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 Small Business Administration 13 CFR Parts 121 and 123
RIN 3245-AF41
 AGENCY: Small Business Administration (SBA).
 ACTION: Interim final rule with request for comments.
 SUMMARY: SBA is adjusting its monetary-based size standards (e.g., receipts, net income, net worth, and financial assets), for the effect of inflation that has occurred since the last inflation adjustment in February 2002. Since the last inflation adjustment, the general level of prices has increased 8.7%. This action would restore small business eligibility to businesses that have lost that status due to inflation. In addition, this rule changes the process for determining the size of small business concerns applying for SBA Business Loans and Economic Injury Disaster Loans (EIDL) from a test considering only the primary industry of the applicant, to a two-part test considering both the primary industry of the applicant and the primary industry of the applicant with affiliates. This rule also changes the date on which SBA determines size status for purpose of EIDL applications for businesses located in disaster areas declared as a result of Hurricanes Katrina, Rita, and Wilma.
 DATES: *Effective Date:*
                         December 6, 2005. *Applicability Dates:*
                         For purposes of Federal procurements, this rule applies to solicitations, except for noncompetitive section 8(a) contracts, issued on or after January 5, 2006. For purposes of noncompetitive section 8(a) contracting actions, the new size standards are applicable to offers of requirements that are accepted by SBA on or after January 5, 2006. *Comment Period:*
                         Comments must be received by SBA on or before January 5, 2006.
 ADDRESSES: You may submit comments identified by RIN 3245-AF41 by any of the following methods: (1) Federal eRulemaking Portal: 
                        *http://www.regulations.gov.*
                         Follow the instructions for submitting comments; (2) Fax: (202) 205-6390; or (3) Mail/ Hand Delivery/Courier: Gary M. Jackson, Assistant Administrator for Size Standards, 409 Third Street, SW., Mail Code, 6530, Washington, DC 20416.
 FOR FURTHER INFORMATION CONTACT: Carl Jordan or Diane Heal, Office of Size Standards, at (202) 205-6618 or at 
                        *sizestandards@sba.gov.*


SUPPLEMENTARY INFORMATION: Inflationary Adjustment SBA is adjusting certain monetary-based size standards (e.g., receipts, net income, net worth, and financial assets) for the effect of inflation that has occurred since the last inflation adjustment that was effectuated on February 22, 2002 (67 FR 3041, January 23, 2002). From the third quarter of 2001 (the ending period for the last inflation adjustment) to the second quarter of 2005, the general level of prices in the United States increased approximately 8.7 percent as measured by the chain-type price index for Gross Domestic Product (GDP). The purpose of this action is to maintain the value of size standards in inflation-adjusted terms and to restore eligibility to businesses that may have lost their small business status due solely to price level increases rather than from increased business activity. While inflationary adjustments are not made on a fixed schedule, prior adjustments occurred in 2002, 1994 (59 FR 16513, April 7, 1994), 1984 (49 FR 5024, February 9, 1984) and 1975 (40 FR 32824 as corrected by 40 FR 36310, August 5, 1975). This interim final rule also satisfies 13 CFR 121.102(c) requiring SBA to assess the impact of inflation on its monetary-based size standards at least once every five years. This provision provides assurances to the public that SBA is monitoring inflation and is making a decision whether or not to adjust size standards within a reasonable period of time since its last inflation adjustment. In this rule, SBA is modifying its size standards after three-and-one-half years in recognition that enough inflation has occurred to allow for an increase to SBA's “anchor” size standard of $6 million by a half-million dollar increment. SBA believes that this level of adjustment to its anchor size standard, while small, is nonetheless a meaningful increase which affects the small business eligibility of a relatively significant number of businesses. This rule also increases higher monetary size standards by $1 million to $2.5 million, depending on the current size standard. For example, the $21 million size standard for Computer Systems Design Services increases to $23 million since an 8.7 percent increase to that level of the size standard supports a $2 million increase (as explained in next section). As discussed in the regulatory flexibility analysis, SBA estimates that approximately 12,000 businesses would regain small business status as a result of this rule. Inflation has no impact on industry size standards based on number of employees, refining capacity, or electric generation. Thus, this rule makes no adjustment to these non-monetary size standards. Any change to a non-monetary size standard will be as a result of a specific review of industry characteristics. How Does SBA Adjust Size Standards for Inflation? The methodology for adjusting the size standards for inflation is as follows: 1. 
                    *Selection of inflation measure:*
                     SBA used the chain-type price index for GDP as published by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA), which is a broad measure of inflation for the economy as a whole, and is available on a quarterly basis. 2. 
                    *Selection of a base period:*
                     SBA selected the third quarter of 2001 as the base period since this was the ending period of the last broad-based inflation adjustment in 2002. The chain-type price index for GDP stood at 102.690 at that time. 3. 
                    *Selection of an end period:*
                     We selected the second quarter of 2005 as the end period for this inflation adjustment since it is the latest available quarterly data published by the BEA. 
                    ( print page 72578)
                    The chain type price index for GDP stood at 111.612 at that time. 4. 
                    *Calculation of inflation:*
                     Based on these price indexes, inflation increased 8.7% between the base and ending periods (((111.612/102.690) − 1.00) × 100 = 8.7%). 5. 
                    *Application of the inflation adjustment to the monetary-based size standards:*
                     The current size standards were multiplied by 1.087 and rounded to the closest $0.5 million. Special Situations Regarding Inflation Adjustment Small Business Investment Company (SBIC) Program Certain monetary-based size standards are not changed in this rule. The size standards for agricultural industries and for “smaller enterprises” under the SBIC Program are set by statute and, therefore, cannot be changed through rulemaking. SBA has elected not to change the alternate net worth and net income size standard for the Small Business Investment Companies (SBIC) Program. In 1994, the average net worth and net income criteria were increased threefold. Therefore, the current size standards remain in place for the SBIC Program and no further increase is deemed necessary at this time. Size Standards Adjusted Since 2002 SBA has changed several receipts-based size standards since the last inflation adjustment in 2002. SBA is applying the full inflation adjustment of 8.7 percent to those receipts-based size standards as well. When SBA establishes or revises a size standard, it does so in relation to other existing size standards to ensure that industries with similar characteristics have similar size standards. To provide a smaller adjustment, while technically precise, would be inconsistent with the size standards decision-making process. Size Standards of $2 Million or Less At the time of the 2002 adjustment, prices had not increased by an amount sufficient to support increasing size standards of $2 million or less. The cumulative effects of inflation from the 2002 adjustment of 15.8 percent and the current adjustment of 8.7 percent is sufficient to increase those size standards by a half-million dollar increment. Therefore, this interim final rule increases size standards of $2 million or less by $0.5 million. Affected industries include real-estate agents and cattle feedlots. Program-Based Size Standards Most SBA programs apply size standards established for industries defined by the North American Industry Classification System (NAICS). This rule lists the size standard for each NAICS industry with a monetary-based size standard (except for the $750,000 statutorily established agricultural size standard). SBA has also established size standard(s) on a program basis rather than an industry basis, which are adjusted in the same manner as the industry-based size standards (except for the SBIC program as discussed above). The following table lists the program-based size standards and the changes adopted by this rule. Program
CFR citation
Size standardCurrent size standard
                             (in millions)
Measurement
New size standard 
                             (in millions)504 Program
13 CFR 121.301(b)
$7.0
Net Worth
$7.5$2.5
Net Income
* $2.5
                             (retained)Surety Bond Guarantee Assistance
13 CFR 121.301(d)
$6.0
Average Annual Receipts
$6.5Sales of Government Property Other Than Manufacturing (which uses employee-based size standards)
13 CFR 121.502
$6.0
Average Annual Receipts
$6.5Stockpile Purchases
13 CFR 121.512
$48.5
Average Annual Receipts
$51.5* The $2.5 million size standard is not being adjusted at this time since the inflation rate supports a change significantly less than $0.5 million.
