The "Zero Based Regulations Act" establishes a rigorous process for reviewing and potentially reinstating existing federal regulations, alongside strict limitations on new rulemaking. It mandates that each agency conduct an ongoing review of every part of the Code of Federal Regulations it promulgated, following an annual schedule set by the Administrator of the Office of Information and Regulatory Affairs (OIRA).

Crucially, prior to its scheduled review, an agency must repeal the part of the Code of Federal Regulations under consideration. To reinstate a repealed rule, the agency must promulgate a new rule under the Administrative Procedure Act, conducting a retrospective analysis to assess if the original goals were met, if costs were justified, and if less restrictive alternatives exist. This new rule must not impose more than 70 percent of the original estimated cost and requires at least two public hearings.

Furthermore, the Act significantly restricts new or amended rulemaking actions until the end of the fiscal year of its enactment. Agencies may only conduct new rulemaking if it is narrowly tailored to achieve specific objectives, such as reducing regulatory burden, complying with new statutory requirements, or preventing public health threats. A key condition is that at least one existing rule must be repealed or significantly simplified in conjunction with the new rule, ensuring a net decrease in regulatory burden, unless mandated by federal law or court order.

All new rulemaking also requires a cost-benefit analysis using an OIRA-developed standardized form and at least one public hearing. Exceptions to these restrictions are provided for good cause or presidential waiver. Additionally, any new rule that creates a new part in the Code of Federal Regulations must undergo a retrospective analysis every five years.