Senate Unveils Bipartisan Comprehensive Permitting Reform Bill

Key Points

• Senate leaders released the Bipartisan American Affordability and Jobs Act of 2026, the most significant permitting reform package considered by Congress in years, following months of negotiations between Senate Republicans and Democrats.
• The legislation would establish new permitting deadlines, reform judicial review procedures, and make significant changes to the National Environmental Policy Act, Clean Water Act, Endangered Species Act, transmission permitting, energy leasing, and project certainty requirements.
• Senate leaders are expected to pursue floor consideration in early November and anticipate broad bipartisan support. House consideration is anticipated shortly thereafter, although procedural hurdles remain.

On September 30, 2026, Senate Environment and Public Works (EPW) Committee Chair Shelley Moore Capito (R-WV), Ranking Member Sheldon Whitehouse (D-RI), Senate Energy and Natural Resources (ENR) Committee Chair Mike Lee (R-UT), and Ranking Member Martin Heinrich (D-NM) unveiled the Bipartisan American Affordability and Jobs Act of 2026 (BAAJA; S. 5653), a comprehensive permitting reform package aimed at accelerating approvals for energy, infrastructure, transmission, mining, manufacturing, and other major projects. The legislation represents the most significant bipartisan permitting reform effort in years and follows months of negotiations between Senate Republicans and Democrats.

The bill seeks to address longstanding concerns that federal permitting and environmental review processes have become increasingly complex, unpredictable, and vulnerable to litigation. To accelerate project development, the legislation establishes new permitting deadlines, expands categorical exclusions, streamlines agency coordination, shortens the statute of limitation, and creates additional protections for previously approved projects. The legislation is pided between the jurisdictions of the Senate EPW and ENR Committees. The EPW title focuses primarily on reforms to the National Environmental Policy Act (NEPA; 42 U.S.C. § 4321 et seq.), the Clean Water Act (CWA; 33 U.S.C. § 1251 et seq.), the Endangered Species Act (ESA; 16 U.S.C. §§ 1531–1544) and, in particular, judicial review, and project certainty. The ENR title addresses electric transmission, energy infrastructure permitting, federal leasing and permitting, geothermal development, hydropower licensing, offshore energy, and historic preservation requirements.

Senate leaders are expected to pursue floor consideration in November and anticipate strong bipartisan support. The House is expected to consider the measure shortly thereafter, although questions remain regarding its path through the Rules Committee and floor consideration. House lawmakers have already advanced several permitting reform initiatives this Congress, including the Standardizing Permitting and Expediting Economic Development Act (H.R. 4776), which passed the House in December by a vote of 221-196, as well as several more targeted permitting, transmission, and energy infrastructure measures.

pision A – Environment and Public Works

National Environmental Policy Act (Sec. 1101–1133)

Title I contains some of the most consequential permitting reforms in the legislation, intending to narrow the scope of federal environmental review, reduce duplicative analysis, accelerate agency decision-making, and limit litigation delays. The legislation clarifies that NEPA is a procedural statute that does not mandate particular environmental outcomes, narrows the definition of “major federal action,” expands the use of categorical exclusions, authorizes agencies to rely on certain state, tribal, and federal review processes, and strengthens lead agency authority. It also establishes enforceable review deadlines, generally requiring environmental assessments to be completed within one year and environmental impact statements within two years, while creating new dispute-resolution procedures within the Council on Environmental Quality (CEQ) to address interagency conflicts that threaten permitting timelines. Finally, the legislation substantially reforms judicial review by establishing a 150-day statute of limitations, requiring most plaintiffs to have participated in the administrative process, channeling review to federal appellate courts, and making remand without vacatur the default remedy in most cases.

Key Reforms:

• Narrows the definition of “major federal action” to agency actions subject to substantial federal control and responsibility. Exclusions include non-federal projects with no or minimal federal funding or involvement; repairs to critical infrastructure that remain in the immediate vicinity, do not change its function, and increase capacity by no more than 20 percent; and specified qualifying geothermal observation, electric transmission, natural gas, and other nationally important energy infrastructure activities.
• Allows agencies to rely on qualifying state, tribal, and other federal environmental reviews.
• Expands the use and cross-agency adoption of categorical exclusions.
• Establishes one-year deadlines for environmental assessments and two-year deadlines for environmental impact statements.
• Narrows judicial review and limits courts’ ability to vacate permits while deficiencies are corrected.

