Cosponsorships, Fee and Non-Fee Based SBA-Sponsored Activities, and Gifts, 39667-39672 [05-13508]

Agencies

• SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 70, Number 131 (Monday, July 11, 2005)]
[Proposed Rules]
[Pages 39667-39672]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13508]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 70, No. 131 / Monday, July 11, 2005 / 
Proposed Rules

[[Page 39667]]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 106

RIN 3245-AF37


Cosponsorships, Fee and Non-Fee Based SBA-Sponsored Activities, 
and Gifts

AGENCY: U.S. Small Business Administration.

ACTION: Proposed rule.

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SUMMARY: The Small Business Reauthorization and Manufacturing 
Assistance Act of 2004 requires the U.S. Small Business Administration 
(SBA or Agency) to promulgate regulations to carry out the Agency's 
statutory authority to provide assistance for the benefit of small 
business through activities sponsored with outside entities (for-profit 
and not-for-profit entities and Federal, state and local government 
officials or entities) as well as activities solely sponsored by SBA. 
This proposed rule implements that authority and sets forth minimum 
requirements for these activities as well as the Agency's solicitation 
and acceptance of gifts.

DATES: The Agency must receive comments on or before September 9, 2005.

ADDRESSES: You may submit comments, identified by agency name and RIN 
3245-AF37, by any of the following methods: Federal eRulemaking Portal: 
https://www.regulations.gov. Follow the instructions for submitting 
comments. E-mail: robert.gangwere2@sba.gov. Include RIN 3245-AF37 in 
the subject line of the message. Fax: (202) 205-6846. Mail or Hand 
Delivery/Courier: Robert Gangwere, Deputy General Counsel, U.S. Small 
Business Administration, 409 Third Street, SW., Suite 7200, Washington, 
DC 20416.

FOR FURTHER INFORMATION CONTACT: Robert Gangwere, Deputy General 
Counsel, (202) 205-6642.

SUPPLEMENTARY INFORMATION:

A. Background

    As part of its mission to assist small business entrepreneurs, SBA 
has long provided training and carried out marketing and outreach 
through SBA-sponsored activities as well as activities conducted in 
cooperation with:

Voluntary, business, professional, educational, and other nonprofit 
organizations, associations and institutions and with other Federal 
and State agencies * * *

Sec. 207(e), Pub. L. 83-163, 67 Stat. 278 (1953). The Agency's 
statutory authority was later expanded to include for-profit 
organizations, referred to as cosponsors, thus giving SBA cosponsorship 
authority. Sec. 59, Pub. L. 98-362, 98 Stat. 431 (1984), amended by 
Sec. 504 (a), Pub. L. 106-554, 114 Stat. 2763 (2000) (SBA's 
cosponsorship authority sunsetted in fiscal year 2004). In addition, 
under section 8(b)(1)(A) of the Small Business Act (Act), SBA has had 
authority to engage in SBA-sponsored activities (referred to herein as 
Non-Fee Based SBA-Sponsored Activities) to ``provide technical, 
managerial and informational aids to small business concerns.'' 15 
U.S.C. 637(b).
    The Small Business Reauthorization and Manufacturing Assistance Act 
of 2004 (Reauthorization Act) was signed into law on December 8, 2004. 
Pub. L. 108-447, Division K, 118 Stat. 2809-644 (2004). The statute 
reauthorized and expanded SBA's cosponsorship authority, provided SBA 
with authority to conduct and charge fees for certain SBA-sponsored 
activities (Fee Based SBA-Sponsored Activities), and expanded SBA's 
authority to use certain gift funds for marketing and outreach 
activities. The statute also made significant changes to the approval 
process for outreach activities and gift acceptance. In addition, the 
Reauthorization Act requires the Agency to issue regulations to carry 
out Cosponsored and Fee Based SBA-Sponsored Activities.
    With the renewal of its cosponsorship authority and the added 
authority for Fee Based SBA-Sponsored Activities, the Agency now has 
three major vehicles by which it may provide information, training, 
and/or conduct marketing and outreach for the benefit of or to small 
businesses: Cosponsored Activities, Fee Based SBA-Sponsored Activities, 
and Non-Fee Based SBA-Sponsored Activities.
    To facilitate these activities and to implement the recent 
statutory changes, SBA proposes this rule adding part 106 to title 13 
of the Code of Federal Regulations. The proposed regulations define 
each of these vehicles, identify the statutory authority underlying 
them, and set forth the minimum requirements applicable to each. In 
addition, the proposed regulations set forth minimum requirements and 
the conflict of interest authority for solicitation and acceptance of 
gifts under certain Agency gift authorities.

