Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35869 

1On December 21, 2021, the U.S. Office of 

Management and Budget (OMB) published its 

‘‘Notice of NAICS 2022 Final Decisions . . .’’ (86 

FR 72277), accepting the Economic Classification 

Policy Committee (ECPC) recommendations, as 

outlined in the July 2, 2021, Federal Register notice 

(86 FR 35350), for the 2022 revisions to the North 

American Industry Classification System (NAICS), 

. . . .’’ In the near future, SBA will issue a 

proposed rule to adopt the OMB’s NAICS 2022 

revisions for its table of size standards. SBA 

anticipates updating its size standards with the 

NAICS 2022 revisions, effective October 1, 2022. 

CFPB strongly encourages enforcers of 

Federal consumer financial law to 

contact the CFPB with suggestions for 

new Consumer Financial Protection 

Circulars. The CFPB is also interested in 

receiving feedback on any Consumer 

Financial Protection Circulars it issues. 

Enforcers, and the broader public, can 

also provide feedback and comments to 

Circulars@cfpb.gov. 

About Consumer Financial Protection 

Circulars 

Consumer Financial Protection 

Circulars are issued to all parties with 

authority to enforce Federal consumer 

financial law. The CFPB is the principal 

Federal regulator responsible for 

administering Federal consumer 

financial law, see 12 U.S.C. 5511, 

including the Consumer Financial 

Protection Act’s prohibition on unfair, 

deceptive, and abusive acts or practices, 

12 U.S.C. 5536(a)(1)(B), and 18 other 

‘‘enumerated consumer laws,’’ 12 U.S.C. 

5481(12). However, these laws are also 

enforced by State attorneys general and 

State regulators, 12 U.S.C. 5552, and 

prudential regulators including the 

Federal Deposit Insurance Corporation, 

the Office of the Comptroller of the 

Currency, the Board of Governors of the 

Federal Reserve System, and the 

National Credit Union Administration. 

See, e.g., 12 U.S.C. 5516(d), 5581(c)(2) 

(exclusive enforcement authority for 

banks and credit unions with $10 

billion or less in assets). Some Federal 

consumer financial laws are also 

enforceable by other Federal agencies, 

including the Department of Justice and 

the Federal Trade Commission, the 

Farm Credit Administration, the 

Department of Transportation, and the 

Department of Agriculture. In addition, 

some of these laws provide for private 

enforcement. 

Consumer Financial Protection 

Circulars are intended to promote 

consistency in approach across the 

various enforcement agencies and 

parties, pursuant to the CFPB’s statutory 

objective to ensure Federal consumer 

financial law is enforced consistently. 

12 U.S.C. 5511(b)(4). 

Consumer Financial Protection 

Circulars are also intended to provide 

transparency to partner agencies 

regarding the CFPB’s intended approach 

when cooperating in enforcement 

actions. See, e.g., 12 U.S.C. 5552(b) 

(consultation with CFPB by State 

attorneys general and regulators); 12 

U.S.C. 5562(a) (joint investigatory work 

between CFPB and other agencies). 

Consumer Financial Protection 

Circulars are general statements of 

policy under the Administrative 

Procedure Act. 5 U.S.C. 553(b). They 

provide background information about 

applicable law, articulate considerations 

relevant to the Bureau’s exercise of its 

authorities, and, in the interest of 

maintaining consistency, advise other 

parties with authority to enforce Federal 

consumer financial law. They do not 

restrict the Bureau’s exercise of its 

authorities, impose any legal 

requirements on external parties, or 

create or confer any rights on external 

parties that could be enforceable in any 

administrative or civil proceeding. The 

CFPB Director is instructing CFPB staff 

as described herein, and the CFPB will 

then make final decisions on individual 

matters based on an assessment of the 

factual record, applicable law, and 

factors relevant to prosecutorial 

discretion. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2022–12727 Filed 6–13–22; 8:45 am] 

BILLING CODE 4810–AM–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 121 

RIN 3245–AH10 

Small Business Size Standards: 

Wholesale Trade and Retail Trade 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) is increasing its 

receipts-based and employee-based 

small business size definitions 

(commonly referred to as ‘‘size 

standards’’) for North American 

Industry Classification System (NAICS) 

sectors related to Wholesale Trade and 

Retail Trade. Specifically, SBA is 

increasing size standards for 57 

industries in those sectors, including 22 

industries in NAICS Sector 42 

(Wholesale Trade) and 35 industries in 

NAICS Sector 44–45 (Retail Trade). 

DATES: This rule is effective July 14, 

2022. 

FOR FURTHER INFORMATION CONTACT: 

Samuel Castilla, Economist, Office of 

Size Standards, (202) 619–0389 or 

sizestandards@sba.gov. 

SUPPLEMENTARY INFORMATION: 

Discussion of Size Standards 

To determine eligibility for Federal 

small business assistance, SBA 

establishes small business size 

definitions (usually referred to as ‘‘size 

standards’’) for private sector industries 

in the United States. SBA uses two 

primary measures of business size for 

size standards purposes: average annual 

receipts and average number of 

employees. SBA uses financial assets for 

certain financial industries and refining 

capacity, in addition to employees, for 

the petroleum refining industry to 

measure business size. In addition, 

SBA’s Small Business Investment 

Company (SBIC), Certified Development 

Company (CDC/504), and 7(a) Loan 

Programs use either the industry-based 

size standards or tangible net worth and 

net income-based alternative size 

standards to determine eligibility for 

those programs. 

In September 2010, Congress passed 

the Small Business Jobs Act of 2010 

(Pub. L. 111–240, 124 Stat. 2504, 

September 27, 2010) (‘‘Jobs Act’’), 

requiring SBA to review all size 

standards every five years and make 

necessary adjustments to reflect current 

industry and market conditions. In 

accordance with the Jobs Act, in early 

2016, SBA completed the first five-year 

review of all size standards—except 

those for agricultural enterprises for 

which size standards were previously 

set by Congress—and made appropriate 

adjustments to size standards for a 

number of industries to reflect current 

industry and Federal market conditions. 

SBA also adjusts its monetary-based size 

standards for inflation at least once 

every five years. An interim final rule 

on SBA’s latest inflation adjustment to 

size standards, effective August 19, 

2019, was published in the Federal 

Register on July 18, 2019 (84 FR 34261). 

SBA also updates its size standards 

every five years to adopt the Office of 

Management and Budget’s (OMB) 

quinquennial North American Industry 

Classification System (NAICS) revisions 

to its table of small business size 

standards. Effective October 1, 2017, 

SBA adopted the OMB’s 2017 NAICS 

revisions to its size standards (82 FR 

44886 (September 27, 2017)).1

This final rule is one of a series of 

final rules that will revise size standards 

of industries grouped by various NAICS 

sectors. Rather than revise all size 

standards at one time, SBA is revising 

size standards by grouping industries 


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35870 Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 

within various NAICS sectors that use 

the same size measure (i.e., employees 

or receipts). Although the industries in 

Sectors 42 and 44–45 have both receiptbased and employee-based industry size 

standards, SBA is evaluating these 

sectors together because these size 

standards share the characteristic that 

they cannot be used in Federal contracts 

for supplies. Instead, by rule, these size 

standards are superseded by a 500- 

employee size standard for Federal 

contracts in the Wholesale and Retail 

Trade sectors. In the prior review, SBA 

revised size standards mostly on a 

sector-by-sector basis. As part of the 

second five-year review of size 

standards, SBA reviewed all receiptbased and employee-based size 

standards in NAICS Sectors 42 and 44– 

45 to determine whether the existing 

size standards should be retained or 

revised based on the current industry 

and program data. After its review, SBA 

published in the May 25, 2021, issue of 

the Federal Register (86 FR 28012) a 

proposed rule to increase the size 

standards for 14 industries in NAICS 

Sector 42 (Wholesale Trade) and 35 

industries in NAICS Sector 44–45 

(Retail Trade). In this final rule, SBA is 

adopting the proposed size standards 

from the May 2021 proposed rule 

without change, except for eight 

industries in Sector 42 for which SBA 

is increasing size standards instead of 

maintaining them as proposed after 

refining its analysis of the economic 

characteristics of the comparison 

industry group. 

In conjunction with the ongoing 

second five-year review of size 

standards under the Jobs Act, SBA 

developed a revised ‘‘Size Standards 

Methodology’’ (Methodology) for 

developing, reviewing, and modifying 

size standards, when necessary. SBA’s 

revised Methodology provides a 

detailed description of its analyses of 

various industry and program factors 

and data sources, and how the agency 

uses the results to establish and revise 

size standards. In the May 2021 

proposed rule itself, SBA detailed how 

it applied its revised Methodology to 

review and modify where necessary, the 

existing size standards for industries 

covered in this final rule. Prior to 

finalizing the revised Methodology, SBA 

issued a notification in the April 27, 

2018, edition of the Federal Register (83 

FR 18468) to solicit comments from the 

public and notify stakeholders of the 

proposed changes to the Methodology. 

SBA considered all public comments in 

finalizing the revised Methodology. For 

a summary of comments and SBA’s 

responses, refer to SBA’s April 11, 2019, 

Federal Register notification (84 FR 

14587) of the issuance of the final 

revised Methodology. SBA’s Size 

Standards Methodology is available on 

its website at www.sba.gov/size. 

In evaluating an industry’s size 

standard, SBA normally examines its 

characteristics (such as average firm 

size, startup costs and entry barriers, 

industry competition, and distribution 

of firms by size) and the level and small 

business share of Federal contract 

dollars in that industry. However, since 

NAICS codes in the Wholesale Trade 

and Retail Trade sectors cannot be used 

to classify Federal Government 

procurement for supplies, and only the 

applicable manufacturing code can be 

applied, the Federal contracting factor is 

not considered in evaluating industrybased size standards for these sectors 

(13 CFR 121.402(b)). SBA also examines 

the potential impact a size standard 

revision might have on its financial 

assistance programs, and whether a 

business concern under a proposed or 

revised size standard would be 

dominant in its industry. 

SBA analyzed the characteristics of 

each industry in NAICS Sectors 42 and 

44–45, mostly using a special tabulation 

obtained from the U.S. Bureau of the 

Census from its 2012 Economic Census 

(the latest available when the proposed 

rule was prepared). The 2012 special 

tabulation contains information for 

different levels of NAICS categories on 

average (simple and weighted average) 

and median firm size in terms of both 

receipts and employment, total receipts 

generated by the four and eight largest 

firms, the Herfindahl-Hirschman Index 

(HHI), the Gini coefficient, and size 

distributions of firms by various receipts 

and employment size groupings. To 

evaluate average asset size, SBA 

combines the sales to total assets ratios 

by industry, obtained from the Risk 

Management Association’s (RMA) 

Annual eStatement Studies (https://

www.rmahq.org/statementstudies/) with 

the simple average receipts size by 

industry from the 2012 Economic 

Census tabulation to estimate the 

average assets size for each industry. 

Table 5 of the May 2021 proposed 

rule, Size Standards Supported by Each 

Factor for Each Industry (Employees) 

and Table 6, Size Standards Supported 

by Each Factor for Each Industry 

(Receipts), show the results of analyses 

of industry factors for each industry 

covered by the proposed rule. Of the 

137 industries, including 71 in Sector 

42 and 66 in Sector 44–45, reviewed in 

the proposed rule, the results from 

analyses of the latest available data on 

the four primary industry factors (i.e., 

average firm size, average assets size, 

four-firm ratio, and Gini coefficient) 

supported increasing size standards for 

49 industries (14 in Sector 42 and 35 in 

Sector 44–45), decreasing size standards 

for 66 industries (38 in Sector 42 and 28 

in Sector 44–45), and maintaining size 

standards for 22 industries (19 in Sector 

42 and 3 in Sector 44–45). Table 1, 

Summary of Calculated Size Standards, 

summarizes the analytical results from 

the proposed rule by NAICS sector. 

