Technical corrections only. The later version updates the attestation of the House Clerk and reflects the bill's referral to the Senate. No substantive policy changes were made between v3 and v4.
Small Business Regulatory Reduction Act of 2025
- Sponsor
- Rep. Van Duyne, Beth [R-TX-24]
- Committees
- Small Business and Entrepreneurship Committee (primary)
- Last action
- Dec 4, 2025
Bottom line
The bill aims to reduce the regulatory burden imposed by the SBA on small businesses by requiring a net-zero regulatory cost budget for the agency's own rules and increasing transparency on regulatory costs from all federal agencies.
What it actually does
This bill mandates that the Small Business Administration (SBA) must achieve a net-zero cost impact on small businesses from its own rulemaking activities each fiscal year, starting in 2026. This means any new regulatory costs imposed by SBA rules must be offset by an equal or greater reduction in costs from existing or new rules. Additionally, it requires the SBA's Office of Advocacy to annually report to Congress on the total small business regulatory budgets for all other federal agencies.
Proponents argue
Proponents argue this bill will foster economic growth and job creation by alleviating the cumulative burden of federal regulations on small businesses, which often lack the resources to comply with complex rules. They contend that a "regulatory budget" approach forces agencies to consider the real-world costs of their actions and prioritize regulatory efficiency, leading to a more favorable environment for entrepreneurship and innovation.
Opponents contend
Opponents might argue that a strict net-zero regulatory budget could hinder the SBA's ability to issue necessary rules that protect consumers, workers, or the environment, or to adapt to new economic realities. They may contend that some regulations, while imposing costs, provide significant public benefits that outweigh those costs, and a blanket zero-budget approach could prevent beneficial regulatory updates.
The bill is very short and clearly written, making it highly accessible for a reader to understand its core provisions quickly.
Section 2(b)
Small Business Administration Regulatory Budget Requirement
Starting in fiscal year 2026, the Small Business Administration (SBA) must ensure that the total cost of its rulemaking activities to small businesses is not greater than zero. This means that if the SBA issues new rules that impose costs on small businesses, it must simultaneously repeal or modify existing rules to achieve an equivalent or greater reduction in costs, resulting in no net increase in regulatory burden from the SBA's own actions.
Supporters argue
Supporters assert that this provision will directly reduce the regulatory compliance costs for small businesses, freeing up capital and resources for investment and growth. They believe it will force the SBA to be more efficient and thoughtful in its rulemaking, ensuring that only truly essential regulations are enacted and maintained.
Critics contend
Critics may argue that this mandate could paralyze the SBA's ability to issue new regulations, even those that are beneficial or necessary for market fairness, consumer protection, or adapting to new technologies. They might contend that a strict zero-budget approach oversimplifies the complex balance between regulatory costs and benefits.
Tradeoffs
The tension lies between reducing regulatory burden on small businesses and ensuring the SBA retains the flexibility to issue necessary or beneficial regulations. It trades potential regulatory agility for a guaranteed cap on regulatory costs.
Section 2(c)
Office of Advocacy Annual Report on Federal Agency Regulatory Budgets
The Chief Counsel for the Office of Advocacy within the Small Business Administration is required to submit an annual report to Congress. This report will detail the total small business regulatory budgets for all other federal agencies (excluding the SBA itself) for the preceding fiscal year, disaggregated by agency. It must list each rule issued by these agencies that impacted small businesses.
Section 3
Funding Limitation
This section explicitly states that no additional funds are authorized to be appropriated to carry out the requirements of this Act. This means the Small Business Administration and its Office of Advocacy must implement the new regulatory budget and reporting requirements using their existing budgetary allocations, without receiving any new or increased appropriations specifically for these tasks.