Latest Small Business Regulatory Roundup
Out for Comment — Small Business Size Standards
The U.S. Small Business Administration is considering revising the definitions of what constitutes "small" business. Current definitions are found at:
http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf
While the broad definition of "small business" covers businesses with 500 or fewer employees, it gets more complicated depending on the type of industry. SBA has not conducted a comprehensive review of its size standards for 25-years. If you or your members provide products or services to the government (even state and local), it would be a good idea to take a look at SBA's proposed changes. Many federal and state programs cross-reference the federal definition.
First, it is worth looking at the 60-page White Paper produced by SBA. The paper contains a comprehensive explanation of current size standards. Most importantly, the policy section (starting on page 45) requests comment on several policy issues related to size standards. For instance, should there be one uniform definition? Should size standards be lowered?
White Paper on Size Standards Methodology
http://www.sba.gov/idc/groups/public/documents/sba_homepage/size_standards_methodology.pdf
Notice of the Size Standards White Paper and instructions on how to comment may be found at: http://edocket.access.gpo.gov/2009/pdf/E9-25196.pdf. There is no listed deadline for comment on SBA's White Paper, but I assume that comments would ideally be received at the same time comments are due for the 3 specific size standard proposals (below) which is December 21, 2009.
Proposed Size Standard for Accommodation and Food Service Industries
http://www.sba.gov/idc/groups/public/documents/sba_homepage/sector72_pr.pdf
Proposed Size Standard for Retail Trade
http://www.sba.gov/idc/groups/public/documents/sba_homepage/sector44-45_pr.pdf
Proposed Size Standard for "other services"
http://www.sba.gov/idc/groups/public/documents/sba_homepage/sector81_pr.pdf
Analysis for SBCRR Subscribers:
The policy section of SBA's White Paper, "Size Standards Methodology" presents an opportunity for small business interests that have long griped about the complexities or unfairness in size determinations to propose constructive solutions to SBA's process.
The regulatory flexibility analysis does a good job promoting the proposed changes. As such, it is a data-driven advocacy exercise to promote some benefits of the proposed changes. However, the analysis stops short of explaining what small businesses lose out under changes to the size standards. It is acknowledged by SBA that every change to SBA size standards creates winners and losers. The regulatory flexibility analysis in each of the 3 proposed changes lays out in detail how a number of small businesses are "winners," but does not describe how some small businesses will have a lower percentage chance of receiving federal preferences because they will be competing with a larger pool of small businesses for federal assistance. Data that would aid SBA's acknowledgement of the "losers" in SBA's proposed size changes would benefit SBA's final determinations.
At OMB for 90 Day Review — EPA's Endangerment Finding
The U.S. Environmental Protection Agency (EPA) submitted its endangerment finding to OMB for review on November 6, 2009. EPA received over 300,000 comments after the proposal was issued in April. Once finalized, the finding sets the stage for EPA to regulate greenhouse gas emissions. In addition to the endangerment finding, EPA sent to OMB the final determination on whether cars and trucks "cause or contribute" to pollution. The finding allows the federal government to control greenhouse gas emissions by increasing vehicle mileage requirements.
Analysis for SBCRR Subscribers:
Executive Order 12866 governs the process for stakeholders to meet with the Office of Information and Regulatory Affairs (OIRA) when a rulemaking is at OMB for its 90 day review. OIRA benefits from any additional data or information that may improve the analysis or rationale for the regulatory proposal. Any meeting under 12866 is a matter of public record, with participants and subject matter disclosed. Additionally, any data or information presented at the meeting are made public. Staff from the promulgating agency and other interested interagency personnel attend. OMB generally listens and sometimes asks questions, but OMB and staff from the promulgating agency do not answer questions about the substance of the rule because the content of the proposal is still considered a confidential work-product prior to its submission to the federal register for publication.
Small business stakeholders remain concerned with the lack of overall small business impact analysis for regulatory proposals issued by EPA to reduce greenhouse gas emissions. There are half-a-dozen regulatory proposals that are expected to be finalized by March 2010. Each individual proposal may satisfy the small business impact analysis requirement of the Regulatory Flexibility Act, but there is no analysis of how all of the regulatory measures will work together to control greenhouse gas emissions. Under the Regulatory Flexibility Act, EPA proposals that significantly impact a substantial number of small businesses must undergo a pre-proposal process that guarantees small business input and consideration of less burdensome alternatives. The Renewable Fuel Standard is the only proposal under EPA's strategy to reduce greenhouse gas emissions that has benefited from a Small Business Advocacy Review Panel. EPA's endangerment finding serves as a foundation for EPA's greenhouse gas reduction plans. As such, EPA and OMB may benefit from data presented during the 90 Day Review that fills in the gap of how all the regulatory pieces fit together and impact small business.
About SBCRR
The Small Business Coalition for Regulatory Relief (SBCRR) is a coalition made up of small businesses and supporting organizations that are interested in federal regulatory developments. SBCRR provides coalition members with regular updates on regulatory proposals and opportunities for small business to provide input that can positively impact final agency decisions.
Contact:
Tom Sullivan
202.545.2909
tom.sullivan@nelsonmullins.com
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.