30646 Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Rules and Regulations

requirements on either small or large

California dried prune handlers. As

with all Federal marketing order

programs, reports and forms are

periodically reviewed to reduce

information requirements and

duplication by industry and public

sector agencies.

The Department has not identified

any relevant Federal rules that

duplicate, overlap or conflict with this

rule.

In addition, the Committee’s meeting

was widely publicized throughout the

prune industry and all interested

persons were invited to attend the

meeting and participate in Committee

deliberations on all issues. Like all

Committee meetings, the November 29,

2000, meeting was a public meeting and

all entities, both large and small, were

able to express views on this issue. The

Committee itself is composed of twentytwo members. Seven are handlers,

fourteen are producers, and one is a

public member. Moreover, the

Committee and its Supply Management

Subcommittee have been monitoring the

supply situation, and this rule reflects

their deliberations completely.

A proposed rule concerning this

action was published in the Federal

Register on Tuesday, March 6, 2001, (66

FR 13454). Copies of this rule were

mailed or sent via facsimile to all

Committee members, alternates and

dried prune handlers. Finally, the rule

was made available through the Internet

by the U.S. Government Printing Office.

The rule provided a comment period

which ended April 16, 2001. No

comments were received. Accordingly,

no changes will be made to the rule as

proposed.

A small business guide on complying

with fruit, vegetable, and specialty crop

marketing agreements and orders may

be viewed at: http://www.ams.usda.gov/

fv/moab.html. Any questions about the

compliance guide should be sent to Jay

Guerber at the previously mentioned

address in the FOR FURTHER INFORMATION

CONTACT section.

After consideration of all relevant

matter presented, including the

information and recommendation

submitted by the Committee and other

available information, it is hereby found

that this rule, as hereinafter set forth,

will tend to effectuate the declared

policy of the Act.

List of Subjects in 7 CFR Part 993

Marketing agreements, Plums, Prunes,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 993 is amended as

follows:

PART 993—DRIED PRUNES

PRODUCED IN CALIFORNIA

1. The authority citation for 7 CFR

part 993 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. A new section 993.408 is added to

read as follows:

§ 993.408 Undersized prune regulation for

the 2001–02 crop year.

Pursuant to §§ 993.49(c) and 993.52,

an undersized prune regulation for the

2001–02 crop year is hereby established.

Undersized prunes are prunes which

pass through openings as follows: for

French prunes, 24⁄32 of an inch in

diameter; for non-French prunes, 30⁄32 of

an inch in diameter.

Dated: June 1, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–14291 Filed 6–4–01; 10:42 am]

BILLING CODE 3410–02–U

SMALL BUSINESS ADMINISTRATION

13 CFR Parts 107 and 121

Size Eligibility Requirements for SBA

Financial Assistance and Size

Standards for Agriculture

AGENCY: Small Business Administration.

ACTION: Direct final rule.

SUMMARY: This final rule implements

legislative changes to size eligibility

requirements for assistance from Small

Business Investment Companies (SBICs)

and Certified Development Companies

(CDCs), and for the Agriculture

industry.

The Small Business Investment

Improvement Act of 1999, codified in

sections 103(5) and 103(12) of the Small

Business Investment Act of 1958, as

amended, established a method for

determining the eligibility of a business

that is not required to pay Federal

income tax at the corporate level, but

that is required to pass income through

to its shareholders or partners. The new

method treats ‘‘pass-through’’

enterprises the same as firms that pay

Federal taxes for the purpose of size

standard determinations.

The Small Business Reauthorization

Act of 2000, codified in section 3(a)(1)

of the Small Business Act, increases the

size standards used for Agriculture from

$500,000 to $750,000 in average annual

receipts.

DATES: The rule will become effective

August 6, 2001, unless adverse

comment is received prior to July 9,

2001. If an adverse comment is received,

SBA will publish a timely withdrawal of

the rule in the Federal Register. The

Agency may proceed to publish a

proposed rule following notice and

comment procedures.

ADDRESSES: Send written comments to

Gary M. Jackson, Assistant

Administrator for Size Standards, U.S.

Small Business Administration, 409

Third St., SW., Mail Code 6530,

Washington, DC 20416; or via e-mail to

sizestandards@sba.gov.

FOR FURTHER INFORMATION CONTACT:

Diane Heal, Office of Size Standards,

(202) 205–6618.