B. Section-by-Section Analysis

    SBA proposes to implement the amended statutory requirements by 
adding part 106 to SBA's regulations. Part 106 is divided into five 
subparts: A, B, C, D and E. Subpart A sets forth the scope of the 
proposed regulations and provides definitions. The regulatory subparts 
B, C and D distinguish the three types of activity vehicles and clarify 
the specific minimum requirements for each vehicle. Subpart B 
specifically addresses Cosponsored Activities. Subparts C and D, in 
turn, relate to SBA-Sponsored Activities. To distinguish between the 
two authorities, SBA is calling one a Fee Based SBA-Sponsored Activity 
and the other a Non-Fee Based SBA-Sponsored Activity. Subpart C deals 
with SBA's new statutory authority that allows the Agency to provide 
assistance for the benefit of small business through Fee Based SBA-
Sponsored Activities. Subpart D addresses the Agency's retained 
authority under section 8(b)(1)(A) of the Act to provide technical and 
managerial assistance directly to small business concerns through SBA-
Sponsored Activities for which the Agency has no authority to charge 
participant fees. Subpart E relates to the Agency's gift acceptance 
authorities and sets forth minimum requirements and procedures 
applicable to SBA.

1. Subpart A: Scope and Definitions

    Subpart A contains Sections 106.100 and 101. Section 106.100 states 
the scope of the proposed regulations. Section 106.101 provides 
definitions. For clarity, the Agency has defined and distinguished the 
three major outreach vehicles: Cosponsored Activities, Fee Based SBA-
Sponsored Activities and Non-Fee Based SBA-Sponsored

[[Page 39668]]

Activities. The terms ``Cosponsor,'' ``Cosponsored Activity,'' and 
``Cosponsorship Agreement'' are familiar terms that have been used by 
the Agency under its prior cosponsorship authority. The terms have been 
redefined to the extent required by the expanded authority of the 
Reauthorization Act. The terms ``Fee Based SBA-Sponsored Activity'' and 
``Non-Fee Based SBA-Sponsored Activity'' are new terms used to 
distinguish between the two vehicles available for SBA-Sponsored 
activities. Written documentation of Fee Based and Non-Fee Based SBA-
Sponsored Activities are defined as Fee Based and Non-Fee Based SBA-
Sponsored Activity Records. The term ``Eligible Entity'' is defined in 
the Reauthorization Act. The definitions of the remaining terms (i.e., 
Donor, Gift, Responsible Program Official, Participant Fee) are 
consistent with current Agency policy.

2. Subpart B: Cosponsored Activities

    Subpart B proposes five sections relating to SBA's cosponsorship 
authority. Section 106.200 mirrors the requirements of the 
Reauthorization Act, which expanded the purpose of Cosponsored 
Activities from providing training directly to small businesses to 
providing assistance for the benefit of small business. The 
Reauthorization Act also requires consultation with the Agency's 
General Counsel before a Cosponsored Activity is approved. Section 
106.200 reiterates the Reauthorization Act and provides that the SBA 
Administrator (or designee), after consultation with the General 
Counsel (or designee), may provide assistance for the benefit of small 
business through Cosponsored Activities.
    Section 106.201 outlines who is eligible to be a Cosponsor. As set 
forth in the Reauthorization Act, only Eligible Entities may be 
Cosponsors. The Agency adds a further restriction that SBA may not 
enter into a Cosponsorship Agreement with an otherwise Eligible Entity 
if the Administrator, after consultation with the General Counsel, 
determines that such an agreement would create a conflict of interest. 
This restriction is consistent with current SBA policy.
    Section 106.202 sets forth the minimum requirements applicable to 
all Cosponsored Activities. Paragraph (a) requires a written 
Cosponsorship Agreement. The Agency's prior statutory authority 
mandated a written Cosponsorship Agreement for Cosponsored Activities 
with for-profit entities. In the proposed regulations the Agency 
maintains the requirement for a written Cosponsorship Agreement, but 
for uniformity and better record keeping, broadens the requirement to 
all Cosponsored Activities, whether or not a for-profit entity is 
involved.
    Paragraph (b) incorporates the statutory requirement in the 
Reauthorization Act that requires that appropriate recognition be given 
to SBA and each Cosponsor. As stated in the legislative history to the 
Reauthorization Act, Congress required that:

[T]he Administration * * * recognize the co-sponsors of such events 
but only to the extent of their contributions. No endorsements of 
the co-sponsors products or services are permitted.