 Determining Size Eligibility for SBA Business Loans and Economic Injury Disaster Loans In 2004, SBA adopted a policy to determine size eligibility for its Business Loan and EIDL programs based on the primary industry of the applicant (69 FR 29192, May 21, 2004). Prior to that time, SBA utilized a two-step process that determined size eligibility for these programs based on the primary industry of the applicant and the primary industry of the applicant including its affiliates. SBA subsequently concluded that the two-step process was not only unnecessary but also the wording was unclear, causing confusion in its proper application (67 FR 70342, November 22, 2002). Since the implementation of the 2004 provision, SBA has come to the realization that a two-step size eligibility process is necessary to ensure that its financial loan programs equitably assist small businesses that have affiliates. Several loans that would have been approved under the previous two-step process have been denied under the existing regulation. However, SBA believes that those businesses should have been considered eligible for its small business financial assistance programs because the size of the applicant's affiliates are within the size standard for the industries in which they operate. Therefore, SBA is establishing a new two-step size eligibility provision for its financial assistance programs. The provision contained in this rule is very similar to SBA's previous regulation, but with additional language explaining how to determine size eligibility. The first step is to determine the primary industry and size of the applicant alone (i.e., without affiliates). If the applicant's size exceeds the applicable size standard, it is deemed ineligible. If the applicant's size does not exceed the applicable size standard, and has affiliates, the second step is triggered. The second step of the analysis is to determine the primary industry and size of the applicant including its affiliates. The applicant is eligible if the combined size of the applicant and its affiliates does not exceed either the size standard for the applicant's primary industry or the size standard for the primary industry of the applicant and its affiliates, whichever is higher. The selection of the higher of the two size standards under the two-part test avoids a number of problems that existed when SBA only considered the size standard for the primary industry of the applicant (as it had done before 2004). For example, two businesses operating in the same group of industries with a different distribution 
                    ( print page 72579)
                    of receipts or employees could result in a larger business qualifying for SBA assistance while a smaller business is denied. Under this rule's two-step process, the applicant must be small within its primary industry, but will not be found ineligible in cases where the size standard for the primary industry of the applicant and its affiliates is lower than the size standard of the applicant's primary industry. In some cases, the primary industry of the applicant alone and the primary industry of the applicant combined with its affiliates may have size standards based on a different measure of size. For example, a retail store applicant whose primary industry including its affiliates is wholesale trade will have the primary industry of a retail store based on average annual receipts while the primary industry of the applicant with affiliates is wholesale trade which is based on number of employees. In applying the two-step process, the size of the applicant combined with its affiliates must be compared against the same measure of size (receipts or employment) for the applicable size standard. Thus, in this scenario, if a retail store applicant (with a size standard based on receipts) whose primary industry including its affiliates is wholesale trade (with a size standard based on employees) is eligible under the receipts-based size standard, but ineligible under the employee-based size standard, the size standard which gives the benefit of the doubt to the applicant should be used. The above criteria for determining size eligibility for SBA's financial assistance programs depend on designating the primary industry of the applicant with and without affiliates. SBA's regulations at 13 CFR 121.107 provide the following guidance in making this designation: In determining the primary industry (kind of work) in which a concern or a concern combined with its affiliates is engaged, SBA considers the distribution of receipts, employees and costs of doing business among the different industries in which business operations occurred for the most recently completed fiscal year. SBA may also consider other factors, such as the distribution of patents, contract awards, and assets. Under this guidance, a determination must first be made of the kind of work a business performs and which among those activities represents the largest activity. Consideration of the percentage distribution of receipts and other factors among the various business activities may be relied upon in identifying the business's main activity. The industry this activity falls into is based on the industry definitions established by the NAICS. These definitions are listed in the NAICS United States, 2002 manual and may also be found in the U.S. Bureau of the Census Web site at 
                    *http://www.census.gov/​epcd/​naics02/​.* For example, a business generating 70 percent of receipts from selling carpets and vinyl tiles to the general public and 30 percent of receipts from window treatments is primarily a floor covering retail store since that represents both a majority of its work and is its largest single business activity. NAICS classifies this activity under the industry of “Floor Covering Stores”, NAICS code 442210. SBA's size standard for this industry is $6.5 million in average annual receipts. The determination of primary industry for applicants with affiliates involves a more detailed analysis, but is essentially the same process as above. For the applicant and each affiliate, identify the types of business activities performed and the level of revenues, employees or other appropriate factors. The business activity that accounts for the largest single activity represents the primary industry of the applicant and its affiliates. The examination of receipts should be the first consideration in determining primary industry. In some cases, however, receipts may not provide a clear picture, and it will be necessary to examine number of employees (emphasis should be placed on full-time employees) or other factors. In every case, the decision should be reasonable and justified. For example, there is an applicant that has two affiliates engaged in five business activities as follows: Business activity
NAICS 
                             code
Size
CompanySales
EmployeesCarpet sales
442210
$1,000,000
10
Applicant.Wall covering sales
442291
400,000
4
Applicant.Blind manufacturing
337920
10,000,000
25
Affiliate 1.Draperies manufacturing
314121
500,000
5
Affiliate 1.Interior design
541410
500,000
8
Affiliate 2.
 The total size of the business is 52 employees and $12.4 million in sales. Blind manufacturing represents its largest activity, measured in terms of either sales or employees, and therefore, is the primary industry of the applicant and its affiliates. With a total of 52 employees, the applicant and its affiliates do not exceed the 500 employee size standard for NAICS 337920, Blind and Shade Manufacturing. Justification for Determining the Size Status of Businesses Affected by the Hurricanes on the Date SBA Accepts EIDL Applications From Those Businesses SBA is also changing the date as of which size status is determined for purposes of Economic Injury Disaster Loan (EIDL) applications submitted by businesses located in disaster areas declared as a result of Hurricanes Katrina, Rita, and Wilma. Existing regulations at 13 CFR 123.300(b) require an applicant for an EIDL loan to be small as of the date the disaster commenced, as set forth in the disaster declaration. SBA is changing the date on which SBA determines size status of those businesses to “the date SBA accepts the application for processing.” This amendment would provide immediate access to SBA's EIDL program to those businesses that would have been ineligible prior to Hurricanes Katrina, Rita, and Wilma based solely as a result of inflation that has occurred since the SBA last adjusted its monetary-based size standards in 2002. Thousands of small businesses suffered substantial economic injury as a direct result of the hurricanes. EIDLs would provide funds to eligible small businesses to meet their ordinary and necessary operating expenses that they are unable to meet as a direct result of Hurricanes Katrina, Rita, or Wilma. This amendment to the date as of which businesses in the declared disaster areas are deemed small for purposes of the EIDL program would support the continuing operation of small businesses in the Gulf Coast region and in Florida, create jobs, and facilitate economic recovery of those communities. 