TABLE 1—SUMMARY OF CALCULATED SIZE STANDARDS

Sector Sector name 

Number of 

size standards 

reviewed 

Number of 

size standards 

increased 

Number of 

size standards 

decreased 

Number of 

size standards 

maintained 

42 .................................................. Wholesale Trade .......................... 71 14 38 19 

44–45 ............................................ Retail Trade .................................. 66 35 28 3 

Total ....................................... ....................................................... 137 49 66 22 

In the May 2021 proposed rule, SBA 

discussed the impacts of the COVID–19 

pandemic on small businesses and 

greater society. Recognizing the wideranging economic impacts of the 

pandemic, SBA decided not to lower 

any size standards for which the 

analysis suggested lowering them. 

Instead, SBA proposed to maintain all 

size standards for industries in which 

the analytical results supported a 

decrease or no change to size standards 

and adopt all size standards for which 

the analytical results supported an 

increase to size standards. In this final 

rule, SBA is adopting the proposed size 

standards from the May 2021 proposed 

rule without change, except for eight 


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Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35871 

industries in Sector 42 for which SBA 

is increasing size standards instead of 

maintaining them as proposed after 

refining its analysis of the economic 

characteristics of the comparison 

industry group in accordance with its 

‘‘Size Standards Methodology.’’ 

Specifically, SBA is increasing the size 

standards for the following eight 

additional NAICS industries from 100 

employees to 125 employees: NAICS 

423740 (Refrigeration Equipment and 

Supplies Merchant Wholesalers); NAICS 

423820 (Farm and Garden Machinery 

and Equipment Merchant Wholesalers); 

NAICS 423840 (Industrial Supplies 

Merchant Wholesalers); NAICS 423850 

(Service Establishment Equipment and 

Supplies Merchant Wholesalers); NAICS 

423930 (Recyclable Material Merchant 

Wholesalers); NAICS 423940 (Jewelry, 

Watch, Precious Stone, and Precious 

Metal Merchant Wholesalers); NAICS 

424520 (Livestock Merchant 

Wholesalers); and NAICS 425110 

(Business to Business Electronic 

Markets). 

To evaluate the impact of the changes 

to size standards adopted in this final 

rule on SBA’s loan programs, SBA 

analyzed its internal data on its 

guaranteed and disaster loan programs 

for fiscal years 2018–2020. The results 

of this analysis can be found in the 

Regulatory Impact Analysis section of 

this final rule. The impact of these 

changes is limited to SBA’s loan 

programs because, as discussed above, 

these size standards do not apply to 

Federal procurements, such as those in 

SBA’s contracting programs. 

In the May 2021 proposed rule, SBA 

sought comments on its proposal to 

increase size standards for 49 industries 

and retain the current size standards for 

the remaining 88 industries in Sectors 

42 and 44–45. Specifically, SBA 

requested comments on whether the 

proposed revisions are appropriate for 

the industries covered by the proposed 

rule; whether the decision not to lower 

any size standards is justified by the 

COVID–19 pandemic; whether the equal 

weighting of individual factors to derive 

an industry size standard is appropriate; 

and whether the data sources used were 

appropriate or sufficient. 

Discussion of Comments 

SBA received a total of nine 

comments to the proposed rule, of 

which four were not pertinent. Of the 

remaining five comments that were 

pertinent to the rule, two comments 

expressed support for the proposed 

changes to size standards in general, one 

comment supported SBA’s proposed 

change for the size standard for 

convenience store-related industries, 

one comment raised concern regarding 

SBA’s proposal to retain the 500- 

employee size standard applicable to 

nonmanufacturers for purposes of 

Federal contracting, and one comment 

opposed the proposed changes. All 

comments to the proposed rule are 

available at www.regulations.gov (RIN 

3245–AH10) and are summarized and 

discussed below. 

Comments Supporting SBA’s Proposed 

Changes to Both Sectors 

SBA received two comments 

supporting SBA’s proposed changes to 

size standards in both Wholesale Trade 

and Retail Trade sectors. One 

commenter supported the rule because 

they viewed size limits as an important 

tool for defining small businesses. The 

second commenter supported the rule 

on the grounds that it would result in 

more assistance to small businesses in 

the form of increased SBA loans and 

Federal contracting opportunities. 

SBA’s Response 

SBA agrees with the comment that 

size limits are an important tool for 

defining small businesses for eligibility 

for Federal small business assistance. 

SBA’s proposed changes will help more 

businesses qualify as small and ensure 

that SBA’s resources and assistance are 

directed to their intended beneficiaries. 

SBA also agrees with the comment 

expressing support for the rule on the 

grounds that it would result in more 

assistance to small businesses in the 

form of increased financial assistance 

and Federal contracting opportunities. 

As shown in Table 6 in the Regulatory 

Impact Analysis section of the rule, 

below, SBA estimates that the changes 

to size standards in this final rule will 

result in an increase to the number of 

7(a) and CDC/504 and Economic Injury 

Disaster Loan (EIDL) loans to small 

firms. Moreover, although industries 

within Sectors 42 and 44–45 cannot be 

used for purposes of classifying Federal 

contracting opportunities, SBA believes 

that all small businesses will benefit 

from this rule in terms of access to its 

financial assistance that is available for 

small businesses. Therefore, SBA is 

adopting increases to 49 size standards 

from the proposed rule plus increases to 

eight additional size standards based on 

its reevaluation of analytical results, as 

discussed above. 

Comment Supporting Proposed Changes 

to the Convenience Services Industry 

SBA received one comment from an 

association representing the U.S. 

convenience services industry, 

including owners and operators of 

vending machines and micro markets, 

expressing support for SBA’s changes to 

size standards for the industries it 

represents. The commenter did not 

specify which 6-digit NAICS industries 

were the focus of their comment, but 

based on industry descriptions in the 

NAICS manual, SBA assumed the 

comment pertained to NAICS 445120 

(Convenience Stores), NAICS 447110 

(Gasoline Stations with Convenience 

Stores), NAICS 454210 (Vending 

Machine Operators), and NAICS 454390 

(Other Direct Selling Establishments). 

The association supported SBA’s 

proposed changes to size standards in 

these industries on the grounds that the 

changes would expand eligibility for 

SBA’s assistance to operators that were 

previously ineligible to participate in 

SBA’s programs and to those who may 

have experienced economic hardships 

related to the COVID–19 pandemic. 

SBA’s Response 

In the May 2021 proposed rule, SBA 

proposed to increase the size standards 

for NAICS 454210 and 454390 from $12 

million and $8 million to $18.5 million 

and $13 million, respectively. For 

NAICS 445120 and 447110, in response 

to the unprecedented economic impacts 

of the ongoing COVID–19 pandemic on 

small businesses and Federal 

Government response, in the May 2021 

proposed rule, SBA proposed to retain 

their size standards at $32 million 

instead of decreasing them to $8.5 

million and $21 million, respectively, 

based on analytical results. SBA agrees 

with the association that these changes 

will help more small businesses in these 

industries qualify for SBA’s financial 

assistance. SBA believes that expanding 

the reach of its programs to include a 

greater number of small firms supports 

all small businesses and the overall 

economy as the Nation continues to 

recover from the economic challenges 

caused by the COVID–19 pandemic and 

small businesses remain in need of 

SBA’s assistance as they recover from 

the pandemic. SBA believes that the 

proposed size standards for these 

industries are more reflective of the 

current economic characteristics of 

businesses in these industries and the 

latest trends in the economy. Thus, SBA 

is adopting its proposal to increase the 

size standards for NAICS 454210 and 

454390 from $12 million and $8 million 

to $18.5 million and $13 million, 

respectively, and retain the size 

standards for NAICS 445120 and 447110 

at $32.0 million. 


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35872 Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 

Comment on the 500-Employee Size 

Standard Applicable to 

Nonmanufacturers for Purposes of 

Federal Contracting 

In response to its proposal to retain 

the nonmanufacturer size standard at 

500 employees, SBA received one 

comment to the May 2021 proposed rule 

from the members of the U.S. House of 

Representatives Subcommittee on 

Contracting and Infrastructure 

requesting that SBA evaluate the current 

500-employee size standard under its 

nonmanufacturer rule. Specifically, the 

comment expressed concern that 

because the level of revenue is 

immaterial to the determination of size 

under the 500-employee 

nonmanufacturer size standard, the 

current rule may allow a firm with 

billions of dollars in revenues to qualify 

as a small business. They suggested that 

SBA conduct an assessment of the 

nonmanufacturing industry based on 

revenue and/or other factors that may be 

more appropriate to determine what 

may be considered small for the size of 

a business qualifying as a 

nonmanufacturer. The comment also 

raised other issues outside the scope of 

the SBA’s proposed rule, such as 

reporting on SBA’s small business 

procurement scorecard and SBA’s 

process for granting waivers to the 

nonmanufacturing rule. SBA responded 

to the comments on those issues in a 

separate letter and addresses the 

comment regarding the 500-employee 

nonmanufacturer size standard below. 

SBA’s Response 

While the nonmanufacturer rule 

applies to firms primarily engaged in 

business activities within Sectors 42 

and 44–45, SBA did not review the 500- 

employee nonmanufacturer size 

standard in its May 2021 proposed rule. 

However, in an upcoming proposed rule 

covering the manufacturing sector and 

industries with employee-based size 

standards in other sectors (except 

Wholesale Trade or Retail Trade), SBA 

will examine whether the current 500- 

employee size standard for 

nonmanufacturers is appropriate and 

provide a detailed response to the 

Subcommittee’s comment. That 

rulemaking will be identified under RIN 

3245–AH09. Interested parties will have 

an opportunity to review the SBA’s 

proposed rule and submit comments 

when the rule is published in the 

Federal Register. Thus, in this final 

rule, SBA is not evaluating the size 

standard for nonmanufacturers. 

Comment Opposed to SBA’s Proposed 

Changes 

SBA received one comment opposed 

to its proposed changes on the grounds 

that SBA’s size standards are generally 

too large and allow larger corporations 

to obtain small business status and to 

dominate the market. The commenter 

also recommended that SBA abolish the 

Davis-Bacon Act and other regulations 

that may place burdens on small 

businesses. The commenter also urged 

SBA to broadly define small businesses 

as those with less than 100 employees. 

SBA’s Response 

SBA believes that establishing a 

common industry size standard of less 

than 100 employees for all wholesale 

and retail trade firms would be contrary 

to the Small Business Act. Under the 

Small Business Act (Act) (15 U.S.C. 

632(a)), SBA’s Administrator is 

responsible for establishing small 

business size definitions and ensuring 

that such definitions vary from industry 

to industry to reflect differences among 

various industries. The Jobs Act requires 

SBA to review every five years all size 

standards and make necessary 

adjustments to reflect current industry 

and Federal market conditions. The size 

standards adopted in this final rule are 

part of SBA’s efforts to meet its statutory 

responsibility. Moreover, SBA 

conducted its review of size standards 

according to its Size Standards 

Methodology which was adopted 

through a notice and comment process. 

SBA considered all public comments in 

finalizing the revised Methodology, 

which included a detailed explanation 

of how these sectors would be analyzed. 

SBA also does not agree with the 

comment urging SBA to abolish the 

Davis-Bacon Act and other regulations 

that may place burdens on small 

businesses. The Davis-Bacon Act 

requires contractors and subcontractors 

to pay laborers and mechanics 

employed under the contract no less 

than the locally prevailing wages and 

fringe benefits for corresponding work 

on similar projects in the area (Pub. L. 

