Small Business Size Standards; Accommodation and Food Services Industries, 61604-61609 [2010-24857]

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Download as PDF 61604 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY—Continued NAICS codes 451120 451130 451140 451211 Size standards in millions of dollars NAICS U.S. industry title Size standards in number of employees 25.5 25.5 10.0 25.5 ........................ ........................ ........................ ........................ 30.0 * ........................ 30.0 * ........................ 30.0 * ........................ 30.0 * ........................ 19.0 * ........................ 14.0 * ........................ 30.0 35.5 35.5 10.0 * ........................ ........................ ........................ ........................ ................... ................... ................... ................... Hobby, Toy and Game Stores ............................................................................................ Sewing, Needlework and Piece Goods Stores ................................................................... Musical Instrument and Supplies Stores ............................................................................ Book Stores ......................................................................................................................... * 451220 ................... * * * * Prerecorded Tape, Compact Disc and Record Stores ....................................................... * * 452111 ................... * * * * Department Stores (except Discount Department Stores) ................................................. * * 452990 ................... * * * * All Other General Merchandise Stores ............................................................................... * * 453210 ................... * * * * Office Supplies and Stationary Stores ................................................................................ * * 453910 ................... * * * * Pet and Pet Supplies Stores ............................................................................................... * * 453930 ................... * * * * Manufactured (Mobile) Home Dealers ................................................................................ * * ................... ................... ................... ................... * * * * Electronic Shopping ............................................................................................................ Electronic Auctions .............................................................................................................. Mail Order Houses .............................................................................................................. Vending Machine Operators ............................................................................................... * 454111 454112 454113 454210 * * * * * 3. In § 121.402 (b), remove the last sentence and add two new sentences to the end of the paragraph to read as follows: SMALL BUSINESS ADMINISTRATION § 121.402 What size standards are applicable to Federal Government Contracting programs? Small Business Size Standards; Accommodation and Food Services Industries ■ * * * * (b) * * *Acquisitions for supplies must be classified under the appropriate manufacturing NAICS code, not under a Wholesale Trade or Retail Trade NAICS code. A concern that submits an offer or quote for a contract or subcontract where the NAICS code assigned to the contract or subcontract is one for supplies, and furnishes a product it did not itself manufacture or produce, is categorized as a nonmanufacturer and deemed small if it has 500 or fewer employees and meets the requirements of 13 CFR 121.406. * * * * * WReier-Aviles on DSKGBLS3C1PROD with RULES * Dated: September 10, 2010. Marie C. Johns, Deputy Administrator. [FR Doc. 2010–24855 Filed 10–5–10; 8:45 am] BILLING CODE 8025–01–P VerDate Mar<15>2010 15:06 Oct 05, 2010 Jkt 223001 13 CFR Part 121 RIN: 3245–AF71 AGENCY: Small Business Administration (SBA). ACTION: Final rule. The United States Small Business Administration (SBA) is increasing small business size standards for five industries in North American Industry Classification System (NAICS) Sector 72, Accommodation and Food Services—namely NAICS 721110, Hotels and Motels, from $7.0 million to $30 million; NAICS 721120, Casino Hotels, from $7.0 million to $30 million; NAICS 722211, Limited Service Restaurants, from $7.0 million to $10 million; NAICS 722212, Cafeterias, from $7.0 million to $25.5 million; and NAICS 722310, Food Service Contractors, from $20.5 million to $35.5 million. As part of its ongoing initiative to review all size standards, SBA has evaluated every industry in Sector 72 to determine whether the existing size standards should be retained or revised. SUMMARY: PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 * * This rule is effective November 5, 2010. FOR FURTHER INFORMATION CONTACT: Carl Jordan, Program Analyst, Office of Size Standards, (202) 205–6618 or sizestandards@sba.gov. DATES: SUPPLEMENTARY INFORMATION: Introduction To determine eligibility for Federal small business assistance programs, SBA establishes small business size definitions (referred to as size standards) for private sector industries in the United States. SBA’s existing size standards use two primary measures of business size—annual receipts and number of employees. Financial assets, electric output and refining capacity are used as size measures for a few specialized industries. In addition, SBA’s Small Business Investment Company (SBIC) and the Certified Development Company (CDC) Programs determine small business eligibility using either the industry based size standards or net worth and net income based size standards. Currently, SBA’s size standards consist of 45 different size levels, covering 1,141 NAICS industries and 17 sub-industry activities. Of these size levels, 32 are based on average annual receipts, eight E:\FR\FM\06OCR1.SGM 06OCR1 WReier-Aviles on DSKGBLS3C1PROD with RULES Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations are based on number of employees, and five are based on other measures. In addition, SBA has established 11 other size standards for its financial and procurement programs. Over the years, SBA has received comments that its size standards have not kept up with changes in the economy and, in particular, that they do not reflect changes in the Federal contracting marketplace. The last overall review of size standards occurred during the late 1970s and early 1980s. Since then, most reviews of size standards have been limited to in-depth analyses of specific industries in response to requests from the public and Federal agencies. SBA also makes periodic inflation adjustments to its monetary based size standards. The latest inflation adjustment to size standards was published in the Federal Register on July 18, 2008 (73 FR 41237). SBA recognizes that changes in industry structure and Federal marketplace over time have rendered existing size standards for some industries no longer supportable by current data. Accordingly, SBA has begun a comprehensive review of its size standards to determine whether existing size standards have supportable bases relative to the current data and, where necessary, to make revisions to existing size standards. Rather than review all size standards at one time, SBA has taken a more manageable approach to reviewing a group of related industries within an NAICS Sector. SBA expects to complete its review of all NAICS Sectors in two years. As part of its ongoing effort to review all small business size standards, SBA evaluated every industry in NAICS Sector 72, Accommodation and Food Services, to determine whether the existing size standards should be retained or revised, and published a proposed rule for public comment in the October 21, 2009 issue of the Federal Register (74 FR 53913) to increase the size standards for five industries in that Sector. The proposed rule was one of a series of proposals that will examine industries grouped by an NAICS Sector. SBA also published concurrently in the same October 21, 2009 issue of the Federal Register proposed rules to increase small business size standards for 47 industries in NAICS Sector 44– 45, Retail Trade (74 FR 53924) and for 18 industries in NAICS Sector 81, Other Services (74 FR 53941). Similarly, SBA is publishing final rules on NAICS Sector 44–45 and NAICS Sector 81 elsewhere in this issue of the Federal Register. In addition, SBA established its ‘‘Size Standards Methodology’’ for reviewing VerDate Mar<15>2010 15:06 Oct 05, 2010 Jkt 223001 small business size standards and modifying them, where necessary. SBA published in the October 21, 2009 issue of the Federal Register (74 FR 53940) a notice of its availability, for public comments, on its Web site at http:// www.sba.gov/contractingopportunities/ officials/size/index.html. In addition, SBA has placed a copy of its ‘‘Size Standards Methodology’’ in the electronic docket of the proposed rule and is available there as well. In evaluating an industry’s size standard, SBA examines the industry’s characteristics (such as average firm size, startup costs, industry competition and distribution of firms by size), Federal government contracting trends, impact on SBA financial assistance