[Federal Register Volume 72, Number 167 (Wednesday, August 29, 2007)]
[Rules and Regulations]
[Pages 49639-49646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17151]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 72, No. 167 / Wednesday, August 29, 2007 /
Rules and Regulations
[[Page 49639]]
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AF66
Small Business Size Standards; Adoption of 2007 North American
Industry Classification System for Size Standards
AGENCY: Small Business Administration.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is amending its
Small Business Size Regulations by incorporating the Office of
Management and Budget's (OMB) 2007 modifications of 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 rule is routine and non-controversial, and
the Agency anticipates no significant adverse comment. If SBA receives
a significant adverse comment, it will withdraw the rule. SBA is
publishing concurrently in this issue of the Federal Register a
proposed rule to achieve the same result, that is, to modify its Small
Business Size Regulations as contemplated in this direct final rule.
DATES: This rule is effective October 1, 2007, without further action,
unless SBA receives a significant adverse comment by September 28,
2007. If SBA receives any significant adverse comments, the Agency will
publish a timely withdrawal of this rule in the Federal Register.
ADDRESSES: You may submit comments, identified by RIN: 3245-AF66, 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 e-mail 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 adopting 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 applying the
same guidelines in this direct final rule.
Table 1
------------------------------------------------------------------------
If the NAICS 2007 industry is composed The Size standard for the NAICS
of: industry will be:
------------------------------------------------------------------------
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.
[[Page 49640]]
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).
------------------------------------------------------------------------
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:
Table 2
------------------------------------------------------------------------
NAICS 2002 code NAICS 2002 industry description
------------------------------------------------------------------------
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.
------------------------------------------------------------------------
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 Adoption of NAICS 2007
Most of the industries in NAICS 2002 remain unchanged under NAICS
2007. This direct final rule adopting 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 is adopting 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.
[[Page 49641]]
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...... 111211 Potato Farming. $0.75 million.
111219*.......... $0.75 million........ Other Vegetable
(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
Melon Farming-- Potato) and
except sweet potato Melon Farming.
and yam 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 112519 Other $0.75 million.
Aquaculture. Aquaculture.
111998*.......... $0.75 million........ All Other
Miscellaneous Crop
Farming--algae,
seaweed, and other
plant aquaculture.
314999........... 500 employees........ All Other 314999 All Other 500 employees.
Miscellaneous Miscellaneous
Textile Product Textile
Mills. Product Mills.
315211*.......... 500 employees........ Men's and Boys' Cut
and Sew Apparel
Contractors--embroi
dery contractors.
315212*.......... 500 employees........ Women's, Girls' and
Infants' Cut and
Sew Apparel
Contractors--embroi
dery 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 and Infants'
Sew Apparel Cut and Sew
Contractors--except Apparel
embroidery Contractors.
contractors.
326199*.......... 500 employees........ All Other Plastics 326199 All Other 500 employees.
Product Plastics
Manufacturing--exce Product
pt inflatable Manufacturing.
plastics boats.
326291*.......... 500 employees........ Rubber Product 326291 Rubber Product 500 employees.
Manufacturing for Manufacturing
Mechanical Use-- for Mechanical
except rubber Use.
tubing for
mechanical use.
326299*.......... 500 employees........ All Other Rubber 326299 All Other 500 employees.
Product Rubber Product
Manufacturing--exce Manufacturing.
pt inflatable
rubber boats.
326291*.......... 500 employees........ Rubber Product
Manufacturing for
Mechanical Use--
rubber tubing for
mechanical use.
333298........... 500 employees........ All Other Industrial 333298 All Other 500 employees.
Machinery Industrial
Manufacturing. Machinery
Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory distilling
equipment.
333415........... 750 employees........ Air-Conditioning and 333415 Air- 750 employees.
Warm Air Heating Conditioning
Equipment and and Warm Air
Commercial and Heating
Industrial Equipment and
Refrigeration Commercial and
Equipment Industrial
Manufacturing. Refrigeration
Equipment
Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory freezers.
333994........... 500 employees........ Industrial Process 333994 Industrial 500 employees.
Furnace and Oven Process
Manufacturing. Furnace and
Oven
Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory furnaces and
ovens.
333997........... 500 employees........ Scale and Balance 333997 Scale and 500 employees.
(except Laboratory) Balance
Manufacturing. Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory scales and
balances.
333999........... 500 employees........ All Other 333999 All Other 500 employees.
Miscellaneous Miscellaneous
General Purpose General
Machinery Purpose
Manufacturing. Machinery
Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory centrifuges.
334220*.......... 750 employees........ Radio and Television 334220 Radio and 750 employees.
Broadcasting and Television
Wireless Broadcasting
Communications and Wireless
Equipment Communications
Manufacturing--exce Equipment
pt communications Manufacturing.
signal testing and
evaluation
equipment.
334515........... 500 employees........ Instrument 334515 Instrument 500 employees.
Manufacturing for Manufacturing
Measuring and for Measuring
Testing Electricity and Testing
and Electrical Electricity
Signals. and Electrical
Signals.
