Local & Federal Updates
Governor Green's Intent to Veto List
Governor Green released his intent to veto list, which includes 19 bills from the 2025 Legislative Session. He is not required to veto every bill listed and has until July 9 to finalize decisions. Included is SB 15, which redefines “historic property” and exempts certain projects from SHPD review. The measure, backed by NAIOP and the industry, aims to reduce unnecessary reviews. GCA is coordinating with NAIOP on next steps.
White House affirms support for PLAs with new exception
On June 12, 2025, the Office of Management and Budget (OMB) issued a memo clarifying that the Trump administration supports the use of PLAs “when practicable and cost effective.” The memo reaffirms that President Biden’s Executive Order 14063, which mandates PLAs on federal construction projects over $35 million, remains in effect.
The memo responds to earlier exceptions issued by the Department of Defense and GSA, which a federal court recently halted. OMB now requires agencies to rescind these broad deviations and warns that independent interpretations of PLA policy will no longer be permitted.
NEW EXCEPTION INTRODUCED:
Agencies may now waive PLA use if market research shows that expected bids will exceed the government’s budget by more than 10% due to the PLA requirement. This narrow exception must be well-documented and justified.
OMB also removed outdated references to rescinded diversity, equity, and inclusion (DEI) policies to align with current administrative priorities.
WHAT THIS MEANS FOR YOU:
- PLAs remain mandatory on most large-scale federal projects.
- Contractors should factor PLA terms into bids unless a specific exception is granted.
- Expect more project-specific exceptions and a potential increase in bid protests.
GCA of Hawaii will continue to monitor developments and provide updates. If you have questions or concerns about how this may impact your business, feel free to reach out to Josh Magno at josh@gcahawaii.org.
Key provisions of Tax Cuts and Jobs Act of 2017 (TJIA) are set to expire in 2025
Key provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) are set to expire in 2025, without action from Congress and the White House. Many construction companies could face a significant tax increase starting in 2026, threatening the financial strength and competitiveness of our industry.
WHY IT MATTERS:
AGC strongly supported the TCJA, and it has helped level the playing field for small and mid-sized contractors by:
- Lowering the corporate tax rate from 35% to 21%.
- Allowing pass-through firms to deduct up to 20% of business income.
- Doubling the estate tax exemption from $5 million to $10 million.
- Enabling full and immediate expensing of equipment investments.
These provisions fueled business growth, expanded hiring, and improved cash flow across the industry. Their expiration would reverse much of that progress.
WHAT'S AT RISK:
If these key provisions expire, construction companies could be hit with:
- A 20% tax increase due to the expiration of the 199A/Qualified Business Income (QBI) Deduction for pass-through businesses.
- The loss of the increased estate tax exemption, making succession planning more difficult and costly for family-owned companies.
- The end of full expensing for new and used equipment purchases—reducing your ability to invest in jobsite efficiency and safety.
THE BOTTOM LINE:
If Congress doesn’t act, your business will pay more in taxes, have less to reinvest, and face new obstacles to staying competitive.
Click here if you would like to join AGC’s push to urge lawmakers to act before it’s too late.