Establish a Single Small Business Size Standard for Commercial Fishing Businesses, 56432-56436 [2015-23375]
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Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Proposed Rules
www.regulations.gov under Docket No.
FWS–R2–ES–2015–0124 under the
Supporting Documents section.
Species and Range
Yuman desert fringe-toed lizard (Uma
rufopunctata); Arizona (United States)
and Sonora (Mexico)
Petition History
On July 11, 2012, we received a
petition dated July 11, 2012, from the
Center for Biological Diversity,
requesting that 53 species of reptiles
and amphibians, including the Yuman
desert fringe-toed lizard, be listed as
endangered or threatened and that
critical habitat be designated for these
species under the Act. The petition
clearly identified itself as such and
included the requisite identification
information for the petitioner, required
at 50 CFR 424.14(a). This finding
addresses the petition.
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Finding
Based on our review of the petition
and sources cited in the petition, we
find that the petition presents
substantial scientific or commercial
information indicating that listing the
Yuman desert fringe-toed lizard (Uma
rufopunctata) may be warranted based
on Factors A and E. However, during
our status review, we will thoroughly
evaluate all potential threats to the
species. Thus, for this species, the
Service requests information on the five
listing factors under section 4(a)(1) of
the Act, including the factors identified
in this finding (see Request for
Information for Status Reviews, above).
Conclusion
On the basis of our evaluation of the
information presented under section
4(b)(3)(A) of the Act, we have
determined that the petitions
summarized above for the Cahaba
pebblesnail and Stephens’ kangaroo rat
do not present substantial scientific or
commercial information indicating that
the requested actions may be warranted.
Therefore, we are not initiating status
reviews for these species.
The petitions summarized above for
the blue Calamintha bee, California
spotted owl, Cascade torrent
salamander, Columbia torrent
salamander, Florida pine snake, Inyo
Mountains salamander, Kern Plateau
salamander, lesser slender salamander,
limestone salamander, northern bog
lemming, Panamint alligator lizard,
Peaks of Otter salamander, regal
fritillary, rusty patched bumble bee,
Shasta salamander, short-tailed snake,
southern rubber boa, Tinian monarch,
tricolored blackbird, tufted puffin,
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Virgin River spinedace, wood turtle, and
the Yuman desert fringe-toed lizard
present substantial scientific or
commercial information indicating that
the requested actions may be warranted.
Because we have found that these
petitions present substantial
information indicating that the
petitioned actions may be warranted, we
are initiating status reviews to
determine whether these actions under
the Act are warranted. At the conclusion
of the status reviews, we will issue a 12month finding, in accordance with
section 4(b)(3)(B) of the Act, as to
whether or not the Service believes
listing is warranted.
It is important to note that the
‘‘substantial information’’ standard for a
90-day finding differs from the Act’s
‘‘best scientific and commercial data’’
standard that applies to a status review
to determine whether a petitioned
action is warranted. A 90-day finding
does not constitute a status review
under the Act. In a 12-month finding,
we will determine whether a petitioned
action is warranted after we have
completed a thorough status review of
the species, which is conducted
following a substantial 90-day finding.
Because the Act’s standards for 90-day
and 12-month findings are different, as
described above, a substantial 90-day
finding does not mean that the 12month finding will result in a warranted
finding.
References Cited
A complete list of references cited is
available on the Internet at https://
www.regulations.gov and upon request
from the appropriate lead field offices
(contact the person listed under FOR
FURTHER INFORMATION CONTACT).
Authors
The primary authors of this notice are
staff members of the Ecological Services
Program, U.S. Fish and Wildlife Service.
Authority
The authority for these actions is the
Endangered Species Act of 1973, as
amended (16 U.S.C. 1531 et seq.).
Dated: August 31, 2015.
Stephen Guertin,
Acting Director, U.S. Fish and Wildlife
Service.
[FR Doc. 2015–23315 Filed 9–17–15; 8:45 am]
BILLING CODE 4310–55–P
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 200
[Docket No. 150227193–5193–01]
RIN 0648–BE92
Establish a Single Small Business Size
Standard for Commercial Fishing
Businesses
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Proposed rule; request for
comment.
AGENCY:
NMFS proposes to establish a
small business size standard of $11
million in annual gross receipts for all
businesses in the commercial fishing
industry (NAICS 11411), for Regulatory
Flexibility Act (RFA) compliance
purposes only. The proposed $11
million standard would be used in RFA
analyses in place of the U.S. Small
Business Administration’s (SBA)
current standards of $20.5 million, $5.5
million, and $7.5 million for the finfish
(NAICS 114111), shellfish (NAICS
114112), and other marine fishing
(NAICS 114119) sectors of the U.S.
commercial fishing industry,
respectively. Establishing a single size
standard of $11 million for the
commercial fishing industry would
simplify the RFA analyses done in
support of NMFS’ rules, better meet the
RFA’s intent by more accurately
representing expected disproportionate
effects of NMFS’ rules between small
and large businesses, create a standard
that more accurately reflects the size
distribution of all businesses in the
commercial fishing industry, and allow
NMFS to determine when changes to
the standard are necessary and
appropriate.
SUMMARY:
Comments must be received by
October 19, 2015.
ADDRESSES: You may submit comments
on this document, identified by NOAA–
NMFS–2015–0061, by either of the
following methods:
• Electronic Submission: Submit all
electronic public comments via the
Federal e-Rulemaking Portal. Go to
www.regulations.gov/
#!docketDetail;D=NOAA-NMFS-20150061, click the ‘‘Comment Now!’’ icon,
complete the required fields, and enter
or attach your comments.
• Mail: Send written comments to
Mike Travis, NOAA Fisheries Service,
DATES:
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Southeast Regional Office, 263 13th
Ave. S., St. Petersburg, FL 33701.
Instructions: Comments sent by any
other method, to any other address or
individual, or received after the end of
the comment period, may not be
considered by NMFS. All comments
received are a part of the public record
and will generally be posted for public
viewing on www.regulations.gov
without change. All personal identifying
information (e.g., name, address, etc.),
confidential business information, or
otherwise sensitive information
submitted voluntarily by the sender will
be publicly accessible. NMFS will
accept anonymous comments (enter
‘‘N/A’’ in the required fields if you wish
to remain anonymous), and will accept
attachments to electronic comments in
Microsoft Word, Excel, or Adobe PDF
file formats only.
