FCA Legislative Update (Week of 6-26-26)

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This Week in Congress

This week the House had a packed legislative agenda that included consideration of multiple appropriations measures, policy reforms across veterans and financial services, and a broad slate of small business legislation. The House voted on the National Security-State appropriations bill (H.R. 8595) and the Energy-Water appropriations bill (H.R. 9022), along with a Veterans Administration reform measure (H.R. 9237). The House considered H.R. 1181, a proposal aimed at prohibiting credit card companies and payment processors from assigning a specific merchant category code for gun retailers.

In addition, the House voted on 11 bills heavily weighted toward small business policy, including nine measures advanced out of the Small Business Committee. Those bills include efforts to increase transparency in Small Business Administration (SBA) pandemic-era and disaster lending programs (H.R. 826; H.R. 4238), strengthen oversight of SBA employee conflicts of interest (H.R. 7401), and enhance cybersecurity assistance for small businesses (H.R. 8880). Additional measures address the SBA’s use of artificial intelligence and machine learning (H.R. 8881), improve processes for handling small business antitrust complaints (H.R. 8882), and expand participation in federal contracting assistance programs (H.R. 8879). Other SBA-related measures would codify the agency’s Office of Native American Affairs (H.R. 7396) and authorize SBA lending for cloud computing services and business software (H.R. 915).

The House also voted on legislation allowing open-end investment companies, such as mutual funds and exchange-traded funds, to delay redemptions when there is suspicion of financial exploitation (H.R. 2478), as well as a Senate-passed bill (S. 629) that would increase the share of federal disaster relief funds available upfront to farmers and timber producers.

Finally, the House voted on newly updated version of the 21st Century ROAD to Housing Act following expected Senate action.

The Senate voted on its revised version of the 21st Century ROAD to Housing Act (H.R. 6644) and confirmed Trump administration nominees. Senate leadership also faces a narrowing window to advance a Foreign Intelligence Surveillance Act (FISA) extension before lawmakers depart Friday for a two-week recess. With limited time before the break, leadership is expected to prioritize high-priority confirmations and must-pass items, leaving little room for additional legislative negotiations in the final days of the work period.

FY 2027 Appropriations: Collins Pushes Ahead on Spending Bills Amid Partisan Tensions
Senate Appropriations Committee Chair Collins (R-ME) attempted to advance four FY 2027 appropriations bills this week, even as negotiations continue to face resistance from Senate Democrats and procedural uncertainty threatens the broader funding process. Collins has already canceled committee markups twice in recent weeks after Democrats signaled plans to offer amendments targeting the now-defunct Anti-Weaponization Fund, a proposed provision that the administration has since indicated is no longer under consideration. The disputes have underscored broader tensions surrounding the structure and content of the upcoming fiscal year spending package.
Republican leadership argues that Democratic opposition to advancing appropriations legislation reflects a broader strategy to slow or block the annual spending process, potentially setting the stage for a government funding confrontation later in the fiscal year. Republican leaders have suggested that the resistance could signal an effort to increase political leverage heading into the midterm election cycle, particularly if spending bills fail to advance through regular order. Democrats, meanwhile, have raised concerns about policy riders and amendment limitations that they argue could affect the scope and direction of federal spending priorities.

Despite current tensions, lawmakers on both sides acknowledge that a full appropriations package remains unlikely before the end of the fiscal cycle. As a result, Congress may ultimately turn to a continuing resolution in late September to maintain government funding. Such a measure would temporarily extend current funding levels and defer final decisions on FY 2027 appropriations, potentially pushing negotiations into late 2026 or early 2027.

21st Century ROAD to Housing Act Set to Influence Construction Industry Through Expanded Housing Production
The 21st Century ROAD to Housing Act is expected to have a notable impact on the U.S. construction industry by increasing housing production, modernizing federal housing programs, and reducing regulatory and administrative barriers that can slow development. At a time when housing supply constraints continue to affect affordability and market stability, the legislation is designed to streamline processes and strengthen the federal framework supporting residential development.

