Mike,
Thanks for checking into this. Hopefully someone will introduce the bill and float it through, especially since it is more of an administrivia issue than an actual change (per se) to the law. In fact, the problem isn't so much the text of the law in itself, it's the way the BATF currently interprets it, which is a change from how they initially interpreted it (probably erring on the side of caution)... But, there is certainly room for more clarity in how it's written.
I really wish they'd just get rid of the 26" requirement all together (as mentioned), and also just get rid of the C&R and the reenactor's group wording. I have a 01 FFL, but I also have to have an 03 FFL just to have the SBRs in Illinois. On the federal side of things, having an 01 and an 03 isn't really ideal... but that's a discussion for another day.
John Thomas