Joint Explanatory Statement, ``Congressional Record,'' H10198 (November 
20, 2004).
    Paragraph (c) embodies current SBA policy (which was also 
statutorily mandated, in part, under the Agency's prior cosponsorship 
authority) by requiring advance approval by SBA for all printed or 
electronically generated material used to publicize or conduct the 
cosponsored activities, including the use of a disclaimer. Paragraph 
(d) also incorporates current SBA policy, which prohibits Cosponsors 
from making a profit on any Cosponsored Activity.
    Paragraph (e) is based upon the Reauthorization Act, which allows 
the Agency to charge participants a minimal fee to cover the cost of 
the Cosponsored Activity. The regulation also allows Cosponsors to 
charge Participant Fees. This is consistent with prior cosponsorship 
authority and current Agency policy and practice. The second part of 
paragraph (e) requiring that Participant Fees must be liquidated prior 
to other sources of funding is also based on current Agency policy.
    Paragraph (f) continues the Agency's current practice, required 
under the prior cosponsorship authority, which states that SBA may not 
provide a Cosponsor with preexisting lists of small business concerns, 
otherwise protected by law or policy from disclosure. Paragraph (g) 
requires written approval of the Cosponsorship Agreement. This 
paragraph implements in part the limited delegation of authority in the 
Reauthorization Act and the requirement to consult with the General 
Counsel.
    Section 106.203 provides minimum guidelines as to what provisions 
must be set forth in a Cosponsorship Agreement. Paragraphs (a)(d) 
require a written agreement with a narrative description of the 
activity, a list of the parties' duties and responsibilities, and a 
proposed budget setting forth the contributions of each Cosponsor, the 
sources of funding and an estimate of anticipated expenses. Paragraphs 
(e) and (f) require that each Cosponsor agree in writing that they will 
not make a profit, that any Participant Fees charged may not exceed 
anticipated direct costs and that Participant Fees will be liquidated 
prior to other sources of funding. These provisions embody current 
Agency policy.
    Finally, Section 106.204, implementing the requirements of the 
Reauthorization Act, establishes that the Administrator has the 
authority to approve a Cosponsorship Agreement and that such authority 
may only be re-delegated to the Deputy Administrator, associate 
administrators and assistant administrators. In the legislative history 
to the Reauthorization Act, Congress made clear that:

No personnel located in district or regional offices are permitted 
to approve cosponsorships. Congress adopted this restriction to 
ensure close cooperation with the General Counsel of the 
Administration.

Joint Explanatory Statement, ``Congressional Record,'' H10199 (November 
20, 2004).

3. Subpart C: Fee Based SBA-Sponsored Activity

    Subpart C addresses SBA's new authority under the Reauthorization 
Act which allows the Agency to provide assistance for the benefit of 
small business through SBA-Sponsored Activities whereby the Agency may 
charge a Participant Fee during activities planned and conducted solely 
by SBA. 15 U.S.C. 633(h). Section 106.300 reiterates the 
Reauthorization Act and provides that the Administrator (or designee), 
after consultation with the General Counsel (or designee), may provide 
assistance for the benefit of small business through Fee Based SBA-
Sponsored Activities.
    Section 106.301 sets forth minimum requirements for Fee Based SBA-
Sponsored Activities. For uniformity, these requirements, where 
possible, mirror the requirements for Cosponsored Activities. Section 
106.301 (a) requires a written record of the activity; (b) restricts 
Participant Fees to anticipated direct costs of the activity; (c) 
subjects collection of money to U.S. Treasury rules and (d) requires 
advance written approval.
    Section 106.302 sets forth the provisions that are required in a 
Fee Based Record. Again, many of these are borrowed from current Agency 
policies and requirements for Cosponsored Activities. SBA proposes 
paragraph (a) requiring a written narrative description of the 
activity. SBA proposes paragraph

[[Page 39669]]

(b) to document the commitment of the Agency official responsible for 
the activity to abide by all applicable laws and policies. SBA also 
requires that all sources and uses of funds be documented in a budget 
pursuant to paragraph (c), including a provision requiring that no 
profit be anticipated from the activity and that any Participant Fees 
charged will not exceed the minimal amount needed to cover the 
anticipated direct costs. Paragraph (d) addresses the application of 
any Gifts made in support of the activity and follows current Agency 
policies.
    Finally, Section 106.303, implementing the requirements of the 
Reauthorization Act, establishes that the Administrator has the 
authority to approve and sign a Fee Based Record after consultation 
with the General Counsel (or designee) and that such authority may only 
be re-delegated to the Deputy Administrator, associate administrators 
and assistant administrators. This requirement is the same for 
Cosponsorship Agreements.

