Capitol to Capitol | Sept. 8, 2025

Capitol to Capitol | Sept. 8, 2025

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

NCSL Updates

State Legislators Meet With US House Privacy Work Group

Following comments NCSL submitted to the U.S. House Energy and Commerce Privacy Work Group, a bipartisan group of legislators representing NCSL met with members of the work group to share highlights from their respective state privacy laws. The legislators emphasized provisions they believe Congress should incorporate into a comprehensive federal data privacy framework.

The legislators noted that across the country, state-level privacy protections have increasingly aligned around core principles, creating a more consistent framework for both consumers and businesses, and helping to counter the tech industry's claims that a confusing patchwork of laws makes compliance difficult.

The legislators also explained that state privacy laws share key provisions, granting consumers significant rights over their personal data. In nearly every state with a privacy law, consumers can access, delete and transfer their personal data, giving them greater control over how businesses handle their information. According to NCSL's legislators, most states give consumers the right to opt out of the sale of their data, targeted advertising and profiling for automated decision-making, reinforcing a broad commitment to data privacy.

Finally, the bipartisan group underscored the importance of preserving state flexibility in any federal approach, particularly advocating for minimal or no federal preemption. One legislator noted the speed of technological change, saying that "a preemption of state privacy laws that does not allow states to tailor legislation to their needs will stifle their ability to respond to emerging risks."

The privacy work group acknowledged the states' role as "laboratories of democracy" and committed to continued conversations with state leaders in the privacy and artificial intelligence areas. The work group said a federal bill-which is slowly being developed-would focus on "interstate commerce and U.S. competitiveness." The group also expressed hope that any legislation would take a bipartisan approach.

Representatives from NCSL included Connecticut Sen. James Maroney, Texas Rep. Giovanni Capriglione, Utah Rep. Paul Cutler, Minnesota Rep. Steve Elkins, Montana Sen. Daniel Zolnikov, Maryland Sen. Katie Fry Hester and Vermont Rep. Monique Priestly.

NCSL Comments on Updates to Financial Data Privacy Act

In comments submitted to the House Financial Services Committee, NCSL urges Congress to preserve state authority while modernizing the consumer data protections found in the Gramm-Leach-Bliley Act of 1999. The act requires financial institutions to disclose data-sharing practices to customers and allow customers to opt out of having their personal financial information shared with certain third parties, among other protections. NCSL explains that some states have enacted privacy laws that apply to data not covered under the act, such as geolocation and marketing information, thereby offering greater protection to consumers. NCSL emphasizes that the GLBA was never meant to exempt financial institutions from all state privacy rules and encourages Congress to integrate a new federal data privacy law with an updated GLBA. Read more

Congressional Updates

Bill to Preserve Critical Cybersecurity Tools Advances

The House Committee on Homeland Security passed a bill reauthorizing for 10 years a cybersecurity grant program that helps state, local, tribal and territorial governments address cybersecurity risks. This critical program has provided states and local governments with the resources they need to bolster their cybersecurity defenses and has assisted in modernizing technology systems across the country. The bill, known as the Protecting Information by Local Leaders for Agency Resilience (PILLAR) Act, does not contain an appropriation amount. Without reauthorization, the grant program will expire on Sept. 30. The reauthorization stabilizes the state and local cost-share at 60% for single entities or 70% for multi-entity groups-the current authorization level for fiscal year 2025. One notable change is that the PILLAR Act incentivizes implementation of multifactor authentication across critical infrastructure by increasing the federal cost-share by 5% if entities or multi-entity groups implement MFA by fiscal year 2028. NCSL supports the reauthorization of this grant but hopes to obtain a specific appropriation before formally weighing in. Read more

Administration Updates

CMS Releases Information on Rural Health Transformation Program

The Centers for Medicare & Medicaid Services has released information on key components of the Rural Health Transformation Program. Established as part of the federal tax and spending bill enacted in July, the program provides $50 billion to states over five years to meet strategic goals.

Key takeaways from the guidance are:

Strategic goals

• CMS is focused on rural health innovations, prevention, chronic disease, behavioral health, prenatal care, sustainable access for rural providers, workforce development in rural communities, innovative care models and tech innovation.

Funding structure

• 50% of the funds will be distributed equally among approved states. (Washington, D.C., and the U.S. territories are not eligible to apply.)
• 50% of the funds will be based on a score that considers "ruralness, state policies and quality of application."

Important dates

• Expected application release: mid-September 2025
• Submission deadline: early November 2025
• Awardee decisions: by Dec. 31, 2025

Governors' offices are the primary point of contact but may designate a lead agency to develop and submit the application.

The CMS will be adding resources to a program website.

Resources

• CMS RHTP guidance
• CMS RHTP webinar
• CMS RHTP slide deck
• Senate finance RHTP fact sheet

Proposed Rule Would Disqualify Certain Employers From Public Service Loan Forgiveness

The proposed rule would disqualify from the PSLF program nonprofits deemed to be engaging in "activities that have a substantial illegal purpose." The department says such activities would include violations of immigration laws or illegal discrimination, supporting terrorism, engaging in chemical or surgical castration or mutilation of children, or engaging in a pattern of violating state laws. The department could make determinations of employer eligibility based on a "preponderance of the evidence" standard. Borrowers who are employed by disqualified nonprofits would receive notice that their employer was at risk or had lost its eligibility under PSLF.

The department estimates the rule could reduce loan forgiveness through the PSLF by $1.5 billion over 10 years. The department estimates a 10% reduction in borrower participation due to disqualified employers. If approved, the rules would go into effect on July 1, 2026. Read more

Education Department Announces On-Time Launch of FAFSA

The department confirmed the Oct. 1 launch of the FAFSA form in a letter to Congress after a successful beta testing phase. The form's availability was delayed during the prior two application cycles. Read more

Labor Board Warns States Against Regulating Private Sector Labor Relations

The acting general counsel of the National Labor Relations Board, William Cowen, warned that "states are not permitted to regulate conduct 'that the NLRB protects, prohibits, or arguably protects or prohibits.'" The NLRB is currently without quorum, which has prompted discussion in some states about fulfilling some of the board's functions. The message is likely aimed at the now 12 states that have banned mandatory employer-run meetings regarding unionization, also called captive audience meetings. Cowen stated that "normal Agency operations are continuing to the greatest extent permitted by law," despite the lack of quorum. A previous attempt by the NLRB under the first Trump administration to preempt an Oregon law banning captive audience meetings was dismissed on technical grounds, but it remains a priority for the agency. Read the NLRB statement.

Labor Department Encourages Workforce Boards to Provide AI Training

In a nonbinding guidance letter, the department encourages state and local workforce boards to use WIOA funds to integrate AI learning into workforce development programs and create AI-focused skill-building initiatives. Read the letter.

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