On May 22, the U.S. House passed their budget reconciliation bill, H.R. 1, the “One, Big, Beautiful Bill Act,” in a 215-214-1 vote. Reps. Thomas Massie, R-Ky., and Warren Davidson, R-Ohio were the only Republicans to vote against the measure, while House Freedom Caucus Chair Andy Harris, R-Md., voted present.

Ahead of the vote, ABC sent a Key Vote letter expressing strong support for the bill that provides critical tax relief to contractors. Among the many essential reforms in the package, ABC particularly supports:

• Making the Small Business Deduction Permanent and Stronger: The bill provides the pass-through sector crucial relief via introduction of a boosted 23% deduction for qualified business income. Locking in the higher deduction under Section 199A will not only prevent a significant tax hike in 2026, but it will also ensure that ABC members—most of whom are passthrough businesses—can reinvest in their companies, expand their workforce, and take on new projects without fear of future tax hikes.

• Permanent Estate Tax Relief: The bill preserves and protects family businesses from destructive estate taxes keeps jobs, skills, and ownership here at home, allowing contractors to pass on the businesses they built to the next generation.

• Restoration of 100% Bonus Depreciation: Renewing previously expired immediate expensing via 100% bonus depreciation is a powerful incentive for businesses to invest in new equipment and technologies. This policy was based on the understanding that allowing immediate expensing of capital investments would encourage businesses to modernize their operations, increase productivity and, ultimately, drive economic growth. It was particularly aimed at capital-intensive industries like construction, where equipment investments can be substantial.

• Revived Expensing of R&D Costs: This provision permanently allows taxpayers to immediately deduct domestic research or experimental expenditures paid or incurred in taxable years beginning after December 31, 2024. Additionally, small business taxpayers with average annual gross receipts of $31 million or less will generally be permitted to apply this change retroactively to taxable years beginning after December 31, 2021. Furthermore, all taxpayers that made domestic research or experimental expenditures after December 31, 2021, and before January 1, 2025, will be permitted to elect to accelerate the remaining deductions for such expenditures over a one-year period or a two-year period.

• Continuation of Simplified Tax Code: The bill permanently extends the larger standard deduction and the alternative minimum tax threshold that were set to expire. These two provisions have greatly simplified the tax code for millions of taxpayers, including construction workers and job creators.

• No Tax on Overtime for American Workers: By exempting overtime pay from federal income tax, the bill delivers direct, meaningful tax relief to the hardworking men and women in the merit shop construction trades—rewarding those who put in the extra hours to get the job done, support their families, and keep America building.

• Expanded 529 Accounts for Skilled Trades Training: By expanding 529 savings accounts to cover training programs and credentials in the skilled trades, the bill supports the next generation of craft professionals—ensuring more young Americans can pursue rewarding careers in construction without crushing debt.

• Relief from Overregulation and Red Tape: From the inclusion of the ABC-supported REINS Act to reducing 1099 reporting burdens to improving Opportunity Zones, this bill cuts unnecessary red tape and unlocks new growth in communities that need it most.

• Expedited Environmental Reviews: By paying 125% of the estimated cost to prepare or supervise the preparation of an Environmental Assessment or Environmental Impact Statement, a project sponsor would receive a deadline of six months for completing an EA and twelve months for completing an EIS along with protection from judicial and administrative reviews.

House leadership’s Managers Amendment added last-minute changes to the legislation ahead of floor consideration, including:

• Lifting the state and local tax deduction cap to $40,000 for individuals making under $500,000.
• The accelerated phasing out of certain IRA clean energy credits by 2028. There will be much debate over this item in the Senate, including the prevailing wage and apprenticeship requirements.

The House-passed bill now heads to the Senate, where it is likely to be amended. Given the bill’s privilege under reconciliation rules, the Senate will only need a simple majority to approve their version bill. Both chambers will have to pass the same bill in order to send it to the President’s desk.

On May 21, the House Judiciary Committee held a legislative markup on several pieces of legislation, including the ABC-supported Prove It Act (H.R. 1163). Ahead of the hearing, ABC sent a letter in support of the bill, urging members of the Committee to report it favorably for a full House vote. The Committee passed H.R. 1163 in a 14-12 vote and, following passage in the House Small Business committee on April 30, will now be reported for a vote by the full U.S. House.

The Prove It Act strengthens the Regulatory Flexibility Act by allowing small businesses, and groups like ABC, to petition the U.S. Small Business Administration’s Office of Advocacy to examine agency rules and requires that agencies evaluate both the direct and indirect costs of proposed rules on small businesses. What’s more, the bill exempts small businesses from regulatory action when agency’s do not comply with the RFA.

On May 20, the U.S. House Committee on Education and the Workforce Subcommittee on Workforce Protections held a hearing titled, “Empowering the Modern Worker.” Ahead of the hearing, ABC joined other business groups of the Independent Work Coalition in submitting a letter to the committee supporting opportunities for independent contractors. “As modern technology continues to drive the growth of independent work opportunities, policymakers should pursue policies that reflect the preferences of the workers themselves and that support the small businesses and entrepreneurs that rely on the independent contractor model,” the letter states.

The letter also pointed to two critical ABC-supported pieces of legislation sponsored by Rep. Kevin Kiley, R-Calif., the Modern Worker Empowerment Act (H.R. 1319) and the Modern Worker Security Act (H.R. 1320). The Modern Worker Empowerment Act provides clarity for workers and businesses by establishing a common-sense definition for independent contractor status across federal law. The Modern Worker Security Act clarifies that independent workers can participate in innovative programs designed to connect them with portable, work-related benefits without fear of potentially jeopardizing their independent contractor status under federal law.