4. Subpart D: Non-Fee Based SBA-Sponsored Activity

    Unlike subpart C, subpart D does not represent new authority, 
rather it has been renamed for clarity. Section 106.400 states the 
authority for SBA to conduct Non-Fee Based SBA-Sponsored Activities.
    Section 106.401 sets forth the minimum requirements for Non-Fee 
Based SBA-Sponsored Activities. Consistent with the requirements for 
Cosponsored and Fee Based SBA-Sponsored Activities, the regulations 
require a written record. In addition, in accordance with applicable 
law, paragraph (b) states that Gifts of cash are subject to SBA 
policies and U.S. Treasury rules and guidelines. Paragraph (c) requires 
written approval.
    Section 106.402 sets forth the provisions that must be in a Non-Fee 
Based Record. Again, these track the requirements for Cosponsorship 
Agreements and Fee Based Records, except a budget is not required. SBA 
proposes paragraph (a) to require a written narrative description of 
the activity. SBA proposes paragraph (b) to document the commitment of 
the Agency official responsible for the activity to abide by all 
applicable laws and policies. Paragraphs (c) and (d) address the 
application of any Gifts made in support of the activity.
    Finally, Section 106.403 establishes who has authority to approve a 
Non-Fee Based SBA-Sponsored Activity. Unlike the authority to approve 
Cosponsored and Fee Based SBA-Sponsored Activities, which authority is 
dictated by the Reauthorization Act, Agency policy places authority to 
approve Non-Fee Based SBA-Sponsored Activity with the Responsible 
Program Official who may be an official in a district or regional 
office.

5. Subpart E: Gifts

    Subpart E has four sections which relate to the Agency's Gift 
acceptance authorities. Section 106.500 identifies the Agency's 
multiple Gift acceptance authorities. Section 106.501 sets forth 
minimum requirements applicable to SBA's solicitation and acceptance of 
Gifts. SBA proposes Section 106.501 in order to provide a uniform Gift 
solicitation and acceptance policy for all Gifts regardless of which 
authority is being used. These minimum requirements include: (a) Use of 
the Gift in the manner consistent with Donor intent; (b) written 
documentation of each Gift solicited and/or accepted; (c) a conflict of 
interest determination; and (d) use of the Agency's designated trust 
account for all cash Gifts. These provisions simply restate current 
Agency policies.
    Section 106.502 outlines who is authorized to perform a Gift 
conflict of interest determination. For Gifts accepted under sections 
4(g), 8(b)(1)(G), and 7(k)(2) of the Act, the conflict of interest 
determination must be done by the General Counsel (or designee). 15 
U.S.C. 633(g). Current Agency policy requires that this conflict of 
interest determination be made by appropriately designated counsel in 
the Office of General Counsel in Headquarters. The conflict of interest 
determination for Gifts of services or facilities accepted under 
section 5(b)(9) of the Act may be made by designated disaster counsel.
    Finally, Section 106.503 identifies the types of Gifts the Agency 
may not solicit or accept. This provision was incorporated to provide 
all SBA employees with a consistent understanding of existing law and 
Agency policy.

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

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, for the purposes of Executive 
Order 13132, SBA determines that this proposed rule has no federalism 
implications warranting preparation of a federalism assessment.
    The Office of Management and Budget (OMB) has determined that this 
rule does not constitute a significant regulatory action under 
Executive Order 12866.
    This action meets applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.
    SBA has determined that this proposed rule does not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act, 44 U.S.C., Chapter 35.
    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires 
administrative agencies to consider the effect of their actions on 
small entities, small non-profit enterprises, and small local 
governments. Pursuant to the RFA, when an agency issues a rulemaking, 
the agency must prepare a regulatory flexibility analysis which 
describes the impact of the rule on small entities. However, section 
605 of the RFA allows an agency to certify a rule, in lieu of preparing 
an analysis, if the rulemaking is not expected to have a significant 
economic impact on a substantial number of small entities. In this 
case, the proposed regulations address the administrative requirements 
for Agency management of SBA outreach programs. In other words, this 
proposed rule will not result in the direct regulation of small 
entities, so no further analysis is required by the RFA. Therefore, SBA 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities within the meaning of RFA.

List of Subjects in 13 CFR Part 106

    Administrative practice and procedure, Authority delegations 
(Government agencies), Conflict of interests, Small businesses, 
Intergovernmental relations.
    For the reasons stated in the preamble, SBA proposes to add 13 CFR 
part 106, as follows:

PART 106--COSPONSORSHIPS, FEE AND NON-FEE BASED SBA-SPONSORED 
ACTIVITIES AND GIFTS

Subpart A--Scope and Definitions
Sec.
106.100 Scope.
106.101 Definitions.
Subpart B--Cosponsored Activity
106.200 Cosponsored Activity.
106.201 Who may be a Cosponsor?

