Small Business Size Standards; Fuel Oil Dealers Industries, 61574-61578 [E7-21401]
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Federal Register / Vol. 72, No. 210 / Wednesday, October 31, 2007 / Proposed Rules
indication of when we would impose
additional and increasing supervisory
oversight on an institution to address
continuing deterioration in its financial
condition and capital position from
credit, interest rate, or other financial
risks.
Question 14: We seek comment on
revising our current capital directive
regulations to include an early
intervention framework. We also seek
comment on potential financial
thresholds, such as capital ratios or risk
measures, that would trigger an FCA
capital directive action.
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M. Multi-Dimensional Regulatory
Structure
As stated above, one of FCA’s
objectives is to implement a revised
capital framework that improves the risk
sensitivity of our capital rules while
avoiding undue regulatory burden.
There are currently five banks and 95
associations in the System with varying
degrees of asset size, complexity of
operations, and sophistication in their
risk management practices. Some
System institutions have the risk
management capabilities to apply more
complex, risk-sensitive regulatory
capital requirements than other System
institutions. It may be appropriate for
the FCA to adopt more than one set of
capital rules to account for these
differences. However, this approach
could result in different capital
requirements for the same type of
transaction and increase examination
and oversight costs.
As described above, the other Federal
financial regulatory agencies are in the
process of proposing two sets of capital
rules for the financial institutions they
regulate. The implementation of the
advanced capital framework would be
limited, for the most part, to the largest,
internationally active banks that meet
certain infrastructure requirements.
Other banks would implement a simpler
capital framework patterned after the
standardized approach of Basel II.
While our expectation is to
implement a revised capital framework
similar to the standardized approach of
Basel II, we also recognize that some
aspects of the advanced approaches may
be appropriate for the larger, more
complex System institutions. However,
we are still reviewing the advanced
approaches of Basel II and its potential
application to the System. Therefore, we
are not seeking comments on specific
aspects of the advanced approaches at
this time. Rather, we are considering the
overall regulatory capital framework for
the System in light of the changes
occurring in the financial services
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industry and recent best practices for
economic capital modeling.
Question 15: We seek comment on the
most appropriate risk-based capital
framework for the System and the
reasons we should implement one
framework over another. Should we
consider creating a uniform regulatory
capital structure for the System or a
multi-dimensional regulatory structure
and allow each System institution the
option of choosing which capital
framework it will apply? How might this
new risk-based capital framework
increase the costs or regulatory burden
to the System? Would the increased
costs be justified by improved risk
sensitivity, risk management, and more
efficient capital allocation?
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245–AF67
Small Business Size Standards; Fuel
Oil Dealers Industries
U.S. Small Business
Administration.
ACTION: Proposed rule.
AGENCY:
Dated: October 25, 2007.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. E7–21422 Filed 10–30–07; 8:45 am]
SUMMARY: The U.S. Small Business
Administration (SBA) proposes to
change the small business size standard
for the Heating Oil Dealers industry
(North American Industry Classification
System (NAICS) code 454311)) from
$11.5 million in average annual receipts
to 50 employees, and the size standard
for the Liquefied Petroleum Gas (Bottled
Gas) Dealers industry (NAICS code
454312) from $6.5 million in average
annual receipts to 50 employees. Large
and fluctuating increases in the prices of
heating oil and propane over the past
several years indicate that a more stable
measure of firm size based on number
of employees rather than receipts is
needed for these two industries.
DATES: SBA must receive comments to
this proposed rule on or before
November 30, 2007.
ADDRESSES: You may submit comments,
identified by RIN 3245–AF67, by one of
the following methods: (1) Federal
eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments;
or (2) Mail/Hand Delivery/Courier: Gary
M. Jackson, Assistant Director for Size
Standards, 409 Third Street, SW., Mail
Code 6530, Washington, DC 20416.
SBA will post all comments on
www.Regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.Regulations.gov, please
submit the information to Diane Heal,
Office of Size Standards, 409 Third
Street, SW., Mail Code 6530,
Washington, DC 20416, or send an email to sizestandards@sba.gov.
Highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination of whether it will
publish the information or not.
FOR FURTHER INFORMATION CONTACT:
Diane Heal, Office of Size Standards,
(202) 205–6618 or
sizestandards@sba.gov.
BILLING CODE 6705–01–P
SUPPLEMENTARY INFORMATION:
N. Reporting Requirements and
Transition Period 60
The other Federal financial regulatory
agencies have announced that they will
be replacing Basel IA with a proposed
rule that would provide all non-core
banks the option of adopting the
standardized approach under Basel II.
Their stated intent is to finalize a
standardized approach for non-core
banks before the core banks begin their
first transition period year under the
advanced capital framework. Our
objective is to minimize, to the extent
possible, the time interval between the
issuance of their final rule and ours. We
also need a transition period to make
appropriate modifications to the Call
Reporting System to track the new riskbased capital requirements.
