Small Business Regulatory Reduction Act
- Bill Number
- H.R. 974
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Commerce
- Status
- Introduced
- Latest Action
- 2025-02-04: Referred to the House Committee on Small Business.
- Last Updated
- 2025-12-05T06:42:18Z
AI-Generated Summary
Purpose
The Small Business Regulatory Reduction Act aims to protect small businesses from additional regulatory costs imposed by the Small Business Administration (SBA) through its rulemaking activities. It requires the SBA to maintain a "zero net cost" policy for regulations affecting small businesses, starting in fiscal year 2026, while also mandating reports on regulations from other federal agencies.
Key Provisions
- Definitions:
- "Administrator" refers to the head of the SBA.
- "Rule" and "rule making" are defined under the Administrative Procedure Act (a federal law governing how agencies create regulations).
- "Small business concern" means a business qualifying as small under the Small Business Act (a law defining small businesses based on size, industry, etc.).
- "Small business regulatory budget" is the total cost to a small business from SBA rules, including costs from new rules, changes to existing rules, or repeals.
- Zero Regulatory Cost Requirement: Beginning in fiscal year 2026 and every year after, the SBA must ensure that the net regulatory costs to each small business from its rules do not exceed zero. This means any new or modified rules cannot increase costs without equivalent reductions elsewhere.
- Annual Reporting: By 60 days after the end of fiscal year 2025 and annually thereafter, the SBA must submit a report to Congress listing all rules issued by other federal agencies in the prior year that impact small businesses. The report must break down rules by the issuing agency.
- Funding Limitation: No new funds are authorized to implement the Act; it must be carried out with existing resources.
Significant Changes to Existing Law
- Introduces a novel "regulatory budget" concept specifically for the SBA, mandating zero net costs to small businesses—a departure from current law, which does not impose such a strict cap on SBA rulemaking costs.
- Adds a reporting obligation on other agencies' rules, which previously was not required from the SBA in this detailed, disaggregated form.
- Builds on existing laws like the Small Business Act and Administrative Procedure Act but adds enforceable limits on SBA's regulatory authority without altering broader federal rulemaking processes.
Potential Impacts
- On Government Agencies: The SBA will face constraints in issuing new rules or modifications that could raise costs for small businesses, potentially requiring offsets like repeals. Other federal agencies may experience indirect scrutiny through the annual reports, possibly leading to more careful consideration of small business effects in their rulemaking.
- On Citizens/Small Businesses: Small businesses (typically those with fewer than 500 employees, depending on industry) could benefit from reduced regulatory burdens from the SBA, lowering compliance costs and easing operations. Larger businesses or non-small entities are unaffected directly.
- On International Relations: No direct impacts, as the bill focuses on domestic SBA activities and does not address trade, foreign policy, or international regulations.
Main Stakeholders Affected
- Small Business Concerns: Primary beneficiaries, as they are shielded from net increases in SBA-imposed regulatory costs.
- Small Business Administration (SBA): Directly obligated to comply with the zero-cost rule and produce reports, which may limit its flexibility in policy-making.
- Congress: Receives annual reports to oversee federal regulations' effects on small businesses, potentially influencing future legislation.
- Other Federal Agencies: Indirectly affected through reporting on their rules, which could prompt reviews or adjustments to minimize small business impacts.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces the Administrative Procedure Act by adding SBA-specific constraints, but could lead to legal challenges if the zero-cost requirement hinders the SBA's statutory duties (e.g., under the Small Business Act). The lack of additional funding may strain agency resources without violating appropriations laws.
- Constitutional: Aligns with Congress's authority to regulate federal agencies and commerce (under Article I), promoting economic liberty for small businesses without raising separation-of-powers issues.
- Political: Supports deregulation efforts favoring small businesses, potentially appealing to pro-business lawmakers. It signals a policy shift toward cost-neutral rulemaking but may spark debate over whether it unduly restricts agency expertise in protecting public interests like worker safety or environmental standards.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Van Duyne, Beth [R-TX-24]
Cosponsors (4)
Rep. Meuser, Daniel [R-PA-9], Rep. Bean, Aaron [R-FL-4], Rep. Schmidt, Derek [R-KS-2], Rep. Finstad, Brad [R-MN-1]
Recent Actions
- 2025-02-04: Referred to the House Committee on Small Business.
- 2025-02-04: Introduced in House
- 2025-02-04: Introduced in House
Bill Versions
- Small Business Regulatory Reduction Act — issued 2025-02-04 — PDF (3 pages)