[Federal Register Volume 72, Number 167 (Wednesday, August 29, 2007)]
[Proposed Rules]
[Pages 49669-49676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17150]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AF68
Small Business Size Standards; Adoption of 2007 North American
Industry Classification System for Size Standards
AGENCY: Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The U.S. Small Business Administration (SBA) proposes to amend
its Small Business Size Regulations by incorporating the Office of
Management and Budget's (OMB) 2007 modifications to the North American
Industry Classification System (NAICS) in its table of small business
size standards. These modifications are few in number and result in
revisions to size standards for three industries and four activities
within other industries.
SBA believes that this proposal is routine and non-controversial,
and the Agency anticipates no significant adverse comment. Therefore,
SBA is publishing concurrently in this issue of the Federal Register a
direct final rule to expedite modifying its Small
[[Page 49670]]
Business Size Regulations as described in this proposed rule. If SBA
receives any significant adverse comment to the direct final rule, it
will withdraw it, and consider those comments in connection with this
proposed rule.
DATES: SBA must receive comments to this proposed rule on or before
September 28, 2007.
ADDRESSES: You may submit comments, identified by RIN 3245-AF68, by any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail, for paper, disk, or CD/ROM submissions: Gary M.
Jackson, Division Chief for Size Standards, 409 Third Street, SW., Mail
Code 6530, Washington, DC 20416.
Hand Delivery/Courier: Gary M. Jackson, Division Chief for
Size Standards, 409 Third Street, SW., Mail Code 6530, Washington, DC
20416.
SBA will post all comments on www.regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.regulations.gov, please submit the information to Carl J.
Jordan, Office of Size Standards, 409 Third Street, SW., Mail Code
6530, Washington, DC 20416, or send an email to [email protected].
Highlight the information that you consider to be CBI and explain why
you believe SBA should hold this information as confidential. SBA will
review the information and make the final determination of whether it
will publish the information or not.
FOR FURTHER INFORMATION CONTACT: Carl Jordan, Office of Size Standards,
at (202) 205-6618 or [email protected].
SUPPLEMENTARY INFORMATION: SBA adopted the NAICS industry definitions
as a basis for its table of small business size standards effective
October 1, 2000, as a replacement to the discontinued Standard
Industrial Classification (SIC) System (65 FR 30836, May 15, 2000).
Since that time, OMB has issued two updates modifying the NAICS. SBA
incorporated OMB's first updated modifications, termed NAICS 2002 (66
FR 3825, January 16, 2001), in its table of size standards effective
October 1, 2002 (67 FR 52597, August 13, 2002). OMB published its most
recent updates, termed NAICS 2007, on May 16, 2006 (71 FR 28532). SBA
is proposing adoption of those updated modifications in its table of
small business size standards, as explained below.
For complete information on the relationship between NAICS 2002 and
NAICS 2007, please see the U.S. Bureau of the Census (Census Bureau)
Web site at http://www.census.gov/epcd/www/naicsdoc.htm#fedreg. That
Census Bureau Web site provides complete information on its
establishment and implementation of NAICS 2007, including its notice of
final action in the March 16, 2006 Federal Register. The Census Bureau
also provides the following correspondence tables: (1) 2007 NAICS-US
matched to 2002 NAICS-US; and (2) 2002 NAICS-US matched to 2007 NAICS-
US.
How SBA Arrived at the Size Standards for NAICS 2007 Industries
On October 22, 1999, SBA published in the Federal Register (64 FR
57188) a proposed rule to establish a new table of small business size
standards based on the NAICS. SBA developed guidelines to transition
from the SIC System to NAICS. The guidelines were intended to minimize
the impact of a new industry classification system on SBA's small
business size standards. Table 1, below, lists those guidelines. SBA
received no negative comments to the guidelines specified in the
proposed rule. Because the guidelines produced the desired results and
received public acceptance, SBA published a final rule on May 5, 2000
(65 FR 3825) (corrected on September 5, 2000, 65 FR 53533) establishing
a new table of size standards based on NAICS without change from its
proposed rule. For purposes of adopting NAICS 2007, SBA is proposing to
apply the same guidelines in this rule.
