and IRS will continue to issue rules that carry out the tax changes made by OBBB and other administration priorities, including the new Prohibited Foreign Entity Restrictions as they relate to renewable energy tax credits. Numerous notices are anticipated before the Treasury Department and IRS issue proposed regulations. In addition, guidance regarding withdrawing regulations issued during the Biden Administration is expected.
• Possible Areas of Bipartisan Cooperation for Tax Writers: Extension of expired provisions, tax treatment of digital assets, retirement incentives and U.S.-Taiwan tax agreement are candidates for bipartisan support in 2026.
• Organisation for Economic Co-operation and Development (OECD):Publication of an outline of the "side-by-side" agreement that will recognize the U.S. as equivalent to Pillar Two. In addition, the OECD is working on other Pillar Two workstream aimed at simplification and the treatment of incentive tax credits.

National Security and Defense

• FY 2026 NDAA: The annual must-pass legislation authorizing funding and programs for the U.S. Department of War (DOW) will likely include additional acquisition authorities and flexibility for the department to enable rapid acquisition of defense technology. In addition, continued emphasis on rebuilding the U.S. defense stockpile and encouraging leveraging AI, advanced manufacturing, and autonomous systems to enhance lethality is anticipated.
• Potential Second Reconciliation Bill: A follow-up to the prior bill, which provided more than $150 billion for generational investments in defense technology and capabilities. Additional funding for DOW may be considered in 2026.
• SBIR, STTR Program Reauthorization: A possible compromise to extend the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) programs. This could be included in the FY 2026 NDAA or delayed until next year.
• Defense Acquisition Reform: Implementation and potential adjustments to major acquisition reforms introduced in the FY 2026 NDAA will be a key focus area.

International Trade

Tariffs and Trade Policy

Renegotiation of the United States-Mexico-Canada Agreement (USMCA)

• The U.S., Canada and Mexico have already kicked off their domestic processes for the USMCA six-year review. The trilateral USMCA negotiations will intensify ahead of the July 1, 2026, deadline to conclude the review.
• Key areas of focus will include automotive rules of origin, agricultural market access concerns and evolving digital trade provisions addressing cross-border data flows and platform governance.
• Industry coalitions and government negotiators will increasingly engage in discussions to identify potential amendments, with particular attention on supply chain resilience provisions, regional content requirements and enforcement mechanisms.
• Companies should consider USMCA-related engagement with the Office of U.S. Trade Representative (USTR), which is the agency leading these negotiations for the U.S., as well as with the White House and on Capitol Hill.

Sections 301 and 232 Investigations and Actions

• Section 301 and Section 232 investigations initiated in 2024 and 2025 will reach critical decision points in 2026. The Trump Administration will likely announce outcomes of Section 232 investigations on topics such as robotics, semiconductors, polysilicon and pharmaceuticals, potentially imposing new tariffs or other import restrictions on national security grounds.
• Trade actions taken pursuant to Sections 301 and 232 could be particularly significant if the Supreme Court limits the president's use of IEEPA to impose tariffs by 2026. If this occurs, Sections 301 and 232 could become the administration's primary bases for imposing tariffs. The business community should prepare for more aggressive use of these tools, with investigations potentially announced regarding new industrial sectors and new trading partners.

Customs Enforcement

U.S. customs-related enforcement is expected to ramp up significantly as U.S. Customs and Border Protection (CBP) and the U.S. Department of Justice (DOJ) Trade Fraud Task Force respond to rising concerns over tariff evasion, including transshipment through third countries. Companies importing goods subject to tariffs should anticipate and prepare for increased audits, enhanced use of data analytics for supply chain tracing, and potential civil or criminal liability for willful evasion. Proactive compliance measures (including origin verification, documentation controls and internal risk assessments) will be critical to mitigate exposure as agencies increasingly prioritize trade enforcement.