Question 16: We seek comment on an
appropriate timetable for implementing
our new risk-based capital rules.
Specifically, what is an appropriate
time interval between the issuance of
the other Federal financial regulatory
agencies’ final rule on the standardized
approach of Basel II and ours? How long
should the transition period be to allow
System institutions to adjust to the new
risk-based capital rules?
Question 17: Additionally, we seek
comment on any other methods that
may be used to increase the risk
sensitivity of our risk-based capital
rules.
60 This
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Several
small businesses, trade associations, and
Members of Congress have requested
that SBA review the $11.5 million size
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standard for the Heating Oil Dealers
industry and the $6.5 million size
standard for the Liquefied Petroleum
Gas (Bottled Gas) Dealers (LPG dealers)
industry. The requesters contend that
SBA should either increase the receiptbased size standards for these industries
to account for the impact of large
increases in crude oil costs on heating
oil and propane prices over the past
several years or establish a size standard
based on the number of employees of a
business concern. They point out that
under the existing receipts size
standard, a heating oil or LPG dealer
currently defined as small may abruptly
exceed the size standard due to large
and unpredictable increases in crude oil
costs, even though it continues to
deliver the same quantity of fuel
products. The reason is because the cost
of such fuel products is included when
calculating the firm’s receipts for size
purposes.
In addition to eligibility for SBA
programs, small business status for
heating oil and LPG dealers also
determines the amount of registration
fees business concerns and other
organizational entities must pay to the
U.S. Department of Transportation
(DOT) for transporting hazardous
materials (HAZMAT). Small businesses
pay a lower HAZMAT fee than other
organizations. For the 2006–2007 and
2007–2008 registration periods, small
businesses pay $275 per year while all
other registrants pay $1,000. Many
organizations register for a 3-year
61575
period. The requestors are concerned
that a large number of small heating oil
and LPG dealers that registered in 2004
and 2005 now have average annual
receipts exceeding the $11.5 million and
$6.5 million size standard for these two
industries due solely to significantly
higher prices of heating oil and propane
since that time and, therefore, will be
subject to a substantially higher
HAZMAT registration fee.
SBA’s research of price trends for
heating oil and propane verify that
significant increases, as well as large
fluctuations, in prices have occurred
since 2002. The following table (Table
1) shows the residential prices of
heating oil and propane as reported by
the U.S. Energy Information Agency:
TABLE 1.—RESIDENTIAL PRICE OF HEATING OIL AND PROPANE—2002–2007
[Cents per gallon excluding taxes]
Heating oil
Propane
Year
Average
2002
2003
2004
2005
2006
2007
.................................
.................................
.................................
.................................
.................................
(Jan.–Mar.) ..............
High
123.6
156.6
180.7
228.3
241.6
242.1
Low
140.8
185.4
206.0
269.2
246.3
249.6
116.0
134.4
149.8
194.6
237.0
233.3
Difference
(high-low)
(percent)
21.4
37.9
34.5
38.3
3.9
7.0
Average
115.2
139.9
160.7
184.8
197.6
201.0
High
125.5
172.2
172.9
200.6
201.3
204.6
Low
112.2
126.8
142.8
171.4
193.3
198.6
Difference
(high-low)
(percent)
11.9
35.8
21.1
17.0
4.1
3.0
Source: U.S. Energy Information Administration; https://tonto.eia.doe.gov/dnav/pet/pet_pnp_wiup_dcu_nus_w.htm
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The data in the above table show that
heating oil and propane average weekly
prices have increased by 95.9 percent
and 74.5 percent, respectively, between
2002 and 2007. Furthermore, prices
have fluctuated by more than 35 percent
in some years. On December 5, 2002,
SBA had adjusted its receipts-based size
standards by 8.7 percent to reflect the
general rate of inflation in the economy
since late 2001 (70 FR 72577). However,
inflation in the heating oil and LPG
industries has been greater than that
level, substantiating the reasons for
reviewing the existing size standards.
Although price data exists to support
an adjustment to the existing size
standards by a level significantly higher
than the general rate of inflation, SBA
believes a preferable approach for these
industries is to establish an employee-
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based size standard. The small business
status of many business concerns can
fluctuate from year to year because of
the instability and uncertainty of the
cost of crude oil, which affects the retail
prices of heating oil and liquid propane
gas, and a business concerns receipts.
SBA believes that an industry’s size
standard measure should reflect the
magnitude of operations of a business
concern. Because of the volatility of
heating oil and propane prices, a size
standard based upon number of
employees better reflects the real level
of operations of heating oil and LPG
dealers than a receipts-based size
standard.