                    ( print page 72580) Justification for Publication as an Interim Final Rule In general, SBA publishes a proposed rule for public comment before issuing a final rule, in accordance with the Administrative Procedure Act (APA) and SBA regulations, 5 U.S.C. 553 and 13 CFR 101.108. The APA provides an exception to this standard rulemaking process, however, in situations where an agency finds good cause to adopt a rule without prior public participation. (See 5 U.S.C. 553(b)(3)(B).) The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under those conditions, an agency may publish an interim final rule without first soliciting public comment. In applying the good cause exception to standard rulemaking procedures, Congress recognized that emergencies (such as a response to a natural disaster) might arise justifying issuance of a rule without prior public participation. On August 29, 2005, the President declared major disaster areas in Louisiana, Mississippi, and Alabama in the aftermath of Hurricane Katrina. The President made the same declarations with respect to Louisiana and Texas as Hurricane Rita destroyed even more of the Gulf Coast region. On October 24, 2005, the President issued a disaster declaration pertaining to the areas in the state of Florida struck by Hurricane Wilma. These natural disasters have affected U.S. businesses in the declared disaster areas and across the Nation. Some of the affected businesses qualify as “small” under SBA size standards and are eligible for SBA assistance. However, some of the affected businesses have lost eligibility solely as a result of the inflation that has occurred since the SBA last adjusted its monetary-based size standards in 2002. This rule is necessary to make available SBA assistance to those businesses. In particular, this rule would make the EIDL program available to those businesses located in the disaster areas declared as a result of Hurricanes Katrina, Rita, and Wilma. Any delay in the adoption of these inflationary adjustments could cause serious harm to these businesses. In addition, small businesses would benefit from the changes to SBA's method of determining size eligibility for SBA's Business Loan and EIDL programs because it would expand availability of SBA assistance. Immediate implementation of this rule would facilitate economic recovery of the Gulf Coast region and is therefore in the best interest of the public. Accordingly, SBA finds that good cause exists to publish this rule as an interim final rule because of the urgent need to make disaster loans and other SBA assistance available to businesses that should be considered small, but no longer qualify under SBA's existing size standards due to inflation. Furthermore, advance solicitation of comments for this rulemaking would be impracticable and contrary to the public interest, as it would delay the delivery of critical assistance to these businesses by a minimum of four to six months. It is likely that some would be forced to cease operations before a rule could be promulgated under standard notice and comment rulemaking procedures. SBA's rationale for preparing this action as an interim final rule is consistent with the Agency's statutory obligation to act in the public interest in determining eligibility for Federal assistance under the Small Business Act, 15 U.S.C. 633(d). It is also consistent with 13 CFR 123.1, under which SBA reserves the right to amend the Disaster Loan Program regulations without advance notice in response to disasters. Pursuant to those authorities, SBA has determined that it is in the public interest to give immediate effect to this rule. The failure to adopt this rule could work to the detriment of many small businesses. Although this rule is being published as an interim final rule, comments are hereby being solicited from interested parties. These comments must be received on or before January 5, 2006. SBA may then consider these comments in making any necessary revisions to these regulations. Justification for Immediate Effective Date of Interim Final Rule The APA requires that “publication or service of a substantive rule shall be made not less than 30 days before its effective date, except * * * as otherwise provided by the agency for good cause found and published with the rule,” 5 U.S.C. 553(d)(3). SBA finds that good cause exists to make this final rule effective the same day it is published in the 
                    **Federal Register**
                    . The purpose of the APA provision delaying the effective date of a rule for 30 days after publication is to provide interested and affected members of the public sufficient time to adjust their behavior before the rule takes effect. In this case, however, the 30-day delay is unnecessary because this interim final rule would not require businesses or SBA to make significant changes to their current procedures for applying for SBA assistance, or determining the status of businesses seeking SBA assistance, including Business Loans or EIDLs. SBA would begin applying the new size standards to businesses and the two-part size eligibility test upon publication of this interim final rule. For purposes of Federal procurements, however, the applicability dates are delayed for 30 days after the date of publication in this rule as described in the Dates section of the preamble for this rule. SBA believes, based on its contacts with interested members of the public, that there is strong interest in immediate implementation of this rule. This action is in the public interest and does not tend to adversely affect any interested parties. SBA expects little if any adverse comments on the inflation-adjusted size standards. Past inflation adjustments by SBA have received widespread support. Compliance With Executive Orders 12866, 12988, and 13132, the Regulatory Flexibility Act (5 U.S.C. 601-612) and the Paperwork Reduction Act (44 U.S.C. Ch. 35) The Office of Management and Budget (OMB) has determined that this rule constitutes a “significant regulatory action” under Executive Order 12866. A general discussion of the need for this regulatory action and its potential costs and benefits follows. Regulatory Impact Analysis i. Is there a need for the regulatory action? SBA's statutory mission is to aid and assist small businesses through a variety of financial, procurement, business development, and advocacy programs. To effectively assist intended beneficiaries of these programs, SBA must establish distinct definitions of which businesses are deemed small businesses. The Small Business Act (15 U.S.C. 632(a)) (Act) delegates to the SBA Administrator the responsibility for establishing small business definitions. The Act also requires that small business definitions vary to reflect industry differences. The supplementary information to this interim final rule explains the approach SBA follows when adjusting size standards for inflation. Based on the rise in the general level of prices, SBA believes that an inflation adjustment to size standards is needed to better reflect small businesses in industries with monetary-based size standards. ii. What are the potential benefits and costs of this regulatory action? The benefits of a size standard increase to a more appropriate level would accrue to three groups: (1) Businesses that benefit by gaining small 
                    ( print page 72581)
                    business status from the higher size standard that also use small business assistance programs; (2) growing small businesses that may exceed the current size standards in the near future and that will retain small business status from the higher size standard; and (3) Federal agencies that award contracts under procurement programs that require small business status. The most significant benefit to businesses obtaining small business status as a result of this rule is eligibility for Federal small business assistance programs. Under this rule, approximately 11,600 additional firms generating 0.6 percent of sales in the adjusted industries will obtain small business status and become eligible for these programs. These include SBA's financial assistance programs, economic injury disaster loans, Federal procurement preference programs for small businesses (including 8(a) firms, small disadvantaged businesses, small businesses located in Historically Underutilized Business Zones (HUBZone), women-owned small businesses, and veteran-owned and service disabled veteran-owned small businesses, and Federal contracts awarded through full and open competition after application of the HUBZone or small disadvantaged business price evaluation preference or adjustment). Through the assistance of these programs, small businesses may benefit by becoming more knowledgeable, stable, and competitive businesses. SBA estimates that up to $400 million in Federal contracts could be awarded to firms becoming newly-designated as small businesses under this rule. In fiscal year 2004, small businesses obtained $39.2 billion out of $170.5 billion in Federal contracts in industries with a monetary-based size standard. This estimate assumes that about half of the newly-defined small businesses participate in Federal contracting and they could obtain the same proportion of their industry share (one-half of 0.6 percent) of the