Use of Federal Surplus Property for Veteran-Owned Small Businesses and Small Businesses in Disaster Areas and Puerto Rico, 69120-69126 [2020-22539]

Agencies

• SMALL BUSINESS ADMINISTRATION

[Federal Register Volume 85, Number 212 (Monday, November 2, 2020)]
[Rules and Regulations]
[Pages 69120-69126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22539]


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SMALL BUSINESS ADMINISTRATION

13 CFR Parts 124, 125, and 129

RIN 3245-AH18


Use of Federal Surplus Property for Veteran-Owned Small 
Businesses and Small Businesses in Disaster Areas and Puerto Rico

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: The U.S. Small Business Administration (SBA) is amending its 
regulations to expand access to the U.S. General Services 
Administration's (GSA) Federal Surplus Personal Property Donation 
Program for certain small business concerns in accordance with the 
Recovery Improvements for Small Entities After Disaster Act of 2015 
(RISE Act), the Veterans Small Business Enhancement Act, and the John 
S. McCain National Defense Authorization Act for Fiscal Year 2019 
(NDAA). These Acts provide that small businesses in disaster areas, 
veteran-owned small businesses, and small business concerns located in 
Puerto Rico, respectively, should be considered for surplus personal 
property distributions. SBA, in coordination with GSA, is enacting 
certain procedures for determining which firms may participate in GSA's 
existing surplus personal property program, and under what conditions.

DATES: This rule is effective December 2, 2020.

FOR FURTHER INFORMATION CONTACT: Donna Fudge, Office of Policy, 
Planning and Liaison, 409 Third Street SW, Washington, DC 20416.

SUPPLEMENTARY INFORMATION:

General Background

    On January 21, 2020, SBA issued a proposed rule to implement three 
new statutory programs regarding the transfer of surplus personal 
property to certain small businesses. 85 FR 3273. As noted in SBA's 
proposed rule, GSA operates the Federal Surplus Personal Property 
Donation Program (Donation Program) under the Federal Property and 
Administrative Services Act of 1949, 63 Stat. 377, as amended, and 
other applicable laws. See 41 CFR part 102-37. Currently, eligible 
state and local government agencies and nonprofit organizations can 
obtain personal property that the Federal Government no longer needs 
through the Donation Program. More information is available on the GSA 
website at https://www.gsa.gov/buying-selling/government-property-for-sale-or-disposal/personal-property-for-reuse-sale/for-state-agencies-and-public-organizations/.
    SBA received 32 comments. Of those 32 comments, 30 were supportive. 
SBA received several unsupportive comments that requested SBA not adopt 
clear statutory requirements. SBA has noted these comments and has 
provided a more thorough response to each of those comments below.

The Veterans Small Business Enhancement Act

    The Veterans Small Business Enhancement Act, Public Law 115-416 
(January 2, 2019), codified in the Small Business Act at 15 U.S.C 
657b(g), provides that veteran-owned small businesses should have 
access to surplus government personal property. SBA is adding a new 
subpart F, containing Sec.  125.100, to 13 CFR part 125 to implement 
these changes.
    SBA is adding this subpart to detail the new statutory authority. 
As noted in SBA's proposed rule, GSA and the State Agencies for Surplus 
Property (SASPs) already maintain a compliance and oversight role with 
regard the distribution of surplus personal property. As such, veteran-
owned small business concerns that receive surplus personal property 
will generally follow the same guidelines and procedures as other 
recipients through GSA's Donation Program.
    The language added in Sec.  125.100(a) references the regulations 
that govern the GSA Donation Program, and the requirements that 
concerns will need to meet to use the Donation Program. There were no 
comments on this paragraph and language is being adopted as proposed.
    SBA received three comments on the proposed language for Sec.  
125.100(b)(1). For this section, SBA proposed language to incorporate 
the requirement that a concern will need to be verified by the 
Department of Veterans Affairs (VA) as a small business owned and 
controlled by veterans in order to be eligible for the Donation 
Program. One commenter agreed with SBA's proposed regulation. Two 
commenters requested that SBA remove the requirement regarding 
verification by the VA. The commenters requested that SBA drop this 
requirement because they believed it creates an obstacle to 
participation that could limit the number of small businesses that use 
the Donation Program. As noted in the proposed rule, the requirement 
that participants be verified by the VA comes directly from the Small 
Business Act and is a statutory requirement. The statutory language 
states that access to the Donation Program is available only to ``to 
small business concerns owned and controlled by veterans (as verified 
by the Secretary of Veterans Affairs under section 8127 of title 38, 
United States Code)''. 15 U.S.C. 657b(g)(2). SBA does not have the 
authority to disregard clear statutory language when promulgating 
regulations and program requirements, and therefore, SBA will not be 
removing this requirement.
    SBA is adding Sec.  125.100(c) to provide the requirements for the 
use of surplus personal property received, and the repercussions for 
misusing the surplus personal property. The proposed language 
references GSA and SASP guidelines for use of surplus personal property 
because, as mentioned above, veteran-owned small businesses will be 
treated similarly to other recipients with regard to the use, 
maintenance, and retention of surplus personal property. SBA received 
one comment on the proposed language. This comment requested that the 
final rule provide more specificity and detail regarding

