The STEP Improvement Act of 2026 reauthorizes and strengthens the State Trade Expansion Program, a federal initiative that helps small businesses enter international markets through state-administered grants. The bill enhances application requirements by mandating detailed budget plans, establishes clear timelines for the grant process with applications due by May 31 each year, and creates a performance-based funding formula that allocates grants based on export sales, participant numbers, and support for underrepresented businesses in rural and low-income areas. A funding floor protects states at 80 percent of their prior-year grants while allowing redistribution of declined or unused funds. The legislation also streamlines reporting requirements for grant recipients, expands the definition of economically distressed businesses to include those in opportunity zones and HUBZones, and requires grant announcements by September 30 annually. Funding is authorized through fiscal years 2027-2031, and the Small Business Administration must submit a comprehensive report to Congress within one year on program processes and best practices.