On September 30, U.S. Senate leaders introduced the bipartisan American Affordability and Jobs Act of 2026 (S. 5653), a comprehensive proposal to reform the federal permitting and environmental review process. 

The legislation was introduced by Sen. Mike Lee (R-Utah), Sen. Shelley Moore Capito (R-W.Va.), Sen. Martin Heinrich (D-N.M.), and Sen. Sheldon Whitehouse (D-R.I.). The 417-page bill is the result of months of bipartisan negotiations and would make changes to federal permitting and environmental review processes for energy, infrastructure, and other major projects.  

The legislation addresses several federal laws and permitting processes, including the National Environmental Policy Act (NEPA), Clean Water Act, Endangered Species Act, and National Historic Preservation Act. It also includes provisions related to interstate transmission, federal lands, judicial review, permitting certainty, and the infrastructure costs associated with data center development. 

For economic developers, this is an important development and permitting reform has been a major priority for IEDC. The time and uncertainty associated with federal approvals can affect the development of energy and infrastructure projects as well as industrial, technology, and other major investments. IEDC supports modernizing and streamlining regulatory policies to reduce unnecessary barriers and delays, particularly for energy, industrial, infrastructure, and emerging technology projects. We also support a balanced approach that keeps regulations efficient, transparent, and adaptable while protecting public interests. 

Key Provisions 

The legislation covers several major federal statutes and policy areas: 

• National Environmental Policy Act (NEPA): The bill would establish additional deadlines for federal agencies after completion of an environmental review. For projects requiring an environmental impact statement, the lead agency would generally have 45 days to issue a record of decision after publication of the final environmental impact statement. Federal agencies that participated in the environmental review would generally have 90 days to issue outstanding authorizations, while agencies that did not participate would have 120 days. The legislation also would modify which projects are considered major federal actions under NEPA and make other changes to the environmental review process. 
• Judicial Review: The legislation would establish a 150-day statute of limitations for certain legal challenges to federal actions under NEPA. It also would establish requirements concerning who may bring certain challenges, including requirements related to participation in the underlying review and comments submitted during the process. Similar changes would apply to judicial review under other federal environmental statutes addressed by the bill. 
• Permitting Certainty: The bill generally would prohibit federal agencies from revoking, rescinding, withdrawing, terminating, suspending, amending or altering certain permits and federal authorizations that are in effect on or after September 16, 2026. Exceptions would apply in specified circumstances, including when a change is required by a court order, requested by the permit holder or necessary because of certain violations of law. 
• Clean Water Act: The bill would establish new timelines for certain state reviews under Section 401 of the Clean Water Act and limit the scope of those reviews to whether a proposed project would comply with applicable water quality requirements. It also would make changes to Section 404 permitting for certain activities, including certain pipelines, transportation projects, utility lines, and telecommunications projects. 
• Endangered Species Act: The legislation would establish a statutory definition of "best available scientific and commercial data" for purposes of the Endangered Species Act and require federal agencies to consider certain data provided by states during consultation. It also would shorten the standard consultation period from 90 days to 60 days, subject to specified extensions, and establish additional requirements for consultations associated with projects undergoing NEPA review. 
• National Historic Preservation Act: The bill would maintain tribal consultation requirements under Section 106 of the National Historic Preservation Act while establishing timelines for completing historic preservation reviews. The timelines would be coordinated with the broader federal environmental review process. The legislation also would establish a 150-day deadline for certain legal challenges to Section 106 reviews. Some stakeholders have raised concerns that the proposed changes could limit the scope and time available for consultation and reduce the role of Tribes, State and Tribal Historic Preservation Officers, and other consulting parties in the process. 
• Transmission Planning and Siting: The legislation would establish new requirements for regional and interregional transmission planning and expand the Federal Energy Regulatory Commission's role in certain interstate transmission projects. It would also address transmission cost allocation and identify benefits that may be considered when determining how costs are assigned, including reliability and access to lower-cost electricity. 
• Data Center Infrastructure Costs: The bill would require electric utilities, before constructing or upgrading generation, transmission or distribution facilities needed to serve a data center, to require the data center to provide financial assurances or contributions sufficient to cover the associated infrastructure costs. The provision is intended to ensure that the costs of infrastructure needed to serve new data center load are not shifted to other electricity customers. 
• Federal Lands and Energy Projects: The legislation would make changes intended to expedite permitting for certain projects on federal lands and address permitting requirements for energy and mineral development. The bill includes specific provisions for geothermal development, including a 60-day deadline for certain geothermal drilling permits and authorizations and exemptions for specified low-disturbance geothermal activities. 
• Hydropower: The bill would make changes to the federal licensing and relicensing process for certain hydropower projects, including provisions intended to coordinate and streamline federal reviews. 
• Federal Permitting Coordination and E-Permitting: The legislation would establish a unified federal permitting information system to provide a centralized, real-time portal for environmental reviews and authorizations. The system would be required to be established by December 1, 2028, and would include information on the status of federal environmental reviews and authorizations. 

Next Steps 

The bill now awaits consideration by the full U.S. Senate. Senate leaders have indicated that they intend to pursue consideration of the legislation after the November 3 midterm elections, with additional amendments possible before a vote. 

The House has not introduced or passed a companion bill to S. 5653. However, in December 2025, the House passed the bipartisan Standardizing Permitting and Expediting Economic Development (SPEED) Act (H.R. 4776) by a vote of 221-196. The SPEED Act would make changes to NEPA intended to streamline federal environmental reviews and permitting, including provisions related to the scope and timing of reviews and judicial challenges. 

The Senate and House would ultimately need to agree on legislation before it could be sent to the President. 

We encourage economic developers to review the legislation and consider how federal permitting requirements affect projects and infrastructure investments in their communities. Economic developers can also contact your senators to share their experiences with permitting delays and communicate their support for efforts to create a more predictable and efficient federal permitting process.  

Permitting reform remains a major federal policy priority for IEDC. We will continue to monitor the legislation and keep members informed as movement occurs.