American Business for American Companies Act of 2026 | ChamberLight
Bills · S 3811
IN COMMITTEE· 119TH CONGRESS
Senate BillS 3811Government Operations and Politics
American Business for American Companies Act of 2026
INTRO FEB 9· LAST ACTION FEB 9
READING
14MIN
COSPONSORS
4
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8
Introduced
In Committee
Reported
Passed Senate
Passed House
Conference
To President
Became Law
WHAT THE BILL DOES
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Voters should care about this bill because it aims to ensure that federal tax dollars are spent with companies that maintain a strong commitment to the United States, rather than those that have moved their legal headquarters abroad while keeping substantial operations here. This connects to concerns about corporate tax avoidance and the perception that some companies benefit from U.S. markets and infrastructure without fully contributing to the U.S. tax base.
If this bill becomes law, it could reduce the number of eligible contractors for some government projects, potentially affecting cost or specialized service availability in certain niches. Conversely, if it doesn't pass, inverted companies would continue to be eligible for government contracts, which critics argue undermines the U.S. tax system and rewards companies for reducing their U.S. tax liability. The bill could encourage companies to maintain or return their headquarters to the U.S. if they value government contracts.
KEY PROVISIONS
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PROVISION 01
Prohibits executive agencies from awarding contracts for goods or services to "inverted domestic corporations," their subsidiaries, or joint ventures where such corporations hold more than 10% ownership.
This directly cuts off a significant source of revenue (government contracts) for companies that have legally reincorporated overseas while maintaining substantial U.S. ties.
PROVISION 02
Requires prime contractors on federal contracts over $10 million to include a clause prohibiting them from awarding major subcontracts (over 10% of prime contract value) to inverted domestic corporations or structuring subcontracts to circumvent this rule.
This extends the prohibition beyond prime contractors to ensure that inverted companies cannot indirectly benefit from large federal contracts through subcontracting.
PROVISION 03
Defines an "inverted domestic corporation" as a foreign entity that acquired a U.S. company after May 8, 2014, and either more than 50% of its stock is still held by the former U.S. owners or its management/control and significant domestic business activities are primarily in the U.S.
This definition is central to identifying which companies are subject to the prohibition and includes criteria related to both ownership and operational control.
PROVISION 04
Allows executive agencies to waive the prohibition if it's necessary for national security or for the efficient administration of federal health benefit or public health programs, requiring a report to Congress within 14 days of such a waiver.
This provides flexibility to ensure critical government functions are not disrupted, especially in emergencies or essential services, while maintaining transparency.
PROVISION 05
Establishes penalties for prime contractors who violate the subcontracting prohibition, including contract termination for default and referral for suspension or debarment from future government work.
These penalties provide strong enforcement mechanisms to deter prime contractors from circumventing the intent of the bill through their subcontracting practices.
Voters should care about this bill because it aims to ensure that federal tax dollars are spent with companies that maintain a strong commitment to the United States, rather than those that have moved their legal headquarters abroad while keeping substantial operations here. This connects to concerns about corporate tax avoidance and the perception that some companies benefit from U.S. markets and infrastructure without fully contributing to the U.S. tax base.
If this bill becomes law, it could reduce the number of eligible contractors for some government projects, potentially affecting cost or specialized service availability in certain niches. Conversely, if it doesn't pass, inverted companies would continue to be eligible for government contracts, which critics argue undermines the U.S. tax system and rewards companies for reducing their U.S. tax liability. The bill could encourage companies to maintain or return their headquarters to the U.S. if they value government contracts.
KEY PROVISIONS
AI-extracted
high
Prohibits executive agencies from awarding contracts for goods or services to "inverted domestic corporations," their subsidiaries, or joint ventures where such corporations hold more than 10% ownership.
This directly cuts off a significant source of revenue (government contracts) for companies that have legally reincorporated overseas while maintaining substantial U.S. ties.
high
Requires prime contractors on federal contracts over $10 million to include a clause prohibiting them from awarding major subcontracts (over 10% of prime contract value) to inverted domestic corporations or structuring subcontracts to circumvent this rule.
This extends the prohibition beyond prime contractors to ensure that inverted companies cannot indirectly benefit from large federal contracts through subcontracting.
med
Defines an "inverted domestic corporation" as a foreign entity that acquired a U.S. company after May 8, 2014, and either more than 50% of its stock is still held by the former U.S. owners or its management/control and significant domestic business activities are primarily in the U.S.
This definition is central to identifying which companies are subject to the prohibition and includes criteria related to both ownership and operational control.
med
Allows executive agencies to waive the prohibition if it's necessary for national security or for the efficient administration of federal health benefit or public health programs, requiring a report to Congress within 14 days of such a waiver.
This provides flexibility to ensure critical government functions are not disrupted, especially in emergencies or essential services, while maintaining transparency.
med
Establishes penalties for prime contractors who violate the subcontracting prohibition, including contract termination for default and referral for suspension or debarment from future government work.
These penalties provide strong enforcement mechanisms to deter prime contractors from circumventing the intent of the bill through their subcontracting practices.
Suspension or debarment from receiving future federal contracts
Prime contractors
GLOSSARY
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Inverted domestic corporation
A company that was originally a U.S. company but reincorporated in a foreign country after May 8, 2014, in a way that still leaves a majority of its ownership with former U.S. shareholders, or its management and significant business activities are still largely based in the U.S.
Executive agency
A part of the U.S. government that carries out laws and policies, like the Department of Defense, the Department of Energy, or the General Services Administration, which award contracts.
Prime contractor
A company that directly signs a contract with the U.S. government to provide goods or services.
Subcontract
A contract between a prime contractor and another company (the subcontractor) to perform a portion of the work required by the prime government contract.
Joint venture
A business arrangement in which two or more companies combine their resources for a specific project or business undertaking.
Suspension or debarment
An official action by the government that temporarily (suspension) or permanently (debarment) prevents a company or individual from doing business with the federal government, including receiving contracts.
ACTION TIMELINE
2 EVENTS
FEB 9
Introduced in Senate
INTROREFERRAL
FEB 9
Read twice and referred to the Committee on Homeland Security and Governmental Affairs. (text: CR S535-537)
A group of related companies that are linked through common ownership, often used when determining the overall business activities and structure of a corporation and its subsidiaries.
