13 CFR - Business Credit and Assistance

The U.S. Small Business Administration (SBA) proposes to amend its small business size regulations to incorporate the U.S. Office of Management and Budget's (OMB) North American Industry Classification System (NAICS) revision for 2017, identified as NAICS 2017, into its table of small business size standards. NAICS 2017 created 21 new industries by reclassifying, combining, or splitting 29 existing industries under changes made to NAICS in 2012 (NAICS 2012). SBA's proposed size standards for these 21 new industries have resulted in an increase to size standards for six NAICS 2012 industries and part of one industry, a decrease to size standards for two, a change in the size standards measure from average annual receipts to number of employees for one, and no change in size standards for twenty industries and part of one industry. SBA proposes to adopt the updated table of size standards, effective October 1, 2017

On December 28, 2016, the Small Business Administration (SBA) published a final rule to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses for the Small Business Investment Company (SBIC) Program, with an effective date of January 27, 2017. On January 26, 2017, SBA published a delay of effective date until March 21, 2017 and re-opened the rule for additional public comment in response to the memorandum dated January 20, 2017 from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review.” SBA requires additional time to consider this final rule and determine whether any further changes are required; therefore, the effective date for this final rule is delayed until May 20, 2017. Any changes to the final rule based on this redetermination will be published in the Federal Register .

The Small Business Administration (SBA) is amending its regulations to adjust for inflation the amount of certain civil monetary penalties that are within the jurisdiction of the agency. These adjustments comply with the requirement in the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to make annual adjustments to the penalties.

In accordance with the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review,” published in the Federal Register on January 24, 2017 (the Memorandum), this action temporarily delays the effective date of the Final Rule entitled “Regional Innovation Program” (Final Rule or Rule) published in the Federal Register on January 11, 2017. The Final Rule implements the Regional Innovation Program of the Economic Development Administration (EDA or the Agency), U.S. Department of Commerce (DOC) and specifically focuses on outlining the regulatory structure of its centerpiece grant program, the Regional Innovation Strategies (RIS) Program.

On December 28, 2016, the Small Business Administration (SBA) published a final rule to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses for the Small Business Investment Company (SBIC) Program, with an effective date of January 27, 2017. In the meantime, a memorandum dated January 20, 2017 from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review” calls for agencies to temporarily postpone the effective date of rules not yet effective and invite new public comment. In view of this development, SBA is delaying the effective date of this rule until March 21, 2017, and is inviting additional public comment on the final rule. Any timely public comments received will be considered and any changes to the final rule will be published in the Federal Register .

The Economic Development Administration (“EDA” or “the Agency”), U.S. Department of Commerce (“DOC”), is issuing a Final Rule implementing the Regional Innovation Program as authorized by section 27 of the Stevenson-Wydler Technology Innovation Act of 1980, as amended (“Stevenson-Wydler” or the “Act”). Through the Regional Innovation Strategies Program (“RIS Program”), the centerpiece of the Regional Innovation Program, EDA currently awards grants for capacity-building programs that provide proof-of-concept and commercialization assistance to innovators and entrepreneurs and for operational support for organizations that provide essential early-stage funding to startup companies. This Final Rule lays out the overarching regulatory framework for the Regional Innovation Program and specifically focuses on outlining the structure of the RIS Program. On September 21, 2016, EDA published a Notice of Proposed Rulemaking (“NPRM”) and received two public comments, one non-germane and one substantive. The Final Rule responds to the substantive comment by making two clarifying edits and one conforming edit to the section regarding eligible RIS Program project activities. EDA also made one technical correction, unrelated to the substantive comment, to the general terms and conditions section relating to the RIS Program.

The U.S. Small Business Administration (SBA) is revising the regulations for the Small Business Investment Company (SBIC) program to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses. SBICs are generally prohibited from investing in passive businesses under the Small Business Investment Act of 1958, as amended (Act). SBIC program regulations provide for two exceptions that allow an SBIC to structure an investment utilizing a passive small business as a pass-through. The first exception provides conditions under which an SBIC may structure an investment through up to two levels of passive entities to make an investment in a non-passive business that is a subsidiary of the passive business directly financed by the SBIC. The second exception, prior to this final rule, enabled a partnership SBIC, with SBA's prior approval, to provide financing to a small business through a passive, wholly-owned C corporation (commonly known as a blocker corporation), but only if a direct financing would cause the SBIC's investors to incur Unrelated Business Taxable Income (UBTI). This final rule clarifies several aspects of the first exception and in the second exception eliminates the prior approval requirement and expands the purposes for which a blocker corporation may be formed. The final rule also adds new reporting and other requirements for passive investments to help protect SBA's financial interests and ensure adequate oversight and makes minor technical amendments. Finally, this rule makes a conforming change to the regulations regarding the amount of leverage available to SBICs under common control. This change is necessary for consistency with the Consolidated Appropriations Act, 2016, which increased the maximum amount of such leverage to $350 million.

The U.S. Small Business Administration (SBA) published a final rule in the Federal Register on July 25, 2016, amending its regulations to establish a new Government-wide mentor-protégé program for all small business concerns, consistent with SBA's mentor-protégé program for Participants in SBA's 8(a) Business Development (BD) program. The rule also made several additional changes to current size, 8(a), Office of Hearings and Appeals, and HUBZone regulations, concerning among other things, ownership and control, changes in primary industry, economic disadvantage of a Native Hawaiian Organization (NHO), standards of review, and interested party status for some appeals. This document makes several technical corrections to that final rule, eliminating a portion of a sentence concerning joint venture profits.

