Summary#
The STEP Improvement Act of 2026 would amend the Small Business Act to reauthorize the Small Business Administration’s existing State Trade Expansion Program (STEP). Its stated goal is to continue the program, which provides grants to states, territories and commonwealths for trade-expansion activities involving eligible small businesses. The bill has not become law.
- The SBA’s Associate Administrator would have to publish grant information and award calculations, set application deadlines, announce recipients on a schedule, use a concise application where feasible, and give applicants specified information about decisions.
- States receiving grants would submit budget plans. They could notify the SBA of revisions; revisions reallocating 10% or more would need approval, unless the SBA does not approve or deny them within 30 days.
- The bill would limit grant cuts, set minimum allocations and, when program funding reaches a specified threshold, use a formula for grant amounts. The formula includes prior grant use, export sales, program activities, first-time participants and new markets, as well as the participation of firms in certain communities and women-owned firms.
- The Associate Administrator would have to survey states, collect and report performance data, and set up less duplicative reporting. The SBA would also have to report to Congress monthly on program funding obligations.
- Grant funds for foreign trade missions could be used only for eligible small businesses that have been operating for at least one year.
What it means for you#
- States, territories and commonwealths: Applicants would get a set application schedule, and unsuccessful applicants would receive recommendations for improving a later application. Recipients would need to provide a budget plan and meet the program’s non-federal matching requirement. The bill would not guarantee every applicant a grant.
- Grant recipients: If they spend less than 80% of a prior grant during its grant period, that could reduce the amount used to calculate their next minimum grant. Grant amounts could also be adjusted if overall appropriations fall, participation grows enough to leave insufficient funds, or a grantee commits a significant program violation.
- Small businesses: The bill would collect data on firms assisted, export sales, new markets, jobs and participation in trade missions or trade shows. It does not create a direct grant or benefit for individual businesses.
- SBA staff: The Associate Administrator would have new duties, including handling applications and budget revisions, surveying grantees, collecting data and reporting. The bill limits what employee information the SBA may collect, with exceptions for investigations and federal grant requirements.
Money#
The bill authorizes appropriations for STEP for fiscal years 2027 through 2031, but the available text gives no dollar amount or cost estimate.
- It does not itself provide a specific appropriation. The formula applies when funding is at least $30 million for a second consecutive fiscal year, and in later years funding remains at least that level; otherwise, grants would be awarded competitively.
- States must commit the required non-federal share to receive the formula-calculated award. States may decline or return all or part of an award.
- The bill adds SBA staffing and administrative duties, but no staffing level or cost estimate is provided.
What is unclear#
- The Small Business Act itself was not supplied, so the current program rules and how this bill changes them could not be verified against the full current law.
- The bill does not specify the amount Congress will appropriate, or whether funding will reach the threshold that triggers formula awards.
- It does not provide detailed rules for measuring some formula metrics, such as export sales attributed to program activities or new markets reached.
- The bill does not set out all application, review or appeal procedures. It also does not say how the SBA would decide whether a violation is “significant.”
- The bill sets authorization years but does not state when its provisions would take effect. Passage is uncertain.
Case for#
- The bill appears intended to make grant schedules, award calculations and program requirements clearer to applicants and recipients.
- A concise application and less duplicative reporting could reduce administrative work for states, where feasible.
- Minimum grant rules could make funding less unpredictable for grantees, while reductions for low spending or significant violations preserve some accountability.
- Regular surveys, performance measures and public reports could give Congress and program managers more information about how grants are used and what results are reported.
Case against#
- A formula based partly on past results could favor states with stronger reported outcomes, while making funding harder to predict for states with fewer resources or incomplete data.
- The bill’s minimums and limits on grant reductions could make it harder to shift funds among states as needs or performance change.
- The formula uses several metrics and geographic or ownership categories. The bill does not fully explain how all data would be measured or checked.
- The new application, reporting, survey and oversight duties could add administrative work and cost, but the bill provides no estimate.