SUPPLEMENTARY INFORMATION:

SBIC/CDC

A business seeking financial

assistance from an SBIC or a CDC must

qualify as a ‘‘small-business concern’’ as

defined in section 103(5) of the Small

Business Investment Act of 1958, as

amended (the Act), and as implemented

by 13 CFR 121.301(b) for CDCs and 13

CFR 121.301(c) for SBICs. For SBIC

financial assistance, a business also may

need to qualify as a ‘‘smaller enterprise’’

as defined in section 103(12) of the Act,

and as implemented by 13 CFR

107.710(a). Each of these definitions

requires a firm to meet either the size

standard for its primary industry or

certain net worth and net income tests.

The net income tests measure the firm’s

average net income after Federal income

taxes for the preceding 2 years.

On April 5, 1999, Public Law 106–9,

the ‘‘Small Business Investment

Improvement Act of 1999’’ which

expands opportunities for small

businesses to receive investment capital

from banks and traditional investment

sources, became effective. This

legislation established a new method for

applying the net income test to a

business that is not required to pay

Federal income tax at the enterprise

level, but that is required to pass income

through to its shareholders, partners, or

other owners. This new method permits

such businesses to use a specified

formula to impute a tax to the business

and to compute ‘‘after-tax’’ net income.

The intent is to permit ‘‘pass-through’’

enterprises to be treated the same as

concerns that pay Federal income taxes

for purposes of SBA size standard

determinations.

As authorized by Public Law 106–9,

this final rule revises 121.301(b),

121.301(c) and 107.710(a) to permit a

business concern that does not pay

Federal income taxes at the enterprise

level to deduct an imputed Federal

income tax expense from its net income.

The business concern computes this

deduction by multiplying its net income

Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Rules and Regulations 30647

by the marginal Federal income tax rate

that would have applied if the concern

were a taxable corporation. If the

business concern is also treated as a

pass-through entity for State and local

income tax purposes, it can compute an

additional deduction equal to its net

income multiplied by the State income

tax rate (or combined State and local

income tax rate, if applicable) that

would have applied if it were a taxable

corporation. In this case, the State/local

tax deduction must be computed first

and then subtracted from net income

before computing the deduction for

Federal income taxes.

Agriculture Industry

On December 21, 2000, Public Law

106–554, the ‘‘Small Business

Reauthorization Act of 2000’’ became

effective. Section 806(b) of this

legislation increases the size standard

for small businesses in the Agriculture

industry from $500,000 in average

annual receipts to $750,000 in average

annual receipts. This change affects

Agriculture industries under North

American Industry Classification

System (NAICS) codes, Sector 11,

‘‘Agriculture, Forestry, Fishing and

Hunting,’’ Subsector 111 ‘‘Crop

Production’’ (NAICS Codes 111110

through 111998) and Subsector 112,

‘‘Animal Production’’ (NAICS Codes

112111 through 112990). Not affected by

this legislative change are NAICS codes

112112, ‘‘Cattle Feedlots’’ and 112310,

‘‘Chicken Egg Production’’ as their size

standard is currently above $750,000.

Those size standards remain at $1.5

million and $9.0 million, respectively.

The SBA is publishing this regulation

as a direct final rule because the SBA

believes the rule is non-controversial. It

is merely implementing provisions of

Public Laws 106–9 and 106–554. As

such, SBA believes that this rule will

elicit no significant adverse comment.

Compliance With Executive Orders

12866, 12988, and 13132, the

Regulatory Flexibility Act (5 U.S.C.

601–612), and the Paperwork

Reduction Act (44 U.S.C. Ch. 35)

This final rule is not a ‘‘significant’’

regulatory action for purposes of

Executive Order 12866 and therefore

was not reviewed by the Office of

Management and Budget.

SBA has determined that this final

rule will not have a significant

economic impact on a substantial

number of small entities within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601–612. This rule is

merely implementing provisions of Pub.

L. 106–9 and 106–554. This rule does

not impose costs upon the businesses

that might be affected by it. The rule

will have no effect on the amount or

dollar value of any contract requirement

or on the number of requirements

reserved for the small business set-aside

program. Therefore, it will not have an

annual economic effect of $100 million

or more, result in a major increase in

costs or prices, or have a significant

adverse effect on competition or the

United States economy.

For purposes of Executive Order

12988, SBA has determined that this

final rule is drafted, to the extent

practicable, in accordance with the

standards set forth in Section 3 of that

Order.

For purposes of Executive Order

13132, SBA has determined that this

final rule will have no federalism

implications.

For the purpose of the Paperwork

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

has determined that this final rule

contains no new reporting or

recordkeeping requirements.