FOR FURTHER INFORMATION CONTACT:
Mike Travis, Industry Economist, at
(727) 209–5982.
SUPPLEMENTARY INFORMATION:
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Background
Prior to 2013, SBA had set the small
business size standard for all sectors of
the commercial fishing industry at the
same amount. Since 2005, this standard
had been $4 million in annual gross
receipts (revenues). Effective July 22,
2013, SBA established significantly
different and higher size standards for
the three separate sectors of the industry
(78 FR 37398, June 20, 2013): $19
million for commercial finfish fishing
businesses (NAICS 114111), $5.0
million for commercial shellfish fishing
businesses (NAICS 114112), and $7.0
million for other commercial marine
fishing businesses (NAICS 114119).
These standards were subsequently
adjusted for inflation to $20.5 million,
$5.5 million, and $7.5 million,
respectively, via an interim final rule,
effective July 14, 2014 (79 FR 33647,
June 12, 2014). The Small Business Jobs
Act of 2010 requires SBA to review all
size standards every five years to
account for changes in industry
structure and market conditions. SBA is
also required to assess the impact of
inflation on its monetary-based size
standards at least once every five years
(13 CFR 121.102). However, as reflected
by the timing of the two recent
rulemakings adjusting the size
standards, SBA is not required to
conduct the reviews for these two
purposes simultaneously. Thus, these
size standards are likely to change on a
regular basis.
Under the RFA, an agency must
prepare an initial and final regulatory
flexibility analysis (IRFA/FRFA) for
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each proposed and final rule,
respectively, unless it certifies that a
rule will not have a significant
economic impact on a substantial
number of small entities. Agencies
generally rely on the SBA size standards
to identify small entities for RFA
purposes. For NMFS, rulemaking
activities that have been impacted by
changes to the size standards for
defining ‘‘small’’ businesses include,
but are not limited to, regulatory actions
and analyses undertaken pursuant to the
Magnuson-Stevens Act (MSA),
Endangered Species Act (ESA), Marine
Mammal Protection Act (MMPA), and
National Environmental Policy Act
(NEPA). Between 2012 and 2014, NMFS
published an average of 285 final rules
per year, more than 40 percent of which
required an RFA analysis, and a
majority of those directly regulated
commercial fishing businesses. Thus,
NMFS’ costs of complying with the RFA
are significant even when the small
business size standards are stable, and
those costs increase substantially when
the standards are changing on a
recurring basis.
NMFS and the Regional Fishery
Management Councils (Councils) have
encountered significant difficulties
implementing and adjusting to the new
standards because: (1) The change was
from a single size standard for all
commercial fishing businesses to three
very different standards, (2) many
commercial fishing businesses
participate in both finfish and shellfish
fishing activities, making it unclear
which standard to apply in the RFA
analyses, and (3) a number of rules
simultaneously implement regulations
under fishery management plans for
both finfish and shellfish species (for
e.g., 76 FR 82044, December 29, 2011;
76 FR 82414, December 30, 2011; 77 FR
15916, March 26, 2012; and 80 FR
41472, July 15, 2015), again making it
unclear which standard to apply in the
RFA analyses.
Furthermore, one of the RFA’s
primary purposes is to determine if
proposed regulations are expected to
have disproportionate economic
impacts on small businesses relative to
large businesses and, if so, to consider
alternatives that would minimize any
significant adverse economic impacts on
small businesses. Under SBA’s current
standards for commercial fishing
businesses, practically all commercial
fishing businesses, and particularly
commercial finfish fishing businesses,
would likely be determined to be small.
Thus, in their RFA analyses, NMFS and
the Councils would not be able to
discern, consider, or address any
disproportionate economic impacts that
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various regulatory alternatives might
have on businesses NMFS and the
Councils think are ‘‘small’’ in the
commercial fishing industry. Such an
outcome effectively precludes NMFS
from fulfilling one of the RFA’s primary
purposes and thus is not desirable.
Section 601(3) of the RFA provides
that an agency, after consultation with
SBA’s Office of Advocacy and after an
opportunity for public comment, may
establish one or more definitions of
‘‘small business’’ which are appropriate
to the activities of the agency and
publish such definition(s) in the Federal
Register. Further, 13 CFR 121.903(c)
states that ‘‘where the agency head is
developing a size standard for the sole
purpose of performing a Regulatory
Flexibility Analysis pursuant to section
601(3) of the Regulatory Flexibility Act,
the department or agency may, after
consultation with the SBA Office of
Advocacy, establish a size standard
different from SBA’s which is more
appropriate for such analysis.’’ NMFS
and the Department of Commerce
General Counsel’s Office had
preliminary discussions with SBA’s
Office of Advocacy about these
provisions, and SBA was supportive of
NMFS using RFA section 601(3) and 13
CFR 121.903(c) to establish its own size
standard for the commercial fishing
industry for purposes of RFA analyses
only.
SBA has also previously expressed
support for the idea of creating a single
size standard in instances where
industries are closely related, as is the
case for the commercial finfish and
shellfish fishing industries. In its
proposed rule to change the size
standard for businesses in
manufacturing industries (79 FR 54146,
Sept. 10, 2014), SBA stated: ‘‘To
simplify size standards and for other
reasons, SBA may propose a common
size standard for closely related
industries. Although the size standard
analysis may support a separate size
standard for each industry, SBA
believes that establishing different size
standards for closely related industries
may not always be appropriate. For
example, in cases where many of the
same businesses operate in the same
multiple industries, a common size
standard for those industries might
better reflect the Federal marketplace.
This might also make size standards
among related industries more
consistent than separate size standards
for each of those industries.’’ (79 FR
54146, 54150, Sept. 10, 2014).