[[Page 49642]]
334220*.......... 750 employees........ Radio and Television
Broadcasting and
Wireless
Communications
Equipment
Manufacturing--comm
unications signal
testing and
evaluation
equipment.
336612........... 500 employees........ Boat Building....... 336612 Boat Building.. 500 employees.
326199*.......... 500 employees........ All Other Plastics
Product
Manufacturing--infl
atable plastics
boats.
326299*.......... 500 employees........ All Other Rubber
Product
Manufacturing--infl
atable rubber boats.
337127........... 500 employees........ Institutional 337127 Institutional 500 employees.
Furniture Furniture
Manufacturing. Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--labo
ratory furniture
(e.g., stools,
tables, benches).
339113........... 500 employees........ Surgical Appliance 339113 Surgical 500 employees.
and Supplies Appliance and
Manufacturing. Supplies
Manufacturing.
339111*.......... 500 employees........ Laboratory Apparatus
and Furniture
Manufacturing--exce
pt laboratory
furniture, scales,
balances, furnaces,
ovens, centrifuges,
distilling
equipment, and
freezers.
517110........... 1500 employees....... Wired 517110 Wired 1,500 employees.
Telecommunications Telecommunicat
Carriers. ions Carriers.
517510........... $13.5 million........ Cable and Other
Program
Distribution..
518111*.......... $23.0 million........ Internet Service
Providers--broadban
d Internet service
providers (e.g.,
cable, DSL).
517211........... 1500 employees....... Paging.............. 517210 Wireless 1,500 employees.
Telecommunicat
ions Carriers
(except
Satellite).
517212........... 1500 employees....... Cellular and Other
Wireless
Telecommunications..
517310........... 1500 employees....... Telecommunications 517911 Telecommunicati 1,500 employees.
Resellers. ons Resellers.
517910........... $13.5 million........ Other 517919 All Other $23.0 million.
Telecommunications. Telecommunicat
ions.
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 519190 All Other $6.5 million.
Information Information
Services. Services.
525990........... $6.5 million......... Other Financial 525990 Other Financial $6.5 million.
Vehicles. Vehicles.
525930*.......... $6.5 million......... Real Estate
Investment Trusts--
hybrid or mortgage
REITs primarily in
underwriting or
investing in
mortgages..
531110........... $6.5 million......... Lessors of 531110 Lessors of $6.5 million.
Residential Residential
Buildings and Buildings and
Dwellings. Dwellings.
525930*.......... $6.5 million......... Real Estate
Investment Trusts--
hybrid or equity
REITs primarily
leasing residential
Buildings and
Dwellings.
531120........... $6.5 million......... Lessors of 531120 Lessors of $6.5 million.
Nonresidential Nonresidential
Buildings (except Buildings
Miniwarehouses). (except
Miniwarehouses
).
525930*.......... $6.5 million......... Real Estate
Investment Trusts--
hybrid or equity
REITs primarily
leasing
nonresidential
buildings.
531130........... $23.5 million........ Lessors of 531130 Lessors of $23.5 million.
Miniwarehouses and Miniwarehouses
Self-Storage Units. and Self-
Storage Units.
525930*.......... $6.5 million......... Real Estate
Investment Trusts--
hybrid or equity
REITs primarily
leasing
miniwarehouses and
self-storage units.
531190........... $6.5 million......... Lessors of Other 531190 Lessors of $6.5 million.
Real Estate Other Real
Property. Estate
Property.
[[Page 49643]]
525930*.......... $6.5 million......... Real Estate
Investment Trusts--
hybrid or equity
REITs 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--
biotechnology
research and
development.
541710*.......... 500 employees........ Research and 541712 Research and 500 employees.
Development in the Development in
Physical, the Physical,
Engineering, and Engineering,
Life Sciences-- and Life
except Sciences
biotechnology (except
research and Biotechnology).
development.
561310........... $6.5 million......... Employment Placement 561311 Employment $6.5 million.
Agencies. Placement
Agencies.
541612*.......... $6.5 million......... Human Resources and 561312 Executive $6.5 million.
Executive Search Search
Consulting Services.
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
revision in 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
is adopting 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 is adopting 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 is adopting 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 is adopting 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 is
adopting 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 is adopting 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
[[Page 49644]]
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 is adopting 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).
Justification for October 1, 2007 Effective Date
If adopted in final form, SBA's table of small business size
standards matched to NAICS 2007 will be effective on and will apply to
all solicitations issued on or after October 1, 2007, because:
1. Federal Government recordkeeping and statistics would be more
consistent and more comparable with other data for analyzing small
business activity. October 1, 2007 is the start of the first Federal
Government fiscal year after the NAICS 2007 January 1, 2007 effective
date.
2. SBA and other users of size standards could collect data on
their small business programs using the more recent NAICS format and
can compare those data with future Federal statistics that will be
based on NAICS 2007 industry classifications. The availability of such
comparable data would ensure the credibility of analyses comparing
program and industry data.
3. Federal agencies that use NAICS and SBA's small business size
standards for their programs, as most of them do, will need time to
implement the new size standards and to develop training tools
necessary to do so. SBA believes that publishing this direct final rule
now provides sufficient time for agencies to determine its impact on
their programs and to convert and update their databases and tracking
systems for implementation by the beginning of FY 2008.
