Small Business Regulatory Reduction Act of 2025
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Would require the Small Business Administration to ensure that its own rulemakings impose no net new costs on small businesses starting in fiscal year 2026, and would require annual public reports to Congress on how all federal agencies' rules affect small businesses.
The zero-cost cap is narrow — it applies only to the SBA's own regulatory activity — but the accompanying government-wide reporting requirement could draw attention to which agencies impose the heaviest compliance burdens on small firms.
What this bill would do
What it would do
The bill would direct the Administrator of the Small Business Administration to ensure the SBA's annual "small business regulatory budget" — defined as the net cost to small businesses from SBA rulemakings, counting both new rules and modifications or repeals of existing ones — is not greater than zero beginning in fiscal year 2026. In effect, the SBA could not issue net cost-increasing rules without simultaneously offsetting those costs through other regulatory actions.
Separately, the bill would require the SBA's Office of Advocacy to submit annual reports to Congress — due within 60 days after each fiscal year ends — cataloging rules issued by all other federal agencies that affect small businesses, including each agency's total small business regulatory budget. The bill explicitly states that no additional funds are authorized to carry out these requirements.
Key provisions
- 1Defines 'small business regulatory budget' as the total cost to small businesses from a federal agency's rulemakings, covering new rules and modifications or repeals of existing rules.
- 2Would require the SBA Administrator to ensure the SBA's small business regulatory budget is not greater than zero in FY2026 and each fiscal year thereafter.
- 3Would require the SBA's Office of Advocacy to submit annual reports to Congress on rules issued by all other federal agencies affecting small businesses, disaggregated by agency, due within 60 days after each fiscal year ends.
- 4Prohibits any additional appropriations to implement the Act, requiring the SBA to fulfill obligations within existing funds.
Who would be affected
Small businesses subject to SBA regulations, which would benefit from the zero-cost cap on new SBA rulemaking burdens. The SBA Administrator and the Office of Advocacy within the SBA must implement and report on the new requirements. Congress receives the annual reports, and all other federal agencies whose rules affect small businesses would be tracked and cataloged in those reports.
Why it matters
If enacted, the SBA could not issue new rules that increase net small business compliance costs without simultaneously repealing or modifying other rules to offset them. The annual government-wide reporting requirement would create a public, agency-by-agency accounting of regulatory costs imposed on small businesses, potentially increasing pressure on agencies with high regulatory burdens — though the reports carry no direct enforcement consequence.
What would change
Agencies directed to act
Effective dates
- SBA regulatory budget zero-cap requirement takes effect
- First annual Office of Advocacy report to Congress due
Funding and costs
- No additional funds
No additional funds are authorized to carry out the Act
Congressional Budget Office estimate
CBO estimates that H.R. 2965 would have no significant effect on the federal deficit, with zero impact on direct spending or revenues over the 2025–2035 period.
CBO estimates that H.R. 2965 would have no effect on direct (mandatory) spending or revenues over the 2025–2035 period, leaving the deficit unchanged. The bill would require the Small Business Administration (SBA) to ensure its regulatory changes do not increase small-business compliance costs each fiscal year and to report annually on compliance costs across all federal agencies; because the SBA already collects the needed information under current law, CBO expects implementation costs would be insignificant over the 2025–2030 period. Any such spending would be subject to the availability of appropriated (discretionary) funds, and CBO did not estimate costs beyond 2030. The bill imposes no intergovernmental or private-sector mandates as defined under the Unfunded Mandates Reform Act.
How implementation would work
The SBA Administrator must track the net annual cost of all SBA rulemakings and ensure the cumulative figure stays at or below zero each fiscal year beginning in FY2026. The Office of Advocacy must separately compile and submit to Congress an annual report — due 60 days after the fiscal year closes — listing every rule issued by other federal agencies that affects small businesses, disaggregated by agency, with each agency's total small business regulatory budget. No new funding is authorized, so both obligations must be carried out within existing SBA resources.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill requires the Small Business Administration (SBA) to ensure the annual small business regulatory budget for the SBA in each fiscal year is no greater than zero.
The small business regulatory budget is the cost to a small business of a federal rulemaking, including the cost resulting from the issuance of any new rule and the cost resulting from the modification or repeal of an existing rule.
Legislative subjects
Administrative law and regulatory procedures; Commerce; Small Business Administration; Small business
Committee report
H. Rept. 119-111