[[Page 69121]]

appropriate use of received property. SBA has reviewed the language of 
the proposed regulation. The proposed language made clear that the 
property needed to be used for normal business purposes of the business 
acquiring the property. The rule as proposed did not allow for the 
personal use of the property or the transfer of the property to other 
businesses. In addition, the proposed language is similar to language 
currently used for SBA's 8(a) Business Development (BD) program. 13 
C.F.R Sec.  124.405(c). As such, SBA is not making any changes and is 
adopting the language as proposed.
    This commenter also raised concerns about the proposed language 
concerning the return of surplus property. SBA has consulted with GSA 
about this comment and believes that the proposed language is 
consistent with Federal Management Regulations on the issue. As such, 
SBA does not believe that the proposed language puts potential 
recipients or SASPs in a position substantially different than other 
potential donees. Given these factors, SBA has decided to adopt the 
language as proposed.
    SBA is adding Sec.  125.100(d) to provide notice that there are 
costs associated with receiving the surplus personal property. These 
costs will be calculated by the individual SASP pursuant to 41 CFR part 
102-37, Appendix B(e), and the SASP's State Plan of Operation. Veteran-
owned small business concerns will be treated similarly to other 
recipients. SBA did not receive any comments on this provision and 
adopts it as proposed.
    SBA proposed to add Sec.  125.100(e) to provide notice of the type 
of title that veteran-owned small business concerns will receive. Firms 
will be receiving conditional title, and full title will transfer when 
they have met all the requirements of GSA and the SASP. As noted 
earlier, this procedure will have veteran-owned small business concerns 
treated in a similar manner to other recipients of surplus personal 
property through GSA's Donation Program. SBA received one comment on 
this specific issue. The commenter asked whether veteran-owned 
companies would have the same retention requirements as other donees. 
As noted in the proposed rule, SBA intends that veteran-owned 
businesses be treated in the same manner as other donees. SBA believes 
the current language will result in veteran-owned businesses having 
similar retention requirements to other donees, and addresses the 
commenter's concern about veteran-owned businesses potentially being 
treated differently. SBA is adopting the language as proposed.

RISE After Disaster Act

    Section 2105 of the RISE After Disaster Act authorizes SBA to 
transfer technology or surplus personal property to small business 
concerns located in disaster areas. In order to implement the changes 
made by section 2105, SBA is amending Sec.  124.405 and part 129 of its 
regulations.

Amendments to Part 124.405

    SBA is amending Sec.  124.405 to update the statutory reference 
contained in paragraph (a)(1). There were no comments and SBA is 
adopting the proposed language as is.
    SBA is also adding a new paragraph (b)(6) to provide that 8(a) BD 
program Participants are not eligible to receive surplus personal 
property under Sec.  124.405 if they have received surplus personal 
property under subpart A to part 129 as a small business concern 
located in a disaster area during the 2-year period beginning on the 
date on which the President declared the applicable major disaster. SBA 
did not receive any comments on this change and adopts the rule as 
proposed.
    In addition to the changes necessitated by section 2105, SBA is 
making several other changes to Sec.  124.405. SBA is changing the 
cross citation for the GSA and SASP procedures in Sec.  124.405(a)(1). 
SBA is also changing the language in paragraph (a)(2) of this section 
to remove the term ``donable'' and in its place provide more 
descriptive language, because ``donable'' is not a defined term in 
GSA's surplus personal property regulations. SBA did not receive any 
comments on these changes and adopts the rule as proposed.
    SBA is amending Sec.  124.405(b)(3) to add a reference to the 
nonprocurement debarment regulations contained in title 2 of the Code 
of Federal Regulations. SBA did not receive any comments on this change 
and adopts the rule as proposed.
    SBA is amending Sec.  124.405(c)(1) to provide clarity on how the 
program has been historically administered. The new language more 
clearly articulates the current policy and SBA believes it will lead to 
less confusion now that there are additional programs. SBA did not 
receive any comments on this change and adopts the rule as proposed.
    SBA is amending Sec.  124.405(d)(1) to update the cross references 
to GSA's regulations. SBA did not receive any comments on this change 
and adopts the rule as proposed.
    SBA is amending Sec.  124.405(f) to alter the method for 
transferring title. As noted in the proposed rule, this change will 
align the 8(a) BD program participant title terms with the other 
programs SBA is implementing, and with the general practice of GSA and 
the SASP, with regard to other donees. SBA did not receive any comments 
on this change and adopts the rule as proposed.