Clean Water Act (Sec. 1201–1205)

The bill makes significant changes to CWA permitting, particularly with respect to state water quality certifications under Section 401 and federal dredge-and-fill permitting under Section 404. The legislation narrows Section 401 reviews to water quality considerations, establishes detailed certification procedures and application requirements, places the burden on states and tribes to justify permit denials and conditions with clear and convincing evidence, and reinforces statutory deadlines that can result in waiver of certification authority if not met. The bill also extends the duration of certain permits, limits the scope of environmental reviews under Section 404, expands the availability of nationwide permits for infrastructure projects, and imposes new timelines and restrictions on judicial challenges to permitting decisions. Collectively, these provisions are intended to reduce permitting uncertainty, constrain permit-related delays, and provide greater predictability for project developers.

Key Reforms:

• Limits Section 401 certification reviews to compliance with water quality requirements and prohibits states or tribes from denying certifications for broader policy reasons unrelated to water quality.
• Requires certifying authorities to establish formal application procedures, determine application completeness with prescribed deadlines, and demonstrate with clear and convincing evidence that permit denials and conditions are necessary to satisfy water quality requirements.
• Preserves the existing one-year maximum review period for Section 401 certification but clarifies that certifications are waived if the reviewing authorities fail to act within the applicable review period. For interstate natural gas pipelines and interstate transmission projects, the maximum review period is reduced to nine months.
• Limits the Environmental Protection Agency’s (EPA) Section 404(c) veto authority to the period before the Army Corps of Engineers issues a permit and extends the duration of Section 404 nationwide permits from five years to ten years.
• Establishes a 150-day statute of limitations for challenges to Section 404 permits and permit verifications, limits challenges in many circumstances to parties that participated in the permit comment process in many circumstances, and generally directs courts to remand permits rather than vacate them absent imminent and substantial danger to human health or the environment.

Endangered Species Act (Sec. 1301–1308)

Several provisions are aimed at accelerating ESA consultations and aligning species reviews more closely with broader federal permitting timelines. The legislation shortens Section 7 consultation timelines, requires consultations for projects undergoing NEPA review to be completed within applicable NEPA deadlines, authorizes states to assume certain consultation responsibilities currently carried out by federal agencies, and modifies judicial review procedures for biological opinions and related agency actions. The bill also expands the role of state-generated scientific data in listing decisions and provides additional funding for ESA implementation.

Key Reforms:

• Shortens Section 7 consultation timelines, reducing the initial consultation period from 90 days to 60 days and shortening related biological opinion deadlines. Projects undergoing NEPA review generally must complete ESA consultations within applicable NEPA permitting timelines.
• Establishes a new program allowing states, subject to federal approval and oversight, to assume certain ESA Section 7 consultation responsibilities currently performed by the U.S. Fish and Wildlife Service.
• Defines “best scientific and commercial data available” and requires federal agencies to consider qualifying state-collected scientific data when making listing and delisting determinations.
• Creates a 150-day statute of limitations for challenges to biological opinions, provides for direct review in the U.S. Court of Appeals for the D.C. Circuit, and authorizes $150 million annually through fiscal year 2031 to support consultation activities and state implementation efforts.

Project Certainty (Sec. 1401–1403)

A central objective of the legislation is to provide greater durability and predictability for projects that have already received federal approvals. The legislation generally prohibits federal agencies from revoking, suspending, modifying, or otherwise interfering with projects that have secured all necessary federal authorizations unless specific circumstances exist, such as fraud, permit violations, court orders, or newly identified threats to public safety or national security. The title also establishes new remedies for project sponsors, places heightened evidentiary burdens on agencies seeking to revisit prior approvals, and creates mechanisms for challenging permitting delays and alleged discriminatory treatment of specific categories of energy and infrastructure projects.

Key Reforms:

• Prohibits federal agencies from revoking, rescinding, suspending, or materially altering previously issued permits for non-federal projects except in limited circumstances, including fraud, permit violations, court orders, or significant newly discovered risks.
• Shifts the burden to federal agencies to justify actions affecting previously approved projects and authorizes courts to reinstate permits, award attorney fees and damages, and provide injunctive relief where agencies fail to meet that burden.
• Creates new causes of action for unreasonable permitting delays and alleged disparate treatment of specific project categories, including transmission, pipelines, LNG facilities, power generation, mining, and other energy infrastructure projects.

pision B – Energy and Natural Resources

Electric Transmission (Sec. 2101–2106, 2108–2113, 2115)

The transmission provisions are among the most significant energy infrastructure reforms in the legislation, expanding federal authority to approve interstate transmission projects, streamlining transmission planning and permitting, encouraging use of existing rights-of-way, and accelerating generator interconnections. The bill revises the Federal Power Act’s (16 U.S.C. §§ 791 et seq) transmission siting framework, allows the Federal Energy Regulatory Commission (FERC) to issue permits after states have had one year to act, establishes new regional and interregional transmission planning requirements, expands categorical exclusions for reconductoring and grid upgrades within existing rights-of-way, promotes deployment of advanced transmission technologies, and requires greater access to grid planning data. The legislation also directs FERC to reform generator interconnection processes and utilize advanced computing tools and artificial intelligence (AI) to reduce queue backlogs and accelerate project reviews.