Table 1
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If the NAICS 2007 Industry is composed The size standard for the NAICS
of: Industry will be:
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1. One NAICS 2002 industry or part of The same size standard as for
one NAICS 2002 industry. the NAICS 2002 industry or
part.
2. More than one NAICS 2002 industry; The same size standard as for
parts of more than one NAICS 2002 those NAICS 2002 industries or
industry; or one or more NAICS 2002 parts of NAICS 2002
industry and part(s) of one or more industries.
NAICS 2002 industry, and they all have
the same size standard.
3. More than one NAICS 2002 industry; The same size standard as for
parts of more than one NAICS 2002 the NAICS 2002 industry or
industry; or one or more NAICS 2002 NAICS 2002 industry part(s)
industry and part(s) of one or more that most closely matches the
NAICS 2002 industry, and they do not economic activity described by
all have the same size standard. the NAICS 2007 industry.
4. One or more parts of an NAICS 2002 The same size standard as for
industry for which SBA has established that specific NAICS 2002
specific size standards (i.e., further industry part.
segmented).
5. One or more NAICS 2002 industries SBA will (a) apply a size
and/or parts of NAICS 2002 industries standard measure (e.g., number
that were categorized broadly under of employees, annual receipts)
the NAICS system as Services, Retail typical of the NAICS Sector;
Trade, Wholesale Trade or and (b) apply the
Manufacturing, but are now categorized corresponding ``anchor'' size
differently under NAICS. standard. The ``anchor'' size
standards are $6.5 million
(effective December 6, 2005)
for Services and Retail Trade,
500 employees for
Manufacturing and 100
employees for Wholesale Trade
(except for Federal
procurement programs, where
the standard is 500 employees
under the non-manufacturer
rule).
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Additions to and Deletions From NAICS 2002 for NAICS 2007
It is important to note the following:
1. NAICS 2007 changes affect 59 NAICS 2002 industries.
2. One NAICS 2002 Subsector and 12 NAICS 2002 industries were
eliminated and their activities reclassified in other more appropriate
or new NAICS 2007 industries as listed in Table 2:
[[Page 49671]]
Table 2
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NAICS 2002 code NAICS 2002 industry description
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NAICS 339111......................... Laboratory Apparatus and
Furniture Manufacturing.
Subsector 516........................ Internet Publishing and
Broadcasting.
NAICS 516110......................... Internet Publishing and
Broadcasting.
NAICS 517211......................... Paging.
NAICS 517212......................... Cellular and Other Wireless
Telecommunications.
NAICS 517310......................... Telecommunications Resellers.
NAICS 517510......................... Cable and Other Program
Distribution.
NAICS 517910......................... Other Telecommunications.
NAICS 518111......................... Internet Service Providers.
NAICS 518112......................... Web Search Portals.
NAICS 525930......................... Real Estate Investment Trusts.
NAICS 541710......................... Research and Development in the
Physical, Engineering, and Life
Sciences.
NAICS 561310......................... Employment Placement Agencies.
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3. The following eight industries listed in Table 3 are new in
NAICS 2007:
Table 3
------------------------------------------------------------------------
NAICS 2007 code NAICS 2007 industry description
------------------------------------------------------------------------
NAICS 517210......................... Wireless Telecommunications
Carriers (except Satellite).
NAICS 517911......................... Telecommunications Resellers.
NAICS 517919......................... All Other Telecommunications.
NAICS 519130......................... Internet Publishing and
Broadcasting and Web Search
Portals.
NAICS 541711......................... Research and Development in
Biotechnology.
NAICS 541712......................... Research and Development in the
Physical, Engineering, and Life
Sciences (except Biotechnology).
NAICS 561311......................... Employment Placement Agencies.
NAICS 561312......................... Executive Search Services.
------------------------------------------------------------------------
Changes in Size Standards Resulting From SBA's Proposed Adoption of
NAICS 2007
Most of the industries in NAICS 2002 remain unchanged under NAICS
2007. This proposal to adopt NAICS 2007 will change size standards for
only three industries and four activities from parts of industries.
Other changes in NAICS 2007 consist of revised industry descriptions or
the reclassification of industry activities in other industries having
the same size standard.