remaining large business awards (($170.5 billion−$39.2 billion−$131.3 billion) × 0.003 = $0.393 billion). SBA views the additional amount of projected contract activity as the potential amount of transfer from non-small to newly-designated small firms. This does not represent the creation of new contracting activity by the Federal government, merely a possible transfer or reallocation to different sized firms. Under the SBA's 7(a) Guaranteed Loan Program, SBA estimates that approximately $86.5 million in new Federal loan guarantees could be made to these newly-defined small businesses. In fiscal year 2004, small businesses received $12.5 billion in loan guarantees under the 7(a) loan program in industries with a monetary-based size standard. Most of the newly-defined small businesses have 50 or more employees. SBA guaranteed 2,404 loans worth $1.1 billion to small businesses with 50 or more employees. Based on an analysis of the Advocacy-Census Bureau data, only about 1.6 percent of businesses within the size range of the newly-defined small businesses participate in the 7(a) program. Assuming this level of participation, 186 additional loans could be guaranteed to the 11,600 newly defined businesses (11,600 × 0.016 = 186). The value of these loans is estimated by applying the average size loan to small businesses with 50 or more employees of $465,000 to the number of additional loans ($465,000 × 186 = $86,490). The newly defined small businesses would also benefit from SBA's Economic Injury Disaster Loan (EIDL) Program. Since this program is contingent upon the occurrence and severity of a disaster, no meaningful estimate of benefits can be projected for future disasters. To the extent that up to 11,600 additional firms could become active in Federal small business programs, this may entail some additional administrative costs to the Federal Government associated with additional bidders for Federal small business procurement programs, additional firms seeking SBA-guaranteed lending programs, and additional firms eligible for enrollment in Central Contractor Registration's Dynamic Small Business Search database. Among businesses in this group seeking SBA assistance, there could be some additional costs associated with compliance and verification of small business status and protests of small business status. These costs are likely to generate minimal incremental administrative costs since mechanisms are currently in place to handle these administrative requirements. The costs to the Federal Government may be higher on some Federal contracts as a result of this rule. SBA believes, however, that there will be only minor distributional effects among large and small businesses relating to Federal procurement. The increase in the number of newly eligible small businesses is not enough to significantly affect current small businesses. Moreover, with a small amount of estimated lending to the newly defined small businesses as discussed above, it is unlikely that currently-defined small businesses would be denied SBA financial assistance due to a larger pool of eligible small businesses. These additional loan guarantees totaling $86.5 million or less will have virtually no impact on the overall availability of loans for SBA's financial assistance programs, which guaranteed about 88,000 loans totaling more than $17 billion in fiscal year 2004. The revision to the current monetary-based size standard is consistent with SBA's statutory mandate to assist small business. This regulatory action promotes the Administration's objectives. One of SBA's goals in support of the Administration's objectives is to help individual small businesses succeed through fair and equitable access to capital and credit, government contracts, and management and technical assistance. Reviewing and modifying size standards where appropriate, including periodic inflation adjustments, ensures that intended beneficiaries have access to small business programs designed to assist them. Size standards do not interfere with State, local, and tribal governments in the exercise of their government functions. In a few cases, state and local governments have voluntarily adopted SBA's size standards for their programs to eliminate the need to establish an administrative mechanism to develop their own size standards. For purposes of Executive Order 12988, SBA has determined that this rule is drafted, to the extent practicable, in accordance with the standards set forth in section 3 of that Order. This regulation would 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 responsibility among the various levels of government. Therefore, under Executive Order 13132, SBA determines that this rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment. SBA has determined that this rule does not impose any new information collection requirements under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501-3520. Under the Regulatory Flexibility Act (RFA), an inflation adjustment to monetary-based size standards as a result of this rule may have a significant economic impact on a substantial number of small entities. SBA does not expect that the implementation of a two-step process to determine small business eligibility for its financial assistance program will have a significant economic impact of a 
                    ( print page 72582)
                    substantial number of small businesses. As discussed in the Regulatory Impact Analysis, the vast majority of 7(a) loans are made to small businesses well below the size standard, and they usually do not have complicated organizational structures. However, the provision is important to equitably evaluate the small business status of some applicants that do have affiliates that operate in various industries. Immediately below, SBA sets forth an initial regulatory flexibility analysis (IRFA) of the inflation adjustment to size standards addressing the reasons for promulgating the rule and its objectives of the rule; SBA's descriptions and estimate of the number of small entities to which the rule will apply; the projected reporting recordkeeping and other compliance requirements of the rule; the relevant Federal rules which may duplicate, overlap or conflict with the rule; and alternatives considered by SBA. (1) What is the reason for this action? As discussed in the supplemental information, the purpose of this rule is to restore the small business eligibility of businesses that have grown above the size standard due to inflation rather than due to increased business activity. A review of the latest inflation indexes indicates that inflation has increased a sufficient amount to warrant an increase to the current monetary-based size standards. (2) What are the objectives and legal basis for the rule? The revision to the monetary-based size standards for inflation more appropriately defines the size of businesses. This rule merely restores small business eligibility in real terms. Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) gives SBA the authority to establish and change size standards. Within its administrative discretion, SBA implemented a policy in its regulations to review the effect of inflation on size standards at least every five years (13 CFR 121.102(c)) and make any changes as appropriate. (3) What is SBA's description and estimate of the number of small entities to which the rule will apply? SBA estimates that there will be approximately 11,600 newly designated small businesses, distributed as follows by NAICS Sector: Sector
Name of sector
Number of firms11
Agriculture
5921
Mining
67223
Construction
28544-45
Retail Trade
2,15948-49
Transportation
21151
Information
8952
Finance and Insurance
52053
Real Estate
1,84654
Professional Services
2,67456
Administration and Support
47261
Educational Services
20162
Health Care
1,17171
Arts, Entertainment and Recreation
18472
Accommodation and Food Services
42081
Other Services
635Total
11,598Source: U.S. Small Business Administration, Office of Advocacy, 2002 data provided by the Statistics of U.S. Business Division of the U.S. Census Bureau.