Key Reforms:

• Expands FERC’s authority to permit interstate transmission projects after states have had one year to act on an application, while establishing new planning, cost-allocation, and reliability requirements.
• Establishes new regional and interregional transmission planning requirements, including mandatory long-term planning processes and new mechanisms to identify and develop transmission projects that improve reliability and reduce congestion.
• Creates broad permitting exemptions and categorical exclusions for reconductoring, transmission upgrades, advanced transmission technologies, and certain projects located within existing rights-of-way.
• Requires utilities to evaluate and deploy advanced transmission technologies when benefits outweigh costs and directs FERC to improve generator interconnection processes through automation and advanced computing tools.

Data Centers and Large Loads (Sec. 2107, 2114)

Responding to rapidly growing electricity demand from AI, cloud computing, and data centers, the legislation establishes new cost-allocation and ratepayer protection requirements for large computational loads. These provisions are intended to ensure that new data center demand bears the costs associated with the infrastructure required to serve it, while improving visibility into the scale of computational load growth nationwide. The legislation generally requires large computational loads to bear both the embedded and incremental costs associated with electric service, prohibits the allocation of certain infrastructure costs to other ratepayers, requires financial assurances for generation, transmission, and distribution upgrades built to serve those facilities, and preserves broad state authority to establish separate rate structures and service requirements for large data center customers. The bill also directs the Energy Information Administration (EIA) to begin collecting data on electricity demand from covered data center entities through Form EIA-861.

Key Reforms:

• Requires large computational loads with electric demand of 20 megawatts (MW) or greater to bear the full embedded and incremental costs associated with transmission service and related infrastructure investments.
• Prohibits shifting incremental generation, transmission, and distribution costs associated with covered computational loads onto other customers and requires covered facilities to provide financial assurances for infrastructure constructed to serve those loads.
• Preserves state authority to establish separate rates, interconnection requirements, competitive solicitation processes, and service conditions for covered loads, while directing the EIA to collect electricity demand data from data centers.

Accelerating Claims (Sec. 2201)

The bill establishes new judicial review procedures for federal energy, mining, carbon management, and wildfire mitigation projects by imposing a uniform 150-day statute of limitations for challenges to federal permit decisions, requiring agencies to make permitting decisions publicly available within three days, and directing courts to expedite review of permitting disputes. The legislation also requires courts to establish timelines for agencies to address remanded permit decisions, generally within 180 days, with the goal of reducing permitting delays associated with extended litigation.

Key Reforms:

• Establishes a 150-day statute of limitations for challenges to federal permit decisions, requires expedited judicial review, and generally requires agencies to act on remanded permit decisions within 180 days.

Federal Onshore Energy Leasing and Permitting (Sec. 2211–2215)

The legislation includes a series of targeted reforms intended to accelerate federal permitting and leasing for oil and gas, renewable energy, electric transmission, mining, and Tribal energy infrastructure projects. The legislation limits federal permitting requirements for certain oil, gas, and geothermal activities occurring on non-federal lands, establishes new deadlines for processing renewable energy rights-of-way, expands the use of categorical exclusions for renewable and grid infrastructure projects, streamlines Tribal rights-of-way approvals, and modifies federal hardrock mining permitting authorities. Collectively, these provisions are designed to reduce federal permitting timelines while increasing state, Tribal, and local control over project development.

Key Reforms:

• Eliminates certain federal drilling permit requirements for oil, gas, and geothermal projects on non-federal lands where the federal government owns less than 50 percent of the underlying resource interest, while preserving federal royalty collection and oversight authorities.
• Establishes new deadlines for processing renewable energy rights-of-way, requires agencies to determine application completeness within 30 days, and directs federal agencies to develop new categorical exclusions for low-disturbance renewable energy, transmission, storage, and grid modernization projects.
• Streamlines Tribal rights-of-way approvals by allowing Tribes with approved regulations to authorize rights-of-way without separate Department of the Interior (DOI) approval and expands federal authorities related to hardrock mining, mill sites, and mineral development on acquired lands.