Table 4 lists all of OMB's modifications to the NAICS 2002
industries. The first three columns show the modified NAICS 2002
industry's six-digit code, its current size standard, and its industry
description. The last three columns show the NAICS 2007 industry (new,
existing and revised) that incorporates the modified NAICS 2002
industry, its industry description, and new size standard. By comparing
the modified NAICS 2002 industry and size standard with the related
NAICS 2007 industry and size standard, a user can identify the size
standard SBA proposes for the applicable NAICS 2007 industries.
Following Table 4, SBA explains the basis for the limited number of
cases that do result in a change to the size standard.
Table 4.--This Table Includes Only Those NAICS Codes Where Size Standards Are Affected. They Are Arranged
According to the Order of Their NAICS 2007 Industry Codes
----------------------------------------------------------------------------------------------------------------
2007
2002 NAICS code Current size 2002 NAICS U.S. NAICS 2007 NAICS U.S. New size standards
standards description code description
----------------------------------------------------------------------------------------------------------------
111211......... $0.75 million.... Potato Farming.
*111219........ $0.75 million.... Other Vegetable 111211 Potato Farming.. $0.75 million.
(except Potato) and
Melon Farming--sweet
potato and yam
farming.
*111219........ $0.75 million.... Other Vegetable 111219 Other Vegetable $0.75 million.
(except Potato) and (except Potato)
Melon Farming--except and Melon
sweet potato and yam Farming.
farming.
*111998........ $0.75 million.... All Other 111998 All Other $0.75 million.
Miscellaneous Crop Miscellaneous
Farming--except Crop Farming.
algae, seaweed, and
other plant
aquaculture.
112519......... $0.75 million.... Other Animal
Aquaculture.
*111998........ $0.75 million.... All Other 112519 Other $0.75 million.
Miscellaneous Crop Aquaculture.
Farming--algae,
seaweed, and other
plant aquaculture.
314999......... 500 employees.... All Other
Miscellaneous Textile
Product Mills.
[[Page 49672]]
*315211........ 500 employees.... Men's and Boys' Cut
and Sew Apparel
Contractors--embroide
ry contractors.
*315212........ 500 employees.... Women's, Girls' and 314999 All Other 500 employees.
Infants' Cut and Sew Miscellaneous
Apparel Contractors-- Textile Product
embroidery Mills.
contractors.
*315211........ 500 employees.... Men's and Boys' Cut 315211 Men's and Boys' 500 employees.
and Sew Apparel Cut and Sew
Contractors--except Apparel
embroidery Contractors.
contractors.
*315212........ 500 employees.... Women's, Girls' and 315212 Women's, Girls' 500 employees.
Infants' Cut and Sew and Infants'
Apparel Contractors-- Cut and Sew
except embroidery Apparel
contractors. Contractors.
*326199........ 500 employees.... All Other Plastics 326199 All Other 500 employees.
Product Plastics
Manufacturing--except Product
inflatable plastic Manufacturing.
boats.
*326291........ 500 employees.... Rubber Product 326291 Rubber Product 500 employees.
Manufacturing for Manufacturing
Mechanical Use-- for Mechanical
except rubber tubing Use.
for mechanical use.
*326299........ 500 employees.... All Other Rubber
Product
Manufacturing--except
inflatable rubber
boats.
*326291........ 500 employees.... Rubber Product 326299 All Other Rubber 500 employees.
Manufacturing for Product
Mechanical Use-- Manufacturing.
rubber tubing for
mechanical use.
333298......... 500 employees.... All Other Industrial
Machinery
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 333298 All Other 500 employees.
and Furniture Industrial
Manufacturing--labora Machinery
tory distilling Manufacturing.
equipment.
333415......... 750 employees.... Air-Conditioning and
Warm Air Heating
Equipment and
Commercial and
Industrial
Refrigeration
Equipment
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 333415 Air-Conditioning 750 employees.
and Furniture and Warm Air
Manufacturing--labora Heating
tory freezers. Equipment and
Commercial and
Industrial
Refrigeration
Equipment
Manufacturing.
333994......... 500 employees.... Industrial Process
Furnace and Oven
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 333994 Industrial 500 employees.
and Furniture Process Furnace
Manufacturing--labora and Oven
tory furnaces and Manufacturing.
ovens.
333997......... 500 employees.... Scale and Balance
(except Laboratory)
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 333997 Scale and 500 employees.
and Furniture Balance
Manufacturing--labora Manufacturing.
tory scales and
balances.
