Proposed Changes to 2 C.F.R. Part 200 and How to Submit Public Comments

Kerry York-Myles, Federal Funding Implementation Team

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Agenda

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1. What is the 2 C.F.R Part 200?
2. How does federal rulemaking work?
3. Significant proposed changes
4. Public Comment Basics
5. Questions and Resources

6/22/2026

This info session summarizes a proposed rule and is not legal advice.

All stakeholders are encouraged to consult their legal counsel before relying on any specific characterization or before filing comments.

Team Intro & Overview

Bryan Dahl, Deputy State Budget Director

Bryan.Dahl@state.mn.us

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Kerry York Myles, FFIT Director

Kerry.YorkMyles@state.mn.us

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Avery Prine, Analyst

Avery.Prine@state.mn.us

Our Focus Areas

1. Monitor the federal landscape
2. Advance the resourcing of strategically significant projects
3. Monitor and evaluate federal funds deployment
4. Curate, develop & share federal funding technical assistance

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Mission: Partner with Minnesota entities to access and deploy federal funds to accelerate state goals.

Overview 

U.S. Office of Management and Budget (OMB), in coordination with all federal grantmaking agencies, published a proposed rule in the Federal Register rewriting Title 2 in the Code of Federal Regulations (CFR) Part 200. 

• Uniform Guidance, 2 CFR Part 200, is the regulation that governs federal financial assistance awards, including grants, cooperative agreements, loans, and loan guarantees.
• Revisions would fundamentally overhaul of federal award application and management requirements and codify into regulation a series of executive orders —notably EO14332, “Improving Oversight of Federal Grantmaking” (August 7, 2025), as well as several other orders addressing diversity, equity, and inclusion (DEI) programs, gender ideology, merit-based opportunity, and foreign collaborations.
• Comments are due by July 13, 2026, with a proposed effective date of October 1, 2026.

mn.gov/mmb/budget/federal-investments/

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What is the 2 C.F.R. 200?

The Code of Federal Regulations (CFR) is the official codification of general and permanent rules published in the Federal Register by U.S. executive departments and agencies. Divided into 50 subject-matter titles, it serves as the legally binding administrative law of the federal government.

Title 2 of the Code of Federal Regulations, Part 200 (2 C.F.R. 200) is the federal government’s guidance for managing federal grants, cooperative agreements, loans and foreign assistance.

Also commonly referred to as the Uniform Guidance, it is issued by the Office of Management and Budget (OMB).

• OMB is the federal government's largest agency and is responsible for implementing the President's agenda across the executive branch.
• It establishes standardized rules for how entities must account for, manage, and report federal funds
• It applies to all "non-Federal entities" that receive and spend federal financial assistance (state and local governments, non-profit organizations, colleges and universities, tribal nations, etc.)
• Split into sections that cover general provisions and definitions, pre-award, post-award, cost principles and audit requirements

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What makes this rule change significant?

• Largest revision to the Uniform Guidance since publication in 2013
• OMB proposes to issue a final rule that would be effective by October 1, 2026, explaining that this proposed effective date “is important to ensure that only a single set of government-wide requirements apply to federal awards” made in FY27. 
•  The rule provisions will impact every state, every Tribe, local governments, most major universities and hospitals, nonprofits, community organizations, and private companies. 
• The rules matter because they change practice. 

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6/22/2026

Why is OMB proposing a rule change?

OMB has organized the proposed revisions around three objectives:

(1) improving transparency, accountability, and oversight for use of Federal funds;

(2) clarifying the status of the 2 CFR regulatory text as an OMB regulation; and

(3) reducing recipient burden

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How does federal rulemaking work?

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Major Changes

Reclassifies 2 C.F.R. Part 200 from guidance to binding OMB regulation

• Under this framework, future OMB amendments to 2 C.F.R will carry binding regulatory effect government-wide on the effective date giving recipients less time to prepare and potentially fewer opportunities for agency-specific input prior to implementation.
• This concentrates future grant policy authority in OMB and streamlines updates—and means that future changes could take effect faster across all agencies without individual agency notice-and-comment.
• Significant implications for MN State Agencies which simultaneously acts as a direct recipients and pass-through entities.

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Major Changes

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Nondiscrimination and DEI Restrictions

• Codifies EO language and prohibits using federal awards to “fund, promote, encourage, subsidize, or facilitate” unlawful DEI policies, gender ideology, and pediatric gender transition care.
• Prohibits promotion or support for "theories of disparate-impact liability"—the legal doctrine under which facially neutral policies can constitute unlawful discrimination if they produce disparate outcomes by race, sex, or other protected characteristics.
• Viewpoint-neutrality requirements for events and services on property under a public entity's control, this also applies to events held on public property regardless of whether the event itself is federally funded.

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Major Changes

Merit Review, Pre-Issuance Review and Risk Assessment

• Senior political appointees would conduct pre-issuance review of all discretionary awards. They must apply specific principles that include ensuring awards "demonstrably advance the President's policy priorities"
•  Peer review by independent experts is advisory; senior appointees must exercise independent judgment and "must not ministerially ratify or routinely defer to" peer reviewers.
• Significant expansion of the risk factors considered when evaluating an applicant's ability to fulfill grant terms and conditions. New factors include an applicant’s financial capacity to manage and oversee high-dollar awards (as determined by the federal agency) and an applicant’s history of “questionable practices” based on publicly available information.