SBA proposes to convert the existing
heating oil and LPG dealers’ receiptsbased size standards to an equivalent
employee-based size standard. The
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primary tool used to calculate an
equivalent employee size standard
associated with a receipts-based size
standard is the receipts-to-employee
ratio for an industry. Data to calculate
these ratios were obtained by the SBA
from the U.S. Bureau of the Census in
a special tabulation of the 2002
Economic Census (The 2002 Economic
Census is available at https://
www.census.gov/econ/census02/). For
purposes of this calculation, SBA will
apply a receipts-to-employee ratio of
small businesses at or near the current
receipt-based size standard. The
following table (Table 2) shows the
receipts-to-employee ratios for the
heating oil and LPG dealer industries
and an employee equivalent size
standard using these data.
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Federal Register / Vol. 72, No. 210 / Wednesday, October 31, 2007 / Proposed Rules
TABLE 2.—RECEIPTS-TO-EMPLOYEE RATIO
Industry
Size standard
Receiptsemployee-ratio
Employee
equivalent size
Standard
(3) ÷ (4)
(1)
(2)
(3)
(4)
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Heating Oil .......................................................................................................................
LPG ..................................................................................................................................
SBA recognizes that this estimate,
while precise, does not take into
account two factors that may result in a
small business currently eligible under
the existing average annual receipts size
standard losing eligibility under the
above calculated employee equivalent
size standard. First, receipts-toemployees ratios vary by business
concern. For small businesses that have
a lower receipts-to-employee ratio than
average, a given level of receipts will
support a higher number of employees
than estimated, and visa versa. For
example, the average receipts-toemployee ratio of all small businesses as
opposed to the ratio for small businesses
near the size standard in the heating oil
industry is $225,973 and in the LPG
dealers industry is $155,646. Using
these ratios instead of those in column
3 of table 2, the employee equivalent
size standards become 54.4 and 41.8
employees, respectively.
Second, under a 3-year average
calculation of annual receipts, the size
of an eligible small business in 1 or 2
of the 3-year averaging period may
exceed the specific size standard. For
example, a business concern with
receipts of $3.0 million, $6.7 million
and $8.0 million qualifies as small since
its 3-year average equals $5.9 million.
However, under an employee-based size
standard, small business status is
determined by the average number of
employees over the past 12 months.
Consequently, if SBA adopts an
employee-based size standard by
directly converting the level of a receiptbased size standard to number of
employees, a business concern that is
eligible under a 3-year average annual
receipts may no longer qualify as small
based on its average employment for the
past 12 months. Assuming, for example,
an eligible small business’s current size
is one-third higher than the current size
standard, using the receipts-to-employee
ratios in the above table the employee
equivalent levels become 52.4 for
heating oil dealers ($11,500,000 times
1.334 = $15,341,000 divided by
$292,750) and 46 for LPG dealers
($6,500,000 times 1.334 = $8,671,000
divided by $188,319).
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$11,500,000
6,500,000
In converting the heating oil and LPG
dealers’ size standards to number of
employees, SBA seeks to maintain
current small business eligibility as it
establishes an employee-based size
standard. Unfortunately, SBA does not
have data at the firm level for receiptsto-employee ratios or on the historical
distribution of receipts of individual
business concerns by which to estimate
a typical current level of receipts for
small businesses whose 3-year average
is at or below the size standard. In lieu
of such data, SBA believes that adopting
50 employees for both industries, as
indicated by the above examples, will
adequately address those considerations
in converting the existing average
annual receipts size standards to an
appropriate employee-based size
standard.
In proposing the 50-employee size
standard, SBA would establish
additional employee size standard level.
SBA has established a general 500employee size standard for the
manufacturing sector and 100-employee
size standard for the wholesale sector.
After analyzing the heating oil and LPG
industries, the 500- and 100-employee
size standards would significantly
increase the size standard for these two
relevant industries. Rather than
selecting one of the existing established
employee levels, SBA believes it is more
important to maintain the size status of
businesses in these two industries and
change only the size measure from
revenue to number of employee. As
stated earlier, the purpose of this
rulemaking is not to increase the size
standard, but to change the measure so
it is not susceptible to the volatile prices
of heating oil and propane. In March
2004, we proposed to convert all
receipts-based size standards to number
of employees (69 FR 13130, March 19,
2004). For the heating oil and LPG
dealers industries, SBA proposed 50
employees and received no adverse
comments. However, SBA withdrew the
entire rule due to concerns unrelated to
the heating oil and LPG dealers
industries. SBA encourages comments
on whether the proposed 50-employee
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$292,750
188,319
39.3
35.5
standard is sufficient to maintain
current small business eligibility.
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)
The Office of Management and Budget
(OMB) has determined that this
proposed rule is not a significant
regulatory action for purposes of
Executive Order 12866. In addition, this
rule is not a major rule under the
Congressional Review Act, 5 U.S.C. 800.
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.
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.
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. Although the measure of
size changes from receipts to number of
employees, business concerns must
maintain records on employees (such as
payroll records) in the course of
business. Providing information to SBA
on the number of employees would
occur only as a result of a request for a
size determination related to an
application for small business
assistance.
