Intro to the Prove It Act of 2025

For small business owners, navigating federal regulations can be both time-consuming and costly. The Prove It Act of 2025 is a bipartisan effort in Congress aimed at ensuring that new federal regulations are fair—and don’t create unnecessary hurdles for small businesses like yours. Let’s dig into key highlights of the Act and what it might look like for your business!

What Is the Prove It Act?

Introduced in February 2025 by Senator Joni Ernst (R-IA) and Representative Brad Finstad (R-MN), the Prove It Act of 2025 is a reintroduction of the previous version from 2024 that successfully passed the U.S. House of Representatives in December of that year (we wrote about it here). The new bill aims to improve transparency, accountability, and fairness in how federal regulations are developed—especially when it comes to small businesses.

Why It Matters to You

Federal regulations often apply the same rules to every business, regardless of size. But small businesses typically don’t have legal teams or compliance departments to interpret and implement those rules. That’s where the Prove It Act comes in: it would require agencies to “prove” that their proposed rules won’t unduly harm small entities before those rules are finalized.

Key Highlights of the Bill

Here’s what the Prove It Act of 2025 would do:

• Count All the Costs
  Agencies would need to evaluate both direct and indirect costs of proposed rules on small businesses, including things like paperwork, compliance time, and downstream impacts.
• More Input from Small Businesses
  The bill strengthens requirements for federal agencies to consult with small businesses earlier in the rule-making process.
• More Accountability
  Agencies would have to back up their claims that a rule doesn’t significantly affect small businesses, and the Small Business Administration’s Office of Advocacy would have the power to push back if those claims aren’t supported by solid data.

Where Things Stand Now

As of April 2025, the Prove It Act of 2025 has been introduced in both the House (H.R. 1163) and Senate (S. 495). Both versions are currently under committee review.

Who’s Supporting It?

Naturally, the National Federation of Independent Business (NFIB) is a major supporter. They argue that the current regulatory process often overlooks the real-world impact on small businesses and that this bill would bring much-needed balance.

What This Could Mean for Your Business

If passed, the Prove It Act could:

• Lead to smarter, more balanced regulations that account for small business realities
• Give you a stronger voice in the federal rule-making process
• Provide greater transparency, so you know what’s coming and why

The Prove It Act of 2025 has the potential to be a game-changer for small businesses, helping ensure they’re not blindsided by complex or costly regulations. While the bill still needs to move through Congress, it signals growing recognition in Washington that small businesses deserve a seat at the table when it comes to federal policy. Keep tabs on all the news from Washington over at the Financial Pantry, where we’re always looking out for the latest regulations that might have an impact on owners like you.

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