Geothermal Leasing and Permitting (Sec. 2221–2229)

Geothermal development receives one of the most comprehensive technology-specific permitting packages in the bill, spanning exploration, leasing, permitting, and project development. The legislation creates new categorical exclusions for geothermal exploration activities, reforms leasing and royalty structures, establishes permitting deadlines, authorizes certain geothermal activities on non-federal lands without additional federal permits, creates a new Geothermal Ombudsman and permitting task force within the Bureau of Land Management (BLM), and expands several existing NEPA exemptions to cover geothermal development activities. Collectively, the provisions are designed to reduce permitting timelines and encourage deployment of both conventional and next-generation geothermal technologies.

Key Reforms:

• Creates a new categorical exclusion for geothermal observation test projects, expands existing NEPA exemptions for geothermal exploration and development activities, and exempts certain geothermal operations on non-federal lands from federal drilling permit requirements.
• Requires annual geothermal lease sales, establishes new deadlines for agency review of geothermal drilling permits, and directs agencies to continue processing geothermal permits and authorizations even when broader leasing decisions are subject to ongoing litigation, unless a court orders otherwise.
• Establishes a new Geothermal Ombudsman and Geothermal Permitting Task Force within BLM to coordinate permit reviews, resolve disputes, develop permitting best practices, and improve agency staffing and permit processing.

Hydropower (Sec. 2231–2234)

The hydropower section is intended to reduce regulatory burdens for existing hydropower facilities and encourage deployment of emerging hydropower technologies. The legislation limits circumstances in which licensees must obtain prior approval from FERC for maintenance and operational changes, directs FERC to evaluate market and regulatory barriers affecting hydropower resources, and establishes an expedited licensing framework for small hydrokinetic projects.

Key Reforms:

• Clarifies that routine maintenance, repairs, replacements, temporary operational adjustments, and certain non-substantial project modifications generally do not require prior FERC approval or license amendments.
• Creates an expedited licensing process for hydrokinetic projects of 5 MW or less and directs FERC to evaluate market and regulatory barriers affecting hydropower development.

Hiring and Retention (Sec. 2241–2243)

Recognizing persistent staffing challenges at federal energy agencies, the legislation includes several provisions designed to improve recruitment, retention, and workforce capacity. The legislation expands hiring and compensation flexibility for FERC and federal power marketing administrations, expands the professional expertise recognized under FERC’s personnel certification requirements to include economic and legal backgrounds, updates a compensation provision for members of the Northwest Power and Conservation Council, and makes targeted changes to FERC staffing authorities and personnel safety requirements.

Key Reforms:

• Expands FERC staffing authorities and professional qualification requirements while authorizing certain FERC personnel to perform law enforcement functions to protect commissioners and agency leadership.

Offshore Energy (Sec. 2251–2252)

The bill makes targeted changes to offshore energy and transmission permitting with a particular focus on improving the development of offshore transmission infrastructure. The legislation authorizes certain transmission rights-of-way within marine sanctuaries, directs federal agencies to identify preferred offshore transmission routes, establishes DOI as the lead agency for offshore transmission permitting, and creates a framework for permitting offshore transmission facilities on either a competitive or noncompetitive basis. The provisions are aimed at facilitating the buildout of offshore energy and transmission infrastructure while improving coordination among federal agencies.

Key Reforms:

• Authorizes certain offshore transmission rights-of-way within the National Marine Sanctuary System, directs federal agencies to identify preferred offshore transmission corridors, and establishes new permitting procedures for offshore transmission facilities.
• Designates DOI as the lead agency for offshore transmission projects and allows offshore transmission rights-of-way to be issued on either a competitive or noncompetitive basis.

Historic Preservation (Sec. 2301–2302)

The historic preservation provisions would substantially reshape the consultation process under the National Historic Preservation Act (NHPA; 54 U.S.C. §§ 300101–320101), narrowing review standards and imposing new timelines for agency action. The legislation also revises definitions governing adverse effects and undertakings, expands the use of programmatic agreements, creates new performance and accountability requirements for State and Tribal Historic Preservation Officers, and limits available judicial remedies in challenges to historic preservation determinations.

Key Reforms:

• Narrows the scope of impacts considered during historic preservation reviews, establishes new consultation deadlines, and generally requires reviews to be completed within applicable NEPA timelines.
• Requires more frequent evaluations of State and Tribal Historic Preservation programs, establishes performance requirements tied to consultation timelines, and increases oversight of preservation offices receiving federal funding.
• Establishes a 150-day statute of limitations for most challenges, limits courts to remand without vacatur in most cases, and restricts judicial review related to programmatic agreements and historic preservation determinations.

A full section-by-section prepared by the Environment and Public Works Committee can be found here: Section-By-Section.