Initial Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act,
this rule, if finalized, may have a
significant impact on a substantial
number of small entities in the heating
oil and LPG dealers industries. This rule
may affect the eligibility of heating and
LPG dealers seeking SBA 7(a) Loans,
SBA Economic Impact Disaster Loans,
DOT HAZMAT Registration Program
fees, and assistance from other Federal
small business programs.
Immediately below, SBA sets forth an
initial regulatory flexibility analysis of
this proposed rule addressing the
following questions: (1) What is the
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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 is 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? Significant increases and
fluctuations in crude oil costs render a
receipts-based size standard for the
heating oil and LGP dealers industries
an unsuitable measure of a dealer’s level
of business activity. Converting the
existing receipts-based size standard to
an employee-based size standard
provides a more accurate measure of the
operations of a heating oil dealer and
LPG dealer and ensures a more stable
small business designation to dealers of
these fuel products.
2. What is SBA’s description and
estimate of the number of small entities
to which the rule will apply? Based on
data from the SBA’s special tabulation
of the U.S. Bureau of the Census’s 2002
Economic Census, there were 3,729
small heating oil dealers and 2,005
small LPG dealers under the existing
size standards. Taking into account
historical trends of residential heating
oil and propane prices between 2002
and 2007, 349 heating oil dealers and
269 LPG dealers may exceed the
existing size standard due solely to
higher receipts generated by higher
prices. Establishing the proposed
employee-based size standard for these
two industries will restore the small
business eligibility of those dealers.
3. What are the projected reporting,
record keeping, and other compliance
requirements of the rule and an estimate
of the classes of small entities which
will be subject to the requirements?
Establishing an employee-based size
standard for heating oil and LPG dealers
does not impose any additional
reporting, record keeping, or
compliance requirements on small
entities. Although the measure of size
changes from receipts to number of
employees, business concerns must
maintain records on employees in the
course of business. In response to a
request for a size determination related
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to an application for small business
assistance, small businesses must
provide information on receipts or
number of employees. This proposed
rule does not create a new requirement
to provide size information, only what
type of information that is requested in
reviewing a business concern’s size.
4. What are the relevant Federal rules
which may duplicate, overlap or conflict
with the rule? This proposed 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 U.S.C.
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–
57991, dated November 24, 1995). In
cases where an SBA size standard is not
appropriate, the Small Business Act and
SBA’s regulations allow Federal
agencies to develop different size
standards with the approval of the SBA
Administrator (13 CFR 121.902). For
purposes of a regulatory flexibility
analysis, agencies must consult with
SBA’s Office of Advocacy when
developing different size standards for
their programs (13 CFR 121.902(b)(4)).
As discussed in the preamble, the
most significant impact of this proposed
rule would be on heating oil and LPG
dealers that register with the DOT’s
HAZMAT Registration Program. DOT
utilizes SBA’s size standard to
determine which registrants are eligible
for a lower fee charged to small
businesses. During the 2006–07
registration period, 2,194 heating oil
dealers and 1,482 LPG dealers
submitted HAZMAT applications. Of
these, 2,111 heating oil and 1,406 LPG
dealers qualified as small.
5. What alternatives will allow the
Agency to accomplish its regulatory
objectives while minimizing the impact
on small entities? SBA considered two
alternatives to the proposed 50employee size standard. First, SBA
considered revising the existing size
standards to account for the above
average inflation increases of heating oil
and propone price since 2002. As
discussed in the preamble, SBA is
concerned that with the wide
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61577
fluctuations of these fuel prices the
small business status of many heating
oil and LPG dealers may change from
year-to-year depending on the prices.
An employee size standard is unaffected
by inflation and provides stability in the
small business status of heating oil and
LPG dealers.
Second, SBA considered excluding
the cost of fuel products in the
calculation of receipts size. This
approach adds more complexity and
uncertainty to the calculation of
business size. This approach would also
put an undue administrative burden on
the small businesses in these industries
by requiring them to separate out 3
years of receipts for the costs of fuel
products in order to calculate their size
status. This is not a common business
practice for business concerns in this
and similar service industries. SBA
believes that receipts size standards
should continue to be on a gross
receipts concept. Otherwise, SBA and
business concerns will encounter more
difficulty in determining and validating
small status.
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 the reasons set forth in the
preamble, SBA proposes to amend 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, and 662(5); and Pub. L. 105–135,
Sec. 401, et seq., 111 Stat, 2592.
2. In § 121.201, in the table ‘‘Small
Business Size Standards by NAICS
Industry,’’ under the heading ‘‘Sector
44–45—Retail Trade,’’ ‘‘Subsector 454—
Nonstore Retailers,’’ revise the entries
for 454311 and 454312 to read as
follows:
§ 121.201 What size standards has SBA
identified by North American Industry
Classification System codes?