NMFS has determined that the data
used by SBA’s Office of Size Standards
to develop the new standards are
incomplete and, as a result, not
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representative of all commercial fishing
businesses. Specifically, the data used
by SBA only account for commercial
fishing businesses that have employees
(i.e., employer firms), and thus do not
include commercial fishing businesses
that do not have employees (i.e., nonemployer firms). Non-employer
commercial fishing businesses typically
pay their self-employed crew a
percentage of the gross or net revenue
on each commercial fishing trip rather
than a standard wage or salary, and thus
self-employed crew are not considered
employees. Commercial fishing
businesses with employees represent
only about 3 percent of all commercial
fishing businesses, while the other 97
percent are non-employer firms.
Further, according to SBA, annual
gross revenues for finfish and shellfish
commercial fishing businesses with
employees average $1.6 and $0.6
million, respectively. Conversely, NMFS
determined the annual gross revenues
for commercial fishing businesses
without employees is only about
$44,000 on average. Thus, NMFS
concluded the exclusion of commercial
fishing businesses without employees is
primarily responsible for the magnitude
of the size standard increases,
particularly for finfish fishing
businesses, and the standards would
have been very different if SBA had
used data for all commercial fishing
businesses. Because the size standards
apply to all commercial fishing
businesses, not just those with
employees, when used to analyze the
economic impacts of management
actions on directly regulated entities
under the RFA, NMFS thinks it is more
appropriate to have size standards for
RFA purposes that are based on all
commercial fishing businesses.
In conjunction with its recent review
of size standards, SBA developed a
‘‘Size Standards Methodology’’ for
establishing, reviewing, and modifying
size standards, where necessary. SBA
included it as a supporting document in
the electronic docket of the September
11, 2012, proposed rule to change the
size standards for the three sectors of
the commercial fishing industry (77 FR
55755) at www.regulations.gov.
Application of this new methodology
resulted in the significantly different
size standards for the three separate
sectors of the industry. NMFS
referenced this document in developing
the proposed size standard in this
proposed rule. Consistent with that
methodology, SBA used the following
industry factors to establish the current
size standards for NAICS Sector 11
(Agriculture, Forestry, Fishing, and
Hunting): Average firm size, as
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measured by simple average receipts
and weighted average receipts; average
assets size; the four-firm concentration
ratio (i.e., the percentage of receipts
accounted for by the four largest firms
in the industry); and the Gini
coefficient, which measures the degree
of inequality in the distribution of firms
by receipts size class under SBA’s
approach.
SBA’s primary source of industry data
used in the rule to establish the new
size standards for the three sectors of
the commercial fishing industry was a
special tabulation of the 2007 County
Business Patterns data from the U.S.
Bureau of Census (Census Bureau). This
special tabulation provided SBA with
data on the number of employer firms,
number of establishments, number of
employees, annual payroll, and annual
receipts of companies by U.S. industry
(6-digit NAICS code). These data were
arrayed by various classes of firms’ size
based on the overall number of
employees and gross receipts of the
entire enterprise (all establishments and
affiliated firms) from all industries.
These data allowed SBA to estimate
average firm size, the four-firm
concentration ratio, and the Gini
coefficient.
SBA’s Office of Size Standards
provided these data upon request to
NMFS. NMFS subsequently requested
and received from the Census Bureau
comparable data for non-employer
businesses. NMFS aggregated data to the
industry level (i.e., NAICS 11411) for
employer and non-employer businesses
and then combined these data. Although
data confidentiality was not an issue
with the non-employer data, prior to
aggregation NMFS had to estimate total
gross receipts in certain receipts classes
for employer firms where the Census
Bureau determined the data were
confidential and thus could not be
released. The combined data provide a
complete accounting of the distribution
of businesses and receipts by receipt
size class category for all commercial
fishing businesses. NMFS used these
data to generate estimates of certain
industry factors needed to establish a
single size standard for the commercial
fishing businesses, consistent with
SBA’s methodology to the extent
practicable.
Specifically, NMFS used the data it
received from SBA and the Census
Bureau to generate estimates of simple
average receipts, weighted average
receipts, and the Gini coefficient. For
simple average receipts, each firm’s
share of the industry’s total receipts is
weighted equally, whereas the shares of
larger firms receive larger weights in
estimating weighted average receipts.
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Weighted average receipts and the Gini
coefficient were estimated using the
equations provided in SBA’s Size
Standards Methodology document.
NMFS generated the following estimates
for the commercial fishing industry:
$77,178 for simple average receipts,
$12,322,365 for weighted average
receipts, and 0.755 for the Gini
coefficient. Based on the information in
Table 2 of SBA’s proposed rule to
change the size standards for the finfish,
shellfish, and other marine fishing
sectors of the commercial fishing
industry (77 FR 55755), these estimates
support size standards of $5 million, $5
million, and $19 million, respectively.
SBA also considers the average assets
size of firms to be an important factor
in establishing a size standard. NMFS
does not possess and was not able to
procure assets size data for nonemployer businesses. SBA has such data
for employer firms in the finfish and
shellfish sectors, though not for
employer firms in the other marine
fishing sector because of the very small
number of firms in that sector. The
number of firms in the other marine
fishing sector is very small because it
includes firms primarily involved in the
harvest of corals, sponges, reef
associated plants (e.g., algae), and
aquarium trade species, whose
allowable harvest levels are very small.
However, SBA had to purchase the
assets size data for employer firms in
the finfish and shellfish sectors from a
private source and thus could not share
the data with NMFS due to their
proprietary nature. Therefore, NMFS
created an estimate based on data that
SBA published in its proposed rule,
using the following approach.
According to SBA’s proposed rule, the
average assets sizes for the finfish and
shellfish commercial fishing sectors are
$1.4 million and $0.4 million,
respectively. Finfish fishing firms and
shellfish fishing firms represent
approximately 54 percent and 46
percent, respectively, of the 2,039
employer firms in those two sectors
combined. Based on these percentages,
the weighted average assets size of the
combined finfish and shellfish
commercial fishing sectors is
approximately $0.94 million. Based on
Table 2 in SBA’s proposed rule, this
estimate supports a $7 million size
standard.