Amendments to Part 129

    Via the final rule, ``National Defense Authorization Acts of 2016 
and 2017, Recovery Improvements for Small Entities After Disaster Act 
of 2015, and Other Small Business Government Contracting'', SBA added 
part 129, Contracts For Small Businesses Located In Disaster Areas, to 
its regulations. 84 FR 65647 (November 29, 2019). To implement section 
2105 of the RISE After Disaster Act, SBA is now creating two subparts 
for part 129: Subpart A, titled, ``Contracts For Small Businesses 
Located In Disaster Areas'', and subpart B, titled, ``Surplus Personal 
Property for Small Businesses Located in Disaster Areas''. The new 
subpart A will contain the existing regulations in part 129. The new 
subpart B will address how a small business concern located in a 
disaster area can obtain surplus personal property and will contain two 
sections, Sec. Sec.  129.200 and 129.201. There were no comments 
regarding moving the noted regulations to the new subpart B. SBA is 
adding Sec.  129.200, containing a definition for ``covered period''. 
This term is being incorporated into SBA regulations as defined in the 
Small Business Act at 15 U.S.C. 636(j)(f)(13)(F)(ii)(I)(aa). SBA did 
not receive any comments on this change and adopts the regulation as 
proposed.
    SBA is adding Sec.  129.201 to implement the program for transfer 
of surplus personal property. SBA received one comment regarding the 
certification/verification of small firms. This commenter noted that 
8(a) firms and veteran-owned firms are certified by Government agencies 
and there is a method for verifying firms. The question raised was how 
a SASP should verify that a firm is small. In response to this comment, 
SBA is adding a requirement in Sec.  129.201(b)(2) that any firm 
seeking to receive property though this program is required to register 
in SAM.gov, or a successor system, and officially certify its status as 
a small business under the size standard corresponding to its primary 
NAICS code. In addition, SASPs and GSA may rely on these 
certifications. SBA also added similar language to Sec.  129.301(b) for 
consistency.
    SBA received two comments on Sec.  129.201(c), which requires that 
firms should only receive property in states the business are located. 
One commenter did not think limiting

[[Page 69122]]

available surplus property to only businesses located in the state of 
the emergency was reasonable and did not account for businesses that 
may want to move into the area after a disaster. The other commenter 
agreed with the rule as written and thought it would be difficult for 
SASP to oversee and monitor property transferred out of their state. 
SBA believes the intent of the statute was to assist businesses located 
in a disaster area. Also, SBA believes that the suggested change by the 
commenter, while not being in line with the intent of the statute, 
would also lead to more burdens on small businesses and SASPs that 
would need to keep track and report on equipment moving out of the 
state. As such, SBA adopts the rule as proposed.

John S. McCain National Defense Authorization Act for Fiscal Year 2019 
(NDAA)

    Section 861 of the John S. McCain National Defense Authorization 
Act for Fiscal Year 2019 (NDAA), provides that SBA may transfer 
technology or surplus personal property to a small business concern 
located in Puerto Rico if the small business meets the requirements for 
such a transfer, without regard to whether that small business is a 
participant in the 8(a) BD program. 15 U.S.C. 636(j)(13)(F)(iii); 
Public Law 115-232 (August 13, 2018). SBA is adding a new subpart C, 
titled, ``Surplus Personal Property for Small Businesses Located in 
Puerto Rico'', to part 129 to incorporate these changes. The new 
subpart will include two sections, Sec. Sec.  129.300 and 301.
    SBA is adding two new definitions via the new Sec.  129.300. 
Specifically, SBA will incorporate the term ``covered period'' as 
defined at 15 U.S.C. 636(j)(13)(F)(iii)(I). SBA noted in the proposed 
rule, and is reiterating here, that this definition for ``covered 
period'' is different than the definition used in the new Sec.  
129.200. The two terms are defined separately in the Small Business 
Act, and therefore SBA is adopting the language from the Act, as is, 
for each program. SBA did not receive any comments on this definition 
and adopts the regulation as proposed. The new Sec.  129.300 also 
provides a definition for the term, ``located in Puerto Rico''. SBA did 
not receive any comments on this definition and adopts the regulation 
as proposed.
    SBA is adding Sec.  129.301 to implement the program for transfer 
of surplus personal property for small business concerns located in 
Puerto Rico. SBA did not receive any comments on this section. However, 
SBA also made changes to Sec.  129.301(b) requiring firms to register 
in SAM.gov, and allowing for SASPs and GSA to rely on those 
certifications. SBA made the change in response to a comment on another 
section referenced above. SBA is adopting the rest of the section 
without any additional changes.

Compliance With Executive Orders 12866, 13563, 12988, 13132, 13771, the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612)

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not a ``significant'' regulatory action for purposes of 
Executive Order 12866. This is not a major rule under the Congressional 
Review Act, 5 U.S.C. 801, et seq.