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SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY
NAICS codes
Size standards in
millions of dollars
NAICS U.S. industry title
*
*
*
*
*
*
*
*
*
Sector 44–45—Retail Trade
*
Size standards in
number of
employees
*
*
*
*
*
Subsector 454—Nonstore Retailing
*
*
*
*
*
*
454311 ..............
Heating Oil Dealers ...........................................................................................................
............................
50
454312 ..............
Liquefied Petroleum Gas (Bottled Gas) Dealers ..............................................................
............................
50
*
*
*
Dated: October 24, 2007.
Steven C. Preston,
Administrator.
[FR Doc. E7–21401 Filed 10–30–07; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2007–0115; Directorate
Identifier 2007–CE–080–AD]
RIN 2120–AA64
Airworthiness Directives; REIMS
AVIATION S.A. Model F406 Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for the
products listed above. This proposed
AD results from mandatory continuing
airworthiness information (MCAI)
originated by an aviation authority of
another country to identify and correct
an unsafe condition on an aviation
product. The MCAI describes the unsafe
condition as:
rwilkins on PROD1PC63 with PROPOSALS-1
SUMMARY:
On several occasions, leaks of the landing
gear emergency blowdown bottle have been
reported. Investigations revealed that the
leakage was located on the nut manometer
because of a design deficiency in the bottle
head.
If left uncorrected, the internal bottle
pressure could not be maintained to an
adequate level and could result in a
malfunction, failing to extend landing gears
during emergency situations.
VerDate Aug<31>2005
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*
*
The proposed AD would require actions
that are intended to address the unsafe
condition described in the MCAI.
DATES: We must receive comments on
this proposed AD by November 30,
2007.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov; or in person at the
Docket Management Facility between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD
docket contains this proposed AD, the
regulatory evaluation, any comments
received, and other information. The
street address for the Docket Office
(telephone (800) 647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT:
Mike Kiesov, Aerospace Engineer, FAA,
Small Airplane Directorate, 901 Locust,
Room 301, Kansas City, Missouri 64106;
telephone: (816) 329–4144; fax: (816)
329–4090.
SUPPLEMENTARY INFORMATION:
PO 00000
Frm 00011
Fmt 4702
Sfmt 4702
*
*
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposed AD. Send your comments
to an address listed under the
ADDRESSES section. Include ‘‘Docket No.
FAA–2007–0115; Directorate Identifier
2007–CE–080–AD’’ at the beginning of
your comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this proposed AD. We will
consider all comments received by the
closing date and may amend this
proposed AD because of those
comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this proposed AD.
Discussion
The European Aviation Safety Agency
(EASA), which is the Technical Agent
for the Member States of the European
Community, has issued EASA AD No.:
2007–0190, dated July 12, 2007 (referred
to after this as ‘‘the MCAI’’), to correct
an unsafe condition for the specified
products. The MCAI states:
On several occasions, leaks of the landing
gear emergency blowdown bottle have been
reported. Investigations revealed that the
leakage was located on the nut manometer
because of a design deficiency in the bottle
head.
If left uncorrected, the internal bottle
pressure could not be maintained to an
adequate level and could result in a
malfunction, failing to extend landing gears
during emergency situations.
The MCAI requires you to replace the
old landing gear emergency blowdown
E:\FR\FM\31OCP1.SGM
31OCP1
]]>Agencies
[Federal Register Volume 72, Number 210 (Wednesday, October 31, 2007)]
[Proposed Rules]
[Pages 61574-61578]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21401]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AF67
Small Business Size Standards; Fuel Oil Dealers Industries
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) proposes to
change the small business size standard for the Heating Oil Dealers
industry (North American Industry Classification System (NAICS) code
454311)) from $11.5 million in average annual receipts to 50 employees,
and the size standard for the Liquefied Petroleum Gas (Bottled Gas)
Dealers industry (NAICS code 454312) from $6.5 million in average
annual receipts to 50 employees. Large and fluctuating increases in the
prices of heating oil and propane over the past several years indicate
that a more stable measure of firm size based on number of employees
rather than receipts is needed for these two industries.
DATES: SBA must receive comments to this proposed rule on or before
November 30, 2007.
ADDRESSES: You may submit comments, identified by RIN 3245-AF67, by one
of the following methods: (1) Federal eRulemaking Portal: https://
www.regulations.gov. Follow the instructions for submitting comments;
or (2) Mail/Hand Delivery/Courier: Gary M. Jackson, Assistant Director
for Size Standards, 409 Third Street, SW., Mail Code 6530, Washington,
DC 20416.
SBA will post all comments on www.Regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.Regulations.gov, please submit the information to Diane
Heal, Office of Size Standards, 409 Third Street, SW., Mail Code 6530,
Washington, DC 20416, or send an e-mail to sizestandards@sba.gov.