333999......... 500 employees.... All Other
Miscellaneous General
Purpose Machinery
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 333999 All Other 500 employees.
and Furniture Miscellaneous
Manufacturing--labora General Purpose
tory centrifuges. Machinery
Manufacturing.
*334220........ 750 employees.... Radio and Television 334220 Radio and 750 employees.
Broadcasting and Television
Wireless Broadcasting
Communications and Wireless
Equipment Communications
Manufacturing--except Equipment
communications signal Manufacturing.
testing and
evaluation equipment.
334515......... 500 employees.... Instrument
Manufacturing for
Measuring and Testing
Electricity and
Electrical Signals.
*334220........ 750 employees.... Radio and Television 334515 Instrument 500 employees.
Broadcasting and Manufacturing
Wireless for Measuring
Communications and Testing
Equipment Electricity and
Manufacturing--commun Electrical
ications signal Signals.
testing and
evaluation equipment.
336612......... 500 employees.... Boat Building.
*326199........ 500 employees.... All Other Plastics
Product
Manufacturing--inflat
able plastics boats.
*326299........ 500 employees.... All Other Rubber 336612 Boat Building... 500 employees.
Product
Manufacturing--inflat
able rubber boats.
337127......... 500 employees.... Institutional
Furniture
Manufacturing.
[[Page 49673]]
*339111........ 500 employees.... Laboratory Apparatus 337127 Institutional 500 employees.
and Furniture Furniture
Manufacturing--labora Manufacturing.
tory furniture (e.g.,
stools, tables,
benches).
339113......... 500 employees.... Surgical Appliance and
Supplies
Manufacturing.
*339111........ 500 employees.... Laboratory Apparatus 339113 Surgical 500 employees.
and Furniture Appliance and
Manufacturing--except Supplies
laboratory furniture, Manufacturing.
scales, balances,
furnaces, ovens,
centrifuges,
distilling equipment,
and freezers.
517110......... 1500 employees... Wired
Telecommunications
Carriers.
517510......... $13.5 million.... Cable and Other
Program Distribution.
*518111........ $23.0 million.... Internet Service 517110 Wired 1500 employees.
Providers--broadband Telecommunicati
Internet service ons Carriers.
providers (e.g.,
cable, DSL).
517211......... 1500 employees... Paging.
517212......... 1500 employees... Cellular and Other 517210 Wireless 1500 employees.
Wireless Telecommunicati
Telecommunications. ons Carriers
(except
Satellite).
517310......... 1500 employees... Telecommunications 517911 Telecommunicatio 1500 employees.
Resellers. ns Resellers.
517910......... $13.5 million.... Other 517919 All Other $23.0 million.
Telecommunications. Telecommunicati
ons.
*518111........ $23.0 million.... Internet Service
Providers ISPs
providing services
via client-supplied
telecommunications
connections.
516110......... 500 employees.... Internet Publishing 519130 Internet 500 employees.
and Broadcasting. Publishing and
Broadcasting
and Web Search
Portals.
518112......... $6.5 million..... Web Search Portals.
519190......... $6.5 million..... All Other Information 519190 All Other $6.5 million.
Services. Information
Services.
525990......... $6.5 million..... Other Financial
Vehicles.
*525930........ $6.5 million..... Real Estate Investment 525990 Other Financial $6.5 million.
Trusts--hybrid or Vehicles.
mortgage REITs
primarily in
underwriting or
investing in
mortgages.
531110......... $6.5 million..... Lessors of Residential
Buildings and
Dwellings.
*525930........ $6.5 million..... Real Estate Investment 531110 Lessors of $6.5 million.
Trusts--hybrid or Residential
equity REITs Buildings and
primarily leasing Dwellings.
residential Buildings
and Dwellings.
531120......... $6.5 million..... Lessors of
Nonresidential
Buildings (except
Miniwarehouses).
*525930........ $6.5 million..... Real Estate Investment 531120 Lessors of $6.5 million.
Trusts--hybrid or Nonresidential
equity REITs Buildings
primarily leasing (except
nonresidential Miniwarehouses).
buildings.
531130......... $23.5 million.... Lessors of
Miniwarehouses and
Self-Storage Units.
