Budget & Taxes (Economic Development)

The RISE Reauthorization Act of 2026 reauthorizes and expands a federal grant program that provides funding to rural communities for economic development projects. It removes specific references to "industry clusters" from previous rules, replacing them with broader language about "opportunities and networks" to increase flexibility for grantees. The bill requires the program to prioritize rural communities with populations under 20,000, and mandates that at least 10% of annual funds support communities with fewer than 10,000 residents. It authorizes $50 million annually for fiscal years 2026-2030 to support these grants.

The Health Investment Zones Act of 2026 establishes a program to designate areas with documented health disparities as "Health Investment Zones" to improve health outcomes and reduce inequities. To qualify, areas must meet specific criteria including low income (below 150% of the federal poverty line), high rates of certain health issues, or designation as a health professional shortage area. The bill provides tax incentives for employers hiring workers in these zones, grants to community organizations for health initiatives, student loan repayment for health care workers, and additional Medicare payments for services provided in designated zones. These zones would be designated for 10 years with requirements for sustainability plans and evaluation of health outcomes.

HR 3439, the "Defund Cities that Defund the Police Act of 2025," blocks certain federal grants from going to states or cities that significantly reduce police funding without a revenue shortfall. It defines a "defunding locality" as an urban city that disbands its police department or cuts its budget substantially (without prior revenue loss), and a "defunding state" similarly for state law enforcement agencies. The bill specifically denies eligibility for Economic Development Administration grants (like public works and planning funds) and Community Development Block Grants to these jurisdictions. If a recipient becomes a "defunding jurisdiction" during a grant period, it must return all funds received for that period.

This bill creates a 40% tax credit for U.S. companies investing in new or upgraded facilities manufacturing critical supply chain goods, including pharmaceuticals, medical devices, semiconductors, and aerospace equipment. It specifically targets facilities located in the U.S., Puerto Rico, or U.S. possessions, with additional incentives for projects in economically distressed areas (poverty rate ≥30% in qualified opportunity zones). The credit excludes investments by foreign entities from "covered nations" or those with significant foreign government control. Companies must meet strict definitions of "qualified property" and facility purpose to qualify, with the credit applying to property placed in service after 2024.

The CREATE JOBS Act (S 2056) changes U.S. tax rules to accelerate business deductions. It allows immediate 100% expensing for qualified property (like equipment) placed in service after 2017, eliminating step-by-step depreciation. For residential and commercial real estate, it introduces a "neutral cost recovery" adjustment that modifies annual depreciation deductions based on economic changes. It also eliminates the option to amortize research and experimental expenses over 60 months, requiring businesses to deduct these costs immediately in the year incurred. These changes directly affect businesses purchasing equipment, owning rental properties, or conducting R&D, aiming to boost investment and cash flow.

This bill modifies tax code to help businesses in disaster-affected areas use unused tax credits. It allows businesses operating in qualified disaster zones (federally declared after 2023 or state-recognized under specific criteria) to treat certain carried-over tax credits as transferrable credits for eligible expenses. Eligible expenses include costs for business operations in these areas within two years of the disaster declaration. The change applies to tax years ending after the bill's enactment, making it easier for affected businesses to access credit benefits they previously couldn't utilize.