 The percentage increase in the number of small businesses that will result from this rule, compared to the existing base of small businesses, is estimated to be about two-tenths of one percent. The special tabulation for the SBA's Office of Advocacy obtained from the Bureau of the Census reports 5,043,335 firms in the industries with monetary-based size standards. Within these industries, 96.0 percent of businesses are currently defined as small under the existing size standards. Under this rule, that percentage will increase to 96.2%. The percentage increase of annual sales attributed to these newly defined small businesses is likely to approximate 0.6 percent. Currently-defined small businesses under monetary-based size standards generate 25.7 percent of sales. Under this rule, the percentage of sales attributable to small businesses will increase to 26.4%. (4) What are the potential benefits of the rule? The most significant benefit to small businesses obtaining small business status is their eligibility for Federal small business assistance programs. These include SBA's financial assistance programs and Federal procurement preference programs for small business, 8(a) firms, small disadvantaged businesses, and small businesses located in historically underutilized business zones (HUBZone). (5) Will this rule impose any additional reporting or recordkeeping requirements on small businesses? This rule does not impose any new information collection requirements from SBA which require approval by OMB under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501-3520. A new size standard does not impose any additional reporting, record keeping or compliance requirements on small entities. Increasing size standards expands access to SBA programs that assist small businesses, but does not impose a regulatory burden as they neither regulate nor control business behavior. (6) What are the relevant Federal rules which may duplicate, overlap or conflict with this rule? This rule overlaps with other Federal rules that use SBA's size standards to define a small business. Under § 3(a)(2)(C) of the Small Business Act, unless specifically authorized by statute, Federal agencies must use SBA's size standards to define a small business. 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 57988-57991, dated November 24, 1995). SBA is not aware of any Federal rule that would duplicate or conflict with establishing size standards. SBA cannot estimate the impact of a size standard change on each and every Federal program that uses its size standards. In cases where a size standard is not appropriate, the Small Business Act and SBA's regulations allow Federal agencies to develop different size standards with the approval of the SBA Administrator (13 CFR 121.902). For purposes of a regulatory flexibility analysis, agencies must consult with SBA's Office of Advocacy when developing different size standards for their programs. (7) What alternatives did SBA consider? SBA considered two alternatives to this rule. First, SBA considered waiting until price levels increased by a greater amount before proposing an adjustment to its receipt-based size standards. Previous inflation adjustments ranged between 16 percent and 100 percent, whereas this increase is 8.7 percent. However, SBA now believes that more frequent adjustments are necessary since smaller amounts of inflation can change the eligibility of significant number of businesses. Second, SBA considered waiting until its review of issues that were raised in the Agency's Advance Notice of Proposed Rulemaking of December 3, 2004 (69 FR 70197) was completed. Ultimately, SBA rejected this approach as it could not predict with precision 
                    ( print page 72583)
                    the time for completion of its full review, the degree of inflation that could occur while the review was underway, or the final disposition of the issues that were raised in the December 3, 2004 notice. SBA did not want to unnecessarily penalize firms during these deliberations. List of Subjects 13 CFR Part 121 Administrative practice and procedure
Government procurement
Government property
Loan programs—business
Small business 13 CFR Part 123 Disaster assistance
Loan programs—business
Small business
 For the reasons set forth in the preamble, amend parts 121 and 123 of title 13 Code of Federal Regulations as follows: PART 121—SMALL BUSINESS SIZE REGULATIONS
 1.The authority citation for part 121 continues to read as follows: Authority:
                        15 U.S.C. 632(a), 634(b) (6), 637(a), 644(c), and 662(5); and Sec. 304, Pub. L. 103-403, 108 Stat. 4175, 4188. 2.Amend § 121.201 by revising the size standards to the referenced NAICS Codes in the table “SIZE STANDARDS BY NAICS INDUSTRY” under sections 11, 21 through 23, 44-45, 48-49, 51 through 56, 61, 62, 71, 72 and 81 and footnotes 9 and 15 to read as follows: § 121.201
  
 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 11—Agriculture, Forestry, Fishing and Hunting***         *         *         *         *         *         ***Subsector 112—Animal Production***         *         *         *         *         *         *112112
Cattle Feedlots
$2.00*         *         *         *         *         *         *112310
Chicken Egg Production
$11.5*         *         *         *         *         *         ***Subsector 113—Forestry and Logging**113110
Timber Tract Operations
$6.5113210
Forest Nurseries and Gathering of Forest Products
$6.5*         *         *         *         *         *         ***Subsector 114—Fishing, Hunting and Trapping**114111
Finfish Fishing
$4.0114112
Shellfish Fishing
$4.0114119
Other Marine Fishing
$4.0114210
Hunting and Trapping
$4.0**Subsector 115—Support Activities for Agriculture and Forestry**115111
Cotton Ginning
$6.5115112
Soil Preparation, Planting, and Cultivating
$6.5115113
Crop Harvesting, Primarily by Machine
$6.5115114
Postharvest Crop Activities (except Cotton Ginning)
$6.5115115
Farm Labor Contractors and Crew Leaders
$6.5115116
Farm Management Services
$6.5115210
Support Activities for Animal Production
$6.5115310
Support Activities for Forestry
$6.5*Except,*
Forest Fire Suppression 17
17
                                     $16.5*Except,*
Fuels Management Services 17
17
                                     $16.5**Sector 21—Mining****Subsector 212—Mining (except Oil and Gas)***         *         *         *         *         *         ***Subsector 213—Support Activities for Mining**( print page 72584)*         *         *         *         *         *         *213112
Support Activities for Oil and Gas Operations
$6.5213113
Support Activities for Coal Mining
$6.5213114
Support Activities for Metal Mining
$6.5213115
Support Activities for Nonmetallic Minerals (except Fuels)
$6.5**Sector 22—Utilities****Subsector 221—Utilities***         *         *         *         *         *         *221310
Water Supply and Irrigation Systems
$6.5221320
Sewage Treatment Facilities
$6.5221330
Steam and Air-Conditioning Supply
$11.5**Sector 23—Construction****Subsector 236—Construction of Buildings**236115
New Single-Family Housing Construction (except Operative Builders)
$31.0236116
New Multifamily Housing Construction (except Operative Builders)
$31.0236117
New Housing Operative Builders
$31.0236118
Residential Remodelers
$31.0236210
Industrial Building Construction
$31.0236220
Commercial and Institutional Building Construction
$31.0**Subsector 237—Heavy and Civil Engineering Construction**237110
Water and Sewer Line and Related Structures Construction
$31.0237120
Oil and Gas Pipeline and Related Structures Construction
$31.0237130
Power and Communication Line and Related Structures Construction
$31.0237210
Land Subdivision
$6.5237310
Highway, Street, and Bridge Construction
$31.0237990
Other Heavy and Civil Engineering Construction
$31.0*Except*,
Dredging and Surface Cleanup Activities 2
2
                                     $18.5**Subsector 238—Specialty Trade Contractors**238110
Poured Concrete Foundation and Structure Contractors
$13.0238120
Structural Steel and Precast Concrete Contractors
$13.0238130
Framing Contractors
$13.0238140
Masonry Contractors
$13.0238150
Glass and Glazing Contractors
$13.0238160
Roofing Contractors
$13.0238170
Siding Contractors
$13.0238190
Other Foundation, Structure, and Building Exterior Contractors
$13.0238210
Electrical Contractors
$13.0238220
Plumbing, Heating, and Air-Conditioning Contractors
$13.0238290
Other Building Equipment Contractors
$13.0238310
Drywall and Insulation Contractors
$13.0238320
Painting and Wall Covering Contractors
$13.0238330
Flooring Contractors
$13.0238340
Tile and Terrazzo Contractors
$13.0238350
Finish Carpentry Contractors
$13.0238390
Other Building Finishing Contractors
$13.0238910
Site Preparation Contractors
$13.0238990
All Other Specialty Trade Contractors 13
13
                                     $13.0238990
Building and Property Specialty Trade Services 13
13
                                     $13.0*         *         *         *         *         *         ***Sectors 44-45—Retail Trade**(Not applicable to Government procurement of supplies. The nonmanufacturer size standard of 500 employees shall be used for purposes of Government procurement of supplies.)**Subsector 441—Motor Vehicle and Parts Dealers**441110
New Car Dealers
$26.5441120
Used Car Dealers
$21.0441210
Recreational Vehicle Dealers
$6.5( print page 72585)441221
Motorcycle Dealers
$6.5441222
Boat Dealers
$6.5441229
All Other Motor Vehicle Dealers
$6.5*Except*,
Aircraft Dealers, Retail
$9.0441310
Automotive Parts and Accessories Stores
$6.5441320
Tire Dealers
$6.5**Subsector 442—Furniture and Home Furnishings Stores**442110
Furniture Stores
$6.5442210
Floor Covering Stores
$6.5442291
Window Treatment Stores
$6.5442299
All Other Home Furnishings Stores
$6.5**Subsector 443—Electronics and Appliance Stores**443111
Household Appliance Stores
$8.0443112
Radio, Television and Other Electronics Stores
$8.0443120
Computer and Software Stores
$8.0443130
Camera and Photographic Supplies Stores
$6.5**Subsector 444—Building Material and Garden Equipment and Supplies Dealers**444110
Home Centers
$6.5444120
Paint and Wallpaper Stores
$6.5444130
Hardware Stores
$6.5444190
Other Building Material Dealers
$6.5444210
Outdoor Power Equipment Stores
$6.5444220
Nursery and Garden Centers
$6.5**Subsector 445—Food and Beverage Stores**445110
Supermarkets and Other Grocery (except Convenience) Stores
$25.0445120
Convenience Stores
$25.0445210
Meat Markets
$6.5445220
Fish and Seafood Markets