SBA does not consider the average
receipts of the four largest firms to be an
important factor in establishing a size
standard for industries where the fourfirm concentration ratio is below 40
percent (i.e., receipts of the 4 largest
firms account for less than 40 percent of
the total receipts). According to the data
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SBA provided to NMFS, the four largest
firms in the commercial fishing industry
are commercial finfish fishing
businesses. Within the finfish sector,
these firms only account for 29 percent
of total receipts within that sector.
Therefore, within the larger commercial
fishing industry as a whole, the
percentage of receipts they account for
must be less than 29 percent. Because
the four largest firms account for less
than 40 percent of the total receipts for
the commercial fishing industry,
consistent with SBA’s methodology,
NMFS did not use the four-firm
concentration ratio in establishing a
single size standard for the commercial
fishing industry.
According to SBA’s methodology, all
factors should be weighted equally.
Therefore, NMFS averaged the
standards supported by the simple
average receipts ($5 million), weighted
average receipts ($5 million), Gini
coefficient ($19 million), and average
assets size ($7 million) estimates, which
results in a size standard of $9 million.
However, SBA only allowed for eight
size standards in its final rule (79 FR
54146, September 10, 2014): $5 million,
$7 million, $10 million, $14 million,
$19 million, $25.5 million, $30 million,
and $35.5 million. When the estimated
size standard is not equivalent to one of
these eight standards, SBA rounds up to
the next highest size standard. For
NMFS’ estimated $9 million size
standard, the next highest size standard
would be $10 million. If the average
assets size factor is not included,
because it is based on aggregated
employer data only rather than a
combination of employer and nonemployer data, the average of the other
3 factors is $9.67 million. Thus, the next
highest size standard would still be $10
million.
NMFS is aware the Census Bureau has
recently released the 2012 County
Business Patterns data for employer
firms. However, 2012 data for nonemployer firms has not yet been
released. As previously discussed,
NMFS does not think it is prudent to
propose a size standard based only on
employer data because 97 percent of the
commercial fishing businesses are nonemployers. Further, even if the 2012
non-employer data is released and
NMFS generates new estimates of the
various industry factors, NMFS would
still not be able to determine what
standards are implied by the new
estimates until SBA generates an
updated version of Table 2 in its
proposed rule to change the size
standards for the finfish, shellfish, and
other marine fishing sectors of the
commercial fishing industry (77 FR
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55755) using 2012 rather than 2007
data.
As previously stated, SBA recently
implemented a rule to adjust all of its
receipts based size standards for
inflation using the chain-type price
index for the U.S. Gross Domestic
Product (GDP price index) (79 FR
33647, June 12, 2014). According to that
rule, for all industries with a noninflation-adjusted size standard of $10
million, the new inflation-adjusted size
standard is $11 million.
Thus, this rule proposes to establish
a small business size standard of $11
million for all businesses in the
commercial fishing industry (NAICS
11411) for RFA compliance purposes
only. This single size standard for
commercial fishing businesses would be
used in all RFA analyses conducted in
support of NMFS’ regulatory actions.
Establishing this single size standard
would simplify the RFA analyses done
in support of NMFS’ rules, better meet
the RFA’s intent by more accurately
representing expected disproportionate
effects of NMFS’ rules between small
and large commercial fishing
businesses, create a standard that more
accurately reflects the size distribution
of all businesses in the commercial
fishing industry, and allow NMFS to
determine when changes to the standard
are necessary and appropriate.
Consistent with SBA’s review
requirements under the Small Business
Jobs Act of 2010 and 13 CFR 121.102,
NMFS also proposes to review this
standard at least once every 5 years to
determine if a change is warranted. A
change may be warranted because of
changes in industry structure, market
conditions, inflation, or other relevant
factors. The reviews for these potential
reasons will be conducted
simultaneously in order to minimize the
frequency of changes to the standard
and additional rulemakings.
Consistent with the requirements in
13 CFR 121.903(c), NMFS will formally
consult SBA’s Office of Advocacy to
ensure their concurrence with this
proposed action.
Classification
Pursuant to section 601(3) of the RFA,
the NMFS Assistant Administrator has
determined that this proposed rule is
consistent with the RFA and other
applicable law, subject to further
consideration after public comment.
This proposed rule has been
determined by the Office of
Management and Budget to be
significant for purposes of Executive
Order 12866 because it raises novel
legal or policy issues arising out of legal
mandates, the President’s priorities, or
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the principles set forth in the Executive
Order.
The Chief Counsel for Regulation of
the Department of Commerce certified
to the Chief Counsel for Advocacy of the
SBA that this rule, if adopted, would
not have a significant economic impact
on a substantial number of small
entities. The factual basis for this
determination is as follows.
The purposes of the rule are to
establish a single small business size
standard of $11 million in annual gross
receipts for the commercial fishing
industry (NAICS 11411), for RFA
compliance purposes only, and a
requirement for NMFS to assess at least
once every 5 years whether this size
standard should be changed. The
objectives of the rule are to simplify the
RFA analyses done in support of NMFS’
rules, better meet the RFA’s intent by
more accurately representing expected
disproportionate effects of NMFS’ rules
between small and large businesses,
create a standard that more accurately
reflects the size distribution of all
businesses in the commercial fishing
industry, and allow NMFS to determine
when changes to the standard are
necessary and appropriate. The RFA
and 13 CFR 121.903(c) serve as the legal
basis for the rule.
The actions in this rule are
administrative in nature and thus would
only potentially generate indirect
economic effects on commercial fishing
businesses. Specifically, the proposed
size standard would only affect how
NMFS and the Councils determine
whether commercial fishing businesses
directly regulated by future regulatory
actions are small or large, whether and
to what extent those actions have
disproportionate economic impacts on
those two classes of businesses, and
when it is appropriate for NMFS to
change the standard in the future. This
rule would not impose any new
requirements on commercial fishing
businesses. Therefore, no small entities
would be directly regulated by this rule.
This rule would not be expected to
affect the behavior or operations of
commercial fishing businesses. As such,
this rule is not expected to generate any
direct economic effects on commercial
fishing businesses.
Based on the information above, a
reduction in profits for a substantial
number of small entities is not expected.
Because this rule, if implemented, is not
expected to have a significant economic
impact on a substantial number of small
entities, an IRFA is not required and
none has been prepared.