The U.S. Small Business Administration (SBA) is amending its regulations to implement section 1614 of the National Defense Authorization Act for Fiscal Year 2014 (NDAA 2014). Section 1614 amended the Small Business Act to provide that where a prime contractor has an individual subcontracting plan for a specific prime contract with an executive agency, the prime contractor shall receive credit towards its subcontracting plan goals for awards made to small business concerns at any tier under the contract. The changes authorized by this statute will allow an other than small prime contractor that has an individual subcontracting plan for a contract to receive credit towards its small business subcontracting goals for subcontract awards made to small business concerns at any tier, to the extent reported on the subcontracting plans of its lower tier subcontractors. The final rule also implements the statutory requirements related to the subcontracting plans of all subcontractors that are required to maintain such plans, including the requirement to monitor subcontractors' performance and compliance toward reaching the goals set out in those plans as well as their compliance with subcontracting reporting requirements. SBA is also clarifying that the size standard for a particular subcontract must appear in the solicitation for the subcontract.

The U.S. Small Business Administration (SBA) is correcting a final rule that appeared in the Federal Register on January 26, 2016 (81 FR 4469). The rule increased small business size standards for a number of industries in North American Industry Classification System (NAICS) Sector 31-33, Manufacturing. The rule also stated that SBA was amending Footnote 5 to the table of size standards relating to NAICS 326211, Tire Manufacturing (except Retreading), to reflect the current Census Product Classification Codes 3262111 and 3262113. However, SBA inadvertently omitted code 3262111 from the revised text in Footnote 5. This action corrects the omission. This correction does not affect the 1,500-employee small business size standard for NAICS 326211.

The U.S. Small Business Administration (SBA) proposes to increase the Small Business Investment Company (SBIC) licensing and examination fees. The Small Business Investment Act of 1958, as amended, allows SBA to collect licensing and examination fees to offset SBA's costs associated with the administration of these two activities. SBA last increased fees for SBICs in 1996. Current fees offset less than 40% of SBA's administrative expenses related to these activities. The proposed rule would revise existing regulations to increase, over a five-year period, SBIC licensing and examination fees in order to annually recoup an estimated 70% of SBA administrative expenses related to these activities. After the five year period, the rule proposes annual increases of these fees based on inflation. To encourage investment into underserved areas, the proposed rule would establish certain examination fee discounts for SBICs that make significant low and moderate income (LMI) investments.

The U.S. Small Business Administration (SBA) is seeking comments on this Notice of Proposed Rulemaking (NPRM) regarding the Women's Business Center (WBC) Program. An Advance Notice of Proposed Rulemaking (ANPRM) was published on April 22, 2015, which received eight comments. This NPRM is being issued to continue the consultative process with stakeholders to examine the proposed WBC regulations. This NPRM also proposes to codify policy and procedural changes that have been included in the Notice of Award, such as language on risk determination as required by, limitations on carryovers, who is considered key personnel and a reduction in the reporting requirements. Implementing these regulations will result in standardization and transparency to the delivery of the WBC Program.

The Economic Development Administration (“EDA”), U.S. Department of Commerce (“DOC”), will hold a webinar to discuss proposed updates to the agency's regulations implementing the Public Works and Economic Development Act of 1965, as amended (“PWEDA”). On October 3, 2016, EDA published a Notice of Proposed Rulemaking (“NPRM”) in the Federal Register at 81 FR 68186. Through this NPRM, EDA is proposing important changes to the regulations governing the Revolving Loan Fund (“RLF”) program that are intended to reflect current best practices and strengthen EDA's efforts to evaluate, monitor, and improve RLF performance by establishing the Risk Analysis System, a risk-based management framework, to evaluate and manage the RLF program. EDA also proposes to reorganize the RLF regulations to improve their readability and clarify the requirements that apply to the distinct phases of an RLF award. In addition, EDA proposes specific changes to RLF requirements to make RLF awards more efficient for Recipients to administer and for EDA to monitor. Through this NPRM EDA proposes important, but less comprehensive updates to other parts of its regulations, including revising definitions, replacing references to superseded regulations to reflect the promulgation of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements (2 CFR part 200) (“Uniform Guidance”), streamlining the provisions that outline EDA's application process, and clarifying EDA's property management regulations. Given the more comprehensive nature of the changes being proposed to the RLF program, EDA will use this webinar to focus on the proposed RLF changes and explain both the rationale behind those changes and their potential impact. All members of the public are invited to participate.

The U.S. Small Business Administration (SBA) is proposing to amend the rules of practice of its Office of Hearings and Appeals (OHA) to implement Section 869 of the National Defense Authorization Act for Fiscal Year 2016. This legislation authorizes OHA to decide Petitions for Reconsideration of Size Standards. This rule also proposes to revise the rules of practice for OHA appeals of agency employee grievances.

The U.S. Small Business Administration (SBA) announces that it is holding a public webinar regarding its Early Stage Small Business Investment Companies proposed rule, which was published on September 19, 2016. The webinar will describe the changes proposed in the rulemaking and answer questions regarding the proposed rule.

The U.S. Small Business Administration (SBA or Agency) seeks comments on a proposed amendment to its regulations governing the small business timber set-aside program (hereafter referred to as the “timber program”) so that appraisals on small business set-aside sales be made to the nearest small business mill. Timber sale appraisals are performed for small business qualifying set-aside and non-set-aside sales. When the U.S. Department of Agriculture's (USDA) Forest Service (FS) offers timber for sale, it appraises its potential market value and sets the minimum bid that it will accept based on that appraisal. Currently, appraisals in small business set-aside timber sales take into account the haul costs to the nearest mill regardless of that mill's size. Since set-aside timber sales require the use of small business mills, SBA proposes that the appraisal on set-aside timber sales be made to the nearest small business mill in order to accurately reflect the estimated cost to an eligible bidder. SBA is also requesting comment on a possible policy alternative that would use a weighted approach to appraising.