107–217, Sec. 1, 6(b), Aug. 21, 2002, 116 

Stat. 1062, 1304). While the commenter 

did not specify which regulations would 

be included under the ‘‘other’’ category, 

SBA notes that it generally does not 

have the authority to repeal or override 

the regulations of other agencies or of 

Acts passed by Congress. 

For the reasons above, in this final 

rule, SBA is adopting the proposed size 

standards from the May 2021 proposed 

rule without change, except for eight 

industries in Sector 42 for which SBA 

is increasing size standards instead of 

maintaining them in the proposed rule. 

Summary of Adopted Revisions to Size 

Standards 

Based on the evaluation of public 

comments it received on the May 2021 

proposed rule and on its analyses of 

industry factors using the latest 

available relevant industry and program 

data when the proposed rule was 

prepared, SBA is increasing 57 size 

standards, including 22 employee-based 

size standards in NAICS Sector 42 and 

35 receipts-based size standards in 

NAICS Sector 44–45. A summary of 

SBA’s size standards revisions in this 

rule can be found below in Table 2, 

Summary of Size Standards Revisions 

(Employees) and Table 3, Summary of 

Size Standards Revisions (Receipts). 

TABLE 2—SUMMARY OF SIZE STANDARDS REVISIONS

[Employees] 

NAICS 

code NAICS U.S. industry title 

Current 

size standard 

(employees) 

Calculated 

size standard 

(employees) 

Adopted 

size standard 

(employees) 

423110 .... Automobile and Other Motor Vehicle Merchant Wholesalers ................................ 250 225 250 

423120 .... Motor Vehicle Supplies and New Parts Merchant Wholesalers ............................ 200 150 200 

423130 .... Tire and Tube Merchant Wholesalers .................................................................... 200 175 200 

423140 .... Motor Vehicle Parts (Used) Merchant Wholesalers ............................................... 100 125 125 

423210 .... Furniture Merchant Wholesalers ............................................................................ 100 50 100 

423220 .... Home Furnishing Merchant Wholesalers ............................................................... 100 75 100 

423310 .... Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers .................. 150 75 150 

423320 .... Brick, Stone, and Related Construction Material Merchant Wholesalers .............. 150 100 150 

423330 .... Roofing, Siding, and Insulation Material Merchant Wholesalers ........................... 200 225 225 

423390 .... Other Construction Material Merchant Wholesalers .............................................. 100 75 100 

423410 .... Photographic Equipment and Supplies Merchant Wholesalers ............................. 200 150 200 


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TABLE 2—SUMMARY OF SIZE STANDARDS REVISIONS—Continued 

[Employees] 

NAICS 

code NAICS U.S. industry title 

Current 

size standard 

(employees) 

Calculated 

size standard 

(employees) 

Adopted 

size standard 

(employees) 

423420 .... Office Equipment Merchant Wholesalers ............................................................... 200 200 200 

423430 .... Computer and Computer Peripheral Equipment and Software Merchant Wholesalers.250 225 250 

423440 .... Other Commercial Equipment Merchant Wholesalers ........................................... 100 50 100 

423450 .... Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers ... 200 200 200 

423460 .... Ophthalmic Goods Merchant Wholesalers ............................................................. 150 175 175 

423490 .... Other Professional Equipment and Supplies Merchant Wholesalers .................... 150 125 150 

423510 .... Metal Service Centers and Other Metal Merchant Wholesalers ............................ 200 150 200 

423520 .... Coal and Other Mineral and Ore Merchant Wholesalers ....................................... 100 200 200 

423610 .... Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment 

Merchant Wholesalers.

200 125 200 

423620 .... Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers.200 225 225 

423690 .... Other Electronic Parts and Equipment Merchant Wholesalers .............................. 250 225 250 

423710 .... Hardware Merchant Wholesalers ........................................................................... 150 75 150 

423720 .... Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers.200 150 200 

423730 .... Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant 

Wholesalers.

150 175 175 

423740 .... Refrigeration Equipment and Supplies Merchant Wholesalers .............................. 100 100 125 

423810 .... Construction and Mining (except Oil Well) Machinery and Equipment Merchant 

Wholesalers.

250 200 250 

423820 .... Farm and Garden Machinery and Equipment Merchant Wholesalers ................... 100 100 125 

423830 .... Industrial Machinery and Equipment Merchant Wholesalers ................................. 100 75 100 

423840 .... Industrial Supplies Merchant Wholesalers ............................................................. 100 100 125 

423850 .... Service Establishment Equipment and Supplies Merchant Wholesalers .............. 100 100 125 

423860 .... Transportation Equipment and Supplies (except Motor Vehicle) Merchant 

Wholesalers.

150 175 175 

423910 .... Sporting and Recreational Goods and Supplies Merchant Wholesalers ............... 100 50 100 

423920 .... Toy and Hobby Goods and Supplies Merchant Wholesalers ................................ 150 175 175 

423930 .... Recyclable Material Merchant Wholesalers ........................................................... 100 100 125 

423940 .... Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers ...... 100 100 125 

423990 .... Other Miscellaneous Durable Goods Merchant Wholesalers ................................ 100 50 100 

424110 .... Printing and Writing Paper Merchant Wholesalers ................................................ 200 225 225 

424120 .... Stationery and Office Supplies Merchant Wholesalers .......................................... 150 150 150 

424130 .... Industrial and Personal Service Paper Merchant Wholesalers .............................. 150 125 150 

424210 .... Drugs and Druggists’ Sundries Merchant Wholesalers ......................................... 250 250 250 

424310 .... Piece Goods, Notions, and Other Dry Goods Merchant Wholesalers ................... 100 50 100 

424320 .... Men’s and Boys’ Clothing and Furnishings Merchant Wholesalers ....................... 150 125 150 

424330 .... Women’s, Children’s, and Infants’ Clothing and Accessories Merchant Wholesalers.100 75 100 

424340 .... Footwear Merchant Wholesalers ............................................................................ 200 200 200 

424410 .... General Line Grocery Merchant Wholesalers ........................................................ 250 250 250 

424420 .... Packaged Frozen Food Merchant Wholesalers ..................................................... 200 150 200 

424430 .... Dairy Product (except Dried or Canned) Merchant Wholesalers ........................... 200 200 200 

424440 .... Poultry and Poultry Product Merchant Wholesalers .............................................. 150 125 150 

424450 .... Confectionery Merchant Wholesalers ..................................................................... 200 225 225 

424460 .... Fish and Seafood Merchant Wholesalers .............................................................. 100 50 100 

424470 .... Meat and Meat Product Merchant Wholesalers ..................................................... 150 100 150 

424480 .... Fresh Fruit and Vegetable Merchant Wholesalers ................................................. 100 75 100 

424490 .... Other Grocery and Related Products Merchant Wholesalers ................................ 250 200 250 

424510 .... Grain and Field Bean Merchant Wholesalers ........................................................ 200 175 200 

424520 .... Livestock Merchant Wholesalers ............................................................................ 100 100 125

424590 .... Other Farm Product Raw Material Merchant Wholesalers .................................... 100 175 175 

424610 .... Plastics Materials and Basic Forms and Shapes Merchant Wholesalers ............. 150 125 150 

424690 .... Other Chemical and Allied Products Merchant Wholesalers ................................. 150 175 175 

424710 .... Petroleum Bulk Stations and Terminals ................................................................. 200 225 225 

424720 .... Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations 

and Terminals).

200 200 200 

424810 .... Beer and Ale Merchant Wholesalers ...................................................................... 200 125 200 

424820 .... Wine and Distilled Alcoholic Beverage Merchant Wholesalers ............................. 250 225 250 

424910 .... Farm Supplies Merchant Wholesalers ................................................................... 200 175 200 

424920 .... Book, Periodical, and Newspaper Merchant Wholesalers ..................................... 200 200 200 

424930 .... Flower, Nursery Stock, and Florists’ Supplies Merchant Wholesalers .................. 100 50 100 

424940 .... Tobacco and Tobacco Product Merchant Wholesalers ......................................... 250 250 250 

424950 .... Paint, Varnish, and Supplies Merchant Wholesalers ............................................. 150 150 150 

424990 .... Other Miscellaneous Nondurable Goods Merchant Wholesalers .......................... 100 50 100 

425110 .... Business to Business Electronic Markets .............................................................. 100 100 125 

425120 .... Wholesale Trade Agents and Brokers ................................................................... 100 125 125 


lotter on DSK11XQN23PROD with RULES1
35874 Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 

TABLE 2—SUMMARY OF SIZE STANDARDS REVISIONS—Continued 

[Employees] 

NAICS 

code NAICS U.S. industry title 

Current 

size standard 

(employees) 

Calculated 

size standard 

(employees) 

Adopted 

size standard 

(employees) 

441110 .... New Car Dealers .................................................................................................... 200 150 200 

454310 .... Fuel Dealers ........................................................................................................... 100 75 100 

TABLE 3—SUMMARY OF SIZE STANDARDS REVISIONS

[Receipts] 

NAICS 

code NAICS U.S. industry title 

Current 

size standard 

($ million) 

Calculated 

size standard 

($ million) 

Adopted 

size standard 

($ million) 

441120 .... Used Car Dealers ................................................................................................... $27.0 $17.0 $27.0 

441210 .... Recreational Vehicle Dealers ................................................................................. 35.0 19.0 35.0 

441222 .... Boat Dealers ........................................................................................................... 35.0 11.5 35.0 

441228 .... Motorcycle, ATV, and All Other Motor Vehicle Dealers ......................................... 35.0 10.0 35.0 

441310 .... Automotive Parts and Accessories Stores ............................................................. 16.5 25.0 25.0 

441320 .... Tire Dealers ............................................................................................................ 16.5 22.5 22.5 

442110 .... Furniture Stores ...................................................................................................... 22.0 19.0 22.0 

442210 .... Floor Covering Stores ............................................................................................. 8.0 7.5 8.0 

442291 .... Window Treatment Stores ...................................................................................... 8.0 10.0 10.0 

442299 .... All Other Home Furnishings Stores ........................................................................ 22.0 29.5 29.5 

443141 .... Household Appliance Stores .................................................................................. 12.0 19.5 19.5 

443142 .... Electronics Stores ................................................................................................... 35.0 31.5 35.0 

444110 .... Home Centers ......................................................................................................... 41.5 41.5 41.5 

444120 .... Paint and Wallpaper Stores .................................................................................... 30.0 21.0 30.0 

444130 .... Hardware Stores ..................................................................................................... 8.0 14.5 14.5 

444190 .... Other Building Material Dealers ............................................................................. 22.0 14.0 22.0 

444210 .... Outdoor Power Equipment Stores .......................................................................... 8.0 8.5 8.5 

444220 .... Nursery, Garden Center, and Farm Supply Stores ................................................ 12.0 19.0 19.0 

445110 .... Supermarkets and Other Grocery (except Convenience) Stores .......................... 35.0 32.0 35.0 

445120 .... Convenience Stores ............................................................................................... 32.0 8.5 32.0 

445210 .... Meat Markets .......................................................................................................... 8.0 7.0 8.0 

445220 .... Fish and Seafood Markets ..................................................................................... 8.0 7.0 8.0 

445230 .... Fruit and Vegetable Markets .................................................................................. 8.0 7.5 8.0 

445291 .... Baked Goods Stores .............................................................................................. 8.0 14.0 14.0 

445292 .... Confectionery and Nut Stores ................................................................................ 8.0 17.0 17.0 

445299 .... All Other Specialty Food Stores ............................................................................. 8.0 9.0 9.0 

445310 .... Beer, Wine, and Liquor Stores ............................................................................... 8.0 9.0 9.0 