[[Page 39670]]

106.202 What are the minimum requirements applicable to Cosponsored 
Activities?
106.203 What provisions must be set forth in a Cosponsorship 
Agreement?
106.204 Who has the authority to approve and sign a Cosponsorship 
Agreement?
Subpart C--Fee Based SBA-Sponsored Activities
106.300 Fee Based SBA-Sponsored Activity.
106.301 What are the minimum requirements applicable to Fee Based 
SBA-Sponsored Activities?
106.302 What provisions must be set forth in a Fee Based Record?
106.303 Who has the authority to approve and sign a Fee Based 
Record?
Subpart D--Non-Fee Based SBA-Sponsored Activities
106.400 Non-Fee Based SBA-Sponsored Activity.
106.401 What are the minimum requirements applicable to a Non-Fee 
Based SBA-Sponsored Activity?
106.402 What provisions must be set forth in a Non-Fee Based Record?
106.403 Who has the authority to approve and sign a Non-Fee Based 
Record?
Subpart E--Gifts
106.500 What is SBA's Gift authority?
106.501 What minimum requirements are applicable to SBA's 
solicitation and/or acceptance of Gifts?
106.502 Who has authority to perform a Gift conflict of interest 
determination?
106.503 Are there types of Gifts which SBA may not solicit and/or 
accept?

    Authority: 15 U.S.C. 633 (g) and (h); 15 U.S.C. 637(b)(1)(A); 15 
U.S.C. 637(b)(G).

Subpart A--Introduction and Definitions


Sec.  106.100  Scope.

    The regulations in this part apply to SBA-provided assistance for 
the benefit of small business through Fee Based SBA-Sponsored 
Activities or through Cosponsored Activities with Eligible Entities 
authorized under section 4(h) of the Small Business Act, and to SBA 
assistance provided directly to small business concerns through Non-Fee 
Based SBA-Sponsored Activities authorized under section 8(b)(1)(A) of 
the Small Business Act. The regulations in this part also apply to 
SBA's solicitation and acceptance of Gifts under certain sections 
(sections 4(g), 8(b)(1)(G), 5(b)(9) and 7(k)(2)) of the Small Business 
Act (15 U.S.C. 631 et seq.), including Gifts of cash, property, 
services and subsistence. Under section 4(g) of the Small Business Act, 
Gifts may be solicited and accepted for marketing and outreach purposes 
including the cost of promotional items and wearing apparel.


Sec.  106.101  Definitions.

    The following definitions apply to this part. Defined terms are 
capitalized wherever they appear.
    (a) Cosponsor means an entity or individual designated in section 
106.201 that has signed a written Cosponsorship Agreement with SBA and 
who actively and substantially participates in planning and conducting 
an agreed upon Cosponsored Activity.
    (b) Cosponsored Activity means an activity, event, project or 
initiative, designed to provide assistance for the benefit of small 
business as authorized by section 4(h) of the Small Business Act, which 
has been set forth in an approved written Cosponsorship Agreement. The 
Cosponsored Activity must be planned and conducted by SBA and one or 
more Cosponsors. Assistance for purposes of Cosponsored Activity does 
not include grant or any other form of financial assistance. A 
Participant Fee may be charged by SBA or another Cosponsor at any 
Cosponsored Activity.
    (c) Cosponsorship Agreement means an approved written document (as 
outlined in sections 106.203-04) which has been duly executed by SBA 
and one or more Cosponsors. The Cosponsorship Agreement shall contain 
the parties' respective rights, duties and responsibilities regarding 
implementation of the Cosponsored Activity.
    (d) Donor means an individual or entity that provides a Gift, 
bequest or devise (in cash or in-kind) to SBA.
    (e) An Eligible Entity is a potential Cosponsor. An Eligible Entity 
must be a for-profit or not-for-profit entity, or a Federal, State or 
local government official or entity.
    (f) Fee Based SBA-Sponsored Activity Record (Fee Based Record) 
means a written document, as outlined in Sec.  106.302, describing a 
Fee Based SBA-Sponsored Activity and approved in writing pursuant to 
Sec.  106.303.
    (g) Fee Based SBA-Sponsored Activity means an activity, event, 
project or initiative designed to provide assistance for the benefit of 
small business, as authorized by section 4(h) of the Small Business 
Act, at which SBA may charge a Participant Fee. Assistance for purposes 
of Fee Based SBA-Sponsored Activity does not include grant or any other 
form of financial assistance. A Fee Based SBA-Sponsored Activity must 
be planned, conducted, controlled and sponsored solely by SBA.
    (h) Gift (including a bequest or a device) is the voluntary 
transfer to SBA of something of value without the Donor receiving legal 
consideration.
    (i) Non-Fee Based SBA-Sponsored Activity Record (Non-Fee Based 
Record) means a written document describing a Non-Fee Based SBA-
Sponsored Activity which has been approved pursuant to Sec.  106.403.
    (j) Non-Fee Based SBA-Sponsored Activity means an activity, event, 
project or initiative designed to provide assistance directly to small 
business concerns as authorized by section 8(b)(1)(A) of the Small 
Business Act. Assistance for purposes of a Non-Fee Based SBA-Sponsored 
Activity does not include grant or any other form of financial 
assistance. A Non-Fee Based SBA-Sponsored Activity must be planned, 
conducted, controlled and sponsored solely by SBA. No fees including 
Participant Fees may be charged for a Non-Fee Based SBA-Sponsored 
Activity.
    (k) Participant Fee means a minimal fee assessed against a person 
or entity that participates in a Cosponsored Activity or Fee Based SBA-
Sponsored Activity and is used to cover the direct costs of such 
activity.
    (l) Responsible Program Official is an SBA senior management 
official from the originating office who is accountable for the 
solicitation and/or acceptance of a Gift to the SBA; a Cosponsored 
Activity; a Fee Based SBA-Sponsored Activity; or a Non-Fee Based SBA-
Sponsored Activity. If the originating office is a district or branch 
office, the Responsible Program Official is the district director or 
their deputy. In headquarters, the Responsible Program Official is the 
management board member or their deputy with responsibility for the 
relevant program area.