Executive Order 13563

    This executive order directs agencies to, among other things: (a) 
Afford the public a meaningful opportunity to comment through the 
internet on proposed regulations, with a comment period that should 
generally consist of not less than 60 days; (b) provide for an ``open 
exchange'' of information among government officials, experts, 
stakeholders, and the public; and (c) seek the views of those who are 
likely to be affected by the rulemaking, even before issuing a notice 
of proposed rulemaking. As far as practicable or relevant, SBA 
considered these requirements in developing this rule.
    First, to the extent possible, SBA utilized the most recent data 
available in the Federal Procurement Data System--Next Generation, 
System for Award Management and Electronic Subcontracting Reporting 
System.
    Second, the proposed rule provided a 60-day comment period and was 
posted on www.regulations.gov (Docket ID: SBA-2020-0002) to allow the 
public to comment meaningfully on its provisions. In addition, the rule 
was discussed with GSA, the VA and with representatives of the National 
Association of State Agencies for Surplus Property.
    Third, the final rule implements statutory provisions and provides 
clarification requested by agencies and stakeholders. In addition, the 
amendments made via this rule will allow potential small business 
participants to participate in the GSA Program in as similar a manner 
as other participants do without additional regulatory requirements.

Executive Order 12988

    This action meets applicable standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. This action does 
not have any retroactive or preemptive effect.

Executive Order 13132

    A rule has implications for federalism under Executive Order 13132 
(Federalism), if it has a substantial direct effect on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. This rule would implement new policies allowing more 
small businesses to participate in the GSA Program administered by the 
SASPs. SBA has determined that this rule is consistent with the 
fundamental federalism principles and preemption requirements described 
in Executive Order 13132. We note that this rule would impose a 
reporting requirement specific to state agencies that participate in 
the Program to provide Federal technology or surplus personal property 
to small business concerns located in disaster areas and in Puerto 
Rico, as well as those designated as veteran-owned small businesses. 
However, given the potential for application and annual reporting 
burdens on the States and Territories, particularly Puerto Rico, SBA 
solicited comments on the issue of whether this rule has implications 
for federalism. SBA did receive a comment from a State Agency for 
Surplus Property and one from the National Association of State 
Agencies for Surplus Property. Both comments raised issues with details 
of the language of the regulations, but neither comment raised the 
issue of federalism.

Executive Order 13771

    This final rule is not expected to be subject to Executive Order 
13771 because the rule is a transfer rule. The benefits to small 
businesses in disaster areas, veteran-owned small businesses, and small 
business concerns located in Puerto Rico produced by this rule are a 
transfer of benefits from other entities who may have received the 
surplus personal property in their place.

Paperwork Reduction Act, 44 U.S.C. Ch. 35

    For the purposes of the Paperwork Reduction Act, SBA has determined 
that this rule will not impose new Government-wide reporting 
requirements on small business concerns. SBA and GSA have discussed the 
possible implication of the new regulations, and do not believe that 
any new requirements are being added to

[[Page 69123]]

GSA's Surplus Property Donation Program in addition to the requirements 
already in place for recipients of surplus personal property. GSA has 
specific forms for its Surplus Property Donation Program, but these 
proposed amendments will require no changes to those forms. See 
Standard Form 123, Transfer Order--Surplus Personal Property and 
Continuation Sheet, OMB Control Number 3090-0014 (expires March 31, 
2022).
    However, this rule does have a reporting requirement specific to 
state agencies that participate in the Program to provide Federal 
technology or surplus personal property to small business concerns 
located in disaster areas, designated as veteran-owned small 
businesses, or located in Puerto Rico. GSA already has a specific form 
to collect data from SASPs with regard to the Surplus Property Donation 
Program. See GSA Form 3040, State Agency Monthly Donation Report of 
Surplus Personal Property, OMB Control Number 3090-0112 (expires March 
31, 2022).
    Concerning the verification of veteran-owned small businesses, the 
VA already has the authority to verify qualified small business 
concerns. 38 CFR part 74. The VA is responsible for updating its public 
database of veteran-owned small businesses https://www.va.gov/osdbu/verification/. SASPs will rely on the accurately updated information to 
make decisions. Concerning the designation of a ``disaster area,'' the 
term is defined in the RISE Act as area for which the President has 
declared a major disaster during the covered period; namely, the 2-year 
period beginning on the date of the declaration of the applicable major 
disaster.
    SBA invited public comments on the proposed changes to the 
regulations requiring reporting from SASPs to the Federal Government. 
SBA received general comments from SASPs regarding the regulations and 
possible burdens related to oversight, but not specifically about the 
collection of data.