Highlight the information that you consider to be CBI and explain why
you believe SBA should hold this information as confidential. SBA will
review the information and make the final determination of whether it
will publish the information or not.
FOR FURTHER INFORMATION CONTACT: Diane Heal, Office of Size Standards,
(202) 205-6618 or sizestandards@sba.gov.
SUPPLEMENTARY INFORMATION: Several small businesses, trade
associations, and Members of Congress have requested that SBA review
the $11.5 million size
[[Page 61575]]
standard for the Heating Oil Dealers industry and the $6.5 million size
standard for the Liquefied Petroleum Gas (Bottled Gas) Dealers (LPG
dealers) industry. The requesters contend that SBA should either
increase the receipt-based size standards for these industries to
account for the impact of large increases in crude oil costs on heating
oil and propane prices over the past several years or establish a size
standard based on the number of employees of a business concern. They
point out that under the existing receipts size standard, a heating oil
or LPG dealer currently defined as small may abruptly exceed the size
standard due to large and unpredictable increases in crude oil costs,
even though it continues to deliver the same quantity of fuel products.
The reason is because the cost of such fuel products is included when
calculating the firm's receipts for size purposes.
In addition to eligibility for SBA programs, small business status
for heating oil and LPG dealers also determines the amount of
registration fees business concerns and other organizational entities
must pay to the U.S. Department of Transportation (DOT) for
transporting hazardous materials (HAZMAT). Small businesses pay a lower
HAZMAT fee than other organizations. For the 2006-2007 and 2007-2008
registration periods, small businesses pay $275 per year while all
other registrants pay $1,000. Many organizations register for a 3-year
period. The requestors are concerned that a large number of small
heating oil and LPG dealers that registered in 2004 and 2005 now have
average annual receipts exceeding the $11.5 million and $6.5 million
size standard for these two industries due solely to significantly
higher prices of heating oil and propane since that time and,
therefore, will be subject to a substantially higher HAZMAT
registration fee.
SBA's research of price trends for heating oil and propane verify
that significant increases, as well as large fluctuations, in prices
have occurred since 2002. The following table (Table 1) shows the
residential prices of heating oil and propane as reported by the U.S.
Energy Information Agency:
Table 1.--Residential Price of Heating Oil and Propane--2002-2007
[Cents per gallon excluding taxes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Heating oil Propane
-------------------------------------------------------------------------------------------------------
Year Difference Difference
Average High Low (high-low) Average High Low (high-low)
(percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2002............................................ 123.6 140.8 116.0 21.4 115.2 125.5 112.2 11.9
2003............................................ 156.6 185.4 134.4 37.9 139.9 172.2 126.8 35.8
2004............................................ 180.7 206.0 149.8 34.5 160.7 172.9 142.8 21.1
2005............................................ 228.3 269.2 194.6 38.3 184.8 200.6 171.4 17.0
2006............................................ 241.6 246.3 237.0 3.9 197.6 201.3 193.3 4.1
2007 (Jan.-Mar.)................................ 242.1 249.6 233.3 7.0 201.0 204.6 198.6 3.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: U.S. Energy Information Administration; https://tonto.eia.doe.gov/dnav/pet/pet_pnp_wiup_dcu_nus_w.htm
The data in the above table show that heating oil and propane
average weekly prices have increased by 95.9 percent and 74.5 percent,
respectively, between 2002 and 2007. Furthermore, prices have
fluctuated by more than 35 percent in some years. On December 5, 2002,
SBA had adjusted its receipts-based size standards by 8.7 percent to
reflect the general rate of inflation in the economy since late 2001
(70 FR 72577). However, inflation in the heating oil and LPG industries
has been greater than that level, substantiating the reasons for
reviewing the existing size standards.
Although price data exists to support an adjustment to the existing
size standards by a level significantly higher than the general rate of
inflation, SBA believes a preferable approach for these industries is
to establish an employee-based size standard. The small business status
of many business concerns can fluctuate from year to year because of
the instability and uncertainty of the cost of crude oil, which affects
the retail prices of heating oil and liquid propane gas, and a business
concerns receipts. SBA believes that an industry's size standard
measure should reflect the magnitude of operations of a business
concern. Because of the volatility of heating oil and propane prices, a
size standard based upon number of employees better reflects the real
level of operations of heating oil and LPG dealers than a receipts-
based size standard.
SBA proposes to convert the existing heating oil and LPG dealers'
receipts-based size standards to an equivalent employee-based size
standard. The primary tool used to calculate an equivalent employee
size standard associated with a receipts-based size standard is the
receipts-to-employee ratio for an industry. Data to calculate these
ratios were obtained by the SBA from the U.S. Bureau of the Census in a
special tabulation of the 2002 Economic Census (The 2002 Economic
Census is available at https://www.census.gov/econ/census02/). For
purposes of this calculation, SBA will apply a receipts-to-employee
ratio of small businesses at or near the current receipt-based size
standard. The following table (Table 2) shows the receipts-to-employee
ratios for the heating oil and LPG dealer industries and an employee
equivalent size standard using these data.