No duplicative, overlapping, or
conflicting Federal rules have been
identified. This rule would not establish
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§ 200.1
any new reporting or record-keeping
requirements.
List of Subjects in 50 CFR Part 200
Commercial fishing, Small businesses.
Dated: September 14, 2015.
Samuel D. Rauch III,
Deputy Assistant Administrator for
Regulatory Programs, National Marine
Fisheries Service.
For the reasons set out in the
preamble, NMFS proposes to add 50
CFR part 200 under subchapter A to
read as follows:
SUBCHAPTER A—GENERAL PROVISIONS
PART 200—SMALL BUSINESS SIZE
STANDARDS ESTABLISHED BY NMFS
FOR REGULATORY FLEXIBILITY ACT
COMPLIANCE PURPOSES ONLY
Sec.
200.1 Purpose and scope.
200.2 Small business size standards and
frequency of review.
Purpose and scope.
(a) This part sets forth the National
Marine Fisheries Service (NMFS) small
business size standards for NMFS to use
in conducting Regulatory Flexibility Act
(RFA) analyses for NMFS actions
subject to the RFA. This part also sets
forth the timeframe for NMFS to review
its small business size standards.
(b) NMFS has established the
alternative size standards in this part,
for RFA compliance purposes only, in
order to simplify the RFA analyses done
in support of NMFS’ rules, better meet
the RFA’s intent by more accurately
representing expected disproportionate
effects of NMFS’ rules between small
and large businesses, create a standard
that more accurately reflects the size
distribution of all businesses in the
industry, and allow NMFS to determine
when changes to the standard are
necessary and appropriate.
tkelley on DSK3SPTVN1PROD with PROPOSALS
Authority: 5 U.S.C. 601 et seq.
VerDate Sep<11>2014
17:14 Sep 17, 2015
Jkt 235001
§ 200.2 Small business size standards and
frequency of review.
(a) NMFS’ small business size
standard for businesses, including their
affiliates, whose primary industry is
commercial fishing is $11 million in
annual gross receipts. This standard
applies to all businesses classified
under North American Industry
Classification System (NAICS) code
11411 for commercial fishing, including
all businesses classified as commercial
finfish fishing (NAICS 114111),
commercial shellfish fishing (NAICS
114112), and other commercial marine
fishing (NAICS 114119) businesses.
(b) NMFS will review each of the
small business size standards in
paragraph (a) of this section at least
once every 5 years to determine if a
change is warranted. A change may be
warranted because of changes in
industry structure, market conditions,
inflation, or other relevant factors.
[FR Doc. 2015–23375 Filed 9–17–15; 8:45 am]
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]]>Agencies
[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Proposed Rules]
[Pages 56432-56436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23375]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 200
[Docket No. 150227193-5193-01]
RIN 0648-BE92
Establish a Single Small Business Size Standard for Commercial
Fishing Businesses
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Proposed rule; request for comment.
-----------------------------------------------------------------------
SUMMARY: NMFS proposes to establish a small business size standard of
$11 million in annual gross receipts for all businesses in the
commercial fishing industry (NAICS 11411), for Regulatory Flexibility
Act (RFA) compliance purposes only. The proposed $11 million standard
would be used in RFA analyses in place of the U.S. Small Business
Administration's (SBA) current standards of $20.5 million, $5.5
million, and $7.5 million for the finfish (NAICS 114111), shellfish
(NAICS 114112), and other marine fishing (NAICS 114119) sectors of the
U.S. commercial fishing industry, respectively. Establishing a single
size standard of $11 million for the commercial fishing industry would
simplify the RFA analyses done in support of NMFS' rules, better meet
the RFA's intent by more accurately representing expected
disproportionate effects of NMFS' rules between small and large
businesses, create a standard that more accurately reflects the size
distribution of all businesses in the commercial fishing industry, and
allow NMFS to determine when changes to the standard are necessary and
appropriate.
DATES: Comments must be received by October 19, 2015.
ADDRESSES: You may submit comments on this document, identified by
NOAA-NMFS-2015-0061, by either of the following methods:
Electronic Submission: Submit all electronic public
comments via the Federal e-Rulemaking Portal. Go to
www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2015-0061, click the
``Comment Now!'' icon, complete the required fields, and enter or
attach your comments.
Mail: Send written comments to Mike Travis, NOAA Fisheries
Service,
[[Page 56433]]
Southeast Regional Office, 263 13th Ave. S., St. Petersburg, FL 33701.
Instructions: Comments sent by any other method, to any other
address or individual, or received after the end of the comment period,
may not be considered by NMFS. All comments received are a part of the
public record and will generally be posted for public viewing on
www.regulations.gov without change. All personal identifying
information (e.g., name, address, etc.), confidential business
information, or otherwise sensitive information submitted voluntarily
by the sender will be publicly accessible. NMFS will accept anonymous
comments (enter ``N/A'' in the required fields if you wish to remain
anonymous), and will accept attachments to electronic comments in
Microsoft Word, Excel, or Adobe PDF file formats only.
FOR FURTHER INFORMATION CONTACT: Mike Travis, Industry Economist, at
(727) 209-5982.
SUPPLEMENTARY INFORMATION:
Background
Prior to 2013, SBA had set the small business size standard for all
sectors of the commercial fishing industry at the same amount. Since
2005, this standard had been $4 million in annual gross receipts
(revenues). Effective July 22, 2013, SBA established significantly
different and higher size standards for the three separate sectors of
the industry (78 FR 37398, June 20, 2013): $19 million for commercial
finfish fishing businesses (NAICS 114111), $5.0 million for commercial
shellfish fishing businesses (NAICS 114112), and $7.0 million for other
commercial marine fishing businesses (NAICS 114119). These standards
were subsequently adjusted for inflation to $20.5 million, $5.5
million, and $7.5 million, respectively, via an interim final rule,
effective July 14, 2014 (79 FR 33647, June 12, 2014). The Small
Business Jobs Act of 2010 requires SBA to review all size standards
every five years to account for changes in industry structure and
market conditions. SBA is also required to assess the impact of
inflation on its monetary-based size standards at least once every five
years (13 CFR 121.102). However, as reflected by the timing of the two
recent rulemakings adjusting the size standards, SBA is not required to
conduct the reviews for these two purposes simultaneously. Thus, these
size standards are likely to change on a regular basis.