Regulatory Flexibility Act, 5 U.S.C. 601-612

    According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601, 
when an agency issues a rulemaking, it must prepare a regulatory 
flexibility analysis to address the impact of the rule on small 
entities. However, Section 605 of the RFA allows an agency to certify a 
rule, in lieu of preparing an analysis, if the rulemaking is not 
expected to have a significant economic impact on a substantial number 
of small entities. Although the rulemaking will impact all veteran-
owned small businesses and small business concerns in disaster areas 
and Puerto Rico, SBA does not believe the impact will be significant. 
After discussions with GSA, SBA believes that the rule will have an 
impact on a substantial number of entities, but that it will not have a 
significant economic impact. SBA reached this conclusion because the 
overall amount of donated personal property will not change. The rule 
will be implementing statutory changes with regard to the mix of how 
that property is distributed among the various eligible entities, but 
neither GSA or SBA believe that the overall impact on all relevant 
parties will be significant given that the regulation is not changing 
the total value of personal property distributed. SBA did not receive 
any comments on its analysis that there would not be significant 
economic impact.
    The Federal Surplus Personal Property Donation Program enables 
certain nonfederal organizations to obtain personal property that the 
Federal Government no longer needs. SASPs maintain the list of eligible 
organizations and these generally include: Public agencies, nonprofit 
educational and public health agencies, nonprofit and public programs 
for the elderly, public airports, and educational agencies of special 
interest to the Armed Services. More information on the list of 
eligible entities can be found at https://www.nasasp.org/findmystate.html. In fiscal year 2018, GSA donated through this program 
personal property with original acquisition value of $418,158,102. It 
should be noted that this reflects the value of the property when it 
was acquired, not when it was donated. SBA does not have accurate data 
to reflect the value at time of donation but does believe the value 
would be significantly less than the value at which the property was 
acquired.
    As noted above this final rule will have an effect on a substantial 
number of entities. First, it will have an impact on all the entities 
currently entitled to receive surplus property. SBA does not have a 
number for all those entities, but that number does include 
approximately 4,400 participants in SBA's 8(a) BD program. In addition 
to the entities already eligible for GSA's Program, these regulations 
will also have an impact on new entities that will be allowed to take 
part once these regulations go into effect. As of December 9, 2019, the 
VA has a total of 13,853 verified service-disabled veteran-owned small 
businesses and veteran-owned small businesses. Those businesses would 
be eligible to participate in GSA's Program under the regulations. 
Further, as of November 2019, SBA used data from the Federal 
Procurement Data System to identify approximately 3,400 small firms in 
Puerto Rico that are currently engaged in business with the Federal 
Government. Finally, according to the 2012 Economic Census there are 
approximately 7.7 million small businesses in the United States with 
employees. Under the regulations any small business located in a major 
disaster area may be eligible for the Donation Program. Under these 
regulations it is possible that any small business in the United States 
could potentially be a participant, because a major disaster could 
happen anywhere and at any time. This is a variable that cannot be 
known with certainty at this time. Therefore, SBA is operating under 
the assumption that all small businesses could be affected at some 
point in the future.
    The provisions of this regulation are implementing three distinct 
and new statutory provisions enacted by Congress and detailed above. 
Therefore, it is necessary for SBA to take some action in order to 
implement the new statutory requirements. SBA in conjunction with GSA 
has reviewed possible alternatives to this proposed regulation. One 
alternative discussed was for SBA and GSA to enter into one or several 
memorandums of understanding with regard to additional potential 
program participants. As noted above, participants in SBA's 8(a) BD 
program are currently able to participate in GSA's Program. 
Participation in the GSA Program by 8(a) BD participants is governed by 
both regulations issued by SBA and memorandums of understanding entered 
into by SBA, GSA, and the various SASPs. In implementing the new 
statutory provisions SBA believes that following the previous example 
of the 8(a) BD program is the best course of action and has therefore 
chosen to implement the statutes by regulation. Going through the 
formal regulation process allows SBA to craft the rules for the 
programs with direct input from the public, and to have a place within 
SBA's regulations that interested parties may go to review the 
requirements of the various programs. While SBA believes that the 
formal rule making process is the best alternative for implementation, 
SBA requested comments on the issue. SBA did not receive any comments 
on this issue.
    SBA is also aware that the statutes implementing these programs and 
other programs for distribution of surplus personal property do not use 
the same

[[Page 69124]]

language. SBA does not think that this regulation, or the various 
statutes conflict with each other. SBA believes that these regulations 
will help provide clarity around any issues or differences between the 
various statutes. That said, SBA requested comments from any impacted 
parties about whether the regulations as written conflict with other 
statutes or regulations. SBA did not receive any comments on this 
issue.
    There are no new compliance or other costs imposed by the rule on 
small business concerns. The rule expands the access to GSA's Program 
to more small business concerns under varying circumstances, without 
significant costs. The benefits to small businesses in disaster areas, 
veteran-owned small businesses, and small business concerns located in 
Puerto Rico produced by this rule are a transfer of benefits from other 
entities who may have received the surplus personal property in their 
place. The firms must adhere to certain regulations regarding 
certification or status relevant to designation as a small business 
concern.
    For the reasons discussed, SBA certifies that this rule would not 
have a significant economic impact on a substantial number of small 
business concerns.

List of Subjects

13 CFR Part 124

    Administrative practice and procedure, Government procurement, 
Government property, Hawaiian Natives, Indians-business and finance, 
Minority businesses, Reporting and recordkeeping requirements, Small 
businesses, Technical assistance.