[[Page 61576]]
Table 2.--Receipts-to-Employee Ratio
----------------------------------------------------------------------------------------------------------------
Employee
Receipts- equivalent size
Industry Size standard employee-ratio Standard (3) /
(4)
(1) (2) (3) (4)
----------------------------------------------------------------------------------------------------------------
Heating Oil............................................... $11,500,000 $292,750 39.3
LPG....................................................... 6,500,000 188,319 35.5
----------------------------------------------------------------------------------------------------------------
SBA recognizes that this estimate, while precise, does not take
into account two factors that may result in a small business currently
eligible under the existing average annual receipts size standard
losing eligibility under the above calculated employee equivalent size
standard. First, receipts-to-employees ratios vary by business concern.
For small businesses that have a lower receipts-to-employee ratio than
average, a given level of receipts will support a higher number of
employees than estimated, and visa versa. For example, the average
receipts-to-employee ratio of all small businesses as opposed to the
ratio for small businesses near the size standard in the heating oil
industry is $225,973 and in the LPG dealers industry is $155,646. Using
these ratios instead of those in column 3 of table 2, the employee
equivalent size standards become 54.4 and 41.8 employees, respectively.
Second, under a 3-year average calculation of annual receipts, the
size of an eligible small business in 1 or 2 of the 3-year averaging
period may exceed the specific size standard. For example, a business
concern with receipts of $3.0 million, $6.7 million and $8.0 million
qualifies as small since its 3-year average equals $5.9 million.
However, under an employee-based size standard, small business status
is determined by the average number of employees over the past 12
months. Consequently, if SBA adopts an employee-based size standard by
directly converting the level of a receipt-based size standard to
number of employees, a business concern that is eligible under a 3-year
average annual receipts may no longer qualify as small based on its
average employment for the past 12 months. Assuming, for example, an
eligible small business's current size is one-third higher than the
current size standard, using the receipts-to-employee ratios in the
above table the employee equivalent levels become 52.4 for heating oil
dealers ($11,500,000 times 1.334 = $15,341,000 divided by $292,750) and
46 for LPG dealers ($6,500,000 times 1.334 = $8,671,000 divided by
$188,319).
In converting the heating oil and LPG dealers' size standards to
number of employees, SBA seeks to maintain current small business
eligibility as it establishes an employee-based size standard.
Unfortunately, SBA does not have data at the firm level for receipts-
to-employee ratios or on the historical distribution of receipts of
individual business concerns by which to estimate a typical current
level of receipts for small businesses whose 3-year average is at or
below the size standard. In lieu of such data, SBA believes that
adopting 50 employees for both industries, as indicated by the above
examples, will adequately address those considerations in converting
the existing average annual receipts size standards to an appropriate
employee-based size standard.
In proposing the 50-employee size standard, SBA would establish
additional employee size standard level. SBA has established a general
500-employee size standard for the manufacturing sector and 100-
employee size standard for the wholesale sector. After analyzing the
heating oil and LPG industries, the 500- and 100-employee size
standards would significantly increase the size standard for these two
relevant industries. Rather than selecting one of the existing
established employee levels, SBA believes it is more important to
maintain the size status of businesses in these two industries and
change only the size measure from revenue to number of employee. As
stated earlier, the purpose of this rulemaking is not to increase the
size standard, but to change the measure so it is not susceptible to
the volatile prices of heating oil and propane. In March 2004, we
proposed to convert all receipts-based size standards to number of
employees (69 FR 13130, March 19, 2004). For the heating oil and LPG
dealers industries, SBA proposed 50 employees and received no adverse
comments. However, SBA withdrew the entire rule due to concerns
unrelated to the heating oil and LPG dealers industries. SBA encourages
comments on whether the proposed 50-employee standard is sufficient to
maintain current small business eligibility.
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)
The Office of Management and Budget (OMB) has determined that this
proposed rule is not a significant regulatory action for purposes of
Executive Order 12866. In addition, this rule is not a major rule under
the Congressional Review Act, 5 U.S.C. 800.
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.
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.
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. Although the measure of size changes from
receipts to number of employees, business concerns must maintain
records on employees (such as payroll records) in the course of
business. Providing information to SBA on the number of employees would
occur only as a result of a request for a size determination related to
an application for small business assistance.
Initial Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act, this rule, if finalized, may
have a significant impact on a substantial number of small entities in
the heating oil and LPG dealers industries. This rule may affect the
eligibility of heating and LPG dealers seeking SBA 7(a) Loans, SBA
Economic Impact Disaster Loans, DOT HAZMAT Registration Program fees,
and assistance from other Federal small business programs.