programs, and dominance in field of operations. SBA analyzed the characteristics of each industry in NAICS Sector 72 mostly using a special tabulation obtained from the U. S. Bureau of the Census from its 2002 Economic Census (the latest available). SBA also evaluated Federal contracting trends using the data from the Federal Procurement Data System—Next Generation (FPDS—NG) for fiscal years 2006–2008. To evaluate the impact of changes to size standards on its loan programs, SBA analyzed internal data on its guaranteed loan programs for fiscal years 2006–2008. SBA’s ‘‘Size Standards Methodology’’ provides a detailed description of analyses of various industry and program factors and data sources and derivation of size standards using the results. In the proposed rule itself, SBA detailed how it applied its ‘‘Size Standards Methodology’’ to review, and to modify where necessary, the existing standards for the Sector and Industries under analysis. SBA sought comments from the public on a number of issues about its ‘‘Size Standards Methodology,’’ such as whether there are alternative methodologies that SBA should consider; whether there are alternative or additional factors or data sources that SBA should evaluate; whether SBA’s approach to establishing small business size standards makes sense in the current economic environment; whether SBA’s definitions of anchor size standards are appropriate in the current economy; whether there are gaps in SBA’s methodology because of the lack of comprehensive data; and whether there are other facts or issues that SBA should consider in its methodology. SBA did not receive any comments on ‘‘Size Standards Methodology.’’ SBA continues to welcome comments from interested parties. PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 61605 In the proposed rule, based on its analyses of current industry and other relevant data, SBA proposed to increase five of the 15 size standards in NAICS Sector 72. SBA’s analyses supported retaining the existing size standards for three industries. As noted in the proposed rule, SBA’s analyses would support reducing size standards for the seven of the remaining industries in the Sector. However, as the proposed rule pointed out, SBA believes that lowering size standards and thereby reducing the number of firms eligible to participate in Federal small business assistance programs would run counter to what the Agency is doing to help small businesses. Therefore, SBA proposed to retain the existing size standards for those seven industries. Summary of Comments The proposed rule sought comments from the public on SBA’s proposal to increase size standards for five Industries in NAICS Sector 72. SBA received six comments; four strongly supported the proposed increases in size standards and two did not. The four supporting comments stated that the proposed increases will help more small hotels participate in Federal procurement opportunities reserved for small businesses. It will also help the Federal government meet its hotel and conference accommodation needs. The commenters stated that there are too few conference hotels under the current size standards with little competition for federal business. Another commenter suggested that there should be only one maximum revenue based and one maximum employee based size standard, regardless of NAICS industry. While this would simplify size standards even more than what SBA had proposed, the Small Business Act states that ‘‘the [SBA] Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.’’ (15 U.S.C. 632(a)(3)) The relevant data show significant differences among industries within each NAICS Sector, including Sector 72, and SBA believes that varying the size standard by industry not only complies with the Act, but it also serves the best interests of small businesses in that Sector. Therefore, SBA does not presently plan to reduce the number of receipts based size standard levels below eight. Another commenter stated that an increase from $7 million to $30 million was ‘‘too drastic,’’ but provided no E:\FR\FM\06OCR1.SGM 06OCR1 61606 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations specifics to support this opinion. SBA agrees that such an increase might appear so, but based on its analysis of the industries in Sector 72, fully explained in the proposed rule (q.v.), SBA believes that the increases are appropriate. SBA did not receive any comments on whether it should lower size standards for the seven industries in NAICS Sector 72 for which SBA’s analyses supported reducing the existing size standards. SBA also did not receive any comments on three industries for which SBA’s analyses supported retaining the existing size standards. Therefore, SBA is retaining the existing size standards for 10 of the 15 Industries in NAICS Sector 72. All comments to the proposed rule are available for public review at http:// www.regulations.gov. Conclusion Based on its analyses of relevant industry and program data and public comments it received on the proposed rule, SBA has decided to increase five small business size standards in NAICS Sector 72, as shown in the following table. SUMMARY OF REVISED SMALL BUSINESS SIZE STANDARDS FOR NAICS SECTOR 72 Current size standard ($ million) NAICS 721110—Hotels (except Casino Hotels) & Motels .................................................................................................. 721120—Casino Hotels ........................................................................................................................................... 722211—Limited Service Restaurants .................................................................................................................... 722212—Cafeterias ................................................................................................................................................. 722310—Food Service Contractors ........................................................................................................................ Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork Reduction Act (44 U.S.C., Ch. 35) and the Regulatory Flexibility Act (5 U.S.C. 601–612) Executive Order 12866 The Office of Management and Budget (OMB) has determined that this rule is a ‘‘significant’’ regulatory action for purposes of Executive Order 12866. Accordingly, the next section contains SBA’s Regulatory Impact Analysis. This is not a major rule, however, under the Congressional Review Act, 5 U.S.C. 800. Regulatory Impact Analysis WReier-Aviles on DSKGBLS3C1PROD with RULES 1. Is there a need for the regulatory action? SBA believes that adjustments to certain size standards in Sector 72, Accommodation and Food Services, are needed to better reflect the economic characteristics of small businesses in those industries. SBA provides aid and assistance to small businesses through a variety of financial, procurement, business development and advocacy programs. To assist effectively the intended beneficiaries of these programs, SBA must establish distinct definitions of which businesses are deemed small businesses. The Small Business Act (15 U.S.C. 632(a)) delegates to SBA’s Administrator the responsibility for establishing small business definitions. The Act also requires that small business definitions vary to reflect industry differences. The supplementary information section of this rule explains SBA’s methodology for analyzing a size standard for a particular industry. VerDate Mar<15>2010 15:06 Oct 05, 2010 Jkt 223001 2. What are the potential benefits and costs of this regulatory action? The most significant benefit to businesses obtaining small business status as a result of this rule is eligibility for Federal small business assistance programs, including SBA’s financial assistance programs, economic injury disaster loans, and Federal procurement preference programs for small businesses. Federal procurement regulations provide opportunities for small businesses under SBA’s business development programs, such as 8(a), Small Disadvantaged Businesses (SDB), small businesses located in Historically Underutilized Business Zones (HUBZone), women owned small businesses and service disabled veteran owned small businesses (SDVOSB). Other Federal agencies also may use SBA size standards for a variety of regulatory and program purposes. Through the assistance of these programs, small businesses become more knowledgeable, stable and competitive businesses. In five industries under Sector 72 for which SBA had proposed to increase size standards, about 2,050 additional firms are estimated to obtain small business status and become eligible for these programs. In the seven industries for which SBA’s analyses indicated a lower size standard as appropriate, there are about 450 firms that might have lost their small business status, had SBA proposed lowering them. That number is less than 0.6 percent of the total number of firms in those industries defined as small under the current standards. Thus, the net impact for the Sector as whole is about 2,050 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 $7.0 7.0 7.0 7.0 20.5 Revised size standard ($ million) $30.0 30.0 10.0 25.5 35.5 additional firms gaining and none losing small business status under this rule. This will increase the small business share of total industry receipts for the Sector from