Daily Rules, Proposed Rules, and Notices of the Federal Government
On October 31, 2007, SBA published in the
In response to its proposed rule, SBA received comments from one individual and three advocacy groups for the affected industries.
One commenter recommended that SBA use an annual volumetric delivery to measure a heating oil dealer's size instead of revenues or employees. The commenter believes that not applying the same standard for all industries could potentially fail the disparate treatment justification, result in equal protection clause challenges, and encourage employment reductions by some businesses to remain an eligible small business for reduced hazardous material transportation registration fees.
SBA is concerned that using a volumetric delivery measure would require heating oil dealers to keep separate records for size determination purposes. Also, that type of information is not independently verifiable in the case of an SBA size determination. The only data collected by government agencies regarding heating oil dealers are average weekly costs obtained from a random survey by state energy agencies and provided to the U.S. Department of Energy. Businesses in other industries where SBA uses size measures other than receipts or employees (e.g., megawatt hours for electric utilities, assets for financial institutions, and barrels of refined petroleum products for petroleum refineries) are legally required to report these data using those measures to an appropriate Federal agency. The use of volumetric delivery measure would also fail to capture other activities of the business and affiliation with other businesses in determining size. Because of these concerns, SBA believes that number of employees is a better measure of size than volumetric delivery and, therefore, does not adopt this recommendation.
Comments from three advocacy groups for these two industries supported the conversion of the size measure from average annual receipts to average number of employees. Two of these advocacy groups, however, recommended that the size standard for heating oil dealers be increased from the proposed 50 employees to 100 employees. They believe that heating oil dealers with up to 100 employees are
The purpose of this rule is to convert the size standard to employees from the current measure in receipts, not increase the size standard. As explained in the proposed rule, the current size standard of $11.5 million for the heating oil dealers industry converts to 50 employees. Furthermore, at that size, more than 90 percent of heating oil dealers are classified as small and they account for approximately 53 percent of total industry sales. SBA concludes that a 50-employee size standard for heating oil dealers is a viable size standard and, therefore, declines to adopt the recommended 100-employee size standard. SBA will give further consideration to the heating oil and LPG dealers' size standards when it receives more current industry data from the U.S. Bureau of the Census in 2009.
For purposes of Executive Order 12866, the Office of Management and Budget (OMB) has determined that this rule is not a significant regulatory action. In addition, this rule is not a major rule under the Congressional Review Act, 5 U.S.C. 800.
For purposes of Executive Order 12988, SBA has determined that this rule is drafted, to the extent practicable, in accordance with the standards set forth in that Order.
For purposes of Executive Order 13132, SBA has determined that this rule does not have any federalism implications warranting the preparation of a federalism assessment.
For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this rule does not impose new reporting or recordkeeping requirements. Although the measure of size changes from receipts to number of employees, business concerns must maintain records on employees (such as payroll records) in the course of business. Providing information to SBA on the number of employees would occur only as a result of a request for a size determination related to an application for small business assistance.
Under the Regulatory Flexibility Act, this rule may have a significant impact on a substantial number of small entities in the heating oil and LPG dealers industries. This rule may affect the eligibility of heating oil and LPG dealers seeking SBA 7(a) Loans, SBA Economic Impact Disaster Loans, reduced U.S. Department of Transportation's Hazardous Materials (HAZMAT) Registration Program fees, and assistance from other Federal small business programs.
Immediately below, SBA sets forth a final regulatory flexibility analysis of this final rule addressing the following questions: (1) What is the reason for this action, (2) what are the objectives and legal basis for the rule, (3) what are SBA's description and estimate of the number of small entities to which the rule will apply, (4) what are the significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis in the October 31, 2005 proposed rule, (5) will this rule impose any additional reporting or recordkeeping requirements on small business entities, (6) what are the relevant Federal rules which may duplicate, overlap or conflict with the rule, and (7) what alternatives did SBA consider?
Section 212 of the Small Business Regulatory Fairness Act (Pub. L. 104-121) requires an agency to publish one or more “small entity compliance guides” to assist small entities in complying with its rules. Although there are not new compliance requirements associated with small business size standards, there may be some small businesses not acquainted with small business size standards and their application to Federal
Other Federal agencies also may use SBA size standards for a variety of regulatory and program purposes. If such a case exists where an SBA size standard is not appropriate, an agency may establish its own size standards with the approval of the SBA Administrator (see 13 CFR 121.902-903). For purposes of a regulatory flexibility analysis, agencies must consult with SBA's Office of Advocacy when developing size standards for its programs. (13 CFR 121.903(3)).
SBA also considered one commenter's recommended use of annual volumetric delivery as a measure for the size standard. Using this measure would require companies to keep separate records which are not verifiable for size determination purposes. The only data collected by government agencies regarding heating oil and LPG are the average weekly costs, which is performed using a random survey by state agencies which forward the data to the U.S. Department of Energy. Therefore, there is no reliable data measuring a firm's annual volumetric delivery. Also, that measure would not capture the activities of the business outside of heating oil and LPG deliveries or the size of any affiliates. For these reasons, SBA did not adopt this recommendation.
Administrative practice and procedure, Government procurement, Government property, Grant programs—business, Individuals with disabilities, Loan programs—business, Reporting and recordkeeping requirements, Small businesses.
15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, and 662(5); and Pub. L. 105-135, Sec. 401,