Immediately below, SBA sets forth an initial regulatory flexibility
analysis of this proposed rule addressing the following questions: (1)
What is the
[[Page 61577]]
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 is 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? Significant
increases and fluctuations in crude oil costs render a receipts-based
size standard for the heating oil and LGP dealers industries an
unsuitable measure of a dealer's level of business activity. Converting
the existing receipts-based size standard to an employee-based size
standard provides a more accurate measure of the operations of a
heating oil dealer and LPG dealer and ensures a more stable small
business designation to dealers of these fuel products.
2. What is SBA's description and estimate of the number of small
entities to which the rule will apply? Based on data from the SBA's
special tabulation of the U.S. Bureau of the Census's 2002 Economic
Census, there were 3,729 small heating oil dealers and 2,005 small LPG
dealers under the existing size standards. Taking into account
historical trends of residential heating oil and propane prices between
2002 and 2007, 349 heating oil dealers and 269 LPG dealers may exceed
the existing size standard due solely to higher receipts generated by
higher prices. Establishing the proposed employee-based size standard
for these two industries will restore the small business eligibility of
those dealers.
3. What are the projected reporting, record keeping, and other
compliance requirements of the rule and an estimate of the classes of
small entities which will be subject to the requirements? Establishing
an employee-based size standard for heating oil and LPG dealers does
not impose any additional reporting, record keeping, or compliance
requirements on small entities. Although the measure of size changes
from receipts to number of employees, business concerns must maintain
records on employees in the course of business. In response to a
request for a size determination related to an application for small
business assistance, small businesses must provide information on
receipts or number of employees. This proposed rule does not create a
new requirement to provide size information, only what type of
information that is requested in reviewing a business concern's size.
4. What are the relevant Federal rules which may duplicate, overlap
or conflict with the rule? This proposed 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 U.S.C.
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 57988-57991, dated November 24, 1995). In cases where an SBA size
standard is not appropriate, the Small Business Act and SBA's
regulations allow Federal agencies to develop different size standards
with the approval of the SBA Administrator (13 CFR 121.902). For
purposes of a regulatory flexibility analysis, agencies must consult
with SBA's Office of Advocacy when developing different size standards
for their programs (13 CFR 121.902(b)(4)).
As discussed in the preamble, the most significant impact of this
proposed rule would be on heating oil and LPG dealers that register
with the DOT's HAZMAT Registration Program. DOT utilizes SBA's size
standard to determine which registrants are eligible for a lower fee
charged to small businesses. During the 2006-07 registration period,
2,194 heating oil dealers and 1,482 LPG dealers submitted HAZMAT
applications. Of these, 2,111 heating oil and 1,406 LPG dealers
qualified as small.
5. What alternatives will allow the Agency to accomplish its
regulatory objectives while minimizing the impact on small entities?
SBA considered two alternatives to the proposed 50-employee size
standard. First, SBA considered revising the existing size standards to
account for the above average inflation increases of heating oil and
propone price since 2002. As discussed in the preamble, SBA is
concerned that with the wide fluctuations of these fuel prices the
small business status of many heating oil and LPG dealers may change
from year-to-year depending on the prices. An employee size standard is
unaffected by inflation and provides stability in the small business
status of heating oil and LPG dealers.
Second, SBA considered excluding the cost of fuel products in the
calculation of receipts size. This approach adds more complexity and
uncertainty to the calculation of business size. This approach would
also put an undue administrative burden on the small businesses in
these industries by requiring them to separate out 3 years of receipts
for the costs of fuel products in order to calculate their size status.
This is not a common business practice for business concerns in this
and similar service industries. SBA believes that receipts size
standards should continue to be on a gross receipts concept. Otherwise,
SBA and business concerns will encounter more difficulty in determining
and validating small status.
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 the reasons set forth in the preamble, SBA proposes to amend 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, and
662(5); and Pub. L. 105-135, Sec. 401, et seq., 111 Stat, 2592.
2. In Sec. 121.201, in the table ``Small Business Size Standards
by NAICS Industry,'' under the heading ``Sector 44-45--Retail Trade,''
``Subsector 454--Nonstore Retailers,'' revise the entries for 454311
and 454312 to read as follows:
Sec. 121.201 What size standards has SBA identified by North American
Industry Classification System codes?
[[Page 61578]]
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
----------------------------------------------------------------------------------------------------------------
* * * * * * *
Sector 44-45--Retail Trade
* * * * * * *
Subsector 454--Nonstore Retailing
* * * * * * *
----------------------------------------------------------------------------------------------------------------
454311.................................. Heating Oil Dealers............... ................ 50
----------------------------------------------------------------------------------------------------------------
454312.................................. Liquefied Petroleum Gas (Bottled ................ 50
Gas) Dealers.
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Dated: October 24, 2007.
Steven C. Preston,
Administrator.
[FR Doc. E7-21401 Filed 10-30-07; 8:45 am]
BILLING CODE 8025-01-P
