On July 3, 2025, the U.S. House of Representatives passed the One Big Beautiful Bill Act (H.R. 1) by a vote of 218–214, adopting the version previously approved by the Senate on July 1 in a 51–50 vote, with Vice President J.D. Vance casting the tie-breaking vote. The House had initially passed its own version on May 22 by a narrow 215–214 margin. Following Senate approval, the amended bill returned to the House, passed without further changes, and was sent to the President for his signature on July 4. 

What’s Included in the Bill? 

The One Big Beautiful Bill Act (OBBBA) is a comprehensive legislative package that addresses a wide range of policy areas, including tax reform, healthcare, defense spending, border security, workforce development, and energy policy. The bill makes permanent several provisions of the 2017 tax cuts, expands affordable housing incentives, overhauls Medicaid eligibility, and increases funding for military and immigration enforcement. It also includes major changes to Opportunity Zones, introduces Workforce Pell Grants, and rolls back certain clean energy subsidies. Passed through the budget reconciliation process, the legislation is one of the most wide-ranging federal policy overhauls in recent years. It is estimated that the OBBBA will add $2.4 trillion to $3.1 trillion to the national deficit.  

Some key provisions  that may be relevant to Regional Development Organizations (RDOs) and their communities include: 

• Modernizes LIHTC: The bill includes several key enhancements to the Low-Income Housing Tax Credit (LIHTC) program. It increases the annual volume cap for 9 percent Housing Credit allocations by 12.5 percent for calendar years 2026 through 2029. It also reduces the bond financing threshold from 50 percent to 25 percent for 4 percent Housing Credit properties placed in service after December 31, 2025, provided the bonds are issued between December 31, 2025, and January 1, 2030. Additionally, the bill allows state Housing Credit agencies to grant a basis boost of up to 30 percent for properties located in rural and Native American areas, if those properties are placed in service between January 1, 2026, and December 31, 2029. 

• Extends NMTC: Permanently extends the New Markets Tax Credit (NMTC) that promotes community development and economic growth by attracting private investment in low-income communities with high unemployment and poverty. 

• Expands Opportunity Zones: Permanently extends and reforms the Opportunity Zone program, starting a new cycle of 10-year designations in 2027 with stricter eligibility requirements to ensure zones are truly low-income. At least one-third of new designations must be rural, and investments in these areas receive enhanced tax benefits, including up to a 30 percent basis step-up and relaxed improvement requirements. The bill also boosts transparency through mandatory annual reporting on job creation and housing impacts, allocates enforcement funding to the IRS, and clarifies gain deferral rules—aiming to better direct capital into underserved and rural communities. 

• Creation of Rural Hospital Grant: Creates a new Rural Health Transformation Program funded with $50 billion from FY 2028 to FY 2032 to support state efforts to strengthen rural hospitals and health providers. States must submit a detailed transformation plan by December 31, 2025 outlining strategies to expand rural access, improve outcomes, leverage technology, boost clinician recruitment and stabilize hospital finances. Funds must not be used for state Medicaid cost-sharing and may be withheld or reclaimed if misused. Unused funds can be redistributed annually through 2034. 

• Establishes Workforce Pell Grants: Establishes Workforce Pell Grants to support students enrolled in short-term, career-oriented education and training programs that are aligned with high-demand industries. Unlike traditional Pell Grants, which are limited to longer academic programs, this provision expands eligibility to include credentialing programs lasting at least eight weeks and meeting workforce relevance and completion benchmarks.   

• Reauthorizes Spectrum Auctions: Reauthorizes the FCC’s power to auction spectrum—a power that had lapsed in March 2023—allowing it to resume competitive bidding for licenses until September 30, 2034. 

• Energy Policy Rollbacks: Accelerates the phase-out of clean energy tax credits from the Inflation Reduction Act (IRA), including the energy-efficient home improvement credit; residential clean energy credit; energy-efficient commercial buildings deduction; new energy-efficient home credit; and the clean electricity production credit for wind and solar facilities.  

• Restrictions to Medicaid & SNAP: Imposes stringent new work and reporting requirements on both Medicaid and SNAP recipients. It mandates about 80 hours/month of work, community service, training, education, or job search for able-bodied adults to remain eligible. It also accelerates eligibility redeterminations (every six months instead of annually), shifts a portion of SNAP costs and administrative burden to states, slashes federal administrative payments by 50%, trims food benefit increases, and enforces stricter verification (e.g., citizenship checks). 
  
  For Medicaid, it reduces federal matching funds, increases cost-sharing for those above the federal poverty line, restricts funding for gender-affirming care and family planning providers, and strengthens provider and eligibility fraud controls. Altogether, it cuts roughly $863 billion from Medicaid and nearly $295 billion from SNAP over the next decade. 

• Debt Ceiling Increase: increases the federal government’s current $36.1 trillion statutory debt limit by $5 trillion. 

What is Budget Reconciliation? 

Reconciliation is a special legislative process that allows for expedited consideration of certain budget-related bills. It was created by the Congressional Budget Act (Budget Act) of 1974 and is used to align spending, revenue, and debt-limit laws with the priorities set in the annual budget resolution.   

Unlike most legislation, reconciliation bills cannot be filibustered in the Senate, meaning they can pass with a simple majority (51 votes) instead of the usual 60 needed to overcome a filibuster. This makes reconciliation a powerful tool for passing controversial fiscal measures. However, its use is limited to provisions that directly affect federal spending or revenues, and a special rule (Byrd Rule) restricts inclusion of non-budgetary items.   

For more information on the process, NADO has put together a FAQ document.