Subpart B--Cosponsored Activity


Sec.  106.200  Cosponsored Activity.

    The Administrator (or designee), after consultation with the 
General Counsel (or designee), may provide assistance for the benefit 
of small business through Cosponsored Activities pursuant to section 
4(h) of the Small Business Act.


Sec.  106.201  Who may be a Cosponsor?

    (a) Except as specified in paragraph (b) of this section, SBA may 
enter into a Cosponsorship Agreement with an Eligible Entity as defined 
in Sec.  106.101(e).
    (b) SBA may not enter into a Cosponsorship Agreement with an 
Eligible Entity if the Administrator (or designee), after consultation 
with the General Counsel (or designee), determines that such agreement 
would create a conflict of interest.

[[Page 39671]]

Sec.  106.202  What are the minimum requirements applicable to 
Cosponsored Activities?

    While SBA may subject a Cosponsored Activity to additional 
requirements through internal policy, procedure and the Cosponsorship 
Agreement, the following requirements apply to all Cosponsored 
Activities:
    (a) Cosponsored Activities must be set forth in a written 
Cosponsorship Agreement signed by the Administrator (or designee) and 
each Cosponsor;
    (b) Appropriate recognition must be given to SBA and each Cosponsor 
but shall not constitute or imply an endorsement by SBA of any 
Cosponsor or any Cosponsor's products or services;
    (c) Any printed or electronically generated material used to 
publicize or conduct the Cosponsored Activity, including any material 
which has been developed, prepared or acquired by a Cosponsor, must be 
approved in advance by the Responsible Program Official and must 
include a prominent disclaimer stating that the Cosponsored Activity 
does not constitute or imply an endorsement by SBA of any Cosponsor or 
the Cosponsor's products or services;
    (d) No Cosponsor shall make a profit on any Cosponsored Activity. 
SBA grantees who earn program income on Cosponsored Activities must use 
that program income for the Cosponsored Activity;
    (e) Participant Fee(s) charged for a Cosponsored Activity may not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Cosponsored Activity and must be liquidated prior to other 
sources of funding for the Cosponsored Activity. If SBA charges a 
Participant Fee, the collection of the Participant Fees is subject to 
internal SBA policies and procedures as well as applicable U.S. 
Treasury rules and guidelines;
    (f) SBA may not provide a Cosponsor with lists of names and 
addresses of small business concerns compiled by SBA which are 
otherwise protected by law or policy from disclosure; and
    (g) Written approval must be obtained as outlined in Sec.  106.204 
of this subpart.


Sec.  106.203  What provisions must be set forth in a Cosponsorship 
Agreement?

