Small Business Regulatory Reduction Act
- Sponsor
- Sen. Marshall, Roger [R-KS]
- Committees
- Small Business and Entrepreneurship Committee (primary)
- Last action
- Feb 4, 2025
Bottom line
This bill aims to eliminate new regulatory costs imposed by the Small Business Administration on individual small businesses and increase transparency regarding regulatory impacts from other federal agencies, without authorizing additional funds for its implementation.
What it actually does
This bill mandates that, starting in fiscal year 2026, the Administrator of the Small Business Administration (SBA) must ensure that the regulatory cost burden imposed by SBA rulemakings on any individual small business concern is zero or less. It also requires the SBA Administrator to submit an annual report to Congress detailing rules issued by other federal agencies that impact small businesses, disaggregated by agency.
Proponents argue
Proponents argue this bill would significantly reduce the regulatory burden on small businesses, fostering economic growth and job creation by preventing the SBA from imposing new costs through its rulemakings. They also highlight the value of increased transparency regarding regulatory impacts from other agencies, which would allow Congress and the public to better understand and address cumulative burdens on small businesses.
Opponents contend
Opponents might argue that a strict 'not greater than 0' regulatory budget for each small business concern could severely limit the SBA's ability to issue necessary rules, even those that protect consumers, workers, or the environment, or those that clarify existing regulations. They might also contend that the reporting requirement on other agencies is duplicative or places an undue, unfunded burden on the SBA without providing new actionable insights.
The bill is very short and clearly written, allowing for a quick and thorough reading, providing ample time for evaluation.
Section 1
Short Title
This section establishes the official short title of the Act as the 'Small Business Regulatory Reduction Act,' which is the common name used to refer to the legislation. This title helps in easily identifying and referencing the bill in legislative and public discourse.
Supporters argue
A clear and concise short title helps in identifying and referring to the legislation, making it easier for the public and policymakers to discuss and track its progress and provisions.
Critics contend
No specific opposition is typically raised against short title provisions as they are procedural and do not introduce substantive policy changes.
Tradeoffs
None.
Section 2(a)
Definitions
This section defines key terms used throughout the bill, including 'Administrator' (referring to the Administrator of the Small Business Administration), 'rule' and 'rule making' (by referencing section 551 of title 5, United States Code), 'small business concern' (by referencing section 3 of the Small Business Act), and 'small business regulatory budget.' The 'small business regulatory budget' is specifically defined as the cost to a small business concern resulting from any SBA rulemaking, including new rules, modifications, or repeals.
Section 2(b)
Zero Regulatory Budget Requirement for Small Businesses
Beginning in fiscal year 2026, the Administrator of the Small Business Administration is required to ensure that the 'small business regulatory budget' for each individual small business concern is not greater than zero. This means that any new rules, modifications, or repeals issued by the SBA cannot result in a net increase in costs for any single small business, effectively requiring offsetting reductions for any new costs imposed.
Section 2(c)
Annual Report on Other Agencies' Rules Affecting Small Businesses
The SBA Administrator is required to submit an annual report to Congress, starting 60 days after the end of fiscal year 2025. This report must detail rules issued by *other* Federal agencies during the preceding fiscal year that have an impact on small business concerns, and it must be disaggregated by the Federal agency that issued each rule. This aims to provide a comprehensive overview of external regulatory impacts.
Section 3
No Additional Funds Authorized
This section explicitly states that no additional funds are authorized to be appropriated to carry out the Act. This means that the Small Business Administration must implement the new regulatory budget and reporting requirements using its existing budget and resources, without receiving any new federal appropriations specifically for these mandates.
Defines 'rule' and 'rule making' by referencing section 551 of title 5, United States Code.
Section 2(a)(2)
Why it matters:It is standard legislative practice to avoid reprinting lengthy statutory definitions and to ensure consistency with existing legal frameworks, specifically the Administrative Procedure Act (APA).
Case for: Referencing established legal definitions ensures consistency and avoids ambiguity in how 'rule' and 'rule making' are interpreted, aligning the bill with broader administrative law and preventing redundant definitions.
Case against: A reader unfamiliar with 5 U.S.C. 551 might not fully grasp the breadth of activities covered by these terms, potentially underestimating the comprehensive scope of the SBA's regulatory actions affected by this bill.
Estimated impact: Ensures the bill's core mandate applies to the full range of formal and informal rulemakings as defined in the Administrative Procedure Act, thereby broadly impacting SBA's regulatory activities.
The requirement that the small business regulatory budget 'for *each* small business concern' is not greater than 0.
Section 2(b)
Why it matters:This phrasing is deliberate to ensure the protection applies universally and individually, not just on a collective or average basis, providing a stronger, more granular safeguard against regulatory costs.
Case for: Proponents would argue that specifying 'each' small business concern ensures that no single small business is disproportionately burdened by new SBA regulations, even if the overall impact across all small businesses is zero. This provides stronger, more individualized protection and prevents 'cherry-picking' of regulatory impacts.
Case against: Opponents might argue that this 'each' requirement makes the mandate practically impossible to implement, as it would require the SBA to conduct highly granular, individualized cost analyses for every potential rule, which is administratively burdensome, resource-intensive, and potentially infeasible. This could effectively halt all SBA rulemaking.
Estimated impact: This phrasing significantly raises the bar for SBA rulemaking, potentially making it extremely difficult to issue any new rule that could impose even a minor cost on *any* individual small business, leading to regulatory paralysis.