about 46 percent under the current size standards to nearly 50 percent under the revised standards. The benefits of increasing certain size standards to a more appropriate level would accrue to three groups: (1) Businesses that benefit by gaining small business status from the higher size standard that also use small business assistance programs; (2) growing small businesses that may exceed the current size standards in the near future and that will retain their small business status from the higher size standards; and (3) Federal agencies that award contracts under procurement programs that require small business status. Nearly 90 percent of Federal contracting dollars spent in Sector 72 during fiscal years 2006–2008 was accounted for by two of five industries for which size standards have been increased in this rule. SBA estimates that additional firms gaining small business status in those two industries under the new size standards could potentially obtain Federal contracts totaling up to $75 million per year under the small business set-aside program, the 8(a), HUBZone, and SDVOSB Programs, or unrestricted procurements. This represents about 5.5 percent of the $1.13 billion in average Federal contract dollars awarded in the Accommodation and Food Services Sector during fiscal years 2006–2008. The added competition for many of these procurements will also likely result in a lower price to the Government for procurements reserved E:\FR\FM\06OCR1.SGM 06OCR1 WReier-Aviles on DSKGBLS3C1PROD with RULES Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations for small businesses, but SBA is not able to quantify this benefit. Under SBA’s 7(a) Guaranteed Loan Program and 504 Certified Development Company (CDC) Program, SBA estimates only a few additional loans totaling $1 million to $2 million in Federal loan guarantees could be made to these newly defined small businesses. Because of the size of the loan guarantees, however, most loans are made to small businesses well below the size standard. Moreover, under the Recovery Act, effective February 17, 2009, SBA temporarily raised guarantees on its SBA’s 7(a) loan program and also temporarily eliminated fees for borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 CDC loans, through calendar year 2009, or until the funds are exhausted. The fee elimination is retroactive to February 17, 2009, the day the Recovery Act was signed. In addition, since SBA has applied its CDC alternative size standard to its 7(a) Business Loan Program, more capital is available to small businesses. Thus, increasing the size standards will likely result in an increase in guaranteed loans to businesses in these industries, but it would be impractical to try to estimate the extent of their number and the total amount loaned. The newly defined small businesses will also benefit from SBA’s Economic Injury Disaster Loan (EIDL) Program. Since this program is contingent on the occurrence and severity disasters, no meaningful estimate of benefits can be projected for future disasters. To the extent that 2,050 additional firms could become active in Federal procurement programs, this may entail some additional administrative costs to the Federal Government associated with additional bidders for Federal small business procurement opportunities, additional firms seeking SBA guaranteed lending programs, additional firms eligible for enrollment in the Central Contractor Registration’s Dynamic Small Business Search database and additional firms seeking certification as 8(a) or HUBZone firms or qualifying for SDB status. Among businesses in this group seeking SBA assistance, there could be some additional costs associated with compliance and verification of small business status and protests of small business status. These additional costs are likely to be minimal because mechanisms are already in place to handle these additional administrative requirements. The costs to the Federal Government may be higher on some Federal contracts. With a greater number of VerDate Mar<15>2010 15:06 Oct 05, 2010 Jkt 223001 businesses defined as small, Federal agencies may choose to set aside more contracts for competition among small businesses rather than using full and open competition. The movement from unrestricted to set-aside contracting is likely to result in competition among fewer bidders. In addition, higher costs may result from additional full and open contracts awarded to HUBZone and SDB businesses because of price evaluation preferences. The additional costs associated with fewer bidders, however, are likely to be minor since, as a matter of law, procurements may be set aside for small businesses or reserved for the 8(a), SDB or HUBZone Programs only if awards are expected to be made at fair and reasonable prices. The increased size standards may have distributional effects among large and small businesses. Although the actual outcome of the gains and losses among small and large businesses cannot be estimated with certainty, several likely impacts can be identified. There will likely be a transfer of some Federal contracts to small businesses from large businesses. Large businesses may have fewer Federal contract opportunities as Federal agencies decide to set aside more Federal contracts for small businesses. Also, some Federal contracts may be awarded to HUBZone or SDB concerns instead of large businesses since those two categories of small businesses may be eligible for an evaluation adjustment for contracts competed on a full and open basis. Similarly, currently defined small businesses may obtain fewer Federal contracts due to the increased competition from more businesses defined as small. This transfer may be offset by a greater number of Federal procurements set aside for all small businesses. The number of newly defined and expanding small businesses that are willing and able to sell to the Federal Government will limit the potential transfer of contracts away from large and currently defined small businesses. The potential distributional impacts of these transfers may not be estimated with any degree of precision because the data on the size of business receiving a Federal contract are limited to identifying small or other than small businesses, without regard to the exact size of the business. The revisions to the existing size standards for Accommodation and Food Services industries is consistent with SBA’s statutory mandate to assist small business. This regulatory action promotes the Administration’s objectives. One of SBA’s goals in support of the Administration’s objectives is to help individual small PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 61607 businesses succeed through fair and equitable access to capital and credit, Government contracts, and management and technical assistance. Reviewing and modifying size standards, when appropriate, ensures that intended beneficiaries have access to small business programs designed to assist them. Executive Order 12988 For purposes of Executive Order 12988, SBA has determined that this rule is drafted, to the extent practicable, in accordance with the standards set forth in that Order. Executive Order 13132 For purposes of Executive Order 13132, SBA has determined that this rule does not have any Federalism implications warranting the preparation of a federalism assessment. Paperwork Reduction Act For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this rule would not impose new reporting or recordkeeping requirements, other than those required of SBA. Final Regulatory Flexibility Analysis Under the Regulatory Flexibility Act (RFA), this rule may have a significant impact on a substantial number of small entities in Sector 72, Accommodation and Food Services. As described above, this rule may affect small entities seeking Federal contracts, SBA 7(a) and 504 Guaranteed Loan Programs, SBA Economic Injury Disaster Loans, and other Federal small business programs. Immediately below, SBA sets forth a final regulatory flexibility analysis of this proposed rule addressing the following questions: (1) What is the need for and objective of the rule? (2) what is SBA’s description and estimate of the number of small entities to which the rule will apply? (3) what are the projected reporting, record keeping, and other compliance requirements of the rule? (4) what are the relevant Federal rules which may duplicate, overlap or conflict with the rule? and (5) what alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small entities? (1) What is the need for and objective of the rule? Most of SBA’s size standards for Accommodation and Food Services industries have not been reviewed since the early 1980s. Technology, productivity growth, international competition, mergers and acquisitions, E:\FR\FM\06OCR1.SGM 06OCR1 61608 Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations and updated industry definitions may have changed the structure of many industries. Such changes can be sufficient to support a revision to size standards for some industries. Based on an analysis of the latest data available to the Agency, SBA believes that the revised standards in this proposed rule more appropriately reflect the size of businesses in those industries that need Federal assistance. (2) What is SBA’s description and estimate of the number of small entities to which the rule will