Export Controls

Regulatory Changes and Increased Export Enforcement

• Companies will continue to confront an aggressive export enforcement environment and further regulatory changes in 2026, with increasing risk for the advanced computing and AI sectors, as well as significantly increased penalties for exports of even low-tech items to Entity List parties, Russia and embargoed regions.
• Recent criminal indictments illustrate the focus on advanced computing, with DOJ charging U.S. citizens and Chinese nationals for illegally exporting advanced chips to China. Moreover, even as the Bureau of Industry and Security (BIS) rescinded a Biden-era rule regulating the export of AI technologies, it issued guidance emphasizing the need for enhanced due diligence to prevent diversion of advanced chips to China and other restricted destinations, as well as the risks of using certain advanced chips developed or produced in China. BIS continued to move aggressively against companies that exported low-tech items to restricted parties and destinations, imposing significant six-figure penalties with expensive external audit requirements.
• BIS also announced an "Affiliates Rule" that dramatically expanded U.S. export control restrictions to cover certain non-U.S. entities owned by listed parties. Then, following trade negotiations with China, the Trump Administration suspended implementation of the Affiliates Rule through November 2026. Changes such as the Affiliates Rule, together with dozens of potential changes to U.S. export controls foreshadowed on the Unified Agenda of Regulatory and Deregulatory Actions, highlight the uncertainty of the current regulatory environment and need for companies to prepare for rapid changes in the rules.
• Companies should use the pause to conduct proactive compliance assessments to minimize future exposure. More broadly, companies should expect rigorous licensing reviews, expanded due diligence requirements and closer scrutiny of indirect supply chains as BIS prioritizes preventing advanced technology transfers.

ITAR Expansion

• In 2026, expect a more aggressive International Traffic in Arms Regulations (ITAR) enforcement environment driven by increasing defense trade, recent amendments to the U.S. Munitions List (USML) and the Trump Administration's announced road map for further regulatory changes over the next 12 months.
• In September 2025, the U.S. Department of State's Directorate of Defense Trade Controls (DDTC) implemented revisions that expand coverage of the USML, signaling a broader jurisdictional reach that will complicate compliance for a wide range of industries. Additional planned rulemaking is anticipated to further expand the USML. Companies should prepare for increased enforcement activity as regulators prioritize supply chain integrity and technology security, making proactive compliance assessments and robust export control programs essential for mitigating risk.

Sanctions

Pressure on Iran

Following the Trump Administration's 2025 directive to restore maximum pressure on Iran, U.S. sanctions enforcement is expected to broaden and deepen throughout 2026. The Treasury Department's Office of Foreign Assets Control (OFAC) will likely continue targeting maritime shipping networks involved in Iranian oil trade, including shadow fleet vessels, management companies and shipping facilitators. Companies engaged in global energy and shipping should anticipate further designations, expanded secondary sanctions risk and heightened compliance obligations as Washington continues to target Iran's oil sector.

Risk in Latin America

Building on the Trump Administration's early designations of cartels and gangs as Foreign Terrorist Organizations (FTOs), the U.S. will continue to expand counterterrorism-based sanctions across the Western Hemisphere. Since January 2025, the State Department has designated multiple entities – including six Mexican cartels, two transnational gangs, and criminal groups in Haiti and Ecuador – under counterterrorism authorities, expanding the risks of criminal enforcement and secondary sanctions in the region. Further, in October 2025, OFAC sanctioned Colombian President Gustavo Petro pursuant to its counternarcotics-related authorities. In 2026, expect OFAC to intensify enforcement by continuing to pair counterterrorism and counternarcotics sanctions, targeting leadership networks, front companies and financial facilitators. These actions may introduce material support liability for businesses in logistics, agriculture and trade, while secondary sanctions and aggressive interagency coordination aim to disrupt cartel revenue streams and penalize complicit state actors.

Expanded U.S. Sanctions on Russian Energy Sector

In October 2025, the U.S. imposed full blocking sanctions on Rosneft and Lukoil, Russia's two largest oil companies, along with numerous Russian subsidiaries, marking a significant escalation in energy-related measures and initiating frantic attempts to sell off the firms' non-Russian assets prior to the end of a limited authorization period. Looking ahead, the trajectory of these sanctions remains uncertain and could shift based on changes in ongoing negotiations to end the Russia-Ukraine war, leaving companies to monitor policy signals and prepare for potential adjustments.

Transportation

Surface Transportation Reauthorization

With the current Surface Transportation Reauthorization bill expiring on Sept. 30, 2026, the long process to draft its replacement is underway, but the road is marred with potholes, and the delays have begun. The key issue that is expected to define the success or failure of the push for a Surface Transportation Reauthorization in 2026 is whether President Trump makes enacting the bill a priority prior to the mid-term elections.

