On May 29, 2026, the Office of Management and Budget (OMB) published a proposed rule rewriting the Uniform Guidance at 2 CFR Part 200, which is the federal regulation governing every federal grant, cooperative agreement and pass-through award. Published as a joint rulemaking by OMB together with every federal grantmaking agency, the proposed rule represents the most substantial revision to federal grants administration since the 2013 promulgation of the Uniform Guidance.
The wide-ranging proposal would significantly impact many domains of local government responsibility — including public safety, public health, transportation, infrastructure, housing, workforce development and emergency management.
NLC has long advocated for streamlining the federal grants process while maintaining common sense guardrails to improve compliance. However, several provisions in the proposed rule could unintentionally limit local governments’ ability to access, administer and effectively use federal funding. As OMB revises the federal grants framework, it should ensure that new requirements strengthen accountability without creating barriers that undermine local governments’ ability to serve residents and deliver essential services.
What’s Happening Now
The 45-day comment period closed on July 13, 2026. There were 496,775 submitted comments. NLC has called for a 45-day extension of the comment period given the wide-ranging impact of the proposed rule. NLC’s submitted comments (PDF) called for the withdrawal of the proposed rule and raised concerns about the impact that increased administrative burdens, funding uncertainty and politicalization of federal grants will have on communities of all sizes.
OMB is now required to review and respond to comments received before issuing a final rule. If OMB wants to meet the proposed Oct. 1 implementation date, it will need to publish the final rule by Sept. 1.
Congress is also actively engaged on this issue. Over the coming weeks, the House and Senate will be negotiating the terms of a government funding deal. On Sunday, Aug. 2, the Senate Appropriations Committee released the text (PDF) for a government funding bill that includes a provision delaying implementation of the proposed changes until after December 11. This bill needs to pass both the Senate and House before being signed by the President – a process that remains uncertain as negotiations continue.
How Communities Can Stay Engaged
- Contact Congress: We encourage you to continue reaching out to your Senate and House offices to share how the proposed changes could impact your communities and to urge support for the provision that delays implementation. Members of Congress will be returning to their districts and states in August, providing an opportunity to meet directly with Members and their district staff. Use NLC’s template outreach letter on the proposed changes.
- Structure and coordinate in-district meetings with our Hometown Champions initiative.
- Watch NLC’s recorded webinar to learn more about the impact that these proposed changes may have on your community
- Read NLC’s overview of the proposed changes.
- Tell Your Story: If your community has previously dealt with a grant termination or pause, we encourage you to share your story. These accounts help NLC document the real-world impact as OMB and Congress determine next steps. Information shared will not be made public without your permission.
Reach Out
Email us with questions or to share information.
About the Author
Beyond the Basics: How Cities Can Support 530A Accounts
Supporting Better Retirement and Financial Decisions for Public and Private Sector Employees
- NLC Partnerships
Taking Economic Mobility to New Heights in the Air Capital of the World
- Tomeka Lee
Ideas Leading to Action: Scaling Workforce Supports for Early Child Care Professionals
Building Economic Resilience in Communities Program