446110 .... Pharmacies and Drug Stores ................................................................................. 30.0 33.0 33.0 

446120 .... Cosmetics, Beauty Supplies, and Perfume Stores ................................................ 30.0 28.0 30.0 

446130 .... Optical Goods Stores ............................................................................................. 22.0 26.0 26.0 

446191 .... Food (Health) Supplement Stores .......................................................................... 16.5 20.0 20.0 

446199 .... All Other Health and Personal Care Stores ........................................................... 8.0 8.5 8.5 

447110 .... Gasoline Stations with Convenience Stores .......................................................... 32.0 21.0 32.0 

447190 .... Other Gasoline Stations ......................................................................................... 16.5 29.5 29.5 

448110 .... Men’s Clothing Stores ............................................................................................ 12.0 22.5 22.5 

448120 .... Women’s Clothing Stores ....................................................................................... 30.0 25.0 30.0 

448130 .... Children’s and Infants’ Clothing Stores .................................................................. 35.0 32.5 35.0 

448140 .... Family Clothing Stores ........................................................................................... 41.5 39.5 41.5 

448150 .... Clothing Accessories Stores ................................................................................... 16.5 29.5 29.5 

448190 .... Other Clothing Stores ............................................................................................. 22.0 27.5 27.5 

448210 .... Shoe Stores ............................................................................................................ 30.0 29.0 30.0 

448310 .... Jewelry Stores ........................................................................................................ 16.5 18.0 18.0 

448320 .... Luggage and Leather Goods Stores ...................................................................... 30.0 33.5 33.5 

451110 .... Sporting Goods Stores ........................................................................................... 16.5 23.5 23.5 

451120 .... Hobby, Toy, and Game Stores ............................................................................... 30.0 31.0 31.0 

451130 .... Sewing, Needlework, and Piece Goods Stores ..................................................... 30.0 19.5 30.0 

451140 .... Musical Instrument and Supplies Stores ................................................................ 12.0 20.0 20.0 

451211 .... Book Stores ............................................................................................................ 30.0 31.5 31.5 

451212 .... News Dealers and Newsstands ............................................................................. 8.0 20.0 20.0

452210 .... Department Stores .................................................................................................. 35.0 32.5 35.0 

452311 .... Warehouse Clubs and Supercenters ..................................................................... 32.0 41.5 41.5 

452319 .... All Other General Merchandise Stores .................................................................. 35.0 35.0 35.0 

453110 .... Florists .................................................................................................................... 8.0 6.5 8.0 

453210 .... Office Supplies and Stationery Stores ................................................................... 35.0 32.0 35.0 

453220 .... Gift, Novelty, and Souvenir Stores ......................................................................... 8.0 12.0 12.0 

453310 .... Used Merchandise Stores ...................................................................................... 8.0 12.5 12.5 

453910 .... Pet and Pet Supplies Stores .................................................................................. 22.0 28.0 28.0 

453920 .... Art Dealers .............................................................................................................. 8.0 14.5 14.5 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35875 

TABLE 3—SUMMARY OF SIZE STANDARDS REVISIONS—Continued 

[Receipts] 

NAICS 

code NAICS U.S. industry title 

Current 

size standard 

($ million) 

Calculated 

size standard 

($ million) 

Adopted 

size standard 

($ million) 

453930 .... Manufactured (Mobile) Home Dealers ................................................................... 16.5 16.5 16.5 

453991 .... Tobacco Stores ....................................................................................................... 8.0 7.5 8.0 

453998 .... All Other Miscellaneous Store Retailers (except Tobacco Stores) ........................ 8.0 10.0 10.0 

454110 .... Electronic Shopping and Mail-Order Houses ......................................................... 41.5 33.0 41.5 

454210 .... Vending Machine Operators ................................................................................... 12.0 18.5 18.5 

454390 .... Other Direct Selling Establishments ....................................................................... 8.0 13.0 13.0 

Table 4, Summary of Adopted Size 

Standards Revisions by Sector, 

summarizes the adopted changes to size 

standards by NAICS sector. 

TABLE 4—SUMMARY OF ADOPTED SIZE STANDARDS REVISIONS BY SECTOR

Sector Sector name 

Number of 

size standards 

reviewed 

Number of 

size standards 

increased 

Number of 

Size standards 

decreased 

Number of 

size standards 

maintained 

42 .................................................. Wholesale Trade .......................... 71 22 0 49 

44–45 ............................................ Retail Trade .................................. 66 35 0 31 

Total ....................................... ....................................................... 137 57 0 80 

Evaluation of Dominance in Field of 

Operation 

SBA determined that for the 

industries evaluated under this final 

rule, no individual firm at or below the 

adopted size standards would be large 

enough to dominate its field of 

operation. At the size standard levels 

adopted in this final rule, the small 

business share of total industry receipts 

among those industries would be, on 

average, 0.4%, varying from 0.005% to 

4.8%. These market shares effectively 

preclude a firm at or below the adopted 

size standards from exerting control on 

any of the industries. 

Alternatives Considered 

In response to the unprecedented 

economic impacts of the ongoing 

COVID–19 pandemic on small 

businesses and Federal Government 

response, SBA is adopting increases to 

size standards where the data suggests 

increases are warranted, and retaining 

all current size standards where the data 

suggested lowering of size standards is 

appropriate. SBA is also retaining all 

current size standards where the data 

suggested no changes to the current size 

standards. 

Nonetheless, SBA considered two 

other alternatives. Alternative Option 

One was to adopt changes to size 

standards exactly as suggested by the 

analytical results. In other words, 

Alternative Option One would entail 

increasing size standards for 57 

industries, decreasing them for 66 

industries, and retaining them at their 

current levels for 14 industries. 

Alternative Option Two was to retain all 

current size standards, including those 

for which the analytical results support 

increases. 

SBA did not adopt Alternative Option 

One because it would cause a 

substantial number of currently small 

businesses to lose their small business 

status and hence to lose their access to 

Federal small business assistance, 

especially SBA’s financial assistance. 

Lowering size standards in the current 

environment would also run counter to 

various measures the Federal 

Government has implemented to help 

small businesses and the overall 

economy recover from the ongoing 

COVID–19 pandemic. Considering the 

impacts of the Great Recession and 

Federal Government actions that 

followed to support small businesses 

and the overall economy, SBA also 

adopted a policy of not decreasing size 

standards during the first five-year 

review of size standards, even though 

the data supported decreases. 

Under Alternative Option Two, given 

the current COVID–19 pandemic, SBA 

considered retaining the current level of 

all size standards even though the 

analytical results suggested changing 

them. Under this option, as the current 

situation develops, SBA will be able to 

assess new data available on economic 

indicators and SBA loans before 

adopting changes to size standards. 

However, SBA is not adopting 

Alternative Option Two because the 

results discussed in the Regulatory 

Impact Analysis section, below, show 

that retaining all size standards at their 

current levels would cause otherwise 

qualified small businesses to forgo 

various small business benefits 

becoming available to them under the 

option of increasing 57 and retaining 80 

size standards. Such benefits would 

include access to capital through SBA’s 

business loan, EIDL loan, and SBIC 

programs, and exemptions from 

paperwork and other compliance 

requirements. 

Compliance With Executive Order 

12866, the Congressional Review Act (5 

U.S.C. 801–808), the Regulatory 

Flexibility Act (5 U.S.C. 601–612), 

Executive Orders 13563, 12988, and 

13132, and the Paperwork Reduction 

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

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this final 

rule is a significant regulatory action for 

purposes of Executive Order 12866. 

Accordingly, in the next section SBA 

provides a Regulatory Impact Analysis 

of this final rule, including: (1) A 

statement of the need for the regulatory 

action, (2) An examination of alternative 

approaches, and (3) An evaluation of the 

benefits and costs—both quantitative 

and qualitative—of the regulatory action 

and the alternatives considered. 


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2The analysis of the disaster loan data excludes 

physical disaster loans that are available to anyone 

regardless of size, disaster loans issued to nonprofit 

entities, and EIDLs issued under the COVID–19 

relief program. Effective January 1, 2022, SBA 

stopped accepting applications for new COVID 

EIDL loans or advances. Thus, the disaster loan 

analysis presented here pertains to the regular EIDL 

loans only. 

SBA estimates impacts of size standards changes 

on EIDL loans by calculating the ratio of businesses 

getting EIDL loans to total small businesses (based 

on the Economic Census data) and multiplying it 

by the number of impacted small firms. Due to data 

limitations, for FY 2019–20, some loans with both 

physical and EIDL loan components could not be 

broken into the physical and EIDL loan amounts. 

In such cases, SBA applied the ratio of EIDL 

amount to total (physical loan + EIDL) amount 

using FY 2016–18 data to the FY 2019–20 data to 

obtain the amount attributable to the EIDL loans. 

Regulatory Impact Analysis 

1. What is the need for this regulatory 

action? 

SBA’s mission is to aid and assist 

small businesses through a variety of 

financial, procurement, business 

development and counseling, and 

disaster assistance programs. To 

determine the actual intended 

beneficiaries of these programs, SBA 

establishes numerical size standards by 

industry to identify businesses that are 

deemed small. 

Under the Small Business Act (Act) 

(15 U.S.C. 632(a)), SBA’s Administrator 

is responsible for establishing small 

business size definitions (or ‘‘size 

standards’’) and ensuring that such 

definitions vary from industry to 

industry to reflect differences among 

various industries. The Jobs Act requires 

SBA to review every five years all size 

standards and make necessary 

adjustments to reflect current industry 

and Federal market conditions. This 

final rule is part of the second five-year 

review of size standards in accordance 

with the Jobs Act. The first five-year 

review of size standards was completed 

in early 2016. Such periodic reviews of 

size standards provide SBA with an 

opportunity to incorporate ongoing 

changes to industry structure and 

Federal market environment into size 

standards and to evaluate the impacts of 

prior revisions to size standards on 

small businesses. This also provides 

SBA with an opportunity to seek and 

incorporate public input to the size 

standards review and analysis. SBA 

believes that the size standards 

revisions adopted for industries being 

reviewed in this final rule will make 

size standards more reflective of the 

current economic characteristics of 

businesses in those industries and the 

latest trends in the Federal marketplace. 

The revisions to the existing size 

standards for 57 industries in NAICS 

Sectors 42 and 44–45 are consistent 

with SBA’s statutory mandate to help 

small businesses grow and create jobs 

and to review and adjust size standards 

every five years. This regulatory action 

promotes the Administration’s goals and 

objectives and ensures that SBA 

complies with statutory requirements. 

One of SBA’s goals in support of 

promoting the Administration’s 

objectives is to help small businesses 

succeed through fair and equitable 

access to capital and credit, Federal 

Government contracts and purchases, 

and management and technical 

assistance. Reviewing and modifying 

size standards, when appropriate, 

ensures that intended beneficiaries can 

access Federal small business programs 

that are designed to assist them to 

become competitive and create jobs. 

2. What are the potential benefits and 

costs of this regulatory action? 

OMB directs agencies to establish an 

appropriate baseline to evaluate any 

benefits, costs, or transfer impacts of 

regulatory actions and alternative 

approaches considered. The baseline 

should represent the agency’s best 

assessment of what the world would 

look like absent the regulatory action. 

For a new regulatory action 

promulgating modifications to an 

existing regulation (such as modifying 

the existing size standards), a baseline 

assuming no change to the regulation 

(i.e., making no changes to current size 

standards) generally provides an 

appropriate benchmark for evaluating 

benefits, costs, or transfer impacts of 

regulatory changes and their 

alternatives. 