*525930........ $6.5 million..... Real Estate Investment 531130 Lessors of $23.5 million.
Trusts--hybrid or Miniwarehouses
equity REITs and Self-
primarily leasing Storage Units.
miniwarehouses and
self-storage units.
531190......... $6.5 million..... Lessors of Other Real
Estate Property..
*525930........ $6.5 million..... Real Estate Investment 531190 Lessors of Other $6.5 million.
Trusts--hybrid or Real Estate
equity REITs Property.
primarily leasing
other real estate
property.
*541612........ $6.5 million..... Human Resources and 541612 Human Resources $6.5 million.
Executive Search Consulting
Consulting Services-- Services.
except executive
search consulting
services.
*541710........ 500 employees.... Research and 541711 Research and 500 employees.
Development in the Development in
Physical, Biotechnology.
Engineering, and Life
Sciences--biotechnolo
gy research and
development.
*541710........ 500 employees.... Research and 541712 Research and 500 employees.
Development in the Development in
Physical, the Physical,
Engineering, and Life Engineering,
Sciences--except and Life
biotechnology Sciences
research and (except
development. Biotechnology).
561310......... $6.5 million..... Employment Placement 561311 Employment $6.5 million.
Agencies. Placement
Agencies..
[[Page 49674]]
*541612........ $6.5 million..... Human Resources and 561312 Executive Search $6.5 million.
Executive Search Services.
Consulting Services--
executive search
consulting services.
----------------------------------------------------------------------------------------------------------------
* Indicates that this activity within the identified NAICS 2002 code is now an activity within the related NAICS
2007 industry.
As shown in Table 4, the NAICS 2007 modifications lead to a
proposed revision to the current size standard for a limited number of
industries or activities. The basis for the revisions to seven size
standards are discussed below:
1. NAICS 339111, ``Laboratory Apparatus and Furniture
Manufacturing,'' (part) laboratory freezers. NAICS 2007 eliminated
NAICS 339111. The various activities of NAICS 339111 are reclassified
in other NAICS 2007 codes having the same 500 employee size standard,
except for laboratory freezer manufacturing. Laboratory freezer
manufacturing is reclassified in NAICS 333415, ``Air-Conditioning and
Warm Air Heating Equipment and Commercial and Industrial Refrigeration
Equipment Manufacturing,'' having a size standard of 750 employees. SBA
proposes to retain the 750 employee size standard for NAICS 333415
because laboratory freezer manufacturing represents a small part of
that industry (Rule 3).
2. NAICS 334220, ``Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing,'' (part) communications signal
testing and evaluation equipment. The current size standard for NAICS
334220 is 750 employees. The activity of ``communications signal
testing and evaluation equipment manufacturing'' in NAICS 2007 is
reclassified in NAICS 334515, ``Instrument Manufacturing for Measuring
and Testing Electricity and Electrical Signals,'' having a size
standard of 500 employees. SBA proposes to retain the 500 employee size
standard for NAICS 334515 because ``communications signal testing and
evaluation equipment manufacturing'' represents a small part of that
industry (Rule 3).
3. NAICS 518111, ``Internet Service Providers,'' (part) broadband
Internet service providers (e.g., cable, DSL). The current size
standard for NAICS 518111 is $23.0 million in average annual receipts.
The activity, ``broadband Internet services providers (e.g., cable,
DSL),'' in NAICS 2007 is reclassified in NAICS 517110, ``Wired
Telecommunications Carriers,'' having a 1,500 employee size standard.
SBA proposes to retain the 1,500 employee size standard for NAICS
517110 because broadband Internet services providers represent a small
part of that industry (Rule 3).
4. NAICS 517510, ``Cable and Other Program Distribution.'' NAICS
2007 eliminated NAICS 517510. The current size standard for NAICS
517510 is $13.5 million in average annual receipts. In NAICS 2007, all
activities of NAICS 517510 are reclassified in 517110, ``Wired
Telecommunications Carriers,'' having a 1,500 employee size standard.
SBA proposes to apply the 1,500 employee size standard for NAICS 517110
because the Cable and Other Program Distribution industry is much
smaller than the Wired Telecommunications Carriers industry (Rule
3).