apply? SBA estimates that approximately 2,050 additional firms will become small because of increases in size standard in five industries. That represents 1.1 percent of total firms in those industries. This will result in an increase in the small business share of total industry receipts for this Sector from about 46 percent under the current size standard to nearly 50 percent under the revised standards. (3) What are the projected reporting, recordkeeping, and other compliance requirements of the rule and an estimate of the classes of small entities which will be subject to the requirements? A new size standard does not impose any additional reporting or recordkeeping requirements on small entities. However, qualifying for Federal procurement and a number of other programs requires that entities register in the Central Contractor Registration (CCR) database and certify at least annually that they are small in the Online Representations and Certifications Application (ORCA). Therefore, businesses opting to participate in those programs must comply with CCR and ORCA requirements. There are no costs associated with either CCR registration or ORCA certification. Revising size standards alters the access to SBA programs that assist small businesses, but does not impose a regulatory burden as they neither regulate nor control business behavior. (4) What are the relevant Federal rules which may duplicate, overlap or conflict with the rule? This rule overlaps with other Federal rules that use SBA’s size standards to define a small business. Under § 3(a)(2)(C) of the Small Business Act, 15 USC 632(a)(2)(C), Federal agencies must use SBA’s size standards to define a small business, unless specifically authorized by statute. In 1995, SBA published in the Federal Register a list of statutory and regulatory size standards that identified the application of SBA’s size standards as well as other size standards used by Federal agencies (60 FR 57988, November 24, 1995). SBA is not aware of any Federal rule that would duplicate or conflict with establishing size standards. However, the Small Business Act and SBA’s regulations allow Federal agencies to develop different size standards if they believe that SBA’s size standards are not appropriate for their programs, with the approval of SBA’s Administrator (13 CFR 121.903). The Regulatory Flexibility Act authorizes an Agency to establish an alternative small business definition, after consultation with the Office of Advocacy of the U.S. Small Business Administration (5 U.S.C. 601(3)). Thus, there may be instances where this rule conflicts with other rules. (5) What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small entities? SBA is required to develop numerical size standards for identifying businesses eligible for Federal small business programs. Other than varying the size standards, no alternative exists to the systems of numerical size standards. List of Subjects in 13 CFR Part 121 Administrative practice and procedure, Government procurement, Government property, Grant programs— business, Individuals with disabilities, Loan programs—business, Reporting and recordkeeping requirements, Small businesses. ■ For reasons set forth in the preamble, SBA amends 13 CFR part 121 as follows: PART 121—SMALL BUSINESS SIZE REGULATIONS 1. The authority citation for part 121 continues to read as follows: ■ Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, 657(a), 657(f), and 662(5); and Pub. L. 105–135, Sec. 401, et seq., 111 Stat, 2592. Subpart A—Size Eligibility Provisions and Standards 2. In § 121.201, in the table, revise the entries for ‘‘721110’’, ‘‘721120’’, ‘‘722211’’,‘‘722212’’, and ‘‘722310’’ to read as follows: ■ § 121.201 What size standards has SBA identified by North American Industry Classification System codes? * * * * * SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY Size standards in millions of dollars NAICS U.S. industry title * 721110 ................... 721120 ................... * * * * Hotels (except Casino Hotels) and Motels ......................................................................... Casino Hotels ...................................................................................................................... * * 722211 ................... 722212 ................... WReier-Aviles on DSKGBLS3C1PROD with RULES NAICS codes * * * * Limited-Service Restaurants ............................................................................................... Cafeterias, Grill Buffets, and Buffets .................................................................................. * * 722310 ................... * * * * Food Service Contractors ................................................................................................... * * VerDate Mar<15>2010 * 15:06 Oct 05, 2010 * Jkt 223001 PO 00000 * Frm 00020 Fmt 4700 * Sfmt 4700 E:\FR\FM\06OCR1.SGM $30.0 30.0 * ........................ ........................ 10.0 25.5 * ........................ ........................ 35.5 * 06OCR1 Size standards in number of employees * ........................ * Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / Rules and Regulations Dated: September 10, 2010. Marie C. Johns, Deputy Administrator. The Rule [FR Doc. 2010–24857 Filed 10–5–10; 8:45 am] BILLING CODE 8025–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA–2009–1136; Airspace Docket No. 09–ANM–26] Establishment and Modification of Class E Airspace; Deer Park, WA Federal Aviation Administration (FAA), DOT. ACTION: Final rule. AGENCY: This action will establish and amend existing Class E airspace at Deer Park, WA, to accommodate aircraft using the existing Area Navigation (RNAV) Global Positioning System (GPS) Standard Instrument Approach Procedures (SIAPs) at Deer Park, WA. This will improve the safety and management of Instrument Flight Rules (IFR) operations at the airport. DATES: Effective date, 0901 UTC, January 13, 2011. The Director of the Federal Register approves this incorporation by reference action under 1 CFR Part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Eldon Taylor, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue, SW., Renton, WA 98057; telephone (425) 203–4537. SUPPLEMENTARY INFORMATION: SUMMARY: WReier-Aviles on DSKGBLS3C1PROD with RULES History On July 19, 2010, the FAA published in the Federal Register a notice of proposed rulemaking to amend controlled airspace at Deer Park, WA (75 FR 41774). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Class E airspace designations are published in paragraph 6002 and 6005, respectively, of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order. VerDate Mar<15>2010 15:06 Oct 05, 2010 Jkt 223001 This action amends Title 14 Code of Federal Regulations (14 CFR) Part 71 by establishing Class E surface airspace, and adding additional Class E airspace extending upward from 700 feet above the surface, at Deer Park Airport, to accommodate IFR aircraft executing new RNAV (GPS) SIAPs at the airport. This action is necessary for the safety and management of IFR operations. The FAA has determined this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a ‘‘significant regulatory action’’ under Executive Order 12866; (2) is not a ‘‘significant rule’’ under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA’s authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 discusses the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency’s authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes amends controlled airspace at Deer Park Airport, Deer Park, WA. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment PART 71—DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR Part 71 continues to read as follows: PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR Part 71.1 of the Federal Aviation Administration Order 7400.9U, Airspace Designations and Reporting Points, dated August 18, 2010, and effective September 15, 2010 is amended as follows: ■ Paragraph 6002 Class E airspace designated as surface areas. * * * * * ANM WA E2 Deer Park, WA [New] Deer Park Airport, WA (Lat. 47°58′01″ N., long. 117°25′43″ W.) Within a 4.1-mile radius of Deer Park Airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory. Paragraph 6005 Class E airspace areas extending upward from 700 feet or more above the surface of the earth. * * * * * ANM WA, E5 Deer Park, WA [Modified] Deer Park Airport, WA (Lat. 47°58′01″ N., long. 117°25′43″ W.) That airspace extending upward from 700 feet above the surface within a 7-mile radius of the Deer Park Airport, excluding the Spokane, WA, Class E airspace area. Issued in Seattle, Washington, on September 23, 2010. Lori Andriesen, Acting Manager, Operations Support Group, Western Service Center. [FR Doc. 2010–24804 Filed 10–5–10; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA–2010–0616; Airspace Docket No. 10–ANM–6] Modification of Class E Airspace; Pendleton, OR Federal Aviation Administration (FAA), DOT. ACTION: Final rule. AGENCY: In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR Part 71 as follows: ■ ■ 61609 This action will amend Class E airspace at Pendleton, OR. Decommissioning of the Foris NonDirectional Radio Beacon (NDB) at Eastern Oregon Regional Airport at Pendleton has made this necessary for the safety and management of Instrument Flight Rules (IFR) operations SUMMARY: E:\FR\FM\06OCR1.SGM 06OCR1