Changes to Size Standards 

Based on the results from the analyses 

of the latest industry data, evaluation of 

the public comments on the proposed 

rule, as well as consideration of the 

impact of size standards changes on 

small businesses and significant adverse 

impacts of the COVID–19 pandemic on 

small firms and the overall economy, of 

the total of 137 industries in Sectors 42 

and 44–45 evaluated in the proposed 

rule, SBA is adopting increases to size 

standards for 57 industries and 

maintaining current size standards for 

the remaining 80 industries. 

The Baseline 

For purposes of this regulatory action, 

the baseline represents maintaining the 

‘‘status quo,’’ i.e., making no changes to 

the current size standards. Using the 

number of small businesses and levels 

of small business benefits (such as 

SBA’s business loans, disaster 

assistance, etc.) they receive under the 

current size standards as a baseline, one 

can examine the potential benefits, 

costs, and transfer impacts of changes to 

size standards on small businesses and 

on the overall economy. 

Based on the 2012 Economic Census 

(the latest available when this proposed 

rule was prepared), of a total of about 

975,569 businesses in industries in 

Sectors 42 and 44–45, 97.4% are 

considered small under the current size 

standards. That percentage varies from 

96.6% in Sector 42 to 97.9% in Sector 

44–45. 

Based on SBA’s internal data on its 

loan programs for fiscal years 2018– 

2020, small businesses in those 

industries received, on an annual basis, 

a total of 9,871 7(a) and CDC/504 loans 

in that period, totaling about $5.4 

billion, of which 82.6% was issued 

through the 7(a) program and 17.4% 

was issued through the CDC/504 

program. During fiscal years 2018–2020, 

small businesses in those industries also 

received 561 loans through SBA’s 

Economic Injury Disaster Loan (EIDL) 

program, totaling about $28.3 million on 

an annual basis.2 Table 5, Baseline for 

All Industries, provides these baseline 

results by sector. 

The results of regulatory impact 

analyses SBA provided in the May 2021 

proposed rule were based on SBA loan 

data for fiscal years (FYs) 2016–2018. In 

this final rule, SBA is updating the 

impact analysis results by using SBA 

loan data for fiscal years 2018–2020. 

Accordingly, there can be some 

differences between the proposed rule 

and this final rule with respect to 

impacts of size standards changes on 

SBA loans. 

TABLE 5—BASELINE FOR ALL INDUSTRIES

Sector 42 Sector 44–45 Total 

Baseline all industries (current size standards) .......................................................................... 71 66 137 

Total firms (2012 Economic Census) .......................................................................................... 319,716 655,853 975,569 

Total small firms under current size standards (2012 Economic Census) ................................. 308,710 641,995 950,705 


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Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35877 

TABLE 5—BASELINE FOR ALL INDUSTRIES—Continued 

Sector 42 Sector 44–45 Total 

Small firms as % of total firms .................................................................................................... 96.6% 97.9% 97.5% 

No. of 7(a) and CDC/504 loans (FY 2018–2020) ....................................................................... 2,665 7,206 9,871 

Amount of 7(a) and CDC/504 loans ($ million) (FY 2018–2020) ............................................... $1,706 $3,732 $5,438 

No. of EIDL loans (FY 2018–2020) * ........................................................................................... 123 438 561 

Amount of EIDL loans ($million) (FY 2018–2020) * .................................................................... $7.4 $20.9 $28.3 

* Excludes COVID–19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for 

new COVID EIDL loans or advances. 

Increases to Size Standards 

As stated above, of the 73-employeebased and 64 receipts-based size 

standards reviewed in NAICS Sectors 42 

and 44–45, based on the results from 

analyses of latest industry data, impacts 

of size standards changes on small 

businesses, considerations of the 

impacts of the COVID–19 pandemic, 

and public comments to the proposed 

rule, SBA is adopting increases to size 

standards for 57 industries and 

maintaining size standards for the 

remaining 80 industries. Below are 

descriptions of the benefits, costs, and 

transfer impacts of the increases to size 

standards adopted in this final rule. 

Benefits of Increasing Size Standards 

The most significant benefit to 

businesses from increases to size 

standards is gaining eligibility for 

Federal small business assistance 

programs or retaining that eligibility for 

such programs for a longer period. 

These include SBA’s business loan 

programs, such as the 7(a) and CDC/504 

programs, and the EIDL loan program. 

SBA’s regulations provide that NAICS 

codes for the Wholesale and Retail 

Trade industries shall not be used to 

classify Federal Government acquisition 

for supplies (13 CFR 121.402(b)). As 

such, for purposes of Federal contracts 

set aside for small businesses, the size 

standard for all industries in the 

Wholesale Trade and Retail Trade 

sectors is 500 employees under the 

SBA’s nonmanufacturer rule (see 13 

CFR 121.406(b)). SBA is not evaluating 

the 500-employee the nonmanufacturer 

size standard in this final rule. Thus, the 

increases to size standards in this final 

rule will not impact the Federal market 

for contracts set aside for small 

businesses. 

Besides the access to SBA’s financial 

assistance programs discussed above, 

because of increases to size standards, 

small businesses also benefit through 

reduced fees, less paperwork, and fewer 

compliance requirements that are 

available to small businesses through 

the Federal Government programs. 

However, SBA has no data to estimate 

the number of small businesses 

receiving such benefits. 

Based on the 2012 Economic Census 

(the latest available when the proposed 

rule was prepared), SBA estimates that 

in 57 industries in NAICS Sectors 42 

and 44–45 for which this final rule is 

increasing size standards, about 2,000 

firms not small under the current size 

standards will become small under the 

adopted size standards increases and 

therefore become eligible for SBA’s 

financial and other Federal nonprocurement programs. That represents 

about 0.5% of all firms classified as 

small under the current size standards 

in industries for which SBA is adopting 

increases to size standards. Table 6, 

Impacts of Increasing Size Standards, 

provides impacts of increasing 57 and 

maintaining 80 size standards by NAICS 

sector. 

TABLE 6—IMPACTS OF INCREASING SIZE STANDARDS

Sector 42 Sector 44–45 Total 

No. of industries with increases to size standards ...................................................................... 22 35 57 

Total current small businesses in industries with increases to size standards (2012 Economic 

Census) .................................................................................................................................... 93,426 286,758 380,184 

Additional firms qualifying as small under standards (2012 Economic Census) ........................ 308 1,694 2,002 

% of additional firms qualifying as small relative to current small businesses in industries with 

increases to size standards ..................................................................................................... 0.3% 0.6% 0.5% 

Total no. of 7(a) and 504 loans to small business in industries with increases to size standards (FY 2018–2020) ............................................................................................................... 536 3,692 4,228 

Total 7(a) and 504 loan amounts to small businesses in industries with increases to size 

standards ($ million) (FY 2018–2020) ..................................................................................... $341 $1,641 $1,982 

Estimated no. of 7(a) and 504 loans to newly-qualified small firms ........................................... 2 23 25 

Estimated 7(a) and 504 loan amounts to newly-qualified small firms ($ million) ....................... $1.3 $10.3 $11.6 

% increase to 7(a) and 504 loan amount relative to the total amount of 7(a) and 504 loans in 

industries with increases to size standards ............................................................................. 0.4% 0.6% 0.6% 

Total no. of EIDL loans to small businesses in industries with increases to size standards 

(FY 2018–2020) * ..................................................................................................................... 26 248 274 

Total amount of EIDL loans to small businesses in industries with increases to size standards ($ million) (FY 2018–2020) * ............................................................................................ $1.5 $11.7 $13.3 

Estimated no. of EIDL loans to newly-qualified small firms * ...................................................... 1 2 3 

Estimated EIDL loan amount to newly-qualified small firms ($ million) * .................................... $0.06 $0.09 $0.2 

% increase to EIDL loan amount relative to the total amount of disaster loans in industries 

with increases to size standards * ............................................................................................ 3.8% 0.8% 1.5% 

* Excludes COVID–19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for 

new COVID EIDL loans or advances. 


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35878 Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 

Growing small businesses that are 

close to exceeding the current size 

standards will be able to retain their 

small business status for a longer period 

under the higher size standards, thereby 

enabling them to continue to benefit 

from the Federal small business 

assistance outside of the contracting 

programs. 

Based on its internal loan data for 

fiscal years 2018–2020, SBA estimates 

that up to about 25 SBA 7(a) and CDC/ 

504 loans totaling about $11.6 million 

could be made to these newly-qualified 

small businesses in those industries 

under the adopted increases to size 

standards. That represents a 0.4% 

increase to the 7(a) and CDC/504 loan 

amount compared to the baseline (see 

Table 6). 

Newly-qualified small businesses will 

also benefit from the SBA’s EIDL 

program. Since the benefits provided 

through this program are contingent on 

the occurrence and severity of a disaster 

in the future, SBA cannot make a 

meaningful estimate of this impact. 

However, based on the historical trends 

of the disaster loan program data, SBA 

estimates that, on an annual basis, the 

newly-defined small businesses under 

the increases to 57 size standards could 

receive three disaster loans (except 

physical disaster loans, which are 

unaffected by the changes in this rule), 

totaling about $0.2 million (see Table 6). 

Additionally, the newly-defined small 

businesses would also benefit through 

reduced fees, less paperwork, and fewer 

compliance requirements that are 

available to small businesses through 

the Federal Government, but SBA has 

no data to quantify this impact. 

Costs of Increasing Size Standards 

To the extent that newly-qualified 

small businesses could seek assistance 

from SBA’s financial assistance 

programs, the adopted increases to size 

standards may entail some additional 

administrative costs to the Government 

for the verification of their small 

business status. However, small 

business lenders have an option of using 

the tangible net worth and net incomebased alternative size standard instead 

of using the industry-based size 

standards to establish eligibility for 

SBA’s loans which many small 

businesses already qualify under. 

Moreover, this rule does not establish 

new size standards for the very first 

time; rather it intends to modify the 

existing size standards in accordance 

with a statutory requirement and the 

latest data and other relevant factors. 

For these reasons, SBA believes that 

these added administrative costs will be 

minor because necessary mechanisms 

are already in place to handle the 

additional requirements. 

Transfer Impacts of Increasing Size 

Standards 

The increases to size standards 

adopted in this final rule may result in 

some redistribution of SBA loans 

between the newly-qualified small 

businesses and small businesses under 

the current size standards. However, 

SBA estimates this impact to be de 

minimis because the vast majority of the 

SBA loans go to small businesses that 

are much smaller than the current or 

adopted size standards. Moreover, this 

rule would not have any impact on 

Federal contract dollars awarded to 

small businesses since SBA’s 

regulations specify that NAICS codes for 

the Wholesale and Retail Trade 

industries shall not be used to classify 

Government procurement for supplies. 

3. What alternatives have been 

considered? 

Under OMB Circular A–4, SBA is 

required to consider regulatory 

alternatives to the adopted changes in 

this final rule. In this section, SBA 

describes and analyzes two such 

alternatives. Alternative Option One to 

the final rule, a more stringent 

alternative to the adopted change, 

would propose adopting size standards 

based solely on the analytical results. In 

other words, the size standards of 57 

industries for which the analytical 

results suggest raising them would be 

raised. However, the size standards of 

66 industries for which the analytical 

results suggest lowering them, as shown 

in Table 4 of the May 2021 proposed 

rule, would be lowered. For the 14 

remaining industries for which analysis 

suggested no changes, size standards 

would be maintained at their current 

levels. Alternative Option Two would 

propose retaining size standards for all 

industries, given the uncertainty 

generated by the ongoing COVID–19 

pandemic. Below, SBA discusses 

benefits, costs, and the net impacts of 

each option. 

