A long-awaited environmental permitting reform bill is being praised by manufacturing groups for its potential to cut through red tape and allow construction projects to move forward more quickly and cheaply.
The Bipartisian American Affordability and Jobs Act of 2026 “delivers long-overdue reforms to our nation’s permitting process, while maintaining American’s commitment to environmental stewardship,” National Association of Manufacturers President and CEO Jay Timmons said in a statement.
The bill, introduced Sept. 30 by Sens. Martin Heinrich, Mike Lee, Shelley Moore Capito and Sheldon Whitehouse, addresses many longstanding concerns of manufacturers and other industry representatives.
“This legislation reflects input from members of Congress on both sides of the aisle and from a diverse group of stakeholders,” the senators said in a statement.
Among other things, the bill narrows the definition of “major federal actions” subject to National Environmental Policy Act review. In particular, it excludes from NEPA review any projects with no or minimal federal funding or involvement, as well as projects that only receive certain types of federal funding such as loans or loan guarantees.
For activities still subject to NEPA, the bill sets a two-year deadline for an agency to prepare an environmental impact statement and a one-year deadline for an environmental assessment review.
To increase transparency, permitting agencies would be required to develop and maintain a “unified interagency data system” comprising interconnected agency systems and shared services for environmental reviews and authorizations. The interagency data system would help track and display real-time data, allow a project sponsor to submit required documentation and allow certain metrics to be tracked over time.
In addition, the bill:
- Sets a 150-day deadline for filing a claim pertaining to a project under a variety of environmental laws, including NEPA, the Clean Water Act, the Endangered Species Act and the National Historic Preservation Act.
- Limits who can file a claim, as well as when a court can temporarily prevent a project from moving forward.
- Sets additional deadlines for various agency actions pertaining to permitting reviews, such as confirming receipt of applications.
- Establishes a Permitting Improvement Fund to help permitting agencies provide timely environmental reviews and authorizations under NEPA. The bill authorizes $20 million per year for the fund through fiscal year 2033.
- Prevents the federal government from rescinding permits for previously authorized projects unless specific circumstances apply, such as a court order or permit violation.
- Expedites permitting for projects on federal lands.
Timmons called the legislation a “game-changing agreement.”
“Our nation’s permitting system is outdated and burdensome, delaying projects across industries and contributing to rising costs across the economy,” he said. “Removing these barriers would unlock greater investment and growth. Manufacturers are ready to build, and modernized permitting will help us race to the future.”
Industry representatives have been calling for permitting reform for some time, including at a Senate Environment & Public Works Committee hearing in January. According to NAM, permitting delays are costing manufacturers some $8 billion annually, limiting their hiring ability and build and expand their operations.
The Trump administration also has prioritized environmental permitting reform. Its proposed EPA budget sought an additional $14 million to “cut through the red tape,” despite slashing the agency’s overall budget.