The House Transportation and Infrastructure Committee (T&I) had long been eyeing December 2025 as a target for producing – and passing – the House's first draft of the legislation. However, in public remarks during the first week of November, House T&I Committee Chair Sam Graves (R-Mo.) pushed back the timeline, targeting early 2026 for a committee markup and spring for the legislation to pass the House as a result of delays caused by the government shutdown. It is reasonable to expect additional delays could occur.

On the Senate side, all three primary transportation committees of jurisdiction – Environment and Public Works (oversees highways), Commerce (oversees rail and freight) and Banking (oversees transit) – completed formal requests for member priorities. The Banking Committee held its traditional informal listening session for committee members. Environment and Public Works has been drafting its bill, but text will most likely not be final until next year, with Committee Chair Shelley Moore Capito (R-W.Va.) saying that she is hoping to mark up the bill before May.

The White House has not formally announced its priorities. In mid-November, it was reported that the administration was seeking to eliminate funding for mass transit from the Highway Trust Fund, a proposal that would catalyze significant opposition. Though this is not the administration's formal proposal, if it is indicative of its efforts, it will represent an additional complication to completion of a bill that can make it through the Senate. Notably, House T&I Committee Chair Graves and Ranking Member Rick Larsen (D-Wash.) ublicly rejected this proposal. The president's proposal and the priority he places on getting a bill done will have a significant impact on the posture Congress takes toward the bill.

Given upcoming midterm elections, the enormous bipartisan need for infrastructure funding and the near-universal reliance on federal highway dollars (approximately $50 billion annually), there will be a strong push to try to get a comprehensive reauthorization bill completed in 2026 before the November elections. Additionally, as this is Rep. Graves' last term as chair, he has made it clear he is extremely motivated to get the legislation across the finish line.

Air Traffic Control Modernization

In the wake of the January 2025 mid-air collision near Ronald Reagan Washington National Airport, the Trump Administration has made air traffic control (ATC) modernization a top policy priority. On Dec. 4, 2025, the Federal Aviation Administration (FAA) announced it had selected a prime integrator to assist in achieving the administration's ATC modernization goals.

The FAA has commenced its ATC modernization project using the $12.5 billion in OBBB funding. The OBBB establishes several specific categories for the spending, such as $4.75 billion for telecommunications infrastructure upgrades, $3 billion to replace radar systems, $1.9 billion to construct new air route traffic control centers (ARTCCs), such that "at least 3 existing ARTCCs are divested and integrated into the newly constructed ARTCC." Also called for is spending of $100 million to conduct further ARTCC realignment and consolidation, $1 billion to support recapitalization and consolidation of terminal radar approach control facilities, known as TRACONs, and several million dollars to address air traffic controller training, ATC tower upgrades, remote towers and research. The OBBB also requires the FAA to submit quarterly reports to Congress describing its expenditures, beginning Dec. 31, 2025.

The DOT has requested a total budget of $31.5 billion for ATC modernization, which Congress could appropriate through a second budget reconciliation bill or the appropriations process. Congress has expressed skepticism in appropriating any additional funds until the FAA proves it can effectively begin spending the funds it has already received. If the FAA can satisfy congressional scrutiny by moving quickly to begin implementing the initial $12.5 billion down payment, Congress could appropriate additional funds through the budget reconciliation process while Republicans still control the House, Senate and White House in 2026.

To date, the FAA has not selected a main contractor or "integrator" to oversee the project, though there are two finalists. The integrator announcement is expected in the first week of December, and both applications were described as worthy of consideration. Holland & Knight is confident that one company will be chosen outright and that the contract will not be split.

Once the prime integrator is selected, the FAA plans to use an Internal Management Board to make all major decisions related to ATC modernization. The prime integrator will have a seat at the table of the Internal Management Board, but the integrator's role will be to fill gaps that exist at the FAA to assess, recommend and oversee key ATC modernization decisions. The Internal Management Board will have more than a dozen FAA officials, including Acting Chief Technology Officer Rebecca Guy, Program Management Organization Vice President Josh Pepper and Acting Chief Operating Officer Franklin McIntosh.