List of Subjects in 13 CFR Parts 107 and

121

Investment companies, Loan

programs—business, Reporting and

recordkeeping requirements, Small

businesses.

For the reasons stated forth above,

SBA amends 13 CFR parts 107 and 121

as follows:

PART 107—SMALL BUSINESS

INVESTMENT COMPANIES

1. The authority citation for 13 CFR

Part 107 continues to read as follows:

Authority: 15 U.S.C. 662, 681 et seq., 683,

687(c), 687b, 687d, 687g and 687m.

2. In § 107.710, revise paragraph (a) to

read as follows:

§ 107.710 Requirement to finance smaller

enterprises.

* * * * *

(a) Definition of Smaller Enterprise. A

Smaller Enterprise means any small

business concern that:

(1) Both together with its Affiliates,

and by itself, meets the size standard of

§ 121.201 of this chapter at the time of

Financing for the industry in which it

is then primarily engaged; or

(2) Together with its affiliates has a

net worth of not more than $6 million

and average net income after Federal

income taxes (excluding any carry-over

losses) for the preceding two years no

greater than $2 million. If the applicant

is not required by law to pay Federal

income taxes at the enterprise level, but

is required to pass income through to its

shareholders, partners, beneficiaries, or

other equitable owners, the applicant’s

‘‘net income after Federal income taxes’’

will be its net income reduced by an

amount computed as follows:

(i) If the applicant is not required by

law to pay State (and local, if any)

income taxes at the enterprise level,

multiply its net income by the marginal

State income tax rate (or by the

combined State and local income tax

rates, as applicable) that would have

applied if it were a taxable corporation.

(ii) Multiply the applicant’s net

income, less any deduction for State and

local income taxes calculated under

paragraph (a)(2)(i) of this section, by the

marginal Federal income tax rate that

would have applied if the applicant

were a taxable corporation.

(iii) Add the results obtained in

paragraphs (a)(2)(i) and (a)(2)(ii) of this

section.

* * * * *

PART 121—SMALL BUSINESS SIZE

REGULATIONS

1. The authority citation for 13 CFR

Part 121 continues to read as follows:

Authority: 15 U.S.C. 632(a), 634(b)(6),

637(a), 644(c), and 662(5).

2. In § 121.201, revise the referenced

NAICS Codes and size standards in the

table ‘‘SMALL BUSINESS SIZE

STANDARDS BY NAICS INDUSTRY,’’

under the heading Sector 11—

Agriculture, Forestry, and Fishing—

Subsector 111—Crop Production, and

Subsector 112—Animal Production, to

read as follows:

§ 121.201 What size standards has SBA

identified by North American Industry

Classification System codes?

* * * * *

30648 Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Rules and Regulations

SMALL BUSINESS SIZE STANDARD BY NAICS INDUSTRY

NAICS code Description

(N.E.C.=not elsewhere classified)

Size standard

in number of

employees or

millions of

dollars

Sector 11—Agriculture, Forestry, and Fishing

Subsector 111—Crop Production

111110 ............................... Soybean Farming ............................................................................................................................ $0.75

111120 ............................... Oilseed (except Soybean) Farming ................................................................................................ 0.75

111130 ............................... Dry Pea and Bean Farming ............................................................................................................ 0.75

111140 ............................... Wheat Farming ............................................................................................................................... 0.75

111150 ............................... Corn Farming .................................................................................................................................. 0.75

111160 ............................... Rice Farming ................................................................................................................................... 0.75

111191 ............................... Oilseed and Grain Combination Farming ....................................................................................... 0.75

111199 ............................... All Other Grain Farming .................................................................................................................. 0.75

111211 ............................... Potato Farming ............................................................................................................................... 0.75

111219 ............................... Other Vegetable (except Potato) and Melon Farming ................................................................... 0.75

111310 ............................... Orange Groves ............................................................................................................................... 0.75

111320 ............................... Citrus (except Orange) Groves ....................................................................................................... 0.75

111331 ............................... Apple Orchards ............................................................................................................................... 0.75

111332 ............................... Grape Vineyards ............................................................................................................................. 0.75

111333 ............................... Strawberry Farming ........................................................................................................................ 0.75

111334 ............................... Berry (except Strawberry) Farming ................................................................................................ 0.75

111335 ............................... Tree Nut Farming ............................................................................................................................ 0.75

111336 ............................... Fruit and Tree Nut Combination Farming ....................................................................................... 0.75