Agencies

[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Rules and Regulations]
[Pages 61604-61609]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24857]


-----------------------------------------------------------------------

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN: 3245-AF71


Small Business Size Standards; Accommodation and Food Services 
Industries

AGENCY: Small Business Administration (SBA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The United States Small Business Administration (SBA) is 
increasing small business size standards for five industries in North 
American Industry Classification System (NAICS) Sector 72, 
Accommodation and Food Services--namely NAICS 721110, Hotels and 
Motels, from $7.0 million to $30 million; NAICS 721120, Casino Hotels, 
from $7.0 million to $30 million; NAICS 722211, Limited Service 
Restaurants, from $7.0 million to $10 million; NAICS 722212, 
Cafeterias, from $7.0 million to $25.5 million; and NAICS 722310, Food 
Service Contractors, from $20.5 million to $35.5 million. As part of 
its ongoing initiative to review all size standards, SBA has evaluated 
every industry in Sector 72 to determine whether the existing size 
standards should be retained or revised.

DATES: This rule is effective November 5, 2010.

FOR FURTHER INFORMATION CONTACT: Carl Jordan, Program Analyst, Office 
of Size Standards, (202) 205-6618 or sizestandards@sba.gov.

SUPPLEMENTARY INFORMATION:

Introduction

    To determine eligibility for Federal small business assistance 
programs, SBA establishes small business size definitions (referred to 
as size standards) for private sector industries in the United States. 
SBA's existing size standards use two primary measures of business 
size--annual receipts and number of employees. Financial assets, 
electric output and refining capacity are used as size measures for a 
few specialized industries. In addition, SBA's Small Business 
Investment Company (SBIC) and the Certified Development Company (CDC) 
Programs determine small business eligibility using either the industry 
based size standards or net worth and net income based size standards. 
Currently, SBA's size standards consist of 45 different size levels, 
covering 1,141 NAICS industries and 17 sub-industry activities. Of 
these size levels, 32 are based on average annual receipts, eight

[[Page 61605]]