5. NAICS 517910, ``Other Telecommunications.'' NAICS 2007
eliminated NAICS 517910. NAICS 2007 establishes a new industry titled
``All Other Telecommunications,'' NAICS 517919, comprising all
activities of NAICS 517910 having a size standard of $13.5 million and
most activities from NAICS 518111, ``Internet Service Providers
(ISP),'' having a size standard of $23 million. As discussed in
3 above, the activity of ``broadband Internet services
providers'' in NAICS 518111 is reclassified in NAICS 517110. SBA
proposes to apply the $23 million size standard for that industry
because ISP establishments providing services via client-supplied
telecommunications connections represent the larger component of the
new NAICS 517919 (Rule 3).
6. NAICS 518112, ``Web Search Portals.'' NAICS 2007 eliminated
NAICS 518112 and NAICS 516110, ``Internet Publishing and
Broadcasting,'' having size standards of $6.5 million and 500
employees, respectively. NAICS 2007 combines these two industries to
form a new six-digit industry--NAICS 519130, ``Internet Publishing and
Broadcasting and Web Search Portals.'' SBA proposes to apply the 500
employee size standard for NAICS 519130 because the Internet Publishing
and Broadcasting industry is much larger than the Web Search Portals
industry (Rule 3).
7. NAICS 525930, ``Real Estate Investment Trusts,'' (part) hybrid
or equity REITs primarily leasing miniwarehouses and self-storage
units. NAICS 2007 eliminated NAICS 525930. The various activities of
NAICS 525930 are reclassified in NAICS 2007 codes having the same $6.5
million size standard, except for the activity of hybrid or equity
REITs primarily leasing miniwarehouses and self-storage units. That
activity is reclassified in NAICS 531130, ``Lessors of Miniwarehouses
and Self-Storage Units,'' having a $23.5 million size standard. SBA
proposes to retain the $23.5 million size standard for NAICS 531130
because hybrid or equity REITs primarily leasing miniwarehouses and
self-storage units represent a small part of that industry (Rule
3).
Alternatives to Adopting NAICS 2007 That SBA Considered
SBA considered retaining the NAICS 2002 codes as the basis for
small business size standards. However, SBA believes that doing so will
lead to inconsistency among Federal agencies that adopt NAICS 2007 for
their programs. More importantly, if SBA does not adopt NAICS 2007 it
will not be able to analyze and evaluate small business size standards
adequately because available Census Bureau data based on NAICS 2007
industries will not be comparable with NAICS 2002 industry data.
Without useful data, SBA cannot properly analyze size standards and
their effects on businesses.
SBA considered segmenting the modified NAICS 2002 size standard for
cases where the size standard changes instead of applying the
guidelines used in previous NAICS revisions. SBA believes this
alternative is impractical because it would complicate size standards
for minor reasons. Furthermore, the application of the guidelines for
NAICS 2007 results in the loss of eligibility for currently-defined
small businesses in only one minor
[[Page 49675]]
industry activity. That occurs for ``communications signal testing and
evaluation equipment manufacturing,'' a part of NAICS 334220, ``Radio
and Television Broadcasting and Wireless Communications Equipment
Manufacturing.'' The size standard for that activity decreases from 750
employees to 500 employees. A search of the Dynamic Small Business
Search (DSBS) reveals that there are 38 small businesses out of 2,200
small businesses registered in NAICS 334220 having more than 500
employees. However, it is unlikely that many of these businesses, if
any, will be affected given the limited activity of ``communications
signal testing and evaluation equipment manufacturing.'' All other
activities in NAICS 334220 will continue to have a size standard of 750
employees.
Consideration of Comments
SBA will take in account all submitted comments on this proposed
rule and on the alternatives it considered. SBA believes that this
proposal is routine and non-controversial. Therefore, SBA is publishing
concurrently in this issue of the Federal Register a direct final rule
to expedite modifying its size standards as explained in this proposed
rule. If SBA decides to adopt NAICS 2007 as proposed, or with limited
modifications, it will publish a final rule that addresses the comments
and explains the basis for its final decision.
Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork
Reduction Act (44 U.S.C. Ch. 35.) and the Regulatory Flexibility Act (5
U.S.C. 601-612)
OMB has determined that this proposed rule is not a ``significant''
regulatory action for purposes of Executive Order (E.O.) 12866. This
proposed rule incorporates the latest revisions of the NAICS, which SBA
uses to identify industries in the United States economy for purposes
of establishing small business size standards. As discussed in the
preamble, the size standard of a limited number of activities would
change because of the NAICS revisions. Almost all businesses currently
defined as small under the NAICS 2002 industries would continue to be
small under the NAICS 2007 industries, if adopted for size standards.
The rule also affects Federal Government programs that provide a
benefit for small businesses. SBA welcomes comments describing the
impact on small businesses of the size standard changes resulting from
this rule.
For purposes of E.O. 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 E.O. 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 any new reporting or
recordkeeping requirements.
When an agency promulgates a proposed rule, the Regulatory
Flexibility Act (5 U.S.C. 601-612) requires the agency to prepare an
initial regulatory flexibility analysis (IRFA) describing the potential
economic impact of the rule on small entities and alternatives that may
minimize that impact. Section 605 of the RFA allows an agency to
certify a rule, in lieu of preparing an IRFA, if the rulemaking is not
expected to have a significant economic impact on a substantial number
of small entities. SBA has determined that this proposed rule as
drafted, including the alternatives discussed in the supplementary
information above, will not have a significant impact on a substantial
number of small entities.
OMB's NAICS 2007 modifications will result in size standards
changes to a minimal number of activities within certain industries
detailed above in the supplementary information, with little, if any,
affect on small businesses. Those activities are now part of other,
more appropriate or new NAICS codes and their industry descriptions.
There will be no changes to the size standards for most NAICS
industries and their economic activities. For those that would change,
they would create a larger number of enterprises that can qualify for
Federal government programs reserved for small businesses.
As stated above, a search of the Dynamic Small Business Search
(DSBS) reveals that there are 38 small businesses out of 2,200 small
businesses registered in NAICS 334220 having more than 500 employees.
However, it is unlikely that many of these businesses, if any, will be
affected given the limited activity of ``communications signal testing
and evaluation equipment manufacturing.'' All other activities in NAICS
334220 will continue to have a size standard of 750 employees.
Therefore, SBA believes that the impact on small businesses will be
minimal because these activities represent relatively minor components
of the NAICS 2002 industries.
When SBA published a direct final rule to replace the table of
small business size standards based on NAICS 1997 with a new one based
on NAICS 2002, it certified that for purposes of the Regulatory
Flexibility Act, the rule would affect a significant number of small
businesses, but that the impact on each business would not be
substantial. (67 FR 52597 to 52606, 62292, 67253 and 67102) SBA
received no comments to the contrary. No changes have occurred since
then. Adopting NAICS 2007 to replace NAICS 2002 as the basis for its
table of size standards would have, SBA believes, an even smaller
impact.
List of Subjects in 13 CFR Part 121
Administrative practice and procedure, Government procurement,
Government property, Grant programs--business, Individuals with
disabilities, Loan programs--business, Reporting and recordkeeping
requirements, Small businesses.
For the reasons set forth in the preamble, SBA proposes to amend 13
CFR part 121 as follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
1. The authority citation for part 121 continues to read as
follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, and
662(5); and Pub. L. 105-135, Sec. 401, et seq., 111 Stat. 2592.
Sec. 121.201 [Amended]
2. Amend Sec. 121.201, in the table ``Small Business Size
Standards by NAICS Industry,'' as follows:
a. Revise the industry description of NAICS code 112519 ``Other
Animal Aquaculture'' to read ``Other Aquaculture.''
b. Revise the heading ``Sector 21--Mining'' to read ``Sector 21--
Mining, Quarrying, and Oil and Gas Extraction.''
c. Revise the industry description of NAICS code 238210,
``Electrical Contractors,'' to read ``Electrical Contractors and other
Wiring Installation Contractors.''
d. Revise the industry description of NAICS code 316999, ``All
Other Leather Good Manufacturing,'' to read ``All Other Leather Good
and Allied Product Manufacturing.''
e. Revise the industry description of NAICS code 322221, ``Coated
and Laminated Packaging Paper and Plastics Film Manufacturing,'' to
read ``Coated and Laminated Packaging Paper Manufacturing.''