$6.5445230
Fruit and Vegetable Markets
$6.5445291
Baked Goods Stores
$6.5445292
Confectionery and Nut Stores
$6.5445299
All Other Specialty Food Stores
$6.5445310
Beer, Wine and Liquor Stores
$6.5**Subsector 446—Health and Personal Care Stores**446110
Pharmacies and Drug Stores
$6.5446120
Cosmetics, Beauty Supplies and Perfume Stores
$6.5446130
Optical Goods Stores
$6.5446191
Food (Health) Supplement Stores
$6.5446199
All Other Health and Personal Care Stores
$6.5**Subsector 447—Gasoline Stations**447110
Gasoline Stations with Convenience Stores
$25.0447190
Other Gasoline Stations
$8.0**Subsector 448—Clothing and Clothing Accessories Stores**448110
Men's Clothing Stores
$8.0448120
Women's Clothing Stores
$8.0448130
Children's and Infants' Clothing Stores
$6.5448140
Family Clothing Stores
$8.0448150
Clothing Accessories Stores
$6.5448190
Other Clothing Stores
$6.5448210
Shoe Stores
$8.0448310
Jewelry Stores
$6.5448320
Luggage and Leather Goods Stores
$6.5**Subsector 451—Sporting Good, Hobby, Book and Music Stores**451110
Sporting Goods Stores
$6.5451120
Hobby, Toy and Game Stores
$6.5( print page 72586)451130
Sewing, Needlework and Piece Goods Stores
$6.5451140
Musical Instrument and Supplies Stores
$6.5451211
Book Stores
$6.5451212
News Dealers and Newsstands
$6.5451220
Prerecorded Tape, Compact Disc and Record Stores
$6.5**Subsector 452—General Merchandise Stores**452111
Department Stores (except Discount Department Stores)
$25.0452112
Discount Department Stores
$25.0452910
Warehouse Clubs and Superstores
$25.0452990
All Other General Merchandise Stores
$10.5**Subsector 453—Miscellaneous Store Retailers**453110
Florists
$6.5453210
Office Supplies and Stationery Stores
$6.5453220
Gift, Novelty and Souvenir Stores
$6.5453310
Used Merchandise Stores
$6.5453910
Pet and Pet Supplies Stores
$6.5453920
Art Dealers
$6.5453930
Manufactured (Mobile) Home Dealers
$12.0453991
Tobacco Stores
$6.5453998
All Other Miscellaneous Store Retailers (except Tobacco Stores)
$6.5**Subsector 454—Nonstore Retailers**454111
Electronic Shopping
$23.0454112
Electronic Auctions
$23.0454113
Mail-Order Houses
$23.0454210
Vending Machine Operators
$6.5454311
Heating Oil Dealers
$11.5454312
Liquefied Petroleum Gas (Bottled Gas) Dealers
$6.5454319
Other Fuel Dealers
$6.5454390
Other Direct Selling Establishments
$6.5**Sectors 48-49—Transportation****Subsector 481—Air Transportation***         *         *         *         *         *         *481211
Nonscheduled Chartered Passenger Air Transportation

1,500*Except,*
Offshore Marine Air Transportation Services
$25.5481212
Nonscheduled Chartered Freight Air Transportation

1,500*Except,*
Offshore Marine Air Transportation Services
$25.5481219
Other Nonscheduled Air Transportation
$6.5*         *         *         *         *         *         ***Subsector 484—Truck Transportation**484110
General Freight Trucking, Local
$23.5484121
General Freight Trucking, Long-Distance, Truckload
$23.5484122
General Freight Trucking, Long-Distance, Less Than Truckload
$23.5484210
Used Household and Office Goods Moving
$23.5484220
Specialized Freight (except Used Goods) Trucking, Local
$23.5484230
Specialized Freight (except Used Goods) Trucking, Long-Distance
$23.5**Subsector 485—Transit and Ground Passenger Transportation**485111
Mixed Mode Transit Systems
$6.5485112
Commuter Rail Systems
$6.5485113
Bus and Motor Vehicle Transit Systems
$6.5485119
Other Urban Transit Systems
$6.5485210
Interurban and Rural Bus Transportation
$6.5485310
Taxi Service
$6.5485320
Limousine Service
$6.5485410
School and Employee Bus Transportation
$6.5485510
Charter Bus Industry
$6.5485991
Special Needs Transportation
$6.5( print page 72587)485999
All Other Transit and Ground Passenger Transportation
$6.5**Subsector 486—Pipeline Transportation***         *         *         *         *         *         *486210
Pipeline Transportation of Natural Gas
$6.5*         *         *         *         *         *         *486990
All Other Pipeline Transportation
$31.5**Subsector 487—Scenic and Sightseeing Transportation**487110
Scenic and Sightseeing Transportation, Land
$6.5487210
Scenic and Sightseeing Transportation, Water
$6.5487990
Scenic and Sightseeing Transportation, Other
$6.5**Subsector 488—Support Activities for Transportation**488111
Air Traffic Control
$6.5488119
Other Airport Operations
$6.5488190
Other Support Activities for Air Transportation
$6.5488210
Support Activities for Rail Transportation
$6.5488310
Port and Harbor Operations
$23.5488320
Marine Cargo Handling
$23.5488330
Navigational Services to Shipping
$6.5488390
Other Support Activities for Water Transportation
$6.5488410
Motor Vehicle Towing
$6.5488490
Other Support Activities for Road Transportation
$6.5488510
Freight Transportation Arrangement 10
10
                                     $6.5*Except,*
Non-Vessel Owning Common Carriers and Household Goods Forwarders
$23.5488991
Packing and Crating
$23.5488999
All Other Support Activities for Transportation
$6.5**Subsector 491—Postal Service**491110
Postal Service
$6.5**Subsector 492—Couriers and Messengers***         *         *         *         *         *         *492210
Local Messengers and Local Delivery
$23.5**Subsector 493—Warehousing and Storage**493110
General Warehousing and Storage
$23.5493120
Refrigerated Warehousing and Storage
$23.5493130
Farm Product Warehousing and Storage
$23.5493190
Other Warehousing and Storage
$23.5**Sector 51—Information****Subsector 511—Publishing Industries (except Internet)***         *         *         *         *         *         *511210
Software Publishers
$23.0**Subsector 512—Motion Picture and Sound Recording Industries**512110
Motion Picture and Video Production
$27.0512120
Motion Picture and Video Distribution
$27.0512131
Motion Picture Theaters (except Drive-Ins)
$6.5512132
Drive-In Motion Picture Theaters
$6.5512191
Teleproduction and Other Postproduction Services
$27.0512199
Other Motion Picture and Video Industries
$6.5512210
Record Production
$6.5( print page 72588)*         *         *         *         *         *         *512240
Sound Recording Studios
$6.5512290
Other Sound Recording Industries
$6.5**Subsector 515—Broadcasting (except Internet)**515111
Radio Networks
$6.5515112
Radio Stations
$6.5515120
Television Broadcasting
$13.0515210
Cable and Other Subscription Programming
$13.5*         *         *         *         *         *         ***Subsector 517—Telecommunications***         *         *         *         *         *         *517410
Satellite Telecommunications
$13.5517510
Cable and Other Program Distribution
$13.5517910
Other Telecommunications
$13.5**Subsector 518—Internet Service Providers, Web Search Portals, and Data Processing Services**518111
Internet Service Providers
$23.0518112
Web Search Portals
$6.5518210
Data Processing, Hosting, and Related Services
$23.0**Subsector 519—Other Information Services**519110
News Syndicates
$6.5519120
Libraries and Archives
$6.5519190
All Other Information Services
$6.5**Sector 52—Finance and Insurance****Subsector 522—Credit Intermediation and Related Activities**522110
Commercial Banking 8
8
                                     $165 million in assets522120
Savings Institutions 8
8
                                     $165 million in assets522130
Credit Unions 8
8
                                     $165 million in assets522190
Other Depository Credit Intermediation 8
8
                                     $165 million in assets522210
Credit Card Issuing 8
8
                                     $165 million in assets522220
Sales Financing
$6.5522291
Consumer Lending
$6.5522292
Real Estate Credit
$6.5522293
International Trade Financing 8
8
                                     $165 million in assets522294
Secondary Market Financing
$6.5522298
All Other Non-Depository Credit Intermediation
$6.5522310
Mortgage and Nonmortgage Loan Brokers
$6.5522320
Financial Transactions Processing, Reserve, and Clearing House Activities
$6.5522390
Other Activities Related to Credit Intermediation
$6.5**Subsector 523—Financial Investments and Related Activities**523110
Investment Banking and Securities Dealing
$6.5523120
Securities Brokerage
$6.5523130
Commodity Contracts Dealing
$6.5523140
Commodity Contracts Brokerage
$6.5523210
Securities and Commodity Exchanges
$6.5523910
Miscellaneous Intermediation
$6.5523920
Portfolio Management
$6.5523930
Investment Advice
$6.5( print page 72589)523991
Trust, Fiduciary and Custody Activities
$6.5523999
Miscellaneous Financial Investment Activities
$6.5**Subsector 524—Insurance Carriers and Related Activities**524113
Direct Life Insurance Carriers
$6.5524114
Direct Health and Medical Insurance Carriers
$6.5*         *         *         *         *         *         *524127
Direct Title Insurance Carriers
$6.5524128
Other Direct Insurance (except Life, Health and Medical) Carriers
$6.5524130
Reinsurance Carriers
$6.5524210
Insurance Agencies and Brokerages
$6.5524291
Claims Adjusting
$6.5524292
Third Party Administration of Insurance and Pension Funds
$6.5524298
All Other Insurance Related Activities
$6.5**Subsector 525—Funds, Trusts and Other Financial Vehicles**525110
Pension Funds
$6.5525120
Health and Welfare Funds
$6.5525190
Other Insurance Funds
$6.5525910
Open-End Investment Funds
$6.5525920
Trusts, Estates, and Agency Accounts
$6.5525930
Real Estate Investment Trusts
$6.5525990