Autonomous Vehicle National Framework

In 2026, stakeholders should expect additional actions to support the deployment of autonomous vehicles (AVs) to be a priority for the Trump Administration. President Trump is anticipated to take executive action to support the deployment of AVs in the U.S. as early as January 2026, which may take the form of an EO. In addition, on April 24, 2025, DOT Secretary Duffy unveiled the National Highway Traffic Safety Administration's (NHTSA) new Automated Vehicle (AV) Framework as part of his transportation innovation agenda. This framework focused on ensuring the safety of AVs on public roads, fostering innovation and enabling commercial deployment.

On Sept. 4, 2025, NHTSA proposed several rulemakings to amend the Federal Motor Vehicle Safety Standards (FMVSS), which included FMVSS No. 102, "Transmission shift position sequence, starter interlock and transmission braking effect," No. 103, "Windshield defrosting and defogging systems" and No. 104, "Windshield wiping and washing systems," and No. 108, "Lamps, reflective devices, and associated equipment." Because this is a priority of Secretary Duffy and the Trump Administration, expect the DOT to continue to propose rulemakings to strengthen the national framework for AVs.

In addition, legislation has begun to move. House lawmakers are advocating for incorporating language that would include regulations for AVs in the Surface Transportation Reauthorization bill. These measures have bipartisan support, beginning with Reps. Bob Latta (R-Ohio) and Debbie Dingell (D-Mich.), co-chairs of the Congressional Autonomous Vehicle Caucus and members of the House Committee on Energy and Commerce. The committee is considering a motor vehicle safety title in the Surface Transportation Reauthorization, and Chair Brett Guthrie (R-Ky.) has stated that AV policy will be included in this title.

In 2026, Holland & Knight will pay attention to pending legislation in Congress, including:

• AV Safety Data Act (R.4376). Rep. Kevin Mullin's (D-Calif.) AV Safety Data Actpromotes public transparency by requiring consistent reporting on miles traveled by AVs and incidents such as unexpected stops or interference with emergency vehicles. In addition to codifying NHTSA's existing collision data reporting requirements in law, the AV Safety Data Act would require that companies report to NHTSA the number of miles traveled on public roads, AV collisions that result in any injuries to other human drivers, pedestrians or bicyclists, and information on unplanned stoppages and any impacts to law enforcement, first responders or public transit agencies.
• AV Accessibility Act (R.4419). Rep. Greg Stanton's (D-Ariz.) and Rep. Brian Mast's (R-Fla.) AV Accessibility Act(AVAA) is designed to help people with disabilities better access the mobility and independence benefits of ride-hail AVs. The AVAA will ensure passengers are legally protected if an AV is pulled over or other issues occur, even if they do not hold a driver's license due to their disability. It also requires the DOT, in collaboration with the National Academies of Science, to study best practices for public transportation infrastructure to be modified to improve the ability of Americans with disabilities to find, access and use ride-hail AVs, including during pickup and drop-off.
• AMERICA DRIVES Act (R.4661). Representative Vince Fong's (R-Calif.) AMERICA DRIVES Actseeks to establish national framework for AV trucking by advancing the modernization of the nation's supply chain to accommodate safe and effective growth of commercial automated driving systems (ADS).
• Autonomous Vehicle Acceleration Act of 2025 (S.1798). Sen. Cynthia Lummis' (R-Wyo.) Autonomous Vehicle Acceleration Act requires federal agencies to implement recommendations from a landmark 2026 federal report, "Accelerating the Next Revolution in Roadway Safety," on AVs within one year, jumpstarting progress on long-dormant policy objectives. Additionally, the legislation establishes a comprehensive road map for achieving commercially viable Level 4 and Level 5 AVs – advanced self-driving systems that require minimal to no human intervention. The DOT secretary will be tasked with identifying essential needs and regulatory barriers that must be addressed to facilitate widespread deployment.

