General Summary of the Bill

H.R. 974, titled the "Small Business Regulatory Reduction Act," aims to limit the regulatory costs imposed on small business concerns. Specifically, it requires the Administrator of the Small Business Administration (SBA) to ensure that the regulatory costs for each small business in a fiscal year do not exceed zero. Starting in fiscal year 2026, this act seeks to alleviate some of the financial burdens that small businesses face from complying with various regulations. The bill also mandates an annual report from the Administrator to Congress, detailing any new Federal rules impacting small businesses. Notably, the bill specifies that no additional funds are authorized for its implementation.

Summary of Significant Issues

1. Clarity of Terms and Implementation:
One of the primary issues with the bill is the introduction of the term "small business regulatory budget," which is not standard in legislative or regulatory frameworks. This could lead to confusion about what this budget entails, how it will be calculated, and how it will be enforced. Furthermore, the requirement that the budget be "not greater than 0" lacks clarity. It is not evident whether this includes both cost savings and incurred costs, leading to potential confusion in its application.

2. Accountability and Compliance:
The bill does not specify the consequences of failing to meet the outlined budgetary restrictions, which could undermine accountability. It is crucial for legislation to include clear repercussions for non-compliance to ensure efficacy.

3. Funding Concerns:
By asserting that no additional funds will be appropriated for the bill's implementation, the bill may inadvertently limit its effectiveness. If existing funds are insufficient, the SBA may struggle to fulfill the bill's requirements, leading to concerns about the practicability of achieving the desired regulatory reductions.

Potential Impact on the Public

This bill is likely to impact the broader public by alleviating some of the financial and administrative burdens on small businesses. The aim to reduce regulatory costs to zero could potentially free up resources for small businesses, allowing them to focus on growth and innovation rather than compliance.

Impact on Specific Stakeholders

Small Businesses:
The most direct positive impact would be on small businesses, which often face challenges related to regulatory compliance. By potentially decreasing regulatory costs, small businesses might be able to allocate more resources to productive activities, employee wages, or expansion efforts.

The Small Business Administration (SBA):
The SBA would have new responsibilities without additional funding, which could strain its resources. Ensuring that the small business regulatory budget remains at zero could require substantial effort, especially in defining, calculating, and monitoring the budget.

Legislators and Policymakers:
For legislators involved in small business advocacy, this bill could represent a significant policy win by showcasing efforts to support the small business community. However, without clear implementation guidelines and consequences for non-compliance, the bill might face criticism for being ineffective or overly ambitious.

Overall, while the bill's objective to reduce regulatory costs is clear, its implementation and potential effectiveness might be hindered by ambiguity in definitions and insufficient funding. Addressing these issues could strengthen the bill’s ability to support small businesses effectively.