are based on number of employees, and five are based on other measures. 
In addition, SBA has established 11 other size standards for its 
financial and procurement programs.
    Over the years, SBA has received comments that its size standards 
have not kept up with changes in the economy and, in particular, that 
they do not reflect changes in the Federal contracting marketplace. The 
last overall review of size standards occurred during the late 1970s 
and early 1980s. Since then, most reviews of size standards have been 
limited to in-depth analyses of specific industries in response to 
requests from the public and Federal agencies. SBA also makes periodic 
inflation adjustments to its monetary based size standards. The latest 
inflation adjustment to size standards was published in the Federal 
Register on July 18, 2008 (73 FR 41237).
    SBA recognizes that changes in industry structure and Federal 
marketplace over time have rendered existing size standards for some 
industries no longer supportable by current data. Accordingly, SBA has 
begun a comprehensive review of its size standards to determine whether 
existing size standards have supportable bases relative to the current 
data and, where necessary, to make revisions to existing size 
standards. Rather than review all size standards at one time, SBA has 
taken a more manageable approach to reviewing a group of related 
industries within an NAICS Sector. SBA expects to complete its review 
of all NAICS Sectors in two years.
    As part of its ongoing effort to review all small business size 
standards, SBA evaluated every industry in NAICS Sector 72, 
Accommodation and Food Services, to determine whether the existing size 
standards should be retained or revised, and published a proposed rule 
for public comment in the October 21, 2009 issue of the Federal 
Register (74 FR 53913) to increase the size standards for five 
industries in that Sector. The proposed rule was one of a series of 
proposals that will examine industries grouped by an NAICS Sector. SBA 
also published concurrently in the same October 21, 2009 issue of the 
Federal Register proposed rules to increase small business size 
standards for 47 industries in NAICS Sector 44-45, Retail Trade (74 FR 
53924) and for 18 industries in NAICS Sector 81, Other Services (74 FR 
53941). Similarly, SBA is publishing final rules on NAICS Sector 44-45 
and NAICS Sector 81 elsewhere in this issue of the Federal Register.
    In addition, SBA established its ``Size Standards Methodology'' for 
reviewing small business size standards and modifying them, where 
necessary. SBA published in the October 21, 2009 issue of the Federal 
Register (74 FR 53940) a notice of its availability, for public 
comments, on its Web site at http://www.sba.gov/contractingopportunities/officials/size/index.html. In addition, SBA 
has placed a copy of its ``Size Standards Methodology'' in the 
electronic docket of the proposed rule and is available there as well.
    In evaluating an industry's size standard, SBA examines the 
industry's characteristics (such as average firm size, startup costs, 
industry competition and distribution of firms by size), Federal 
government contracting trends, impact on SBA financial assistance 
programs, and dominance in field of operations. SBA analyzed the 
characteristics of each industry in NAICS Sector 72 mostly using a 
special tabulation obtained from the U. S. Bureau of the Census from 
its 2002 Economic Census (the latest available). SBA also evaluated 
Federal contracting trends using the data from the Federal Procurement 
Data System--Next Generation (FPDS--NG) for fiscal years 2006-2008.
    To evaluate the impact of changes to size standards on its loan 
programs, SBA analyzed internal data on its guaranteed loan programs 
for fiscal years 2006-2008.
    SBA's ``Size Standards Methodology'' provides a detailed 
description of analyses of various industry and program factors and 
data sources and derivation of size standards using the results. In the 
proposed rule itself, SBA detailed how it applied its ``Size Standards 
Methodology'' to review, and to modify where necessary, the existing 
standards for the Sector and Industries under analysis.
    SBA sought comments from the public on a number of issues about its 
``Size Standards Methodology,'' such as whether there are alternative 
methodologies that SBA should consider; whether there are alternative 
or additional factors or data sources that SBA should evaluate; whether 
SBA's approach to establishing small business size standards makes 
sense in the current economic environment; whether SBA's definitions of 
anchor size standards are appropriate in the current economy; whether 
there are gaps in SBA's methodology because of the lack of 
comprehensive data; and whether there are other facts or issues that 
SBA should consider in its methodology.
    SBA did not receive any comments on ``Size Standards Methodology.'' 
SBA continues to welcome comments from interested parties.
    In the proposed rule, based on its analyses of current industry and 
other relevant data, SBA proposed to increase five of the 15 size 
standards in NAICS Sector 72. SBA's analyses supported retaining the 
existing size standards for three industries. As noted in the proposed 
rule, SBA's analyses would support reducing size standards for the 
seven of the remaining industries in the Sector. However, as the 
proposed rule pointed out, SBA believes that lowering size standards 
and thereby reducing the number of firms eligible to participate in 
Federal small business assistance programs would run counter to what 
the Agency is doing to help small businesses. Therefore, SBA proposed 
to retain the existing size standards for those seven industries.

Summary of Comments

    The proposed rule sought comments from the public on SBA's proposal 
to increase size standards for five Industries in NAICS Sector 72. SBA 
received six comments; four strongly supported the proposed increases 
in size standards and two did not. The four supporting comments stated 
that the proposed increases will help more small hotels participate in 
Federal procurement opportunities reserved for small businesses. It 
will also help the Federal government meet its hotel and conference 
accommodation needs. The commenters stated that there are too few 
conference hotels under the current size standards with little 
competition for federal business.
    Another commenter suggested that there should be only one maximum 
revenue based and one maximum employee based size standard, regardless 
of NAICS industry. While this would simplify size standards even more 
than what SBA had proposed, the Small Business Act states that ``the 
[SBA] Administrator shall ensure that the size standard varies from 
industry to industry to the extent necessary to reflect the differing 
characteristics of the various industries and consider other factors 
deemed to be relevant by the Administrator.'' (15 U.S.C. 632(a)(3)) The 
relevant data show significant differences among industries within each 
NAICS Sector, including Sector 72, and SBA believes that varying the 
size standard by industry not only complies with the Act, but it also 
serves the best interests of small businesses in that Sector. 
Therefore, SBA does not presently plan to reduce the number of receipts 
based size standard levels below eight.
    Another commenter stated that an increase from $7 million to $30 
million was ``too drastic,'' but provided no

[[Page 61606]]

specifics to support this opinion. SBA agrees that such an increase 
might appear so, but based on its analysis of the industries in Sector 
72, fully explained in the proposed rule (q.v.), SBA believes that the 
increases are appropriate.
    SBA did not receive any comments on whether it should lower size 
standards for the seven industries in NAICS Sector 72 for which SBA's 
analyses supported reducing the existing size standards. SBA also did 
not receive any comments on three industries for which SBA's analyses 
supported retaining the existing size standards. Therefore, SBA is 
retaining the existing size standards for 10 of the 15 Industries in 
NAICS Sector 72.
    All comments to the proposed rule are available for public review 
at http://www.regulations.gov.

Conclusion

    Based on its analyses of relevant industry and program data and 
public comments it received on the proposed rule, SBA has decided to 
increase five small business size standards in NAICS Sector 72, as 
shown in the following table.

  Summary of Revised Small Business Size Standards for NAICS Sector 72
------------------------------------------------------------------------
                                           Current size    Revised size
                  NAICS                    standard  ($    standard  ($
                                             million)        million)
------------------------------------------------------------------------
721110--Hotels (except Casino Hotels) &             $7.0           $30.0
 Motels.................................
721120--Casino Hotels...................             7.0            30.0
722211--Limited Service Restaurants.....             7.0            10.0
722212--Cafeterias......................             7.0            25.5
722310--Food Service Contractors........            20.5            35.5
------------------------------------------------------------------------

Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork 
Reduction Act (44 U.S.C., Ch. 35) and the Regulatory Flexibility Act (5 
U.S.C. 601-612) Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is a ``significant'' regulatory action for purposes of Executive 
Order 12866. Accordingly, the next section contains SBA's Regulatory 
Impact Analysis. This is not a major rule, however, under the 
Congressional Review Act, 5 U.S.C. 800.

Regulatory Impact Analysis

1. Is there a need for the regulatory action?

    SBA believes that adjustments to certain size standards in Sector 
72, Accommodation and Food Services, are needed to better reflect the 
economic characteristics of small businesses in those industries. SBA 
provides aid and assistance to small businesses through a variety of 
financial, procurement, business development and advocacy programs. To 
assist effectively the intended beneficiaries of these programs, SBA 
must establish distinct definitions of which businesses are deemed 
small businesses. The Small Business Act (15 U.S.C. 632(a)) delegates 
to SBA's Administrator the responsibility for establishing small 
business definitions. The Act also requires that small business 
definitions vary to reflect industry differences. The supplementary 
information section of this rule explains SBA's methodology for 
analyzing a size standard for a particular industry.