Alternative Option One: Adopting All 

Calculated Size Standards 

As discussed previously in the 

Alternatives Considered section of this 

final rule, Alternative Option One 

would cause a substantial number of 

currently small businesses to lose their 

small business status and hence to lose 

their access to Federal small business 

assistance, especially SBA’s financial 

assistance. These consequences could 

be mitigated. For example, in response 

to the 2008 Financial Crisis and the 

economic conditions that followed, SBA 

adopted a general policy in the first fiveyear comprehensive size standards 

review to not lower any size standard 

(except to exclude dominant firms) even 

when the analytical results suggested 

the size standard should be lowered. 

Currently, because of the economic 

challenges presented by the COVID–19 

pandemic and the measures taken to 

protect public health, SBA has decided 

to adopt the same general policy of not 

lowering size standards in the ongoing 

second five-year comprehensive size 

standards review as well. 

The primary benefits of adopting 

Alternative Option One would include: 

(1) SBA’s management, technical, and 

financial assistance would be targeted to 

the most appropriate beneficiaries of 

such programs according to the 

analytical results; (2) Adopting the size 

standards based on the analytical results 

would also promote consistency and 

predictability in SBA’s implementation 

of its authority to set or adjust size 

standards; and (3) Firms who would 

remain small would face less 

competition from larger small firms for 

the remaining Federal opportunities. 

Specifically, SBA sought public 

comment on the impact of adopting the 

size standards based on the analytical 

results. 

As explained in the ‘‘Size Standards 

Methodology’’ white paper, in addition 

to adopting all results of the analysis of 

the primary factors, SBA evaluates other 

relevant factors as needed, such as the 

impact of the reductions or increases of 

size standards on the distribution of 

SBA resources intended for small 

businesses and may adopt different 

results with the intention of mitigating 

potential negative impacts. 

We have already discussed the 

benefits, costs, and transfer impacts of 

increasing 57 and retaining 80 size 

standards. Below we discuss the 

benefits, costs, and transfer impacts of 

decreasing 66, increasing 57, and 

maintaining 14 size standards based on 

the analytical results. 

Benefits of Decreasing Size Standards 

Under Alternative Option One 

The most significant benefit to 

businesses from decreases to size 

standards when SBA’s analysis suggests 

such decreases is to ensure that size 

standards are more reflective of latest 

industry structure and current market 

trends and that Federal small business 

assistance is more effectively targeted to 

its intended beneficiaries. These include 

SBA’s business loan and EIDL programs. 

Decreasing size standards may reduce 

the administrative costs to the Federal 

Government, because the risk of 

providing SBA’s loans to firms that do 


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not need them the most may diminish 

when the size standards reflect better 

the structure of the market. This may 

provide a better chance for smaller 

small firms to grow and benefit from the 

opportunities and resources available 

through SBA. 

Costs of Decreasing Size Standards 

Under Alternative Option One 

Table 7, Impacts of Decreasing Size 

Standards Under Alternative Option 

One, below, shows the various impacts 

of lowering size standards in 66 

industries based solely on the analytical 

results. Based on the 2012 Economic 

Census, more than 5,500 (1.0%) firms 

would lose their small business status 

under Alternative Option One. 

As shown in Table 7, decreasing size 

standards would have a relatively minor 

impact on small businesses applying for 

SBA’s 7(a) and CDC/504 loans because 

a vast majority of such loans are issued 

to businesses that are far below the 

reduced size standards. For example, 

based on the loan data for fiscal years 

2018–2020, SBA estimates that 67 of 

SBA’s 7(a) and CDC/504 loans, totaling 

$32.5 million, could not be made to 

those small businesses that would lose 

eligibility under the reduced size 

standards. That represents a 1.1% 

decrease of the loan amounts compared 

to the baseline. However, the actual 

impact could be much less as businesses 

losing small business eligibility under 

the decreases to industry-based size 

standards could still qualify for SBA’s 

7(a) and CDC/504 loans under the 

tangible net worth and net incomebased alternative size standard. 

TABLE 7—IMPACTS OF DECREASING SIZE STANDARDS UNDER ALTERNATIVE OPTION ONE

Sector 42 Sector 44–45 Total 

No. of industries for which SBA considered decreasing size standards (2012 Economic Census) ........................................................................................................................................... 38 28 66 

Total current small businesses in industries for which SBA considered decreasing size standards (2012 Economic Census) ................................................................................................ 184,837 343,639 528,476 

Estimated no. of firms losing small status for which SBA considered decreasing size standards (2012 Economic Census) ................................................................................................ 2,735 2,774 5,509 

% of Firms losing small status relative to current small businesses in industries for which 

SBA considered decreasing size standards ............................................................................ 1.5% 0.8% 1.0% 

Total no. of 7(a) and 504 loans to small businesses in industries for which SBA considered 

decreasing size standards (FY 2018–2020) ............................................................................ 1,829 3,464 5,293 

Total amount of 7(a) and 504 loans to small businesses in industries for which SBA considered decreasing size standards ($ million) (FY 2018–2020) .................................................. $1,176 $1,856 $3,032

Estimated no. of 7(a) and 504 loans not available to firms that would have lost small business status ............................................................................................................................... 28 23 51 

Estimated 7(a) and 504 loan amounts not available to firms that would have small status ($ 

million) ...................................................................................................................................... $18.0 $14.5 $32.5 

% decrease to 7(a)and 504 loan amounts relative to the total amount of 7(a) and 504 loans 

in industries for which SBA considered decreasing size standards ........................................ 1.5% 0.8% 1.1% 

Total no. of EIDL loans to small businesses in industries for which SBA considered decreasing size standards (FY 2018–2020) * ....................................................................................... 79 187 266 

Total amount of EIDL loans to small businesses in industries for which SBA considered decreasing size standards ($ million) (FY 2018–2020) * ............................................................. $4.8 $9.0 $13.8

Estimated no. of EIDL loans not available to firms that would have lost small business status * ........................................................................................................................................... 2 3 5 

Estimated EIDL loan amount not available to firms that would have lost small business status 

($ million) * ................................................................................................................................ $0.1 $0.1 $0.2 

% decrease to EIDL loan amount relative to the baseline * ....................................................... 2.5% 1.5% 1.8% 

* Excludes COVID–19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for 

new COVID EIDL loans or advances. 

Businesses losing small business 

status would also be impacted in terms 

of access to loans through the SBA’s 

EIDL program. However, SBA expects 

such impact to be minimal as only a 

small number of businesses in those 

industries received such loans during 

fiscal years 2018–2020. Additionally, 

most of those businesses were below the 

reduced size standards. Since this 

program is contingent on the occurrence 

and severity of a disaster in the future, 

SBA cannot make a precise estimate of 

this impact. However, based on the 

disaster loan data for fiscal years 2018– 

2020, SBA estimates that, under 

Alternative Option One, on an annual 

basis, five EIDL loans, totaling about 

$0.2 million, would be unavailable to 

firms that no longer qualify as small 

under the decreases to size standards. 

Table 7 shows these results by sector. 

Small businesses becoming other than 

small if size standards were decreased 

might lose the benefits of reduced fees, 

and paperwork and compliance 

requirements that are available to small 

businesses through the Federal 

Government programs, but SBA has no 

data to quantify this impact. However, 

if agencies determine that SBA’s size 

standards do not adequately serve the 

needs of their programs, they can 

establish a different size standard, with 

an approval from SBA, if they are 

required to use SBA’s size standards for 

such programs. 

SBA may adopt mitigating measures 

to reduce the negative impact under the 

Alternative Option One. SBA could 

adopt one or more of the following three 

actions: (1) Accept decreases in size 

standards as suggested by the analytical 

results; (2) Decrease size standards by a 

smaller amount than the calculated 

values; and (3) Retain the size standards 

at their current levels. For example, in 

response to the 2008 Financial Crisis, 

SBA adopted a general policy in the first 

five-year comprehensive size standards 

review to not lower any size standard 

(except to exclude dominant firms) even 

when the analytical results suggested 

the size standard should be lowered. 

Currently, because of the economic 

challenges presented by the COVID–19 

pandemic and the measures taken to 

protect public health, in this final rule, 

SBA has decided to adopt the same 

general policy of not lowering size 

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year comprehensive size standards 

review as well. 

Nevertheless, the impact on the 

overall loan activity is likely to be de 

minimis because SBA estimates that the 

majority of firms currently eligible for 

its loan programs would continue to 

remain eligible under the reduced size 

standards. SBA’s regulations specify 

that NAICS codes for the Wholesale 

Trade and Retail Trade industries shall 

not be used to classify Federal 

Government acquisition for supplies (13 

CFR 121.402(b)). As such, for purposes 

of Federal contracting, the size standard 

for all industries in the Wholesale Trade 

and Retail Trade sectors is 500 

employees under SBA’s 

nonmanufacturer rule (13 CFR 

121.406(b)). Thus, SBA estimates that 

any decreases to size standards as part 

of this rulemaking will not impact the 

market for Federal contracts. 

Transfer Impacts of Decreasing Size 

Standards Under Alternative Option 

One 

If the size standards were decreased 

under Alternative Option One, it may 

result in a redistribution of loans 

between the newly-qualified small 

businesses and small businesses under 

the current size standards. However, 

SBA estimates this impact to be de 

minimis as participants in SBA’s 

financial assistance programs are on 

average much smaller than their 

industry size standards and SBA’s loans 

are not disbursed based on a 

competitive process. Moreover, this rule 

would not have an impact on Federal 

contract dollars awarded to small 

businesses since SBA’s regulations 

specify that NAICS codes for the 

Wholesale and Retail Trade industries 

shall not be used to classify Government 

acquisition for supplies. While SBA 

cannot estimate with certainty the 

actual outcome of the gains and losses 

among different groups of businesses 

from this redistribution, it can identify 

several probable impacts. With a smaller 

pool of small businesses under the 

decreases to size standards, some SBA’s 

resources to be otherwise awarded to 

small businesses may be diverted to 

other uses or programs. However, since 

the total benefit provided through this 

program is contingent on the availability 

of funds and the occurrence and 

severity of a disaster in the future, SBA 

cannot make a meaningful estimate of 

this impact. 

Net Impact of Alternative Option One 

To estimate the net impacts of 

adopting Alternative Option One, SBA 

followed the same methodology used to 

evaluate the impacts of the increasing 

size standards (see Table 6). However, 

under Alternative Option One, SBA 

used the calculated size standards 

instead of the adopted increases to 

determine the impacts of changes to 

current thresholds. The impacts of the 

increases of size standards were already 

shown in Table 6. Similarly, the impacts 

of the decreases of size standards were 

also already presented in Table 7. Table 

8, Net Impacts of Size Standards 

Changes under Alternative Option One, 

presents the net impacts of adopting the 

calculated size standards under 

Alternative Option One. 

TABLE 8—NET IMPACTS OF SIZE STANDARDS CHANGES UNDER ALTERNATIVE OPTION ONE

Sector 42 Sector 44–45 Total 

No. of industries with changes to size standards ....................................................................... 60 63 123 

Total no. of small business under the current size standards (2012 Economic Census) .......... 278,263 630,397 908,660 

Additional firms qualifying as small under size standards (2012 Economic Census) ................ ¥2,427 ¥1,080 ¥3,507 

% of additional firms qualifying as small relative to total current small businesses ................... ¥0.9% ¥0.2% ¥0.4% 

Total no. of 7(a) and 504 loans to small businesses (FY 2018–2020) ...................................... 2,665 7,206 9,871 

Total amount of 7(a) and 504 loans to small businesses (FY 2018–2020) ............................... $1,706 $3,732 $5,438 

Estimated no. of additional 7(a) and 504 loans to newly- qualified small firms ......................... ¥26 0 ¥26 

Estimated additional 7(a) and 504 loan amount to newly- qualified small firms ($ million) ....... ¥$16.7 ¥$4.2 ¥$20.9 

% increase to 7(a)and 504 loan amount relative to the total amount of 7(a) and 504 loans to 

small businesses ...................................................................................................................... ¥1.0% ¥0.1% ¥0.4% 

Total no. of EIDL loans to small businesses (FY 2018–2020) * ................................................. 123 438 561 

Total amount of EIDL loans to small businesses (FY 2018–2020) * .......................................... $7.4 $20.9 $28.3 

Estimated no. of additional EIDL loans to newly-qualified small firms * ..................................... ¥1 ¥1 ¥2 

Estimated additional EIDL loan amount to newly-qualified small firms ($ million) * ................... ¥$0.04 ¥$0.01 ¥$0.01 

% increase to EIDL loan amount relative to the total amount of EIDL loans to small businesses * .................................................................................................................................... ¥0.5% 0.0% 0.01% 

* Excludes COVID–19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for 

new COVID EIDL loans or advances. 