Other Financial Vehicles
$6.5**Sector 53—Real Estate and Rental and Leasing****Subsector 531—Real Estate**531110
Lessors of Residential Buildings and Dwellings
$6.5531120
Lessors of Nonresidential Buildings (except Miniwarehouses)
$6.5531130
Lessors of Miniwarehouses and Self Storage Units
$23.5531190
Lessors of Other Real Estate Property
$6.5*Except,*
Leasing of Building Space to Federal Government by Owners 9
9
                                     $19.0531210
Offices of Real Estate Agents and Brokers 10
10
                                     $2.0531311
Residential Property Managers
$2.0531312
Nonresidential Property Managers
$2.0531320
Offices of Real Estate Appraisers
$2.0531390
Other Activities Related to Real Estate
$2.0**Subsector 532—Rental and Leasing Services**532111
Passenger Car Rental
$23.5532112
Passenger Car Leasing
$23.5532120
Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing
$23.5532210
Consumer Electronics and Appliances Rental
$6.5532220
Formal Wear and Costume Rental
$6.5532230
Video Tape and Disc Rental
$6.5532291
Home Health Equipment Rental
$6.5532292
Recreational Goods Rental
$6.5532299
All Other Consumer Goods Rental
$6.5532310
General Rental Centers
$6.5532411
Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing
$6.5532412
Construction, Mining and Forestry Machinery and Equipment Rental and Leasing
$6.5532420
Office Machinery and Equipment Rental and Leasing
$23.0532490
Other Commercial and Industrial Machinery and Equipment Rental and Leasing
$6.5**Subsector 533—Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)**533110
Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)
$6.5**Sector 54—Professional, Scientific and Technical Services****Subsector 541—Professional, Scientific and Technical Services**541110
Offices of Lawyers
$6.5541191
Title Abstract and Settlement Offices
$6.5541199
All Other Legal Services
$6.5541211
Offices of Certified Public Accountants
$7.5( print page 72590)541213
Tax Preparation Services
$6.5541214
Payroll Services
$7.5541219
Other Accounting Services
$7.5541310
Architectural Services
$4.5541320
Landscape Architectural Services
$6.5541330
Engineering Services
$4.5*Except,*
Military and Aerospace Equipment and Military Weapons
$25.0*Except,*
Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992
$25.0*Except,*
Marine Engineering and Naval Architecture
$17.0541340
Drafting Services
$6.5*Except,*
Map Drafting
$4.5541350
Building Inspection Services
$6.5541360
Geophysical Surveying and Mapping Services
$4.5541370
Surveying and Mapping (except Geophysical) Services
$4.5541380
Testing Laboratories
$11.0541410
Interior Design Services
$6.5541420
Industrial Design Services
$6.5541430
Graphic Design Services
$6.5541490
Other Specialized Design Services
$6.5541511
Custom Computer Programming Services
$23.0541512
Computer Systems Design Services
$23.0541513
Computer Facilities Management Services
$23.0541519
Other Computer Related Services
$23.0*Except,*
Information Technology Value Added Resellers 18

18
                                     150541611
Administrative Management and General Management Consulting Services
$6.5541612
Human Resources and Executive Search Consulting Services
$6.5541613
Marketing Consulting Services
$6.5541614
Process, Physical Distribution and Logistics Consulting Services
$6.5541618
Other Management Consulting Services
$6.5541620
Environmental Consulting Services
$6.5541690
Other Scientific and Technical Consulting Services
$6.5*         *         *         *         *         *         *541720
Research and Development in the Social Sciences and Humanities
$6.5541810
Advertising Agencies 10
10
                                     $6.5541820
Public Relations Agencies
$6.5541830
Media Buying Agencies
$6.5541840
Media Representatives
$6.5541850
Display Advertising
$6.5541860
Direct Mail Advertising
$6.5541870
Advertising Material Distribution Services
$6.5541890
Other Services Related to Advertising
$6.5541910
Marketing Research and Public Opinion Polling
$6.5541921
Photography Studios, Portrait
$6.5541922
Commercial Photography
$6.5541930
Translation and Interpretation Services
$6.5541940
Veterinary Services
$6.5541990
All Other Professional, Scientific and Technical Services
$6.5**Sector 55—Management of Companies and Enterprises****Subsector 551—Management of Companies and Enterprises**551111
Offices of Bank Holding Companies
$6.5551112
Offices of Other Holding Companies
$6.5**Sector 56—Administrative and Support, Waste Management and Remediation Services****Subsector 561—Administrative and Support Services**561110
Office Administrative Services
$6.5561210
Facilities Support Services 12
12
                                     $32.5561310
Employment Placement Agencies
$6.5561320
Temporary Help Services
$12.5561330
Employee Leasing Services
$12.5561410
Document Preparation Services
$6.5561421
Telephone Answering Services
$6.5561422
Telemarketing Bureaus
$6.5561431
Private Mail Centers
$6.5561439
Other Business Service Centers (including Copy Shops)
$6.5( print page 72591)561440
Collection Agencies
$6.5561450
Credit Bureaus
$6.5561491
Repossession Services
$6.5561492
Court Reporting and Stenotype Services
$6.5561499
All Other Business Support Services
$6.5561510
Travel Agencies 10
10
                                     $3.510561520
Tour Operators 10
10
                                     $6.5561591
Convention and Visitors Bureaus
$6.5561599
All Other Travel Arrangement and Reservation Services
$6.5561611
Investigation Services
$11.5561612
Security Guards and Patrol Services
$11.5561613
Armored Car Services
$11.5561621
Security Systems Services (except Locksmiths)
$11.5561622
Locksmiths
$6.5561710
Exterminating and Pest Control Services
$6.5561720
Janitorial Services
$15.0561730
Landscaping Services
$6.5561740
Carpet and Upholstery Cleaning Services
$4.5561790
Other Services to Buildings and Dwellings
$6.5561910
Packaging and Labeling Services
$6.5561920
Convention and Trade Show Organizers 10
10
                                     $6.5561990
All Other Support Services
$6.5**Subsector 562—Waste Management and Remediation Services**562111
Solid Waste Collection
$11.5562112
Hazardous Waste Collection
$11.5562119
Other Waste Collection
$11.5562211
Hazardous Waste Treatment and Disposal
$11.5562212
Solid Waste Landfill
$11.5562213
Solid Waste Combustors and Incinerators
$11.5562219
Other Nonhazardous Waste Treatment and Disposal
$11.5562910
Remediation Services
$13.0*Except,*
Environmental Remediation Services 14

14
                                     500562920
Materials Recovery Facilities
$11.5562991
Septic Tank and Related Services
$6.5562998
All Other Miscellaneous Waste Management Services
$6.5**Sector 61—Educational Services****Subsector 611—Educational Services**611110
Elementary and Secondary Schools
$6.5611210
Junior Colleges
$6.5611310
Colleges, Universities and Professional Schools
$6.5611410
Business and Secretarial Schools
$6.5611420
Computer Training
$6.5611430
Professional and Management Development Training
$6.5611511
Cosmetology and Barber Schools
$6.5611512
Flight Training
$23.5611513
Apprenticeship Training
$6.5611519
Other Technical and Trade Schools
$6.5*Except,*
Job Corps Centers 16
16
                                     $32.5611610
Fine Arts Schools
$6.5611620
Sports and Recreation Instruction
$6.5611630
Language Schools
$6.5611691
Exam Preparation and Tutoring
$6.5611692
Automobile Driving Schools
$6.5611699
All Other Miscellaneous Schools and Instruction
$6.5611710
Educational Support Services
$6.5**Sector 62—Health Care and Social Assistance****Subsector 621—Ambulatory Health Care Services**621111
Offices of Physicians (except Mental Health Specialists)
$9.0621112
Offices of Physicians, Mental Health Specialists
$9.0621210
Offices of Dentists
$6.5621310
Offices of Chiropractors
$6.5621320
Offices of Optometrists
$6.5621330
Offices of Mental Health Practitioners (except Physicians)
$6.5( print page 72592)621340
Offices of Physical, Occupational and Speech Therapists and Audiologists
$6.5621391
Offices of Podiatrists
$6.5621399
Offices of All Other Miscellaneous Health Practitioners
$6.5621410
Family Planning Centers
$9.0621420
Outpatient Mental Health and Substance Abuse Centers
$9.0621491
HMO Medical Centers
$9.0621492
Kidney Dialysis Centers
$31.5621493
Freestanding Ambulatory Surgical and Emergency Centers
$9.0621498
All Other Outpatient Care Centers
$9.0621511
Medical Laboratories
$12.5621512
Diagnostic Imaging Centers
$12.5621610
Home Health Care Services
$12.5621910
Ambulance Services
$6.5621991
Blood and Organ Banks
$9.0621999
All Other Miscellaneous Ambulatory Health Care Services
$9.0**Subsector 622—Hospitals**622110
General Medical and Surgical Hospitals
$31.5622210
Psychiatric and Substance Abuse Hospitals
$31.5622310
Specialty (except Psychiatric and Substance Abuse) Hospitals
$31.5**Subsector 623—Nursing and Residential Care Facilities**623110
Nursing Care Facilities
$12.5623210
Residential Mental Retardation Facilities
$9.0623220
Residential Mental Health and Substance Abuse Facilities
$6.5623311
Continuing Care Retirement Communities
$12.5623312
Homes for the Elderly
$6.5623990
Other Residential Care Facilities
$6.5**Subsector 624—Social Assistance**624110
Child and Youth Services
$6.5624120
Services for the Elderly and Persons with Disabilities
$6.5624190
Other Individual and Family Services