A primary effect of the legislation would be an increase in residential construction activity. By enhancing federal housing tools and encouraging expanded development, the bill is expected to:

• Support higher levels of new housing construction
• Encourage redevelopment and rehabilitation of existing housing stock
• Expand production of workforce and affordable housing units

For the construction industry, this would likely translate into a more robust pipeline of residential building projects across both urban and suburban markets.

The Act also focuses on improving the efficiency of federal housing programs. By reducing administrative complexity and modernizing program requirements, the legislation could:

• Shorten project approval timelines
• Improve consistency in financing and program eligibility
• Reduce compliance burdens on developers and builders

These reforms are intended to help move housing projects more quickly from planning stages into active construction.

Increased housing development typically generates additional demand for related infrastructure and site preparation work. As a result, construction firms could see expanded opportunities in areas such as:

• Water and sewer system improvements
• Road construction and site access development
• Utility installation and supporting infrastructure
• Land grading and site preparation services

This secondary layer of activity often represents a significant portion of total project investment.

The legislation’s focus on increasing housing supply could benefit a broad range of industry participants, including:

• General contractors involved in residential construction
• Specialty subcontractors such as electricians, plumbers, HVAC technicians, and framers
• Manufacturers of modular and prefabricated housing systems
• Suppliers of construction materials and related logistics providers

As housing production scales up, these sectors are likely to experience increased demand and project volume.

While the legislation may stimulate growth, it could also contribute to ongoing industry challenges. Increased construction activity may place additional pressure on:

• Availability of skilled labor
• Supply chains for key building materials
• Overall project costs in high-demand markets

The extent of these pressures will depend on how quickly industry capacity expands in response to increased demand.

TRADE TROUBLES: Members of Congress Urge White House to Preserve USMCA Ahead of Critical July Review
Concerns are mounting on Capitol Hill over the future of the U.S.-Mexico-Canada Agreement (USMCA) after President Trump suggested he may be open to abandoning the trade pact ahead of its mandatory six-year review. The comments have sparked renewed urgency among Senate Republicans and other lawmakers who are urging the administration to maintain and reaffirm the agreement, warning that uncertainty could disrupt North American trade relationships just weeks before a key decision point.

On June 10, President Trump told reporters he was “erring on the side of terminating” the agreement, stating that the United States does not need imports from Canada or Mexico. The remarks immediately raised questions about the future of the pact, which governs trade across North America. Despite those comments, the Trump administration is currently engaged in formal negotiations with Mexico and has also opened discussions with Canada as part of the required six-year review process.

Under USMCA’s “sunset review” provisions, the three countries must jointly determine whether to extend the agreement for an additional 16 years, with a key review meeting scheduled for July 1. USMCA is currently undergoing its mandatory six-year review, during which the United States, Mexico, and Canada must decide whether to extend the agreement for another 16 years. If any party objects to renewal, the agreement would remain in place until 2036 unless resolved through ongoing annual reviews. Each country also retains the ability to withdraw with six months’ notice, though both Mexico and Canada have already indicated support for continuing the pact.

With the July 1 review meeting approaching, attention is now focused on whether the administration will reaffirm the agreement or pursue a more aggressive renegotiation stance, a decision that could shape the future of North American trade for years to come.

SBA Office of Advocacy Supports DOL’s New Joint Employer Rule
The U.S. Small Business Administration’s Office of Advocacy has formally expressed support for the U.S. Department of Labor’s (DOL) proposed rule revising the definition of “joint employer” under the Fair Labor Standards Act (FLSA), highlighting the effort as an important step toward greater clarity and consistency in federal labor standards.

The DOL issued its proposed rule on April 23, 2026, seeking to establish a revised framework for determining when multiple entities may be considered joint employers under the FLSA. The proposal is intended to provide a more uniform federal standard for assessing employment relationships across industries.