As shown in Table 8, based on the 

2012 Economic Census, SBA estimates 

that in 123 industries in NAICS Sectors 

42 and 44–45 for which the analytical 

results suggested to change size 

standards, about 3,500 firms would lose 

their small business size status under 

Alternative Option One. That represents 

about 0.4% of all firms classified as 

small under the current size standards 

in those industries. 

Based on SBA’s loan data for fiscal 

years 2018–2020, the total number of 

7(a) and CDC/504 loans will decrease by 

26 loans, while the total loan amount 

will decrease by about $21 million. This 

is a 0.4% decrease of the 7(a) and CDC/ 

504 loan amounts relative to the 

baseline. 

Firms’ participation under SBA’s 

EIDL loan program will be affected as 

well. Since the benefit provided through 

this program is contingent on the 

occurrence and severity of a disaster in 

the future, SBA cannot make a precise 

estimate of this impact. However, based 

on the EIDL loan program data for fiscal 

years 2018–2020, SBA estimates that the 

number of EIDL loans will decrease by 

two loans, while the total loan amount 

will decrease by about $0.01 million. 

This is a 0.01% decrease of the EIDL 

loan amounts relative to the baseline. 

Table 8 provides these results by NAICS 

sector. 

Alternative Option Two: Retaining All 

Current Size Standards 

Under this option, given the current 

COVID–19 pandemic, as discussed 

elsewhere, SBA considered retaining the 

current levels of all size standards even 

though the analytical results suggested 

changing them. Under this option, as 

the current situation develops, SBA will 

be able to assess new data available on 

economic indicators and SBA loans as 

well. When compared to the baseline, 

there is a net impact of zero (i.e., zero 


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benefit and zero cost) for retaining all 

size standards. However, this option 

would cause otherwise qualified small 

businesses to forgo various small 

business benefits (e.g., access to capital 

and other benefits) that become 

available to them under the option of 

increasing 57 and retaining 80 size 

standards adopted in this final rule. 

Moreover, retaining all size standards 

under this option would also be 

contrary to the SBA’s statutory mandate 

to review and adjust, every five years, 

all size standards to reflect current 

industry and market conditions. 

Retaining all size standards without 

required periodic adjustments would 

increasingly exclude otherwise eligible 

small firms from small business 

benefits. 

Congressional Review Act 

Subtitle E of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (codified at 5 U.S.C. 801–808), also 

known as the Congressional Review Act 

or CRA, generally provides that before a 

rule may take effect, the agency 

promulgating the rule must submit a 

rule report, which includes a copy of 

the rule, to each House of the Congress 

and to the Comptroller General of the 

United States. SBA will submit a report 

containing this rule and other required 

information to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the United 

States. A major rule under the CRA 

cannot take effect until 60 days after it 

is published in the Federal Register. 

OMB’s Office of Information and 

Regulatory Affairs has determined that 

this rule is not a ‘‘major rule’’ as defined 

by 5 U.S.C. 804(2). 

Final Regulatory Flexibility Analysis 

According to the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601–612, 

when an agency issues a rulemaking, it 

must prepare a regulatory flexibility 

analysis to address the impact of the 

rule on small entities. This final rule 

may have a significant impact on a 

substantial number of small businesses 

in the industries covered by this final 

rule. As described above, this final rule 

may affect small businesses seeking 

loans under SBA’s 7(a), CDC/504, and 

EIDL loan programs, and assistance 

under other Federal small business 

programs. 

Immediately below, SBA sets forth a 

final regulatory flexibility analysis 

(FRFA) of this final rule addressing the 

following questions: (1) What is the 

need for, and objectives of the rule?; (2) 

What are significant issues raised by the 

public comments in response to the 

initial regulatory flexibility analysis, 

assessment of the agency of such issues, 

and any changes made in the proposed 

rule as a result of such comments?; (3) 

What’s the agency’s response to any 

comments filed by the Chief Counsel for 

Advocacy of the Small Business 

Administration in response to the 

proposed rule and description of any 

change made to the proposed rule in the 

final rule as a result of the comments?; 

(4) What is SBA’s description and 

estimate of the number of small 

businesses to which the rule will 

apply?; (5) What are the projected 

reporting, record keeping, and other 

compliance requirements of the rule?; 

(6) What are the relevant Federal rules 

that may duplicate, overlap, or conflict 

with the rule?; (7) What alternatives will 

allow SBA to accomplish its regulatory 

objectives while minimizing the 

economic impact on small businesses? 

1. What is the need for, and 

objectives, of the rule? 

Changes in industry structure, 

technological changes, productivity 

growth, mergers and acquisitions, and 

updated industry definitions have 

changed the structure of many the 

industries covered by this final rule. 

Such changes can be enough to support 

revisions to current size standards for 

some industries. Based on the analysis 

of the latest data available, SBA believes 

that the size standards adopted in this 

final rule more appropriately reflect the 

size of businesses that need Federal 

assistance. The 2010 Jobs Act also 

requires SBA to review every five years 

all size standards and make necessary 

adjustments to reflect market 

conditions. 

2. What are the significant issues 

raised by the public comments in 

response to the initial regulatory 

flexibility analysis, assessment of the 

agency of such issues, and any changes 

made in the proposed rule as a result of 

such comments? 

SBA did not receive any public 

comments to the initial regulatory 

flexibility analysis it provided in the 

proposed rule. 

3. What is the agency’s response to 

any comments filed by the Chief 

Counsel for Advocacy of the Small 

Business Administration in response to 

the proposed rule and description of 

any change made to the proposed rule 

in the final rule as a result of the 

comments? 

SBA did not receive any comments 

from the Chief Counsel for Advocacy of 

the Small Business Administration in 

response to the proposed rule. 

4. What is SBA’s description and 

estimate of the number of small 

businesses to which the rule will apply, 

or an explanation of why no such 

estimate is available? 

Based on data from the 2012 

Economic Census, SBA estimates that 

there are about 380,184 small firms 

covered by this rulemaking under 

industries with adopted changes to size 

standards. Under this final rule, SBA 

estimates that an additional 2,000 

businesses will be defined as small. 

5. What are the projected reporting, 

record keeping and other compliance 

requirements of the rule? 

The size standard changes in this final 

rule impose no additional reporting or 

record keeping requirements on small 

businesses. However, qualifying for 

Federal procurement and a number of 

other programs requires that businesses 

register in the System for Award 

Management (SAM) and self-certify that 

they are small at least once annually (48 

CFR 52.204–13 (the Federal Acquisition 

Regulation (FAR)). For existing 

contracts, small business contractors are 

required to update their SAM 

registration as necessary to ensure that 

they reflect the contractor’s current 

status (FAR 52.219–28). Businesses are 

also required to verify that their SAM 

registration is current, accurate, and 

complete with the submission of an 

offer for every new contract (FAR 

52.204–7 and 52.204–8). Therefore, 

businesses opting to participate in those 

programs must comply with SAM 

requirements. Changes in small business 

size standards do not result in 

additional costs associated with SAM 

initial registration or annual 

recertification. Changing size standards 

alters the access to SBA’s programs that 

assist small businesses but does not 

impose a regulatory burden because 

they neither regulate nor control 

business behavior. 

6. What are the relevant Federal rules 

that may duplicate, overlap, or conflict 

with the rule? 

Under section 3(a)(2)(C) of the Small 

Business Act, 15 U.S.C. 632(a)(2)(c), 

Federal agencies must use SBA’s size 

standards to define a small business, 

unless specifically authorized by statute 

to do otherwise. In 1995, SBA published 

in the Federal Register a list of statutory 

and regulatory size standards that 

identified the application of SBA’s size 

standards as well as other size standards 

used by Federal agencies (60 FR 57988 

(November 24, 1995)). SBA is not aware 

of any Federal rule that would duplicate 

or conflict with establishing size 

standards. 

However, the Small Business Act and 

SBA’s regulations allow Federal 

agencies to develop different size 

standards if they believe that SBA’s size 

standards are not appropriate for their 


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programs, with the approval of SBA’s 

Administrator (13 CFR 121.903). The 

Regulatory Flexibility Act authorizes an 

agency to establish an alternative small 

business definition, after consultation 

with the Office of Advocacy of the U.S. 

Small Business Administration (5 U.S.C. 

601(3)). 

7. What alternatives will allow SBA to 

accomplish its regulatory objectives 

while minimizing the impact on small 

entities? 

By law, SBA is required to develop 

numerical size standards for 

establishing eligibility for Federal small 

business assistance programs. Other 

than varying size standards by industry 

and changing the size measures, no 

practical alternative exists to the 

systems of numerical size standards. 

However, SBA considered two 

alternatives to increasing 57 and 

maintaining 80 size standards at their 

current levels. The first alternative SBA 

considered was adopting size standards 

revisions based solely on the analytical 

results. In other words, the size 

standards of 57 industries for which the 

analytical results suggest raising size 

standards would be raised. However, 

the size standards of 66 industries for 

which the analytical results suggest 

lowering them would be lowered. This 

would cause a significant number of 

small businesses to lose their small 

business status in both Sectors 42 and 

44–45 (see Table 7). Under the second 

alternative, in view of the COVID–19 

pandemic, SBA considered retaining all 

size standards at the current levels, even 

though the analytical results suggested 

increasing 57 and decreasing 66 size 

standards. SBA believes retaining all 

size standards at their current levels 

would be more onerous for small 

businesses than the option of increasing 

57 and retaining 80 size standards. 

Postponing the adoption of the higher 

calculated size standards in 57 

industries would be detrimental for 

otherwise small businesses in terms of 

access to various small business 

benefits, including access to SBA’s 

financial assistance programs and 

exemptions from paperwork and other 

compliance requirements. 

Executive Order 13563 

Executive Order 13563 emphasizes 

the importance of quantifying both costs 

and benefits, reducing costs, 

harmonizing rules, and promoting 

flexibility. A description of the need for 

this regulatory action and benefits and 

costs associated with this action, 

including possible distributional 

impacts that relate to Executive Order 

13563, is included above in the 

Regulatory Impact Analysis under 

Executive Order 12866. Additionally, 

Executive Order 13563, section 6, calls 

for retrospective analyses of existing 

rules. 

The review of size standards in the 

industries covered by this final rule is 

consistent with section 6 of Executive 

Order 13563 and the 2010 Jobs Act, 

which requires SBA to review all size 

standards and make necessary 

adjustments to reflect market 

conditions. Specifically, the 2010 Jobs 

Act requires SBA to review at least onethird of all size standards during every 

18-month period from the date of its 

enactment (September 27, 2010) and to 

review all size standards not less 

frequently than once every five years, 

thereafter. SBA had already launched a 

comprehensive review of size standards 

in 2007. In accordance with the Jobs 

Act, in early 2016, SBA completed the 

first five-year review of all small 

business size standards, except those for 

agricultural enterprises previously set 

by Congress, and made appropriate 

adjustments to size standards for a 

number of industries to reflect current 

Federal and industry market conditions. 