Emerging Aviation Technologies

In August, DOT Secretary Duffy unveiled the highly anticipated Notice of Proposed Rulemaking (NPRM) for commercial done operations, Normalizing Unmanned Aircraft Systems Beyond Visual Line of Sight Operations (BVLOS), to further the integration of unmanned aircraft systems (UAS) in the national airspace system (NAS). A joint publication of the FAA and U.S. Transportation Security Administration (TSA), the NPRM has faced criticism – particularly regarding TSA's proposed security provisions, which many view as overly burdensome and lacking clarity. The period for public comment closed on Oct. 6, 2025. The public comments posted to the docket reflected widespread engagement and concern among industry and the broader public. It is clear that both commercial and private interests believe that if finalized as written, the rule would imperil the industry.

The FAA has acknowledged that the proposed rule has numerous flaws that need to be addressed before final publication, though it is unclear how that will impact the timeline. FAA Administrator Bryan Bedford appears committed to publication in 2026, rather than allowing the process to slip into 2027. Holland & Knight will track these rulemakings closely next year.

Efforts to develop and integrate Advanced Air Mobility (AAM) concepts, which Congress has defined as a transportation system "comprised of urban air mobility and regional air mobility using manned or unmanned aircraft," will also continue to move forward at an increased pace in 2026. In a June 6, 2025, EO titled "Unleashing American Drone Dominance," the president required the DOT secretary, acting through the FAA administrator and in coordination with the White House's Office of Science and Technology Policy (OSTP), to establish an electric Vertical Takeoff and Landing (eVTOL) Integration Pilot Program as an extension of the FAA's existing BEYOND Program. As an extension of the FAA's BEYOND Program, which Congress developed from the FAA's UAS Integration Pilot Program in 2020, the EO anticipates the FAA administrator issuing waivers of certain statutory requirements and related regulations under a BEYOND program agreement.

The eVTOL Integration Pilot Program will consist of state, local, Tribal or territorial governments agreeing with the FAA to function as lead participants along with partners such as manufacturers, operators or developers of vertiports. The FAA will select at least five lead participants and track data from them to inform future FAA regulatory updates. The DOT secretary is expected to submit an initial implementation report to the president through the OSTP director of during the first half of 2026.

Discussions of counter UAS (cUAS) authority have drawn increased attention in the context of the FY 2026 NDAA passage and the upcoming 2026 World Cup and 2028 Olympics. In late August 2025, Rep. Andrew Garbarino (R-N.Y.) introduced a bill to reauthorize and expand the federal government's counter-drone authorities. Referred to House T&I, the bill passed out of committee by a 60-0 vote in October.

President Trump has made enacting cUAS authorities in the FY 2026 NDAA a priority ahead of the 2026 World Cup and 2028 Olympics. A final vote on the NDAA is expected before the end of this session. Holland & Knight is closely tracking possible floor action before the end of this Congress.

Furthermore, the White House in November 2025 announced a Notice of Funding Opportunity (NOFO) for the cUAS Grant Program, authorized under the OBBB. The program provides $500 million across FY 2026 and FY 2027 to enhance state and local capabilities to detect, identify, track or monitor UAS. Applications are due Dec. 5, 2025.

Maritime

The administration has made it a priority to increase focus on the maritime industry, outlined in EO 14269 issued April 9, 2025, titled "Restoring America's Maritime Dominance." This EO called for a comprehensive approach to increase and stabilize federal funding, improve the competitiveness of U.S.-flagged and U.S.-built vessels, improve the domestic workforce and rebuild the U.S. maritime industrial base.

The Federal Maritime Commission (FMC) is just ;one sphere where this reinvigorated focus on maritime is coming to fruition. In September 2025, the administration nominated two new commissioners, Robert Harvey and Laura DiBella, to the FMC to help execute these efforts. These nominations were sent to the Senate and await approval. If confirmed in 2026, DiBella and Harvey would fill the FMC's two remaining vacancies, bringing the FMC to its full capacity of five commissioners for the first time since Commissioner Carl Bentzel's December 2024 departure. These nominations come in the wake of the FMC's sweeping reforms following the enactment of the Ocean Shipping Reform Act of 2022 (OSRA 2022). Looking ahead, the FMC is poised to issue decisions on major investigations into Maritime Chokepoints and Flags of Convenience, as well as advance rulemakings pursuant to OSRA 2022 directives.