Under the RFA, an agency must prepare an initial and final
regulatory flexibility analysis (IRFA/FRFA) for each proposed and final
rule, respectively, unless it certifies that a rule will not have a
significant economic impact on a substantial number of small entities.
Agencies generally rely on the SBA size standards to identify small
entities for RFA purposes. For NMFS, rulemaking activities that have
been impacted by changes to the size standards for defining ``small''
businesses include, but are not limited to, regulatory actions and
analyses undertaken pursuant to the Magnuson-Stevens Act (MSA),
Endangered Species Act (ESA), Marine Mammal Protection Act (MMPA), and
National Environmental Policy Act (NEPA). Between 2012 and 2014, NMFS
published an average of 285 final rules per year, more than 40 percent
of which required an RFA analysis, and a majority of those directly
regulated commercial fishing businesses. Thus, NMFS' costs of complying
with the RFA are significant even when the small business size
standards are stable, and those costs increase substantially when the
standards are changing on a recurring basis.
NMFS and the Regional Fishery Management Councils (Councils) have
encountered significant difficulties implementing and adjusting to the
new standards because: (1) The change was from a single size standard
for all commercial fishing businesses to three very different
standards, (2) many commercial fishing businesses participate in both
finfish and shellfish fishing activities, making it unclear which
standard to apply in the RFA analyses, and (3) a number of rules
simultaneously implement regulations under fishery management plans for
both finfish and shellfish species (for e.g., 76 FR 82044, December 29,
2011; 76 FR 82414, December 30, 2011; 77 FR 15916, March 26, 2012; and
80 FR 41472, July 15, 2015), again making it unclear which standard to
apply in the RFA analyses.
Furthermore, one of the RFA's primary purposes is to determine if
proposed regulations are expected to have disproportionate economic
impacts on small businesses relative to large businesses and, if so, to
consider alternatives that would minimize any significant adverse
economic impacts on small businesses. Under SBA's current standards for
commercial fishing businesses, practically all commercial fishing
businesses, and particularly commercial finfish fishing businesses,
would likely be determined to be small. Thus, in their RFA analyses,
NMFS and the Councils would not be able to discern, consider, or
address any disproportionate economic impacts that various regulatory
alternatives might have on businesses NMFS and the Councils think are
``small'' in the commercial fishing industry. Such an outcome
effectively precludes NMFS from fulfilling one of the RFA's primary
purposes and thus is not desirable.
Section 601(3) of the RFA provides that an agency, after
consultation with SBA's Office of Advocacy and after an opportunity for
public comment, may establish one or more definitions of ``small
business'' which are appropriate to the activities of the agency and
publish such definition(s) in the Federal Register. Further, 13 CFR
121.903(c) states that ``where the agency head is developing a size
standard for the sole purpose of performing a Regulatory Flexibility
Analysis pursuant to section 601(3) of the Regulatory Flexibility Act,
the department or agency may, after consultation with the SBA Office of
Advocacy, establish a size standard different from SBA's which is more
appropriate for such analysis.'' NMFS and the Department of Commerce
General Counsel's Office had preliminary discussions with SBA's Office
of Advocacy about these provisions, and SBA was supportive of NMFS
using RFA section 601(3) and 13 CFR 121.903(c) to establish its own
size standard for the commercial fishing industry for purposes of RFA
analyses only.
SBA has also previously expressed support for the idea of creating
a single size standard in instances where industries are closely
related, as is the case for the commercial finfish and shellfish
fishing industries. In its proposed rule to change the size standard
for businesses in manufacturing industries (79 FR 54146, Sept. 10,
2014), SBA stated: ``To simplify size standards and for other reasons,
SBA may propose a common size standard for closely related industries.
Although the size standard analysis may support a separate size
standard for each industry, SBA believes that establishing different
size standards for closely related industries may not always be
appropriate. For example, in cases where many of the same businesses
operate in the same multiple industries, a common size standard for
those industries might better reflect the Federal marketplace. This
might also make size standards among related industries more consistent
than separate size standards for each of those industries.'' (79 FR
54146, 54150, Sept. 10, 2014).
NMFS has determined that the data used by SBA's Office of Size
Standards to develop the new standards are incomplete and, as a result,
not
[[Page 56434]]
representative of all commercial fishing businesses. Specifically, the
data used by SBA only account for commercial fishing businesses that
have employees (i.e., employer firms), and thus do not include
commercial fishing businesses that do not have employees (i.e., non-
employer firms). Non-employer commercial fishing businesses typically
pay their self-employed crew a percentage of the gross or net revenue
on each commercial fishing trip rather than a standard wage or salary,
and thus self-employed crew are not considered employees. Commercial
fishing businesses with employees represent only about 3 percent of all
commercial fishing businesses, while the other 97 percent are non-
employer firms.
Further, according to SBA, annual gross revenues for finfish and
shellfish commercial fishing businesses with employees average $1.6 and
$0.6 million, respectively. Conversely, NMFS determined the annual
gross revenues for commercial fishing businesses without employees is
only about $44,000 on average. Thus, NMFS concluded the exclusion of
commercial fishing businesses without employees is primarily
responsible for the magnitude of the size standard increases,
particularly for finfish fishing businesses, and the standards would
have been very different if SBA had used data for all commercial
fishing businesses. Because the size standards apply to all commercial
fishing businesses, not just those with employees, when used to analyze
the economic impacts of management actions on directly regulated
entities under the RFA, NMFS thinks it is more appropriate to have size
standards for RFA purposes that are based on all commercial fishing
businesses.
In conjunction with its recent review of size standards, SBA
developed a ``Size Standards Methodology'' for establishing, reviewing,
and modifying size standards, where necessary. SBA included it as a
supporting document in the electronic docket of the September 11, 2012,
proposed rule to change the size standards for the three sectors of the
commercial fishing industry (77 FR 55755) at www.regulations.gov.