$6.5624210
Community Food Services
$6.5624221
Temporary Shelters
$6.5624229
Other Community Housing Services
$6.5624230
Emergency and Other Relief Services
$6.5624310
Vocational Rehabilitation Services
$6.5624410
Child Day Care Services
$6.5**Sector 71—Arts, Entertainment and Recreation****Subsector 711—Performing Arts, Spectator Sports and Related Industries**711110
Theater Companies and Dinner Theaters
$6.5711120
Dance Companies
$6.5711130
Musical Groups and Artists
$6.5711190
Other Performing Arts Companies
$6.5711211
Sports Teams and Clubs
$6.5711212
Race Tracks
$6.5711219
Other Spectator Sports
$6.5711310
Promoters of Performing Arts, Sports and Similar Events with Facilities
$6.5711320
Promoters of Performing Arts, Sports and Similar Events without Facilities
$6.5711410
Agents and Managers for Artists, Athletes, Entertainers and Other Public Figures
$6.5711510
Independent Artists, Writers, and Performers
$6.5**Subsector 712—Museums, Historical Sites and Similar Institutions**712110
Museums
$6.5712120
Historical Sites
$6.5712130
Zoos and Botanical Gardens
$6.5712190
Nature Parks and Other Similar Institutions
$6.5**Subsector 713—Amusement, Gambling and Recreation Industries**713110
Amusement and Theme Parks
$6.5713120
Amusement Arcades
$6.5713210
Casinos (except Casino Hotels)
$6.5( print page 72593)713290
Other Gambling Industries
$6.5713910
Golf Courses and Country Clubs
$6.5713920
Skiing Facilities
$6.5713930
Marinas
$6.5713940
Fitness and Recreational Sports Centers
$6.5713950
Bowling Centers
$6.5713990
All Other Amusement and Recreation Industries
$6.5**Sector 72—Accommodation and Food Services****Subsector 721—Accommodation**721110
Hotels (except Casino Hotels) and Motels
$6.5721120
Casino Hotels
$6.5721191
Bed and Breakfast Inns
$6.5721199
All Other Traveler Accommodation
$6.5721211
RV (Recreational Vehicle) Parks and Campgrounds
$6.5721214
Recreational and Vacation Camps (except Campgrounds)
$6.5721310
Rooming and Boarding Houses
$6.5**Subsector 722—Food Services and Drinking Places**722110
Full-Service Restaurants
$6.5722211
Limited-Service Restaurants
$6.5722212
Cafeterias
$6.5722213
Snack and Nonalcoholic Beverage Bars
$6.5722310
Food Service Contractors
$19.0722320
Caterers
$6.5722330
Mobile Food Services
$6.5722410
Drinking Places (Alcoholic Beverages)
$6.5**Sector 81—Other Services****Subsector 811—Repair and Maintenance**811111
General Automotive Repair
$6.5811112
Automotive Exhaust System Repair
$6.5811113
Automotive Transmission Repair
$6.5811118
Other Automotive Mechanical and Electrical Repair and Maintenance
$6.5811121
Automotive Body, Paint and Interior Repair and Maintenance
$6.5811122
Automotive Glass Replacement Shops
$6.5811191
Automotive Oil Change and Lubrication Shops
$6.5811192
Car Washes
$6.5811198
All Other Automotive Repair and Maintenance
$6.5811211
Consumer Electronics Repair and Maintenance
$6.5811212
Computer and Office Machine Repair and Maintenance
$23.0811213
Communication Equipment Repair and Maintenance
$6.5811219
Other Electronic and Precision Equipment Repair and Maintenance
$6.5811310
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
$6.5811411
Home and Garden Equipment Repair and Maintenance
$6.5811412
Appliance Repair and Maintenance
$6.5811420
Reupholstery and Furniture Repair
$6.5811430
Footwear and Leather Goods Repair
$6.5811490
Other Personal and Household Goods Repair and Maintenance
$6.5**Subsector 812—Personal and Laundry Services**812111
Barber Shops
$6.5812112
Beauty Salons
$6.5812113
Nail Salons
$6.5812191
Diet and Weight Reducing Centers
$6.5812199
Other Personal Care Services
$6.5812210
Funeral Homes and Funeral Services
$6.5812220
Cemeteries and Crematories
$6.5812310
Coin-Operated Laundries and Drycleaners
$6.5812320
Drycleaning and Laundry Services (except Coin-Operated)
$4.5812331
Linen Supply
$13.0812332
Industrial Launderers
$13.0812910
Pet Care (except Veterinary) Services
$6.5812921
Photo Finishing Laboratories (except One-Hour)
$6.5( print page 72594)812922
One-Hour Photo Finishing
$6.5812930
Parking Lots and Garages
$6.5812990
All Other Personal Services
$6.5**Subsector 813—Religious, Grantmaking, Civic, Professional and Similar Organizations**813110
Religious Organizations
$6.5813211
Grantmaking Foundations
$6.5813212
Voluntary Health Organizations
$6.5813219
Other Grantmaking and Giving Services
$6.5813311
Human Rights Organizations
$6.5813312
Environment, Conservation and Wildlife Organizations
$6.5813319
Other Social Advocacy Organizations
$6.5813410
Civic and Social Organizations
$6.5813910
Business Associations
$6.5813920
Professional Organizations
$6.5813930
Labor Unions and Similar Labor Organizations
$6.5813940
Political Organizations
$6.5813990
Other Similar Organizations (except Business, Professional, Labor, and Political Organizations)
$6.5Footnotes*         *         *         *         *         *         *9. 
                                *NAICS code 531190*
                                —Leasing of building space to the Federal Government by Owners: For Government procurement, a size standard of $19.0 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.*         *         *         *         *         *         *15. 
                                *Subsector 483—*
                                Water Transportation—Offshore Marine Services: The applicable size standard shall be $25.5 million for firms furnishing specific transportation services to concerns engaged in offshore oil and/or natural gas exploration, drilling production, or marine research; such services encompass passenger and freight transportation, anchor handling, and related logistical services to and from the work site or at sea.*         *         *         *         *         *         *
 3.Amend § 121.301 as follows: a.Revise paragraphs (a) and (d)(1); b.Amend paragraph (b)(2) introductory text by removing the term “$7 million” and inserting “$7.5 million” in its place. The revised paragraphs read as follows: § 121.301
  (a) For Business Loans and Disaster Loans (other than physical disaster loans), an applicant business concern must satisfy two criteria: (1) The size of the applicant alone (without affiliates) must not exceed the size standard designated for the industry in which the applicant is primarily engaged; and (2) The size of the applicant combined with its affiliates must not exceed the size standard designated for either the primary industry of the applicant alone or the primary industry of the applicant and its affiliates, whichever is higher. These size standards are set forth in § 121.201. 
 (d) * * * (1) Any construction (general or special trade) concern or concern performing a contract for services is small if, together with its affiliates, its average annual receipts does not exceed $6.5 million.
 4.Amend § 121.302 by revising paragraph (c) to read as follows: § 121.302
  
 (c) For disaster loan assistance (other than physical disaster loans), size status is determined as of the date the disaster commenced, as set forth in the Disaster Declaration. For economic injury disaster loan assistance under disaster declarations for Hurricanes Katrina, Rita, and Wilma, size status is determined as of the date SBA accepts the application for processing, and for applications submitted before December 6, 2005, whether denied because of size status or pending, such applications shall be deemed resubmitted on December 6, 2005. For pre-disaster mitigation loans, size status is determined as of the date SBA accepts a complete Pre-Disaster Mitigation Small Business Loan Application for processing. Refer to § 123.408 of this chapter to find out what SBA considers to be a complete Pre-Disaster Mitigation Small Business Loan Application.
 5.Amend § 121.502 by revising paragraph (a)(2) to read as follows: § 121.502
  (a) * * * (1) * * * (2) A concern not primarily engaged in manufacturing is small for sales or leases of Government property if it has annual receipts not exceeding $6.5 million.
 6.Amend § 121.512 by revising paragraph (b) to read as follows: § 121.512
  (a) * * * (b) Its annual receipts, together with its affiliates, do not exceed $51.5 million.
 PART 123—DISASTER LOAN PROGRAM
 7.The authority citation for part 123 continues to read as follows: Authority:
                        15 U.S.C. 634(b)(6), 636(b), 636(c) and 636(f); Public Law 102-395, 106 Stat. 1828, 1864; Public Law 103-75, 107 Stat. 739; and Public Law 106-50, 113 Stat. 245. 
 
 8.Amend § 123.300 by revising paragraph (b) to read as follow: § 123.300
  
 (b) Economic injury disaster loans are available only if you were a small business (as defined in part 121 of this chapter) when the declared disaster commenced (except disaster declarations for Hurricanes Katrina, Rita, and Wilma, for which size status is determined as of the date SBA accepts the application for processing, and for applications submitted before December 6, 2005, whether denied because of size status or pending, such applications shall be deemed resubmitted on December 6, 2005), you and your affiliates and principal owners (20% or more ownership interest) have used all reasonably available funds, and you are unable to obtain credit elsewhere (see § 123.104).
 Dated: November 4, 2005. Hector V. Barreto, Administrator.


[FR Doc. 05-23435 Filed 12-5-05; 8:45 am] BILLING CODE 8025-01-P