2. What are the potential benefits and costs of this regulatory action?

    The most significant benefit to businesses obtaining small business 
status as a result of this rule is eligibility for Federal small 
business assistance programs, including SBA's financial assistance 
programs, economic injury disaster loans, and Federal procurement 
preference programs for small businesses. Federal procurement 
regulations provide opportunities for small businesses under SBA's 
business development programs, such as 8(a), Small Disadvantaged 
Businesses (SDB), small businesses located in Historically 
Underutilized Business Zones (HUBZone), women owned small businesses 
and service disabled veteran owned small businesses (SDVOSB). Other 
Federal agencies also may use SBA size standards for a variety of 
regulatory and program purposes. Through the assistance of these 
programs, small businesses become more knowledgeable, stable and 
competitive businesses. In five industries under Sector 72 for which 
SBA had proposed to increase size standards, about 2,050 additional 
firms are estimated to obtain small business status and become eligible 
for these programs.
    In the seven industries for which SBA's analyses indicated a lower 
size standard as appropriate, there are about 450 firms that might have 
lost their small business status, had SBA proposed lowering them. That 
number is less than 0.6 percent of the total number of firms in those 
industries defined as small under the current standards. Thus, the net 
impact for the Sector as whole is about 2,050 additional firms gaining 
and none losing small business status under this rule. This will 
increase the small business share of total industry receipts for the 
Sector from about 46 percent under the current size standards to nearly 
50 percent under the revised standards.
    The benefits of increasing certain size standards to a more 
appropriate level would accrue to three groups: (1) Businesses that 
benefit by gaining small business status from the higher size standard 
that also use small business assistance programs; (2) growing small 
businesses that may exceed the current size standards in the near 
future and that will retain their small business status from the higher 
size standards; and (3) Federal agencies that award contracts under 
procurement programs that require small business status.
    Nearly 90 percent of Federal contracting dollars spent in Sector 72 
during fiscal years 2006-2008 was accounted for by two of five 
industries for which size standards have been increased in this rule. 
SBA estimates that additional firms gaining small business status in 
those two industries under the new size standards could potentially 
obtain Federal contracts totaling up to $75 million per year under the 
small business set-aside program, the 8(a), HUBZone, and SDVOSB 
Programs, or unrestricted procurements. This represents about 5.5 
percent of the $1.13 billion in average Federal contract dollars 
awarded in the Accommodation and Food Services Sector during fiscal 
years 2006-2008. The added competition for many of these procurements 
will also likely result in a lower price to the Government for 
procurements reserved

[[Page 61607]]

for small businesses, but SBA is not able to quantify this benefit.
    Under SBA's 7(a) Guaranteed Loan Program and 504 Certified 
Development Company (CDC) Program, SBA estimates only a few additional 
loans totaling $1 million to $2 million in Federal loan guarantees 
could be made to these newly defined small businesses. Because of the 
size of the loan guarantees, however, most loans are made to small 
businesses well below the size standard. Moreover, under the Recovery 
Act, effective February 17, 2009, SBA temporarily raised guarantees on 
its SBA's 7(a) loan program and also temporarily eliminated fees for 
borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 
CDC loans, through calendar year 2009, or until the funds are 
exhausted. The fee elimination is retroactive to February 17, 2009, the 
day the Recovery Act was signed. In addition, since SBA has applied its 
CDC alternative size standard to its 7(a) Business Loan Program, more 
capital is available to small businesses. Thus, increasing the size 
standards will likely result in an increase in guaranteed loans to 
businesses in these industries, but it would be impractical to try to 
estimate the extent of their number and the total amount loaned.
    The newly defined small businesses will also benefit from SBA's 
Economic Injury Disaster Loan (EIDL) Program. Since this program is 
contingent on the occurrence and severity disasters, no meaningful 
estimate of benefits can be projected for future disasters.
    To the extent that 2,050 additional firms could become active in 
Federal procurement programs, this may entail some additional 
administrative costs to the Federal Government associated with 
additional bidders for Federal small business procurement 
opportunities, additional firms seeking SBA guaranteed lending 
programs, additional firms eligible for enrollment in the Central 
Contractor Registration's Dynamic Small Business Search database and 
additional firms seeking certification as 8(a) or HUBZone firms or 
qualifying for SDB status. Among businesses in this group seeking SBA 
assistance, there could be some additional costs associated with 
compliance and verification of small business status and protests of 
small business status. These additional costs are likely to be minimal 
because mechanisms are already in place to handle these additional 
administrative requirements.
    The costs to the Federal Government may be higher on some Federal 
contracts. With a greater number of businesses defined as small, 
Federal agencies may choose to set aside more contracts for competition 
among small businesses rather than using full and open competition. The 
movement from unrestricted to set-aside contracting is likely to result 
in competition among fewer bidders. In addition, higher costs may 
result from additional full and open contracts awarded to HUBZone and 
SDB businesses because of price evaluation preferences. The additional 
costs associated with fewer bidders, however, are likely to be minor 
since, as a matter of law, procurements may be set aside for small 
businesses or reserved for the 8(a), SDB or HUBZone Programs only if 
awards are expected to be made at fair and reasonable prices.
    The increased size standards may have distributional effects among 
large and small businesses. Although the actual outcome of the gains 
and losses among small and large businesses cannot be estimated with 
certainty, several likely impacts can be identified. There will likely 
be a transfer of some Federal contracts to small businesses from large 
businesses. Large businesses may have fewer Federal contract 
opportunities as Federal agencies decide to set aside more Federal 
contracts for small businesses. Also, some Federal contracts may be 
awarded to HUBZone or SDB concerns instead of large businesses since 
those two categories of small businesses may be eligible for an 
evaluation adjustment for contracts competed on a full and open basis. 
Similarly, currently defined small businesses may obtain fewer Federal 
contracts due to the increased competition from more businesses defined 
as small. This transfer may be offset by a greater number of Federal 
procurements set aside for all small businesses. The number of newly 
defined and expanding small businesses that are willing and able to 
sell to the Federal Government will limit the potential transfer of 
contracts away from large and currently defined small businesses. The 
potential distributional impacts of these transfers may not be 
estimated with any degree of precision because the data on the size of 
business receiving a Federal contract are limited to identifying small 
or other than small businesses, without regard to the exact size of the 
business.
    The revisions to the existing size standards for Accommodation and 
Food Services industries is consistent with SBA's statutory mandate to 
assist small business. This regulatory action promotes the 
Administration's objectives. One of SBA's goals in support of the 
Administration's objectives is to help individual small businesses 
succeed through fair and equitable access to capital and credit, 
Government contracts, and management and technical assistance. 
Reviewing and modifying size standards, when appropriate, ensures that 
intended beneficiaries have access to small business programs designed 
to assist them.