SHIPS Act

In April 2025, Sens. Mark Kelly (D-Ariz.) and Todd Young (R-Ind.), as well as Reps. John Garamendi (D-Calif.) and Trent Kelly (R-Miss.), led a bipartisan and bicameral group of lawmakers in introducing the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America (SHIPS) Act of 2025. The bill includes provisions to modernize cargo preference requirements, enhance sealift capability and address foreign shipping practices while introducing tax credits for vessel and shipyard investments and streamlining regulatory processes. The sponsors describe the legislation as a comprehensive approach to revitalizing the U.S. Merchant Marine and maritime industrial base.

The bill is a reintroduction of the SHIPS Act of 2024, a similarly bipartisan and bicameral effort. The 2025 version incorporates language from EO 14269. In addition to garnering support from the Administration, in September, five U.S. unions sent a letter to Congress urging members to pass the bill. Though steps to move this legislation may be complicated by the current animosity between Sen. Kelly and the administration, the strong bipartisan support and emphasis of the White House on maritime efforts mean that progress may be made. Holland & Knight will track this legislation closely throughout the second half of the 119th Congress.

FMC Enforcement

The FMC is expected to increase enforcement actions under OSRA 2022, focusing on detention and demurrage billing practices and carrier compliance with transparency requirements. Anticipated rulemaking will expand reporting obligations for vessel-operating common carriers and non-vessel operators, including stricter timelines for dispute resolution and enhanced data-sharing mandates. FMC investigations are likely to target systemic violations tied to cargo delays and discriminatory service practices, with civil penalties increasing to deter noncompliance. Shippers and carriers should prepare for audit activity, new compliance benchmarks for billing accuracy and potential legislative proposals aimed at strengthening FMC authority over supply chain resilience and port infrastructure modernization.

Port Fee Pause

In November 2025, USTR announced a one-year suspension of certain port services fees tied to a Section 301 action against China-linked vessels and foreign-built vehicle carriers calling at U.S. ports. The suspension covers fees that would otherwise have been applicable during the exclusion period and reflects USTR's effort to ease compliance burdens amid ongoing trade negotiations. Though the measure offers immediate relief, companies should monitor USTR announcements for any updates on duration or reinstatement as future adjustments could impact operational costs and customs planning. Importers should review documentation processes to ensure accurate application of the suspension and prepare contingency plans for potential regulatory or policy changes.

FOCI Mitigation Expansion

In May 2024, the DOW issued Instruction 5205.87, "Mitigating Risks Related to Foreign Ownership, Control, or Influence (FOCI) for Covered DoD Contractors and Subcontractors," reflecting a new mandate to extend FOCI assessments and potential mitigation measures to companies performing certain unclassified defense contracts. Expected in 2026, further regulations implementing this policy will significantly broaden obligations for contractors by requiring disclosure of FOCI in connection with covered defense contracts. The rule aims to enhance national security by mandating more detailed reporting on beneficial ownership structures and foreign affiliations, with potential implications for eligibility determinations and contract awards. Companies should anticipate stricter compliance reviews and prepare to implement robust due diligence processes to identify and mitigate FOCI risks early in the procurement cycle.

CFIUS and Outbound Investment

U.S. foreign investment controls will likely tighten further as the administration leverages the Committee on Foreign Investment in the United States (CFIUS) and outbound screening to address national security risks tied to China-affiliated investors. Expect expanded restrictions on inbound investments in technology, critical infrastructure, healthcare and energy alongside continued development of the promised "fast-track" process for trusted investors, which remains pending as of late 2025. Recent high-profile cases – such as TikTok's mandated divestiture and the Nippon Steel/U.S. Steel transaction – signal a trend toward creative mitigation measures, including golden shares and mandatory U.S.-based joint ventures. Outbound investment rules, implemented in early 2025, may broaden to cover additional sectors such as hypersonics and directed energy, as well as additional types of investment vehicles, requiring rigorous diligence and compliance planning for U.S. firms engaged in global investment transactions.

Federal Communications Commission (FCC)

• Ongoing Deregulatory Agenda: The FCC is expected to continue its broad deregulatory approach across communications sectors.
• Media Ownership Rules: Significant relaxation of existing broadcast radio and television ownership restrictions is anticipated, likely spurring renewed transactions and industry consolidation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.