111339 ............................... Other Noncitrus Fruit Farming ........................................................................................................ 0.75

111411 ............................... Mushroom Production ..................................................................................................................... 0.75

111419 ............................... Other Food Crops Grown Under Cover ......................................................................................... 0.75

111421 ............................... Nursery and Tree Production ......................................................................................................... 0.75

111422 ............................... Floriculture Production .................................................................................................................... 0.75

111910 ............................... Tobacco Farming ............................................................................................................................ 0.75

111920 ............................... Cotton Farming ............................................................................................................................... 0.75

111930 ............................... Sugarcane Farming ........................................................................................................................ 0.75

111940 ............................... Hay Farming ................................................................................................................................... 0.75

111991 ............................... Sugar Beet Farming ........................................................................................................................ 0.75

111992 ............................... Peanut Farming .............................................................................................................................. 0.75

111998 ............................... All Other Miscellaneous Crop Farming ........................................................................................... 0.75

Subsector 112—Animal Production

112111 ............................... Beef Cattle Ranching and Farming ................................................................................................ 0.75

112112 ............................... Cattle Feedlots ................................................................................................................................ 1.50

112120 ............................... Dairy Cattle and Milk Production .................................................................................................... 0.75

112210 ............................... Hog and Pig Farming ...................................................................................................................... 0.75

112310 ............................... Chicken Egg Production ................................................................................................................. 9.00

112320 ............................... Broilers and Other Meat Type Chicken Production ........................................................................ 0.75

112330 ............................... Turkey Production ........................................................................................................................... 0.75

112340 ............................... Poultry Hatcheries ........................................................................................................................... 0.75

112390 ............................... Other Poultry Production ................................................................................................................ 0.75

112410 ............................... Sheep Farming ............................................................................................................................... 0.75

112420 ............................... Goat Farming .................................................................................................................................. 0.75

112511 ............................... Finfish Farming and Fish Hatcheries .............................................................................................. 0.75

112512 ............................... Shellfish Farming ............................................................................................................................ 0.75

112519 ............................... Other Animal Aquaculture ............................................................................................................... 0.75

112910 ............................... Apiculture ........................................................................................................................................ 0.75

112920 ............................... Horse and Other Equine Production .............................................................................................. 0.75

112930 ............................... Fur-Bearing Animal and Rabbit Production .................................................................................... 0.75

112990 ............................... All Other Animal Production ........................................................................................................... 0.75

*******

3. In § 121.301, revise paragraphs (b)

and (c) to read as follows:

§ 121.301 What size standards are

applicable to financial assistance

programs?

* * * * *

(b) For Development Company

programs, an applicant must meet one

of the following standards:

(1) The same standards applicable

under paragraph (a) of this section; or

(2) Including its affiliates, tangible net

worth not in excess of $6 million, and

average net income after Federal income

taxes (excluding any carry-over losses)

for the preceding two completed fiscal

years not in excess of $2 million. If the

applicant is not required by law to pay

Federal income taxes at the enterprise

level, but is required to pass income

through to its shareholders, partners,

beneficiaries, or other equitable owners,

Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Rules and Regulations 30649

the applicant’s ‘‘net income after

Federal income taxes’’ will be its net

income reduced by an amount

computed as follows:

(i) If the applicant is not required by

law to pay State (and local, if any)

income taxes at the enterprise level,

multiply its net income by the marginal

State income tax rate (or by the

combined State and local income tax

rates, as applicable) that would have

applied if it were a taxable corporation.

(ii) Multiply the applicant’s net

income, less any deduction for State and

local income taxes calculated under

paragraph (b)(2)(i) of this section, by the

marginal Federal income tax rate that

would have applied if the applicant

were a taxable corporation.

(iii) Sum the results obtained in

paragraphs (b)(2)(i) and (b)(2)(ii) of this

section.

(c) For the Small Business Investment

Company (SBIC) program, an applicant

must meet one of the following

standards:

(1) The same standards applicable

under paragraph (a) of this section; or

(2) Including its affiliates, tangible net

worth not in excess of $18 million, and

average net income after Federal income

taxes (excluding any carry-over losses)

for the preceding two completed fiscal

years not in excess of $6 million. If the

applicant is not required by law to pay

Federal income taxes at the enterprise

level, but is required to pass income

through to its shareholders, partners,

beneficiaries, or other equitable owners,

the applicant’s ‘‘net income after

Federal income taxes’’ will be its net

income reduced by an amount

computed as follows:

(i) If the applicant is not required by

law to pay State (and local, if any)

income taxes at the enterprise level,

multiply its net income by the marginal

State income tax rate (or by the

combined State and local income tax

rates, as applicable) that would have

applied if it were a taxable corporation.