13 CFR Part 125

    Government contracts, Government procurement, Reporting and 
recordkeeping requirements, Small businesses, Technical assistance, 
Veterans.

13 CFR Part 129

    Administrative practice and procedure, Government contracts, 
Government procurement, Government property, Reporting and 
recordkeeping requirements, Small businesses.

    Accordingly, for the reasons stated in the preamble, SBA amends 13 
CFR parts 124, 125, and 129 as follows:

PART 124--8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS 
STATUS DETERMINATIONS

0
1. The authority citation for part 124 continues to read as follows:

    Authority:  15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d), 644 and 
Pub. L. 99-661, Pub. L. 100-656, sec. 1207, Pub. L. 101-37, Pub. L. 
101-574, section 8021, Pub. L. 108-87, and 42 U.S.C. 9815.


0
2. Amend Sec.  124.405 by:
0
a. Revising the second sentence of paragraph (a)(1);
0
b. Revising paragraphs (a)(2) and (b)(3);
0
c. Adding paragraph (b)(6);
0
d. Revising the paragraph (c) subject heading and paragraph (c)(1) 
introductory text;
0
e. Revising the paragraph (d) subject heading and paragraph (d)(1); and
0
f. Revising paragraph (f).
    The revisions and addition read as follows:


Sec.  124.405  How does a Participant obtain Federal Government surplus 
property?

    (a) * * *
    (1) * * * The procedures set forth in 41 CFR part 102-37 and this 
section will be used to transfer surplus personal property to eligible 
Participants.
    (2) The surplus personal property which may be transferred to SASPs 
for further transfer to eligible Participants includes all personal 
property which has become available for donation pursuant to 41 CFR 
102-37.30.
    (b) * * *
    (3) Not be debarred, suspended, or declared ineligible under Title 
2 or Title 48 of the Code of Federal Regulations;
* * * * *
    (6) Not have received property under part 129, Subpart B of this 
chapter, during the applicable period described in that section.
    (c) Use of acquired surplus personal property. (1) Eligible 
Participants may acquire Federal surplus personal property from the 
SASP in the State(s) where the Participant is located and operates, 
provided the Participant represents in writing:
* * * * *
    (d) Procedures for acquiring Federal Government surplus personal 
property. (1) Participants may participate in the GSA Federal Surplus 
Personal Property Donation Program administered by the SASPs. See 
generally 41 CFR part 102-37 and/or Sec.  102-37.125 of that title.
* * * * *
    (f) Title. Upon execution of the SASP distribution document, the 
Participant has conditional title only to the surplus personal property 
during the applicable period of restriction. Full title to the surplus 
personal property will vest in the donee only after the donee has met 
all of the requirements of this part.
* * * * *

PART 125--GOVERNMENT CONTRACTING PROGRAMS

0
3. The authority citation for part 125 is revised to read as follows:

    Authority:  15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657b, 
657(f), and 657r.


0
4. Add subpart F, consisting of Sec.  125.100, to read as follows:

Subpart F--Surplus Personal Property for Veteran-Owned Small 
Business Programs


Sec.  125.100   How does a small business concern owned and controlled 
by veterans obtain Federal surplus personal property?

    (a) General. (1) Pursuant to 15 U.S.C. 657b(g), eligible small 
business concerns owned and controlled by veterans may receive surplus 
Federal Government property from State Agencies for Surplus Property 
(SASPs). The procedures set forth in 41 CFR part 102-37 and this 
section will be used to transfer surplus personal property to such 
concerns.
    (2) The surplus personal property which may be transferred to SASPs 
for further transfer to eligible small business concerns owned and 
controlled by veterans includes all surplus personal property which has 
become available for donation pursuant to 41 CFR 102-37.30.
    (b) Eligibility to receive Federal surplus personal property. To be 
eligible to receive Federal surplus personal property, on the date of 
transfer a concern must:
    (1) Be a small business concern owned and controlled by veterans, 
that has been verified by the Secretary of Veterans Affairs under 
section 8127 of title 38, United States Code;
    (2) Not be debarred, suspended, or declared ineligible under title 
2 or title 48 of the Code of Federal Regulations; and
    (3) Be engaged or expect to be engaged in business activities 
making the item useful to it.
    (c) Use of acquired surplus personal property. (1) Eligible 
concerns may acquire Federal surplus personal property from the SASP in 
the State(s) where the concern is located and operates, provided the 
concern represents and agrees in writing:
    (i) As to what the intended use of the surplus personal property is 
to be;
    (ii) That it will use the surplus personal property to be acquired 
in the normal conduct of its business activities or be liable for the 
fair rental value from the date of its receipt;
    (iii) That it will not sell or transfer the surplus personal 
property to be acquired to any party other than the Federal

[[Page 69125]]