Prior to 2007, the last time SBA 

conducted a comprehensive review of 

all size standards was during the late 

1970s and early 1980s. 

SBA issued a white paper entitled 

‘‘Size Standards Methodology’’ and 

published a notification in the April 11, 

2019, edition of the Federal Register (84 

FR 14587) to advise the public that the 

document is available for public review. 

The ‘‘Size Standards Methodology’’ 

white paper explains how SBA 

establishes, reviews, and modifies its 

receipts-based and employee-based 

small business size standards. The 

methodology also provides descriptions 

of methodologies SBA employs to adjust 

monetary-based size standards for 

inflation and to update size standards to 

adopt the OMB’s quinquennial NAICS 

revisions. SBA considered all input, 

suggestions, recommendations, and 

relevant information obtained from 

industry groups, individual businesses, 

and Federal agencies in developing size 

standards for those industries covered 

by this final rule. SBA received a total 

of nine comments to the proposed rule. 

In the Discussion of Comments section 

of this final rule, SBA summarizes 

comments received on the proposed 

rule and provides its responses. 

Executive Order 12988 

This action meets applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. The action does not have 

retroactive or preemptive effect. 

Executive Order 13132 

For purposes of Executive Order 

13132, SBA has determined that this 

final rule will not have substantial, 

direct effects on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, SBA 

has determined that this final rule has 

no federalism implications warranting 

preparation of a federalism assessment. 

Paperwork Reduction Act 

For the purpose of the Paperwork 

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

has determined that this final rule will 

not impose any new reporting or record 

keeping requirements. 

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 amends 13 CFR part 121 

as follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

■ 1. The authority citation for part 121 

is revised to read as follows: 

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

636(a)(36), 662, and 694a(9); 15 U.S.C. 9012. 

■ 2. In § 121.201, amend the table 

‘‘Small Business Size Standards by 

NAICS Industry’’ by revising entries 

‘‘423140,’’ ’’423330,’’ ‘‘423460,’’ 

‘‘423520,’’ ‘‘423620,’’ ‘‘423730,’’ 

‘‘423740,’’ ‘‘423820,’’ ‘‘423840,’’ 

‘‘423850,’’ ‘‘423860,’’ ‘‘423920,’’ 

‘‘423930,’’ ‘‘423940,’’ ‘‘424110,’’ 

‘‘424450,’’ ‘‘424520,’’ ‘‘424590,’’ 

‘‘424690,’’ ‘‘424710,’’ ‘‘425110,’’ 

‘‘425120,’’ ‘‘441310,’’ ‘‘441320,’’ 

‘‘442291,’’ ‘‘442299,’’ ‘‘443141,’’ 

‘‘444130,’’ ‘‘444210,’’ ‘‘444220,’’ 

‘‘445291,’’ ‘‘445292,’’ ‘‘445299,’’ 

‘‘445310,’’ ‘‘446110,’’ ‘‘446130,’’ 

‘‘446191,’’ ‘‘446199,’’ ‘‘447190,’’ 

‘‘448110,’’ ‘‘448150,’’ ‘‘448190,’’ 

‘‘448310,’’ ‘‘448320,’’ ‘‘451110,’’ 

‘‘451120,’’ ‘‘451140,’’ ‘‘451211,’’ 

‘‘451212,’’ ‘‘452311,’’ ‘‘453220,’’ 

‘‘453310,’’ ‘‘453910,’’ ‘‘453920,’’ 

‘‘453998,’’ ‘‘454210,’’ and ‘‘454390’’ to 

read as follows: 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35883 

§ 121.201 What size standards has SBA 

identified by North American Industry 

Classification System codes? 

* * * * * 

SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY

NAICS codes NAICS U.S. industry title 

Size 

standards in 

millions of 

dollars 

Size 

standards in 

number of 

employees 

*******

Sector 42—Wholesale Trade 

*******

Subsector 423—Merchant Wholesalers, Durable Goods 

*******

423140 .......... Motor Vehicle Parts (Used) Merchant Wholesalers ..................................................................... ........................ 125 

* * * * * * * 

423330 .......... Roofing, Siding, and Insulation Material Merchant Wholesalers ................................................. ........................ 225 

*******

423460 .......... Ophthalmic Goods Merchant Wholesalers .................................................................................. ........................ 175 

*******

423520 .......... Coal and Other Mineral and Ore Merchant Wholesalers ............................................................ ........................ 200 

*******

423620 .......... Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers......................... 225 

*******

423730 .......... Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers ......... ........................ 175 

423740 .......... Refrigeration Equipment and Supplies Merchant Wholesalers ................................................... ........................ 125 

*******

423820 .......... Farm and Garden Machinery and Equipment Merchant Wholesalers ........................................ ........................ 125 

*******

423840 .......... Industrial Supplies Merchant Wholesalers ................................................................................... ........................ 125 

423850 .......... Service Establishment Equipment and Supplies Merchant Wholesalers .................................... ........................ 125 

423860 .......... Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers ........... ........................ 175 

*******

423920 .......... Toy and Hobby Goods and Supplies Merchant Wholesalers ...................................................... ........................ 175 

423930 .......... Recyclable Material Merchant Wholesalers ................................................................................. ........................ 125 

423940 .......... Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers ............................ ........................ 125 

*******

Subsector 424—Merchant Wholesalers, Nondurable Goods 

424110 .......... Printing and Writing Paper Merchant Wholesalers ...................................................................... ........................ 225 

* * * * * * * 

424450 .......... Confectionery Merchant Wholesalers .......................................................................................... ........................ 225 

* * * * * * * 

424520 .......... Livestock Merchant Wholesalers ................................................................................................. ........................ 125 

424590 .......... Other Farm Product Raw Material Merchant Wholesalers .......................................................... ........................ 175 

*******

424690 .......... Other Chemical and Allied Products Merchant Wholesalers ....................................................... ........................ 175 

424710 .......... Petroleum Bulk Stations and Terminals ...................................................................................... ........................ 225 


lotter on DSK11XQN23PROD with RULES1
35884 Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 

SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY—Continued 

NAICS codes NAICS U.S. industry title 

Size 

standards in 

millions of 

dollars 

Size 

standards in 

number of 

employees 

*******

Subsector 425—Wholesale Electronic Markets and Agents and Brokers 

425110 .......... Business to Business Electronic Markets .................................................................................... ........................ 125 

425120 .......... Wholesale Trade Agents and Brokers ......................................................................................... ........................ 125 

Sector 44–45—Retail Trade 

*******

Subsector 441—Motor Vehicle and Parts Dealers 

*******

441310 .......... Automotive Parts and Accessories Stores .................................................................................. $25.0 ........................

441320 .......... Tire Dealers .................................................................................................................................. 22.5 ........................

Subsector 442—Furniture and Home Furnishings Stores 

*******

442291 .......... Window Treatment Stores ........................................................................................................... 10.0 ........................

442299 .......... All Other Home Furnishings Stores ............................................................................................. 29.5 ........................

Subsector 443—Electronics and Appliance Stores 

443141 .......... Household Appliance Stores ........................................................................................................ 19.5 ........................

*******

Subsector 444—Building Material and Garden Equipment and Supplies Dealers 

*******

444130 .......... Hardware Stores .......................................................................................................................... 14.5 ........................

*******

444210 .......... Outdoor Power Equipment Stores ............................................................................................... 8.5 ........................

444220 .......... Nursery, Garden Center, and Farm Supply Stores ..................................................................... 19.0 ........................

Subsector 445—Food and Beverage Stores 

*******

445291 .......... Baked Goods Stores .................................................................................................................... 14.0 ........................

445292 .......... Confectionery and Nut Stores ...................................................................................................... 17.0 ........................

445299 .......... All Other Specialty Food Stores .................................................................................................. 9.0 ........................

445310 .......... Beer, Wine, and Liquor Stores .................................................................................................... 9.0 ........................

Subsector 446—Health and Personal Care Stores 

446110 .......... Pharmacies and Drug Stores ....................................................................................................... 33.0 ........................

* * * * * * * 

446130 .......... Optical Goods Stores ................................................................................................................... 26.0 ........................

446191 .......... Food (Health) Supplement Stores ............................................................................................... 20.0 ........................

446199 .......... All Other Health and Personal Care Stores ................................................................................. 8.5 ........................

Subsector 447—Gasoline Stations 

*******

447190 .......... Other Gasoline Stations ............................................................................................................... 29.5 ........................

Subsector 448—Clothing and Clothing Accessories Stores 

448110 .......... Men’s Clothing Stores .................................................................................................................. 22.5 ........................


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 87, No. 114 / Tuesday, June 14, 2022 / Rules and Regulations 35885 

SMALL BUSINESS SIZE STANDARDS BY NAICS INDUSTRY—Continued 

NAICS codes NAICS U.S. industry title 

Size 

standards in 

millions of 

dollars 

Size 

standards in 

number of 

employees 

*******

448150 .......... Clothing Accessories Stores ........................................................................................................ 29.5 ........................

448190 .......... Other Clothing Stores .................................................................................................................. 27.5 ........................

*******

448310 .......... Jewelry Stores .............................................................................................................................. 18.0 ........................

448320 .......... Luggage and Leather Goods Stores ........................................................................................... 33.5 ........................

Subsector 451—Sporting Good, Hobby, Book and Music Stores 

451110 .......... Sporting Goods Stores ................................................................................................................. 23.5 ........................

451120 .......... Hobby, Toy, and Game Stores .................................................................................................... 31.0 ........................

*******

451140 .......... Musical Instrument and Supplies Stores ..................................................................................... 20.0 ........................

451211 .......... Book Stores .................................................................................................................................. 31.5 ........................

451212 .......... News Dealers and Newsstands ................................................................................................... 20.0 ........................

Subsector 452—General Merchandise Stores 

*******

452311 .......... Warehouse Clubs and Supercenters ........................................................................................... 41.5 ........................

* * * * * * * 

Subsector 453—Miscellaneous Store Retailers 

*******

453220 .......... Gift, Novelty, and Souvenir Stores .............................................................................................. 12.0 ........................

453310 .......... Used Merchandise Stores ............................................................................................................ 12.5 ........................

453910 .......... Pet and Pet Supplies Stores ........................................................................................................ 28.0 ........................

453920 .......... Art Dealers ................................................................................................................................... 14.5 ........................

*******

453998 .......... All Other Miscellaneous Store Retailers (except Tobacco Stores) ............................................. 10.0 ........................

Subsector 454—Nonstore Retailers 

*******

454210 .......... Vending Machine Operators ........................................................................................................ 18.5 ........................

*******

454390 .......... Other Direct Selling Establishments ............................................................................................ 13.0 ........................

*******

* * * * * 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2022–12512 Filed 6–13–22; 8:45 am] 

BILLING CODE 8026–03–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2022–0085; Project 

Identifier MCAI–2021–00498–T; Amendment 

39–22072; AD 2022–12–01] 

RIN 2120–AA64 

Airworthiness Directives; Bombardier, 

Inc., Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Bombardier, Inc., Model BD–700–1A10 

and BD–700–1A11 airplanes. This AD 

was prompted by reports of oxygen 

leaks caused by cracked, brittle, or 

broken oxygen hoses that were found 

during scheduled maintenance tests of 

the airplane oxygen system. This AD 

requires an inspection of the oxygen 

hose assembly to determine if an 

affected part number is installed, and 

replacement of affected oxygen hoses. 

For certain airplanes, this AD allows 

repetitive testing of the oxygen system 


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