Bills · HR 7424
IN COMMITTEE· 119TH CONGRESS
House BillHR 7424Government Operations and Politics
American Business for American Companies Act of 2026
INTRO FEB 9· LAST ACTION FEB 9
READING
14MIN
COSPONSORS
0
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenVoters should care about this bill because it addresses a practice known as "tax inversion," where companies relocate their legal headquarters to foreign countries with lower corporate tax rates, even though their primary business operations, management, and customers may remain largely in the United States. This practice can reduce the amount of tax revenue collected by the U.S. government.
If this bill becomes law, it would ensure that taxpayer money spent on government contracts is directed towards companies that maintain a stronger presence and tax obligation within the United States. This could be seen as an incentive for companies to keep their headquarters domestically and contribute to the U.S. tax base, rather than seeking tax advantages abroad. If the bill does not become law, the federal government would continue to be able to award contracts to these inverted domestic corporations, which some argue contradicts the spirit of supporting American businesses and ensuring fair tax contributions.
KEY PROVISIONS
5AI-extractedPROVISION 01
Prohibits executive agencies from awarding contracts to 'inverted domestic corporations' or their subsidiaries.
This stops companies that have moved their legal address overseas for tax purposes from directly benefiting from federal government spending.
PROVISION 02
Requires prime contractors on federal contracts over $10 million to include a clause prohibiting awarding major subcontracts to inverted domestic corporations.
This extends the prohibition to significant portions of subcontracting work, closing a potential loophole for inverted companies.
PROVISION 03
Defines what constitutes an 'inverted domestic corporation,' generally involving a U.S. company acquiring a foreign one after May 8, 2014, and former U.S. shareholders retaining more than 50% ownership or primary management remaining in the U.S.
This provides clear criteria for agencies to identify which companies are subject to the contract prohibition.
PROVISION 04
Allows for waivers if a contract is critical for national security or essential health programs.
This ensures that critical government functions are not disrupted, even if it means contracting with an otherwise prohibited company.
PROVISION 05
Establishes penalties for prime contractors who violate the subcontracting prohibition, including contract termination or debarment.
This provides a strong enforcement mechanism to ensure compliance with the subcontracting rules.
SPONSORSHIP
1 + 0
D· Connecticut
YRS IN OFFICE
35
BILLS LED
39
ACTION TIMELINE
2 EVENTSFEB 9
Introduced in House
FEB 9
Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
BILL INFO
TypeHouse Bill
NumberHR 7424
Congress119th
StatusIn Committee
IntroducedFeb 9, 2026
Last actionFeb 9, 2026
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IN COMMITTEE· 119TH CONGRESS · OVERSIGHT AND GOVERNMENT REFORM COMMITTEE · INTRODUCED FEB 9, 2026
House BillHR 7424Government Operations and Politics
American Business for American Companies Act of 2026
INTRODUCED FEB 9, 2026· LAST ACTION FEB 9, 2026
PASSAGE CHANCES
—%
READING
14 min
COSPONSORS
0
COMPLEXITY
Moderate