    While SBA may require additional provisions in the Cosponsorship 
Agreement through internal policy and procedure, the following 
provisions must be in all Cosponsorship Agreements:
    (a) A written statement agreed to by each Cosponsor that they will 
abide by all of the provisions of the Cosponsorship Agreement, the 
requirements of this subpart as well the applicable definitions in 
Sec.  106.100;
    (b) A narrative description of the Cosponsored Activity;
    (c) A listing of SBA's and each Cosponsor's rights, duties and 
responsibilities with regard to the Cosponsored Activity;
    (d) A proposed budget demonstrating:
    (1) The type and source of financial contribution(s) (including but 
not limited to cash, in-kind, Gifts, and Participant Fees) that the SBA 
and each Cosponsor will make to the Cosponsored Activity; and
    (2) A reasonable estimation of all anticipated expenses;
    (e) A written statement that each Cosponsor agrees that they will 
not make a profit on the Cosponsored Activity; and
    (f) A written statement that Participant Fees, if charged, will not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Cosponsored Activity as outlined in the budget and will be 
liquidated prior to other sources of funding for the Cosponsored 
Activity.


Sec.  106.204  Who has the authority to approve and sign a 
Cosponsorship Agreement?

    The Administrator, or upon his/her written delegation, the Deputy 
Administrator, an associate or assistant administrator, after 
consultation with the General Counsel (or designee), has the authority 
to approve each Cosponsored Activity and sign each Cosponsorship 
Agreement. This authority cannot be re-delegated.

Subpart C--Fee Based SBA-Sponsored Activity


Sec.  106.300  Fee Based SBA-Sponsored Activity.

    The Administrator (or designee), after consultation with the 
General Counsel (or designee), may provide assistance for the benefit 
of small business through Fee-Based SBA-Sponsored Activities pursuant 
to section 4(h) of the Small Business Act.


Sec.  106.301  What are the minimum requirements applicable to Fee 
Based SBA-Sponsored Activities?

    While SBA may subject a Fee Based SBA-Sponsored Activity to 
additional requirements through internal policy and procedure, the 
following requirements apply to all Fee Based SBA-Sponsored Activities:
    (a) A Fee Based Record must be prepared by the Responsible Program 
Official in advance of the activity;
    (b) Any Participant Fees charged will not exceed the minimal amount 
needed to cover the anticipated direct costs of the activity;
    (c) Gifts of cash accepted and the collection of Participant Fees 
for Fee Based SBA-Sponsored Activities are subject to the applicable 
requirements in this part, internal SBA policies and procedures as well 
as applicable U.S. Treasury rules and guidelines; and
    (d) Written approval must be obtained as outlined in Sec.  106.303 
of this subpart.


Sec.  106.302  What provisions must be set forth in a Fee Based Record?

    A Fee Based Record must contain the following:
    (a) A narrative description of the Fee Based SBA-Sponsored 
Activity;
    (b) A certification by the Responsible Program Official that he or 
she will abide by the requirements contained in this part, as well as 
all other applicable statutes, regulations, policies and procedures for 
Fee Based SBA-Sponsored Activities;
    (c) A proposed budget demonstrating:
    (1) All sources of funding, including annual appropriations, 
Participant Fees and Gifts, to be used in support of the Fee Based SBA-
Sponsored Activity;
    (2) A reasonable estimation of all anticipated expenses, which 
indicates that no profit is anticipated from the Fee Based SBA-
Sponsored Activity; and
    (3) A provision stating that Participant Fees, if charged, will not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Fee Based SBA-Sponsored Activity as outlined in the budget;
    (d) With regard to any donations made in support of the Fee Based 
SBA-Sponsored Activity, the Fee Based Record will reflect the 
following:
    (1) SBA will not unnecessarily promote a Donor, or the Donor's 
products or services;
    (2) Each Donor may receive appropriate recognition for its Gift; 
and
    (3) Any printed or electronically generated material recognizing a 
Donor will include a prominent disclaimer stating that the acceptance 
of the Gift does not constitute or imply an endorsement by SBA of the 
Donor or the Donor's products or services.


Sec.  106.303  Who has the authority to approve and sign a Fee Based 
Record?

    The Administrator, or upon his/her written delegation, the Deputy 
Administrator, an associate or assistant administrator, after 
consultation with the General Counsel (or designee), has the authority 
to approve and sign each Fee Based Record. This authority may not be 
re-delegated.

[[Page 39672]]

Subpart D--Non-Fee Based SBA-Sponsored Activity


Sec.  106.400  Non-Fee Based SBA-Sponsored Activity.

    The Administrator (or designee) may provide assistance directly to 
small business concerns through Non-Fee Based SBA-Sponsored Activities 
under section 8(b)(1)(A) of the Small Business Act.


