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 Friday, May 16, the House Budget Committee, tasked with compiling and presenting the final package for consideration by the full House, shot down the bill, now officially labeled the “One, Big, Beautiful Bill Act,” in a 16-21 vote. Reps. Ralph Norman, R-S.C., Chip Roy, R-Texas, Josh Brecheen, R-Okla., Andrew Clyde, R-Ga., and Lloyd Smucker, R-Pa., all voted against the measure. The Budget Committee reconvened late Sunday and approved the package in a 17-16 vote, with four of these Republicans (Norman, Roy, Brecheen, and Clyde) voting present and allowing the measure to move forward. Speaker Johnson spent the weekend negotiating with these hardline conservatives, agreeing to accelerate work requirements for Medicaid and the repeal of clean energy tax credits in the Inflation Reduction Act. Ahead of the hearing, ABC sent a letter in support of the One, Big, Beautiful Bill Act, specifically highlighting some of the bill’s key tax provisions crucial to the construction industry. ABC has expressed concerns over the business state and local tax deduction limits included in the bill which impose unnecessary complexity and potentially higher taxes for small businesses.

 

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.

On May 14, after a more than 17-hour markup, the U.S. House Committee on Ways and Means, the chief tax writing committee in Congress, passed its recommendations for President Trump’s One, Big, Beautiful Bill in a 26-19 vote. Ahead of the hearing, ABC sent a letter to the committee expressing strong support for the measure. Specifically, ABC supported the bill’s permanent expansion of a 23% small business deduction under Section 199A and permanent relief from the estate tax. In addition, the legislation delivers a series of reforms that directly strengthen the construction sector, including:

• Full and Immediate Expensing + Expanded Section 179: By restoring 100% bonus depreciation and doubling Section 179 expensing to $2.5 million, the bill supports critical reinvestment in equipment, vehicles, and tools—assets our members need to stay productive, safe, and competitive.
• Restored Interest Deductibility: Construction firms often finance labor and materials across long project timelines. This provision allows them to deduct legitimate interest costs, improving cash flow and supporting sustainable growth.
• Immediate Expensing for R&D: Many contractors are innovating—developing energy-efficient systems, project management platforms, and safety technologies. This provision rewards that investment and keeps jobs and IP in the U.S.
• Incentives for U.S.-Based Manufacturing Projects: When America builds, our members get to work. Enhanced cost recovery for domestic manufacturing structures translates directly into demand for contractors, skilled trades, and materials.
• Improved Opportunity Zones: Enhancements to the OZ program will unlock new development in underserved and rural communities—delivering contracts, jobs, and infrastructure that benefit both local residents and the firms that build there.
• Reduced Reporting Burdens: Raising the 1099-MISC threshold and repealing the expanded 1099-K rule reduces unnecessary red tape. Contractors should be on the job, not buried in compliance paperwork.

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 April 8, the U.S. Senate Committee on Small Business and Entrepreneurship and the U.S. House Committee on Small Business held a joint hearing titled, “Prosperity on Main Street: Keeping Taxes Low for Small Businesses.” Ahead of the hearing, ABC sent a letter to the committees in support of key provisions from the Tax Cuts and Jobs Act that provided important tax relief for contractors. Specifically, ABC called on House and Senate members to support critical tax policies, such as:

• Maintaining Parity for Pass-Through Entities through the permanence of the TCJA’s Section 199A
• Revived Expensing of Research and Development Costs
• Restoration of 100% Bonus Depreciation

The scheduled expiration of many of these policies would have grave effects, not only for our contractor members, but for the construction market more broadly, specifically harming small businesses around the country. On Jan. 17, ABC sent a letter to the House Ways & Means Committee emphasizing the significance of making permanent the provisions of the TCJA for America’s working families.