On May 20, the House Transportation and Infrastructure Committee's Subcommittee on Economic Development, Public Buildings, and Emergency Management held the hearing, "Federal Courthouse Design and Construction: Examining the Costs to the Taxpayer." Ahead of the hearing, ABC sent a letter to the subcommittee, highlighting how the Biden administration's project labor agreement mandate increases federal courthouse construction costs. ABC noted several courthouse construction and improvement projects, totaling several hundred million dollars, that require a PLA as a result of the mandate. In his opening statement, Chairman Scott Perry, R-Pa., entered ABC's letter into the hearing record. 

On May 15 the U.S. House Committee on Education and the Workforce Subcommittee on Workforce Protections held a hearing titled, “Reclaiming OSHA’s Mission: Ensuring Safety Without Overreach.” Ahead of the hearing, ABC sent a letter to the committee calling for the withdrawal of two Biden-era OSHA regulations, the Heat Injury and Illness Prevention in Outdoor and Indoor Settings Proposed Rule and the Worker Walkaround Representative Designation Process Final Rule.

Regarding the Heat rule, ABC noted that the rule imposes prescriptive, complicated requirements on construction industry employers, limiting all flexibility, which could weaken contractor efforts to prevent heat stress for workers. ABC added through the Worker Walkaround rule, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law. This final rule negatively impacts the rights of employers while simultaneously ignoring the rights of the majority of employees who have not authorized a union to represent them.

In response to a request from the Office of Management and Budget for stakeholder recommendations to cut federal red tape, ABC submitted a letter outlining arguments for rescinding 10 final rules promulgated by the Biden administration, including project labor agreement mandates, Davis-Bacon Act updates, overtime, independent contractor under the Fair Labor Standards Act, OSHA walkaround and the noncompete clause ban, as well as withdrawing the heat rule as proposed.

On April 30, the U.S. House Committee on Small Business held a full committee markup on several pieces of legislation, including the ABC-supported Prove It Act (H.R. 1163). Ahead of the markup, ABC sent a letter to the committee urging members to report the bill for a full House vote. The Prove It Act strengthens the Regulatory Flexibility Act by allowing small businesses, and groups like ABC, to petition the U.S. Small Business Administration’s Office of Advocacy to examine agency rules and requires that agencies evaluate both the direct and indirect costs of proposed rules on small businesses. What’s more, the bill exempts small businesses from regulatory action when agency’s do not comply with the RFA.

The Prove It Act was favorably reported for a full House vote in a 15-11 vote.

On March 25, the U.S. House Committee on Education and the Workforce Subcommittee on Workforce Protections held a hearing title, “The Future of Wage Laws: Assessing the FLSA’s Effectiveness, Challenges, and Opportunities.” Ahead of the hearing, ABC sent a letter to the committee in support of legislation that clarifies who qualifies as an independent contractor and protects workers who have long been properly classified as independent contractors in the construction industry:

• H.R.1319, the Modern Worker Empowerment Act, introduced by Rep. Kevin Kiley, R-Calif., which amends the FLSA to base worker classification determinations on two clear tests: a business’s control over a worker’s work and how it is performed and the worker’s opportunity to express entrepreneurial discretion. This legislation also clarifies that safety, legal and insurance guidelines and contractual project completion deadlines are not determinants of worker classification. Further, it would ensure the worker classification standard is consistent between the FLSA and the National Labor Relations Act.
• H.R.1320, the Modern Worker Security Act, introduced by Rep. Kiley, which provides businesses with the opportunity to offer flexible or portable benefits to workers without the risk of the provision of these benefits jeopardizing worker classification determinations.

ABC also encouraged representatives to reintroduce H.R.1980, the Working Families Flexibility Act, from the 117th Congress. This legislation amends the FLSA to provide workers choice between compensatory overtime pay and compensatory time off at a rate not less than 1.5 times hours worked.

In addition to the letter, ABC joined other coalitions of trade associations, including the Independent Work Coalition, in submitting letters in support of the Modern Worker Employment Act, Modern Worker Security Act, Working Families Flexibility Act, and the Ensuring Workers get PAID Act.

On March 11, the U.S. House Committee on Small Business Subcommittee on Oversight, Investigations, and Regulations held a hearing titled, “Restoring the SBA: Putting Main Street America First.” Ahead of the hearing, ABC sent a letter to the Committee calling on Congress to empower the SBA and small businesses around the country to keep federal agencies in check when implementing new regulations. The letter specifically supports the ABC-supported Prove It Act which strengthens the Regulatory Flexibility Act (H.R. 1163) by allowing Main Street businesses, and groups like ABC, to petition the SBA to examine whether a federal regulation would have significant economic effects on a large number of small businesses.

In the hearing, Prove It Act sponsor Rep. Brad Finstad, R-Minn., touted the bill, noting that it helps small business navigate the regulatory environment. Alfredo Ortiz, CEO of Job Creators Network, added that the bill, “is a game changer… for too long, agencies have been given a pass from showing the impact of regulations on small businesses. Having the opportunity to have a seat at the table at the beginning of thew process rather than at the end of the process is critical.” You can watch their exchange here.

On Feb. 5, the U.S. House Committee on Oversight and Government Reform held a hearing, Rightsizing Government. The hearing focused on eliminating waste, fraud and abuse by the federal government. Ahead of the hearing, ABC sent a letter to the Committee highlighting how the Biden administration’s Use of Project Labor Agreements for Federal Construction Projects final rule eliminated merit-based federal contracting and increased taxpayer costs by 12-20%. The letter urged Congress and the Trump administration to Congress and the Trump administration have the opportunity to restore merit to federal contracting by advancing fair and open competition. Rep. Clay Higgins, R-La., who serves on the Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs, entered ABC’s letter into the hearing record. The Congressman's remarks may be seen here.