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Major Changes

Termination and Suspension Authority

• Expanded authority for “discretionary termination” of federal awards that “no longer effectuate program goals, Federal agency priorities, or the national interest” as they exist at the time of termination. Statutory entitlements are not included. 
• No administrative hearing right for discretionary terminations—only for terminations based on noncompliance. Judicial review is available in the U.S. Court of Federal Claims.
• A new 90-day suspension authority would allow agencies to pause awards while considering termination of those awards.

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Major Changes

Subawards and Subrecipient Monitoring

• Increased federal oversight to ensure that pass-through entities comply with the reporting requirements for subawards on SAM.gov
• Pass-through entities ensure subrecipients "do not take actions that could significantly damage the reputation of the pass-through entity, the Federal agency, or the Federal Government."

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Major Changes

Other Provisions

• Mandatory participation (including subrecipients) in DHS's E-Verify program to confirm employment eligibility of "all employees and contractors hired in or performing work in the United States under a Federal award."
• Requirements for recipients and subrecipients to submit drawdown payment justification to their funding agency and pass-through entity
• Adds new restrictions on allowable costs, including voter registration, advertising and public relations, publication costs, conference attendance, and lobbying
• Elimination of fixed-cost awards
• References to GAO's Green Book and the COSO internal-control framework are stripped from the audit rules, and agency, Inspector General, and GAO audits are limited to those expressly authorized by statute

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What does this mean?

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Revisions that benefit grantees

• Preservation of Indirect Cost Provisions
• 15% de minimis IDC
• Continued recognition of negotiated IDC
• Continued Recognition of Tribal Sovereignty 
• Generally retains provisions that recognize Tribal governments as a distinct class of award recipients and keeps language around Tribal rights and self-determination
• Standardization Across Agencies
• More predictable application and award processes 
• Fewer agency-specific interpretations of regulations
• Explicit Encouragement of Multi-Year Awards
• Agencies encouraged to use longer budget periods and longer award structures
• 30-Day NOFO Requirement
• Continues 30-day requirement already in guidance, but adds accountability measures that require greater documentation/special circumstances for shorter periods.

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Now What?

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What about congress?

OMB’s 2026 rewrite of 2 CFR Part 200 is a major structural and policy shift in federal grantmaking, and if Congress chooses, it can block or revise it under the Congressional Review Act within 60 days of publication.

How to prepare and submit public comment

The purpose of the public comment period is to allow individuals, organizations, local governments, and other stakeholders to submit formal feedback, data, and opinions directly to OMB.

• Anyone can comment.
• OMB is legally required to consider every substantive comment when developing a final rule, especially when there is a critically high volume of comments on a particular revision.
• Opportunity to formally document concerns, impact, or support in the rulemaking process.
• All comments become public record.

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Comment Best Practices

• Substantive comments are unique, factual, and may include legal or scientific citations.
• The most effective comments are focused.
•  Are you an attorney? Community member? Do you have regulatory experience? If so, consider focusing on those aspects of your expertise.
• Give yourself sufficient time to prepare, draft, and submit your comment.
• Write what you know/from experience as much as possible. Focus on specific impacts.
• If possible, insert specific citations or studies and give yourself time to adequately prepare and include the appropriate citations in your comment.

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Submitting your comment

Comments due July 13, 2026 at 11:59 PM Eastern time

Submit comments via the Federal eRulemaking Portal: http://www.regulations.gov 

• Select the link “Comment” on the docket page for “Regulation for Federal Financial Assistance” Docket ID: OMB-2026-0034
• When submitting comments, include your name, organization name (if applicable) and label comments with docket number and title

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Comment FAQs

• Can I submit anonymously or use another name? Yes. You don’t need to give your name or other identifying information such as your address.
• Can I submit more than 1 comment? Yes, but submit any comment by the due date (7/13/26), otherwise it may not be considered.
• Is there a page minimum or maximum for comments? No. You can submit directly in the text box or upload attachments.
• Is it better to submit my own comment or sign onto someone else’s? It's up to you. If you sign onto someone else’s comment or submit a copy of someone else’s comment, that counts as only 1 substantive comment. If you sign onto a comment letter, then also submit your own separate and unique comment, that counts as 2 substantive comments.
• Are there examples of other comments we can see? People have already commented on the proposal on regulations.gov so you can search the existing public comments. (15K+ submitted so far)

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6/22/2026

Biweekly Federal Update Series

The Federal Update Series provides a forum for state agencies and external stakeholders to share updates about federal funding and related topics.  Add to your calendar. 

Calls are held Biweekly, Thursdays (12:00-12:30 PM) 

***NO CALL on 7/2***

Instead, look for an update email with federal funding opportunities, resources, and relevant updates. 

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6/22/2026

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Sign up for Federal Funds Implementation Team emails

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Resources

More information about the proposed changes

• https://www.federalregister.gov/documents/2026/05/29/2026-10817/regulation-for-federal-financial-assistance (Federal Register)
• Chart of Proposed Changes to the OMB Uniform Guidance (National Council of Nonprofits)
• 2024 regulations vs 2026 proposal (MyFedTrainer)

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More info about regulatory review and the federal rulemaking process

DASHBOARD - REGINFO.GOV

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Where to submit public comment

Regulations.gov

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Resources for writing an effective public comment

• Regulations.gov
• How To — Public Comment Project 
• Engaging in Agency Rulemaking: How to Submit Effective Public Comments | Johns Hopkins
• A-CITIZENS-GUIDE-TO-THE-FEDERAL-REGULATORY-PROCESS.pdf

6/22/2026

Q&A

Additional Questions? Federal.investments.mmb@state.mn.us

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Sign up for Federal Funds Implementation Team emails