Sec.  106.401  What are the minimum requirements applicable to a Non-
Fee Based SBA-Sponsored Activities?

    While SBA may subject Non-Fee Based SBA-Sponsored Activities to 
additional requirements through internal policy and procedure, the 
following requirements apply to all Non-Fee Based SBA-Sponsored 
Activity:
    (a) A Non-Fee Based Record must be prepared and approved by the 
Responsible Program Official in advance of the activity;
    (b) Gifts of cash accepted for Non-Fee Based SBA-Sponsored 
Activities are subject to Sec.  106.500, internal SBA policies and 
procedures as well as applicable U.S. Treasury rules and guidelines; 
and
    (c) Written approval must be obtained as outlined in Sec.  106.403.


Sec.  106.402  What provisions must be set forth in a Non-Fee Based 
Record?

    A Non-Fee Based Record must contain the following:
    (a) A narrative description of the Non-Fee Based SBA-Sponsored 
Activity;
    (b) A certification by the Responsible Program Official that he or 
she will abide by the requirements contained in this part, as well as 
all other applicable statutes, regulations, policies and procedures for 
Non-Fee Based SBA-Sponsored Activities;
    (c) If applicable, a list of Donors supporting the activity; and
    (d) With regard to any donations made in support of a Non-Fee Based 
SBA-Sponsored Activity, the Non-Fee Based Record will reflect the 
following:
    (1) SBA will not unnecessarily promote a Donor, or the Donor's 
products or services;
    (2) Each Donor may receive appropriate recognition for its Gift; 
and
    (3) Any printed or electronically generated material recognizing a 
Donor will include a prominent disclaimer stating that the acceptance 
of the Gift does not constitute or imply an endorsement by SBA of the 
Donor, or the Donor's products or services.


Sec.  106.403  Who has the authority to approve and sign a Non-Fee 
Based Record?

    The appropriate Responsible Program Official, after consultation 
with the designated legal counsel, has authority to approve and sign 
each Non-Fee Based Record.

Subpart E--Gifts


Sec.  106.500  What is SBA's Gift authority?

    This section covers SBA's Gift acceptance authority under sections 
4(g), 8(b)(1)(G), 5(b)(9) and 7(k)(2) of the Small Business Act.


Sec.  106.501  What minimum requirements are applicable to SBA's 
solicitation and/or acceptance of Gifts?

    While SBA may subject the solicitation and/or acceptance of Gifts 
to additional requirements through internal policy and procedure, the 
following requirements must apply to all Gift solicitations and/or 
acceptances under the authority of the Small Business Act sections 
cited in Sec.  106.500:
    (a) SBA is required to use the Gift (whether cash or in-kind) in a 
manner consistent with the original purpose of the Gift;
    (b) There must be written documentation of each Gift solicitation 
and/or acceptance signed by an authorized SBA official;
    (c) Any Gift solicited and/or accepted must undergo a 
determination, prior to solicitation of the Gift or prior to acceptance 
of the Gift if unsolicited, of whether a conflict of interest exists 
between the Donor and SBA; and
    (d) All cash Gifts donated to SBA under the authority cited in 
Sec.  106.500 must be deposited in an SBA trust account at the U.S. 
Department of the Treasury.


Sec.  106.502  Who has authority to perform a Gift conflict of interest 
determination?

    (a) For Gifts solicited and/or accepted under sections 4(g), 
8(b)(1)(G), and 7(k)(2) of the Small Business Act, the General Counsel, 
or designee, must make the final conflict of interest determination. No 
Gift shall be solicited and/or accepted under these sections of the 
Small Business Act if such solicitation and/or acceptance would, in the 
determination of the General Counsel (or designee), create a conflict 
of interest.
    (b) For Gifts of services and facilities solicited and/or accepted 
under section 5(b)(9), the conflict of interest determination may be 
made by designated disaster legal counsel.


Sec.  106.503  Are there types of Gifts which SBA may not solicit and/
or accept?

    Yes. SBA shall not solicit and/or accept Gifts of or for (or use 
cash Gifts to purchase or engage in) the following:
    (a) Alcohol products;
    (b) Tobacco products;
    (c) Pornographic or sexually explicit objects or services;
    (d) Gambling (including raffles and lotteries);
    (e) Parties primarily for the benefit of Government employees; and
    (f) Any other product or service prohibited by law or policy.

    Dated: June 29, 2005.
Hector V. Barreto,
Administrator.
[FR Doc. 05-13508 Filed 7-8-05; 8:45 am]
BILLING CODE 8025-01-P