Application of this new methodology resulted in the significantly
different size standards for the three separate sectors of the
industry. NMFS referenced this document in developing the proposed size
standard in this proposed rule. Consistent with that methodology, SBA
used the following industry factors to establish the current size
standards for NAICS Sector 11 (Agriculture, Forestry, Fishing, and
Hunting): Average firm size, as measured by simple average receipts and
weighted average receipts; average assets size; the four-firm
concentration ratio (i.e., the percentage of receipts accounted for by
the four largest firms in the industry); and the Gini coefficient,
which measures the degree of inequality in the distribution of firms by
receipts size class under SBA's approach.
SBA's primary source of industry data used in the rule to establish
the new size standards for the three sectors of the commercial fishing
industry was a special tabulation of the 2007 County Business Patterns
data from the U.S. Bureau of Census (Census Bureau). This special
tabulation provided SBA with data on the number of employer firms,
number of establishments, number of employees, annual payroll, and
annual receipts of companies by U.S. industry (6-digit NAICS code).
These data were arrayed by various classes of firms' size based on the
overall number of employees and gross receipts of the entire enterprise
(all establishments and affiliated firms) from all industries. These
data allowed SBA to estimate average firm size, the four-firm
concentration ratio, and the Gini coefficient.
SBA's Office of Size Standards provided these data upon request to
NMFS. NMFS subsequently requested and received from the Census Bureau
comparable data for non-employer businesses. NMFS aggregated data to
the industry level (i.e., NAICS 11411) for employer and non-employer
businesses and then combined these data. Although data confidentiality
was not an issue with the non-employer data, prior to aggregation NMFS
had to estimate total gross receipts in certain receipts classes for
employer firms where the Census Bureau determined the data were
confidential and thus could not be released. The combined data provide
a complete accounting of the distribution of businesses and receipts by
receipt size class category for all commercial fishing businesses. NMFS
used these data to generate estimates of certain industry factors
needed to establish a single size standard for the commercial fishing
businesses, consistent with SBA's methodology to the extent
practicable.
Specifically, NMFS used the data it received from SBA and the
Census Bureau to generate estimates of simple average receipts,
weighted average receipts, and the Gini coefficient. For simple average
receipts, each firm's share of the industry's total receipts is
weighted equally, whereas the shares of larger firms receive larger
weights in estimating weighted average receipts. Weighted average
receipts and the Gini coefficient were estimated using the equations
provided in SBA's Size Standards Methodology document. NMFS generated
the following estimates for the commercial fishing industry: $77,178
for simple average receipts, $12,322,365 for weighted average receipts,
and 0.755 for the Gini coefficient. Based on the information in Table 2
of SBA's proposed rule to change the size standards for the finfish,
shellfish, and other marine fishing sectors of the commercial fishing
industry (77 FR 55755), these estimates support size standards of $5
million, $5 million, and $19 million, respectively.
SBA also considers the average assets size of firms to be an
important factor in establishing a size standard. NMFS does not possess
and was not able to procure assets size data for non-employer
businesses. SBA has such data for employer firms in the finfish and
shellfish sectors, though not for employer firms in the other marine
fishing sector because of the very small number of firms in that
sector. The number of firms in the other marine fishing sector is very
small because it includes firms primarily involved in the harvest of
corals, sponges, reef associated plants (e.g., algae), and aquarium
trade species, whose allowable harvest levels are very small. However,
SBA had to purchase the assets size data for employer firms in the
finfish and shellfish sectors from a private source and thus could not
share the data with NMFS due to their proprietary nature. Therefore,
NMFS created an estimate based on data that SBA published in its
proposed rule, using the following approach.
According to SBA's proposed rule, the average assets sizes for the
finfish and shellfish commercial fishing sectors are $1.4 million and
$0.4 million, respectively. Finfish fishing firms and shellfish fishing
firms represent approximately 54 percent and 46 percent, respectively,
of the 2,039 employer firms in those two sectors combined. Based on
these percentages, the weighted average assets size of the combined
finfish and shellfish commercial fishing sectors is approximately $0.94
million. Based on Table 2 in SBA's proposed rule, this estimate
supports a $7 million size standard.
SBA does not consider the average receipts of the four largest
firms to be an important factor in establishing a size standard for
industries where the four-firm concentration ratio is below 40 percent
(i.e., receipts of the 4 largest firms account for less than 40 percent
of the total receipts). According to the data
[[Page 56435]]
SBA provided to NMFS, the four largest firms in the commercial fishing
industry are commercial finfish fishing businesses. Within the finfish
sector, these firms only account for 29 percent of total receipts
within that sector. Therefore, within the larger commercial fishing
industry as a whole, the percentage of receipts they account for must
be less than 29 percent. Because the four largest firms account for
less than 40 percent of the total receipts for the commercial fishing
industry, consistent with SBA's methodology, NMFS did not use the four-
firm concentration ratio in establishing a single size standard for the
commercial fishing industry.
According to SBA's methodology, all factors should be weighted
equally. Therefore, NMFS averaged the standards supported by the simple
average receipts ($5 million), weighted average receipts ($5 million),
Gini coefficient ($19 million), and average assets size ($7 million)
estimates, which results in a size standard of $9 million. However, SBA
only allowed for eight size standards in its final rule (79 FR 54146,
September 10, 2014): $5 million, $7 million, $10 million, $14 million,
$19 million, $25.5 million, $30 million, and $35.5 million. When the
estimated size standard is not equivalent to one of these eight
standards, SBA rounds up to the next highest size standard. For NMFS'
estimated $9 million size standard, the next highest size standard
would be $10 million. If the average assets size factor is not
included, because it is based on aggregated employer data only rather
than a combination of employer and non-employer data, the average of
the other 3 factors is $9.67 million. Thus, the next highest size
standard would still be $10 million.
NMFS is aware the Census Bureau has recently released the 2012
County Business Patterns data for employer firms. However, 2012 data
for non-employer firms has not yet been released. As previously
discussed, NMFS does not think it is prudent to propose a size standard
based only on employer data because 97 percent of the commercial
fishing businesses are non-employers. Further, even if the 2012 non-
employer data is released and NMFS generates new estimates of the
various industry factors, NMFS would still not be able to determine
what standards are implied by the new estimates until SBA generates an
updated version of Table 2 in its proposed rule to change the size
standards for the finfish, shellfish, and other marine fishing sectors
of the commercial fishing industry (77 FR 55755) using 2012 rather than
2007 data.