f. Revise the industry description of NAICS code 326111,
``Unsupported Plastics Bag Manufacturing,'' to read
[[Page 49676]]
``Plastics Bag and Pouch Manufacturing.''
g. Revise the industry description of NAICS code 333997, ``Scale
and Balance (except Laboratory) Manufacturing,'' to read ``Scale and
Balance Manufacturing.''
h. Remove the entry NAICS code 339111, ``Laboratory Apparatus and
Furniture Manufacturing.''
i. Revise the industry description of NAICS code 441221,
``Motorcycle Dealers,'' to read ``Motorcycle, ATV, and Personal
Watercraft Dealers.''
j. Revise the heading ``Sectors 48--49--Transportation'' to read
``Sectors 48--49--Transportation and Warehousing.''
k. Revise the industry description of NAICS code 492110,
``Couriers,'' to read ``Couriers and Express Delivery Services.''
l. Remove the heading ``Subsector 516--Internet Publishing and
Broadcasting'' and the entry for NAICS code 516110, ``Internet
Publishing and Broadcasting.''
m. Remove the entries for NAICS codes 517211, ``Paging;'' 517212,
``Cellular and Wireless Telecommunications;'' and, 517310
``Telecommunications Resellers'' and add in their place the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
517210................... Wireless ......... 1,500
Telecommunications
Carriers (except
Satellite).
------------------------------------------------------------------------
n. Remove the entries for NAICS codes 517510, ``Cable and Other
Program Distribution,'' and 517910, ``Other Telecommunications,'' and
add in their place the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
517911................... Telecommunications ......... 1,500
Resellers.
517919................... All Other $23.5 .........
Telecommunications.
------------------------------------------------------------------------
o. Revise the heading ``Subsector 518--Internet Service Providers,
Web Search Portals, and Data Processing Services'' to read ``Subsector
518--Data Processing, Hosting, and Related Services.''
p. Remove the entries for NAICS codes 518111, ``Internet Service
Providers,'' and 518112, ``Web Search Portals''.
q. Add immediately after entry for NAICS code 519120, `` Libraries
and Archives'' the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
519130................... Internet Publishing and ......... 500
Broadcasting and Web
Search Portals.
------------------------------------------------------------------------
r. Revise the heading ``Subsector 523--Financial Investments and
Related Activities'' to read ``Subsector 523--Securities, Commodity
Contracts, and Other Financial Investments and Related Activities.''
s. Revise the industry description of NAICS code 541612, ``Human
Resources and Executive Search Consulting Services,'' to read ``Human
Resources Consulting Services.''
t. Remove the entry NAICS code 541710, ``Research and Development
in the Physical, Engineering, and Life Sciences,'' and add in its place
the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
541711................... Research and ......... \11\500
Development in
Biotechnology \11\.
541712................... Research and ......... \11\500
Development in the
Physical, Engineering,
and Life Sciences
(except Biotechnology)
\11\.
Except,.................. Aircraft............... ......... 1,500
Except,.................. Aircraft Parts, and ......... 1,000
Auxiliary Equipment,
and Aircraft Engine
Parts.
Except,.................. Space Vehicles and ......... 1,000
Guided Missiles, their
Propulsion Units,
their Propulsion Units
Parts, and their
Auxiliary Equipment
and Parts.
------------------------------------------------------------------------
u. Remove the entry for NAICS code 561310, ``Employment Placement
Agencies,'' and add in its place the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
561311................... Employment Placement $6.5 .........
Agencies.
561312................... Executive Search 6.5 .........
Services.
------------------------------------------------------------------------
v. Revise the industry description of NAICS code 561422,
``Telemarketing Bureaus,'' to read ``Telemarketing Bureaus and Other
Contact Centers.''
w. Revise the industry description of NAICS code 722212,
``Cafeterias,'' to read ``Cafeterias, Grill Buffets, and Buffets.''
x. Revise the heading ``Sector 81--Other Services'' to read
``Sector 81--Other Services (except Public Administration).''
y. Amend footnote 11 by removing ``NAICS code 541710'' and adding
in its place ``NAICS codes 541711 and 541712.''
Dated: August 23, 2007.
Steven C. Preston,
Administrator.
[FR Doc. E7-17150 Filed 8-28-07; 8:45 am]
BILLING CODE 8025-01-P