(ii) Multiply the applicant’s net

income, less any deduction for State and

local income taxes calculated under

paragraph (c)(2)(i) of this section, by the

marginal Federal income tax rate that

would have applied if the applicant

were a taxable corporation.

(iii) Add the results obtained in

paragraphs (c)(2)(i) and (c)(2)(ii) of this

section.

* * * * *

Dated: May 30, 2001.

John Whitmore,

Acting Administrator.

[FR Doc. 01–14222 Filed 6–6–01; 8:45 am]

BILLING CODE 8025–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 23

[Docket No. CE167, Special Condition 23–

107–SC]

Special Conditions; Diamond DA 40;

Protection of Systems for High

Intensity Radiated Fields (HIRF)

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final special conditions; request

for comments.

SUMMARY: These special conditions are

issued to Diamond Aircraft Industries

GmbH, N.A. Otto-Str. 5, A–2700 Wiener

Neustadt, Austria, for a Type Certificate

for the Model DA 40 airplane. This

airplane will have the potential for

novel and unusual design features when

compared to the state of technology

envisaged in the applicable

airworthiness standards. The current

design does not include novel and

unusual design features such as the

installation of electronic flight

instrument system (EFIS) displays;

however, Diamond Aircraft Industries

GmbH would like to make the

applicable tests necessary for these

types of installations for which the

applicable regulations do not contain

adequate or appropriate airworthiness

standards for the protection of these

systems from the effects of high

intensity radiated fields (HIRF). These

special conditions contain the

additional safety standards that the

Administrator considers necessary to

establish a level of safety equivalent to

the airworthiness standards applicable

to these airplanes.

DATES: The effective date of these

special conditions is July 9, 2001.

Comments must be received on or

before July 9, 2001.

ADDRESSES: Comments may be mailed

in duplicate to: Federal Aviation

Administration Regional Counsel, ACE–

7, Attention: Rules Docket Clerk, Docket

No. CE167, Room 506, 901 Locust,

Kansas City, Missouri 64106. All

comments must be marked: Docket No.

CE167. Comments may be inspected in

the Rules Docket weekdays, except

Federal holidays, between 7:30 a.m. and

4 p.m.

FOR FURTHER INFORMATION CONTACT:

Ervin Dvorak, Aerospace Engineer,

Standards Office (ACE–110), Small

Airplane Directorate, Aircraft

Certification Service, Federal Aviation

Administration, 901 Locust, Room 301,

Kansas City, Missouri 64106; telephone

(816) 329–4123.

SUPPLEMENTARY INFORMATION: The FAA

has determined that notice and

opportunity for prior public comment

hereon are impracticable because these

procedures would significantly delay

issuance of the approval design and

thus delivery of the affected aircraft. In

addition, the substance of these special

conditions has been subject to the

public comment process in several prior

instances with no substantive comments

received. The FAA, therefore, finds that

good cause exists for making these

special conditions effective upon

issuance.

Comments Invited

Interested persons are invited to

submit such written data, views, or

arguments as they may desire.

Communications should identify the

regulatory docket or notice number and

be submitted in duplicate to the address

specified above. All communications

received on or before the closing date

for comments will be considered by the

Administrator. The special conditions

may be changed in light of the

comments received. All comments

received will be available in the Rules

Docket for examination by interested

persons, both before and after the

closing date for comments. A report

summarizing each substantive public

contact with FAA personnel concerning

this rulemaking will be filed in the

docket. Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this notice

must include a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket No. CE167.’’ The postcard will

be date stamped and returned to the

commenter.

Background

On May 11, 2000, Diamond Aircraft

Industries GmbH, N.A. Otto-Str. 5, A–

2700 Wiener Neustadt, Austria, made an

application to the FAA for a new

Certificate for the Model DA 40

airplane. The current design does not

include novel and unusual design

features such as the installation of

electronic flight instrument system

(EFIS) displays; however, Diamond

Aircraft Industries GmbH would like to

make the applicable tests necessary for

these types of installations. The

applicable regulations do not contain

adequate or appropriate airworthiness

standards for the protection of these

systems from the effects of high

intensity radiated fields (HIRF). These

special conditions contain the

additional safety standards that the

Administrator considers necessary to

establish a level of safety equivalent to