Government as required by GSA and SASP requirements and guidelines;
    (iv) That, at its own expense, it will return the surplus personal 
property to a SASP if directed to do so by SBA, including where the 
concern has not used the property as intended within one year of 
receipt;
    (v) That, should it breach its agreement not to sell or transfer 
the surplus personal property, it will be liable to the Federal 
Government for the established fair market value or the sale price, 
whichever is greater, of the property sold or transferred; and
    (vi) That it will give GSA and the SASP access to inspect the 
surplus personal property and all records pertaining to it.
    (2) A concern receiving surplus personal property pursuant to this 
section assumes all liability associated with or stemming from the use 
of the property, and all costs associated with the use and maintenance 
of the property.
    (d) Costs. Concerns acquiring surplus personal property from a SASP 
may be required to pay a service fee to the SASP in accordance with 41 
CFR 102-37.280. In no instance will any SASP charge a concern more for 
any service than their established fees charged to other transferees.
    (e) Title. Upon execution of the SASP distribution document, the 
firm receiving the property has only conditional title to the property 
during the applicable period of restriction. Full title to the property 
will vest in the donee only after the donee has met all of the 
requirements of this part and the requirements of GSA and the SASP that 
it received the property from.

PART 129--CONTRACTS FOR SMALL BUSINESSES LOCATED IN DISASTER AREAS, 
AND SURPLUS PERSONAL PROPERTY FOR SMALL BUSINESSES LOCATED IN 
DISASTER AREAS AND PUERTO RICO

0
5. The authority citation for part 129 is revised to read as follows:

    Authority:  15 U.S.C. 636(j)(13)(F)(ii), (iii), 644(f).


0
6. The heading for part 129 is revised to read as set forth above.


Sec. Sec.  129.200, 129.300, 129.400, and 129.500   [Resdesignated as 
Sec. Sec.  129.101, 129.102, 129.103, and 129.104]

0
7. Redesignate Sec. Sec.  129.200, 129.300, 129.400, and 129.500, as 
129.101, 129.102, 129.103, and 129.104, respectively.

Subpart A--Contracts for Small Businesses Located in Disaster Areas

0
8. Designate Sec.  129.100 and newly redesignated Sec. Sec.  129.101, 
129.102, 129.103, and 129.104 as subpart A under the heading set forth 
above.

0
9. Add subparts B and C to read as follows:
Subpart B--Surplus Personal Property For Small Businesses Located in 
Disaster Areas
Sec.
129.200 What definitions are important in this subpart?
129.201 How does a small business concern located in a disaster area 
obtain Federal surplus personal property?
Subpart C--Surplus Personal Property for Small Businesses Located in 
Puerto Rico
129.300 What definitions are important in this subpart?
129.301 How does a small business concern located in Puerto Rico 
obtain Federal surplus personal property?

Subpart B--Surplus Personal Property for Small Businesses Located 
in Disaster Areas


Sec.  129.200   What definitions are important in this subpart?

    Covered period means the 2-year period beginning on the date on 
which the President declared the applicable major disaster. 15 U.S.C. 
636(j)(f)(13)(F)(ii)(I)(aa).


Sec.  129.201  How does a small business concern located in a disaster 
area obtain Federal surplus personal property?

    (a) General. Pursuant to 15 U.S.C. 636(j)(13)(F)(ii) eligible small 
business concerns located in disaster areas may receive surplus Federal 
Government property from State Agencies for Surplus Property (SASPs). 
The procedures set forth in 41 CFR part 102-37 and this section will be 
used to transfer surplus personal property to eligible small business 
concerns.
    (1) The property which may be transferred to SASPs for further 
transfer to eligible small business concerns includes all personal 
property which has become available for donation pursuant to 41 CFR 
102-37.30.
    (b) Eligibility to receive Federal surplus personal property. To be 
eligible to receive Federal surplus personal property, on the date of 
transfer a concern must:
    (1) Be located in a disaster area;
    (2) Qualify as small under the size standard corresponding to its 
primary NAICS code and certify its size in SAM.gov, or a successor 
system, prior to seeking access to surplus property. SASPs and GSA may 
rely on a concern's certification as small for purposes of this 
program;
    (3) Not be debarred, suspended, or declared ineligible under Title 
2 or Title 48 of the Code of Federal Regulations;
    (4) Be engaged or expect to be engaged in business activities 
making the item useful to it; and
    (5) Not have received a transfer of property under Sec.  124.405 of 
this chapter during the covered period. The 2-year period of the 
presidentially declared disaster does not affect eligibility for 
additional technology transfers or surplus personal property to a small 
business concern located in a disaster area for a subsequent 
presidentially declared disaster occurring within the original 2-year 
period of a prior presidentially declared disaster.
    (c) Use of acquired surplus personal property. (1) Eligible 
concerns may acquire surplus Federal personal property from the SASP in 
the State(s) where the concern is located and operates, provided the 
concern represents and agrees in writing:
    (i) As to what the intended use of the surplus personal property is 
to be;
    (ii) That it will use the property to be acquired in the normal 
conduct of its business activities or be liable for the fair rental 
value from the date of its receipt;
    (iii) That it will not sell or transfer the property to be acquired 
to any party other than the Federal Government as required by GSA and 
SASP requirements and guidelines;
    (iv) That, at its own expense, it will return the property to a 
SASP if directed to do so by SBA, including where the concern has not 
used the property as intended within one year of receipt;
    (v) That, should it breach its agreement not to sell or transfer 
the property, it will be liable to the Federal Government for the 
established fair market value or the sale price, whichever is greater, 
of the property sold or transferred; and
    (vi) That it will give GSA and the SASP access to inspect the 
property and all records pertaining to it.
    (2) A concern receiving surplus personal property pursuant to this 
section assumes all liability associated with or stemming from the use 
of the property.
    (d) Costs. Concerns acquiring surplus personal property from a SASP 
must pay a service fee to the SASP in accordance with 41 CFR 102-
37.280. In no instance will any SASP charge a concern more for any 
service than their established fees charged to other transferees.
    (e) Title. Upon execution of the SASP distribution document, the 
firm