Executive Order 12988

    For purposes of Executive Order 12988, SBA has determined that this 
rule is drafted, to the extent practicable, in accordance with the 
standards set forth in that Order.

Executive Order 13132

    For purposes of Executive Order 13132, SBA has determined that this 
rule does not have any Federalism implications warranting the 
preparation of a federalism assessment.

Paperwork Reduction Act

    For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, 
SBA has determined that this rule would not impose new reporting or 
recordkeeping requirements, other than those required of SBA.

Final Regulatory Flexibility Analysis

    Under the Regulatory Flexibility Act (RFA), this rule may have a 
significant impact on a substantial number of small entities in Sector 
72, Accommodation and Food Services. As described above, this rule may 
affect small entities seeking Federal contracts, SBA 7(a) and 504 
Guaranteed Loan Programs, SBA Economic Injury Disaster Loans, and other 
Federal small business programs.
    Immediately below, SBA sets forth a final regulatory flexibility 
analysis of this proposed rule addressing the following questions: (1) 
What is the need for and objective of the rule? (2) what is SBA's 
description and estimate of the number of small entities to which the 
rule will apply? (3) what are the projected reporting, record keeping, 
and other compliance requirements of the rule? (4) what are the 
relevant Federal rules which may duplicate, overlap or conflict with 
the rule? and (5) what alternatives will allow the Agency to accomplish 
its regulatory objectives while minimizing the impact on small 
entities?

(1) What is the need for and objective of the rule?

    Most of SBA's size standards for Accommodation and Food Services 
industries have not been reviewed since the early 1980s. Technology, 
productivity growth, international competition, mergers and 
acquisitions,

[[Page 61608]]

and updated industry definitions may have changed the structure of many 
industries. Such changes can be sufficient to support a revision to 
size standards for some industries. Based on an analysis of the latest 
data available to the Agency, SBA believes that the revised standards 
in this proposed rule more appropriately reflect the size of businesses 
in those industries that need Federal assistance.

(2) What is SBA's description and estimate of the number of small 
entities to which the rule will apply?

    SBA estimates that approximately 2,050 additional firms will become 
small because of increases in size standard in five industries. That 
represents 1.1 percent of total firms in those industries. This will 
result in an increase in the small business share of total industry 
receipts for this Sector from about 46 percent under the current size 
standard to nearly 50 percent under the revised standards.

(3) What are the projected reporting, recordkeeping, and other 
compliance requirements of the rule and an estimate of the classes of 
small entities which will be subject to the requirements?

    A new size standard does not impose any additional reporting or 
recordkeeping requirements on small entities. However, qualifying for 
Federal procurement and a number of other programs requires that 
entities register in the Central Contractor Registration (CCR) database 
and certify at least annually that they are small in the Online 
Representations and Certifications Application (ORCA). Therefore, 
businesses opting to participate in those programs must comply with CCR 
and ORCA requirements. There are no costs associated with either CCR 
registration or ORCA certification. Revising size standards alters the 
access to SBA programs that assist small businesses, but does not 
impose a regulatory burden as they neither regulate nor control 
business behavior.

(4) What are the relevant Federal rules which may duplicate, overlap or 
conflict with the rule?

    This rule overlaps with other Federal rules that use SBA's size 
standards to define a small business. Under Sec.  3(a)(2)(C) of the 
Small Business Act, 15 USC 632(a)(2)(C), Federal agencies must use 
SBA's size standards to define a small business, unless specifically 
authorized by statute. In 1995, SBA published in the Federal Register a 
list of statutory and regulatory size standards that identified the 
application of SBA's size standards as well as other size standards 
used by Federal agencies (60 FR 57988, November 24, 1995). SBA is not 
aware of any Federal rule that would duplicate or conflict with 
establishing size standards.
    However, the Small Business Act and SBA's regulations allow Federal 
agencies to develop different size standards if they believe that SBA's 
size standards are not appropriate for their programs, with the 
approval of SBA's Administrator (13 CFR 121.903). The Regulatory 
Flexibility Act authorizes an Agency to establish an alternative small 
business definition, after consultation with the Office of Advocacy of 
the U.S. Small Business Administration (5 U.S.C. 601(3)). Thus, there 
may be instances where this rule conflicts with other rules.

(5) What alternatives will allow the Agency to accomplish its 
regulatory objectives while minimizing the impact on small entities?

    SBA is required to develop numerical size standards for identifying 
businesses eligible for Federal small business programs. Other than 
varying the size standards, no alternative exists to the systems of 
numerical size standards.

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Grant programs--business, Individuals with 
disabilities, Loan programs--business, Reporting and recordkeeping 
requirements, Small businesses.

0
For reasons set forth in the preamble, SBA amends 13 CFR part 121 as 
follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, 
657(a), 657(f), and 662(5); and Pub. L. 105-135, Sec. 401, et seq., 
111 Stat, 2592.

Subpart A--Size Eligibility Provisions and Standards

0
2. In Sec.  121.201, in the table, revise the entries for ``721110'', 
``721120'', ``722211'',``722212'', and ``722310'' to read as follows:


Sec.  121.201  What size standards has SBA identified by North American 
Industry Classification System codes?

* * * * *

                                 Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
                                                                                  Size standards  Size standards
               NAICS codes                       NAICS U.S. industry title        in millions of   in number of
                                                                                      dollars        employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
721110...................................  Hotels (except Casino Hotels) and               $30.0  ..............
                                            Motels.
721120...................................  Casino Hotels........................            30.0  ..............
 
                                                  * * * * * * *
722211...................................  Limited-Service Restaurants..........            10.0  ..............
722212...................................  Cafeterias, Grill Buffets, and                   25.5  ..............
                                            Buffets.
 
                                                  * * * * * * *
722310...................................  Food Service Contractors.............            35.5  ..............
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------



[[Page 61609]]

    Dated: September 10, 2010.
Marie C. Johns,
Deputy Administrator.
[FR Doc. 2010-24857 Filed 10-5-10; 8:45 am]
BILLING CODE 8025-01-P