WASHINGTON The nations small businesses spent $2,365 more per employee last year to comply with federal regulations than large businesses, a figure small business advocates say needs to be pushed lower.

In 2004, all businesses spent a combined $648 billion to comply with federal regulations, up more than 30 percent since 2000, according to a new report from the U.S. Small Business Administration's Office of Advocacy.

Release of the report coincided with the 25th anniversary of the signing of the federal Regulatory Flexibility Act. The act, designed to make sure small businesses are considered by federal regulators, became law in late September 1980.

The anniversary was marked in Washington by a gathering of small business owners, trade association representatives, think-tank scholars, congressional staff and elected officials. The United Motorcoach Association was a major sponsor of the event.

While the SBAs Office of Advocacy figures that the Regulatory Flexibility Act saved small businesses more than $17 billion last year alone, the new SBA report suggests there remains much more to do.

The study found that those firms with fewer than 20 employees annually spend $7,647 per employee to comply with federal regulations, ranging from tax and environmental compliance, to international trade and workplace requirements. That compares with $5,282 spent by firms with more than 500 employees.

In 2000, small businesses spent $6,975 per employee on compliance. Then, the study showed small businesses paid nearly 60 percent more than big firms per employee, but the methodology for calculating the cost was different.

The small businesses included in the study were in services, manufacturing, health care, and wholesale and retail trade. The report did not look at the cost of state and local regulations. Among the findings:

The health care industry had the lowest cost per employee for regulatory compliance, at $3,246. Utility companies had the largest share at $17,636 per employee.

Economic regulations, such as tariffs for international trade and transportation rules, were the biggest dollar burden on businesses, at $2,567 per employee. The smallest amount was spent on tax compliance: $894 per employee.

To help reduce the regulatory burdens on small businesses, federal agencies must consider how new rules will affect small companies under the Regulatory Flexibility Act.

President Bush, in an executive order signed three years ago, also began requiring agencies to notify the SBA Office of Advocacy whenever a rule change may have a "significant" economic impact on small business.

The order's intent was to get the advocacy office involved with recommendations early so small-business burdens can be addressed.

For more information, go to www.sba.gov/advo.