[[Page 69126]]

receiving the surplus personal property has only conditional title only 
to the surplus personal property during the applicable period of 
restriction. Full title to the property will vest in the donee only 
after the donee has met all of the requirements of this part and the 
requirements of GSA and the SASP that it received the property from.

Subpart C--Surplus Personal Property for Small Businesses Located 
in Puerto Rico


Sec.  129.300  What definitions are important in this subpart?

    Covered period means the period beginning on August 13, 2018 and 
ending on the date which the Oversight Board established under section 
101 of the Puerto Rico Oversight, Management, and Economic Stability 
Act (48 U.S.C. 2121) terminates. 15 U.S.C. 636(j)(13)(F)(iii).
    Located in Puerto Rico means a concern with a physical location in 
Puerto Rico and organized under the laws of Puerto Rico.


Sec.  129.301   How does a small business concern located in a Puerto 
Rico obtain Federal surplus personal property?

    (a) General. Pursuant to 15 U.S.C. 636(j)(13)(F)(iii), eligible 
small business concerns located in Puerto Rico may receive surplus 
Federal Government property from the Puerto Rico State Agency for 
Surplus Property (SASP). The procedures set forth in 41 CFR part 102-37 
and this section will be used to transfer surplus personal property to 
eligible small business concerns. The property which may be transferred 
to the Puerto Rico SASP for further transfer to eligible small business 
concerns includes all personal property which has become available for 
donation pursuant to 41 CFR 102-37.30.
    (b) Eligibility to receive Federal surplus personal property. To be 
eligible to receive Federal surplus personal property, on the date of 
transfer a concern must:
    (1) Be located in Puerto Rico;
    (2) Qualify as small under the size standard corresponding to its 
primary NAICS code and certify its size in SAM.gov, or a successor 
system, prior to seeking access to surplus property. SASPs and GSA may 
rely on concern's certification as small for purposes of this program;
    (3) Not be debarred, suspended, or declared ineligible under Title 
2 or Title 48 of the Code of Federal Regulations; and
    (4) Be engaged or expect to be engaged in business activities 
making the item useful to it.
    (c) Use of acquired surplus personal property. (1) Eligible 
concerns may acquire surplus Federal personal property from the Puerto 
Rico SASP, provided the concern represents and agrees in writing:
    (i) As to what the intended use of the surplus personal property is 
to be;
    (ii) That it will use the property to be acquired in the normal 
conduct of its business activities or be liable for the fair rental 
value from the date of its receipt;
    (iii) That it will not sell or transfer the property to be acquired 
to any party other than the Federal Government as required by GSA and 
SASP requirements and guidelines;
    (iv) That, at its own expense, it will return the property to the 
SASP if directed to do so by SBA, including where the concern has not 
used the property as intended within one year of receipt;
    (v) That, should it breach its agreement not to sell or transfer 
the property, it will be liable to the Federal Government for the 
established fair market value or the sale price, whichever is greater, 
of the property sold or transferred; and
    (vi) That it will give GSA and SASPs access to inspect the property 
and all records pertaining to it.
    (2) A concern receiving surplus personal property pursuant to this 
section assumes all liability associated with or stemming from the use 
of the property.
    (d) Costs. Concerns acquiring surplus personal property from a SASP 
must pay a service fee to the SASP in accordance with 41 CFR 102-
37.280. In no instance will any SASP charge a concern more for any 
service than their established fees charged to other transferees.
    (f) Title. Upon execution of the SASP distribution document, the 
firm receiving the surplus personal property has only conditional title 
to the surplus personal property during the applicable period of 
restriction. Full title to the surplus personal property will vest in 
the donee only after the donee has met all of the requirements of this 
part.

Jovita Carranza,
Administrator.
[FR Doc. 2020-22539 Filed 10-30-20; 8:45 am]
BILLING CODE 8026-03-P