On June 22, 2026, the Office of Advocacy submitted public comments in response to the proposed rule, commending the Department of Labor for moving toward a clearer and more predictable regulatory approach. Advocacy emphasized that a consistent federal definition of joint employer status would provide greater certainty for small businesses navigating complex employment arrangements.

• Emphasis on Clarity and Uniformity – In its comments, the Office of Advocacy praised the proposed rule’s effort to create a single, uniform federal standard, noting that such consistency is critical for reducing regulatory uncertainty and compliance burdens on small employers. Advocacy underscored that clarity in the joint employer standard is particularly important for small businesses that operate through franchises, subcontracting relationships, or staffing arrangements. To inform its position, the Office of Advocacy convened a roundtable of small business stakeholders representing a range of industries. Participants provided feedback on how joint employer determinations affect hiring practices, operational flexibility, and legal exposure.

• Stakeholder Recommendations – Based on input from the roundtable, Advocacy recommended that the Department of Labor refine and finalize the rule in a way that:

o Clearly defines and limits “reserved” and “indirect” control provisions; and
o Restricts the joint employer analysis to the four enumerated primary factors outlined in the proposed framework.
o Advocacy participants stressed that narrowing the scope of analysis would help ensure predictability in enforcement and reduce ambiguity that can lead to inconsistent interpretations across jurisdictions.

The Department of Labor’s joint employer rule remains under review following the public comment period, and further revisions may be made before a final rule is issued. Stakeholder engagement, including input from small business representatives, is expected to play a central role in shaping the final regulatory framework.

FAR Overhaul Proposed Rules — June 23, 2026
On June 23, 2026, the Federal Acquisition Regulatory Council (FAR Council)—comprised of the Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB), Department of Defense (DoD), General Services Administration (GSA), and NASA—released the first set of twelve proposed rules to implement Executive Order 14275, “Restoring Common Sense to Federal Procurement.”

These proposed changes represent the opening phase of what the Administration has described as a “Revolutionary FAR Overhaul,” widely characterized as the most significant rewrite of the Federal Acquisition Regulation in more than four decades.

The stated objective of the FAR overhaul is to reduce regulatory complexity, eliminate duplicative or outdated acquisition requirements, and better align procurement rules with underlying statutory mandates. The first package of proposed rules spans 17 FAR parts and is divided into four separate rulemakings issued by the FAR Council.

Notably, FAR Part 19 (Small Business Programs) is not included in this initial package and is expected to be addressed in a subsequent rulemaking cycle.

The initial rulemaking package includes several structural and procedural reforms intended to simplify federal acquisition processes and reduce administrative burden:
• Acquisition planning simplification: Replacement of lengthy written acquisition plan requirements with a one-page practitioner-focused guidance tool, with flexibility for oral planning where appropriate.
• Audit coordination reform: Transition from a blanket requirement for $2 million-plus settlements to a more risk-based framework for audit and resolution decisions.
• Regulatory sunset mechanism: Establishment of a mandatory four-year review cycle for FAR provisions, including structured public input to reduce regulatory accumulation over time.
• Security consolidation: Centralization of federal security-related acquisition requirements into a newly organized Part 40, structured into subparts addressing supply chain risk, prohibited/excluded sources, and information safeguarding.
• Market research integration: Consolidation of prior FAR Part 10 (market research) into Part 7 (acquisition planning) to streamline pre-award processes.
• Transparency adjustments: Removal of the prior requirement for mandatory public announcements of contract awards exceeding $5.5 million, replacing it with a revised disclosure framework.

The proposed rules are subject to a 30-day public comment period, with comments due by July 23, 2026. Stakeholders across the federal procurement ecosystem including contractors, agencies, and trade associations are expected to engage actively during this period as the FAR Council evaluates potential revisions prior to final rule issuance.