Capitol to Capitol | May 19, 2026

Capitol to Capitol | May 19, 2026

Questions? Please use the email icon at left to contact NCSL's State-Federal Affairs Division.

Administration Updates

EPA Proposal Would Allow Projects to Start Construction Before Passing Air Quality Reviews

The Environmental Protection Agency proposed a new rule (Reg. 2060-AW84) that would allow data centers, power plants and other large industrial facilities to start construction before obtaining certain federal air permits. Currently, new facilities that would qualify as major sources of pollution and current facilities undergoing major modifications must go through a process called new source review, or NSR, certifying their emissions wouldn't make air quality worse than current levels.

The proposed rule, announced on May 13, would distinguish between emitting and non-emitting structures, allowing construction of the latter before an NSR permit is issued. The comment period for the proposed rule closes June 29; comments can be submitted at Regulation.gov.

USDA Rule to Expand SNAP Retail Food Options

A new rule requires Supplemental Nutrition Assistance Program retailers to carry seven varieties of food items across four categories, more than doubling available grains, fruits, vegetables and diary options. If retailers do not comply with the new rule, they will no longer be authorized to accept SNAP dollars.

Education Department Releases Additional IDEA Funding and Guidance for States

The guidance explains how states can use IDEA Part C funding-designed to support early intervention for children under 2 with disabilities-to conduct child find, public awareness and referral activities for parents expecting infants with disabilities. The department also announced an additional $144 million for IDEA Part C and Part B, which serves students with disabilities ages 3 to 21. Read the guidance for states.

Final Rule Revises Child Care and Development Fund Requirements

The Administration for Children and Families released a final rule on CCDF that rolls back four state requirements:

• Capping family co-payments at 7% of family income.
• Paying providers prospectively instead of on a reimbursement basis.
• Paying providers based on enrollment rather than attendance.
• Using some grants and contracts to provide direct services for certain populations of children.

The rule allows but no longer requires states to adopt the practices, which were included in a 2024 rule; it goes into effect on July 13. Read the final rule.

ACF Proposes Rule New Head Start Rule

The Administration for Children and Families proposal would roll back several requirements for providers related to staff wages and benefits that were added in 2024. The rule would not change other requirements in the 2024 rule, including those related to program quality, family engagement and non-compensation workforce wellness provisions. Comments on the proposed rule are due June 11. Read the proposed rule.

ACF Encourages Temporary Assistance for Needy Families Spending on Childcare

The Administration for Children and Families is encouraging states to transfer the maximum 30% of TANF funding to the Child Care and Development Fund to increase access to childcare subsidies through that program. The agency memo also encourages states to use TANF funding to support needy married, two-parent families with one at-home parental caregiver and one parent working at least 35 hours per week. Read the memo.

New Guidance: States Can Broaden Childcare Subsidy Provider Categories

In a letter to state agencies, the Office of Child Care highlights existing flexibilities that allow states to expand Child Care and Development Fund providers to include family, friend and neighbor providers; license-exempt providers; and faith-based providers. Read the full letter.

Agencies Would Expand Employer-Provided Fertility Benefits

A proposed rule, issued by the Departments of the Treasury, Labor and Health and Human Services, would expand access to fertility benefits by creating a new category of "limited excepted benefits" that are exempt from federal health insurance requirements. The rule would give employers the flexibility to offer fertility coverage as a separate, simplified benefit similar to dental and vision coverage, which are also excepted benefits.

Under the proposal, benefits must primarily cover the diagnosis or treatment of infertility, with a combined lifetime cap of $120,000 per participant (indexed for inflation after 2028), and employers would be required to provide clear notice of coverage. The rule aims to address gaps in employer-sponsored coverage and builds on an earlier executive order.

The proposal is open for public comment for 60 days following publication in the Federal Register. Read the DOL press release.

Lifting Restrictions on Hunting on National Park Service Lands

The Department of the Interior has directed multiple agencies to remove regulatory or administrative barriers to hunting and fishing on department-managed lands. Interior Secretary Doug Burgum claimed that efforts to remove regulations and barriers would strengthen conservation outcomes, support rural economies and improve public health and access to America's outdoor spaces. The order, which went into effect on May 4, applies to 55 sites in the Lower 48 states under the National Park Service's jurisdiction.

Congressional Updates

Lawmakers Weigh Impacts of Federal Gas Tax Suspension

Discussions around a temporary suspension of the federal gas tax come as consumers across the country deal with high gas and diesel prices, which sit at $4.53 per gallon and $5.67 per gallon respectively, according to AAA. President Donald Trump has recently expressed support for the idea, and some lawmakers have proposed gas tax holiday legislation, including the Gas Prices Relief Act and the Gas Tax Suspension Act. However, congressional leaders have been more tepid, citing concerns about increasing the deficit.

A new report from the Bipartisan Policy Center estimates that a five-month suspension of the gas tax would increase federal deficits by about $12 billion. Current federal fuel taxes are 18.3 cents per gallon for gas and 24.3 cents per gallon for diesel; those amounts were last changed in 1993. According to NCSL, four states-Georgia, Indiana, Kentucky and Utah-have already temporarily reduced or suspended their gas taxes this year. Gas tax revenue is the largest revenue source for states, making up 36.5% of state transportation funding on average, according to the National Association of State Budget Officers.

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