4. To evaluate and establish small business size standards, SBA
uses data that the U.S. Bureau of the Census (Census Bureau) compiles
for the Agency from its quinquennial Economic Census of U. S. industry
and businesses. SBA acquires this special compilation from the Census
Bureau every five years, after each Economic Census. To evaluate and
establish meaningful small business size standards, SBA requires the
same data and on the same basis as the Census Bureau collects them.
Because the next compilation that SBA will obtain from the Census
Bureau will be based on NAICS 2007, SBA needs to use NAICS 2007 as the
basis for its table of small business size standards.
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 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
This is a direct final rule, but SBA will consider comments. SBA
believes that this rule is routine and non-controversial, and SBA
anticipates no significant adverse comments to this action. If SBA
receives significant any adverse comments, it will withdraw this direct
final rule. SBA is publishing concurrently in this issue of the Federal
Register a proposed rule to modify its Small Business Size Regulations
as contemplated in this direct final rule. If SBA does receive
significant adverse comments, it will consider the comment(s) before
making a final decision. 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 direct final rule is not a
``significant'' regulatory action for purposes of Executive Order
(E.O.) 12866. This direct final 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 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 direct final rule as drafted, including
the alternatives discussed in the supplementary information above,
[[Page 49645]]
would 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 NAICS
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.
0
For the reasons set forth in the preamble, SBA amends 13 CFR part 121
as follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
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]
0
2. Amend Sec. 121.201, in the table ``Small Business Size Standards by
NAICS Industry,'' as follows:
0
a. Revise the industry description of NAICS code 112519 ``Other Animal
Aquaculture'' to read ``Other Aquaculture.''
0
b. Revise the heading ``Sector 21--Mining'' to read ``Sector 21--
Mining, Quarrying, and Oil and Gas Extraction.''
0
c. Revise the industry description of NAICS code 238210, ``Electrical
Contractors,'' to read ``Electrical Contractors and other Wiring
Installation Contractors.''
0
d. Revise the industry description of NAICS code 316999, ``All Other
Leather Good Manufacturing,'' to read ``All Other Leather Good and
Allied Product Manufacturing.''
0
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.''
0
f. Revise the industry description of NAICS code 326111, ``Unsupported
Plastics Bag Manufacturing,'' to read ``Plastics Bag and Pouch
Manufacturing.''
0
g. Revise the industry description of NAICS code 333997, ``Scale and
Balance (except Laboratory) Manufacturing,'' to read ``Scale and
Balance Manufacturing.''
0
h. Remove the entry NAICS code 339111, ``Laboratory Apparatus and
Furniture Manufacturing.''
0
i. Revise the industry description of NAICS code 441221, ``Motorcycle
Dealers,'' to read ``Motorcycle, ATV, and Personal Watercraft
Dealers.''
0
j. Revise the heading ``Sectors 48-49--Transportation'' to read
``Sectors 48-49--Transportation and Warehousing.''
0
k. Revise the industry description of NAICS code 492110, ``Couriers,''
to read ``Couriers and Express Delivery Services.''
0
l. Remove the heading ``Subsector 516--Internet Publishing and
Broadcasting'' and the entry for NAICS code 516110, ``Internet
Publishing and Broadcasting.''
0
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
Telecommunication
s Carriers
(except
Satellite).
------------------------------------------------------------------------
0
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 ..............
Telecommunication
s.
------------------------------------------------------------------------
0
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.''
0
p. Remove the entries for NAICS codes 518111, ``Internet Service
Providers,'' and 518112, ``Web Search Portals.''
0
q. Add immediately after entry for NAICS code 519120, `` Libraries and
Archives'' the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
519130.............. Internet .............. 500
Publishing and
Broadcasting and
Web Search
Portals.
------------------------------------------------------------------------
[[Page 49646]]
0
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.''
0
s. Revise the industry description of NAICS code 541612, ``Human
Resources and Executive Search Consulting Services,'' to read ``Human
Resources Consulting Services.''
0
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).\1
1\
Except,............. Aircraft.......... .............. 1,500
Except,............. Aircraft Parts, .............. 1,000
and 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.
------------------------------------------------------------------------
0
u. Remove the entry for NAICS code 561310, ``Employment Placement
Agencies,'' and add in its place the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
561311.............. Employment $6.5 ..............
Placement
Agencies.
561312.............. Executive Search $6.5 ..............
Services.
------------------------------------------------------------------------
0
v. Revise the industry description of NAICS code 561422,
``Telemarketing Bureaus,'' to read ``Telemarketing Bureaus and Other
Contact Centers.''
0
w. Revise the industry description of NAICS code 722212,
``Cafeterias,'' to read ``Cafeterias, Grill Buffets, and Buffets.''
0
x. Revise the heading ``Sector 81--Other Services'' to read ``Sector
81--Other Services (except Public Administration).''
0
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. E7-17151 Filed 8-28-07; 8:45 am]
BILLING CODE 8025-01-P