As previously stated, SBA recently implemented a rule to adjust all
of its receipts based size standards for inflation using the chain-type
price index for the U.S. Gross Domestic Product (GDP price index) (79
FR 33647, June 12, 2014). According to that rule, for all industries
with a non-inflation-adjusted size standard of $10 million, the new
inflation-adjusted size standard is $11 million.
Thus, this rule proposes to establish a small business size
standard of $11 million for all businesses in the commercial fishing
industry (NAICS 11411) for RFA compliance purposes only. This single
size standard for commercial fishing businesses would be used in all
RFA analyses conducted in support of NMFS' regulatory actions.
Establishing this single size standard would simplify the RFA analyses
done in support of NMFS' rules, better meet the RFA's intent by more
accurately representing expected disproportionate effects of NMFS'
rules between small and large commercial fishing businesses, create a
standard that more accurately reflects the size distribution of all
businesses in the commercial fishing industry, and allow NMFS to
determine when changes to the standard are necessary and appropriate.
Consistent with SBA's review requirements under the Small Business
Jobs Act of 2010 and 13 CFR 121.102, NMFS also proposes to review this
standard at least once every 5 years to determine if a change is
warranted. A change may be warranted because of changes in industry
structure, market conditions, inflation, or other relevant factors. The
reviews for these potential reasons will be conducted simultaneously in
order to minimize the frequency of changes to the standard and
additional rulemakings.
Consistent with the requirements in 13 CFR 121.903(c), NMFS will
formally consult SBA's Office of Advocacy to ensure their concurrence
with this proposed action.
Classification
Pursuant to section 601(3) of the RFA, the NMFS Assistant
Administrator has determined that this proposed rule is consistent with
the RFA and other applicable law, subject to further consideration
after public comment.
This proposed rule has been determined by the Office of Management
and Budget to be significant for purposes of Executive Order 12866
because it raises novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
The Chief Counsel for Regulation of the Department of Commerce
certified to the Chief Counsel for Advocacy of the SBA that this rule,
if adopted, would not have a significant economic impact on a
substantial number of small entities. The factual basis for this
determination is as follows.
The purposes of the rule are to establish a single small business
size standard of $11 million in annual gross receipts for the
commercial fishing industry (NAICS 11411), for RFA compliance purposes
only, and a requirement for NMFS to assess at least once every 5 years
whether this size standard should be changed. The objectives of the
rule are to simplify the RFA analyses done in support of NMFS' rules,
better meet the RFA's intent by more accurately representing expected
disproportionate effects of NMFS' rules between small and large
businesses, create a standard that more accurately reflects the size
distribution of all businesses in the commercial fishing industry, and
allow NMFS to determine when changes to the standard are necessary and
appropriate. The RFA and 13 CFR 121.903(c) serve as the legal basis for
the rule.
The actions in this rule are administrative in nature and thus
would only potentially generate indirect economic effects on commercial
fishing businesses. Specifically, the proposed size standard would only
affect how NMFS and the Councils determine whether commercial fishing
businesses directly regulated by future regulatory actions are small or
large, whether and to what extent those actions have disproportionate
economic impacts on those two classes of businesses, and when it is
appropriate for NMFS to change the standard in the future. This rule
would not impose any new requirements on commercial fishing businesses.
Therefore, no small entities would be directly regulated by this rule.
This rule would not be expected to affect the behavior or operations of
commercial fishing businesses. As such, this rule is not expected to
generate any direct economic effects on commercial fishing businesses.
Based on the information above, a reduction in profits for a
substantial number of small entities is not expected. Because this
rule, if implemented, is not expected to have a significant economic
impact on a substantial number of small entities, an IRFA is not
required and none has been prepared.
No duplicative, overlapping, or conflicting Federal rules have been
identified. This rule would not establish
[[Page 56436]]
any new reporting or record-keeping requirements.
List of Subjects in 50 CFR Part 200
Commercial fishing, Small businesses.
Dated: September 14, 2015.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
For the reasons set out in the preamble, NMFS proposes to add 50
CFR part 200 under subchapter A to read as follows:
SUBCHAPTER A--GENERAL PROVISIONS
PART 200--SMALL BUSINESS SIZE STANDARDS ESTABLISHED BY NMFS FOR
REGULATORY FLEXIBILITY ACT COMPLIANCE PURPOSES ONLY
Sec.
200.1 Purpose and scope.
200.2 Small business size standards and frequency of review.
Authority: 5 U.S.C. 601 et seq.
Sec. 200.1 Purpose and scope.
(a) This part sets forth the National Marine Fisheries Service
(NMFS) small business size standards for NMFS to use in conducting
Regulatory Flexibility Act (RFA) analyses for NMFS actions subject to
the RFA. This part also sets forth the timeframe for NMFS to review its
small business size standards.
(b) NMFS has established the alternative size standards in this
part, for RFA compliance purposes only, in order to simplify the RFA
analyses done in support of NMFS' rules, better meet the RFA's intent
by more accurately representing expected disproportionate effects of
NMFS' rules between small and large businesses, create a standard that
more accurately reflects the size distribution of all businesses in the
industry, and allow NMFS to determine when changes to the standard are
necessary and appropriate.
Sec. 200.2 Small business size standards and frequency of review.
(a) NMFS' small business size standard for businesses, including
their affiliates, whose primary industry is commercial fishing is $11
million in annual gross receipts. This standard applies to all
businesses classified under North American Industry Classification
System (NAICS) code 11411 for commercial fishing, including all
businesses classified as commercial finfish fishing (NAICS 114111),
commercial shellfish fishing (NAICS 114112), and other commercial
marine fishing (NAICS 114119) businesses.
(b) NMFS will review each of the small business size standards in
paragraph (a) of this section at least once every 5 years to determine
if a change is warranted. A change may be warranted because of changes
in industry structure, market conditions, inflation, or other relevant
factors.
[FR Doc. 2015-23375 Filed 9-17-15; 8:45 am]
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