Document ID: DOT-OST-2009-0074-0003
Agency: dot
Document Type: Rule
Title: Disadvantaged Business Enterprise Program; Inflationary Adjustment
Posted Date: 2009-04-03T04:00Z

[Federal Register: April 3, 2009 (Volume 74, Number 63)]
[Rules and Regulations]               
[Page 15222-15225]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ap09-5]                         

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Parts 23 and 26

[Docket No. DOT-OST-2009-0074]
RIN 2105-AD79

 
Disadvantaged Business Enterprise Program; Inflationary 
Adjustment

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: Under the statutes governing the Department's Disadvantaged 
Business Enterprise (DBE) Program, firms are not considered small 
business concerns and are therefore ineligible as DBEs once their 
average annual receipts over the preceding three fiscal years reach 
specified dollar limits. The Department of Transportation is amending 
the size limits or gross receipts caps to ensure that the opportunity 
of small businesses to participate in the Department's DBE programs 
remains unchanged after taking inflation into account. This final rule 
provides 2009 inflation adjustment of size limits on small businesses 
participating in the DOT's Disadvantaged Business Enterprise programs.

DATES: This rule is effective April 3, 2009.

FOR FURTHER INFORMATION CONTACT: Robert C. Ashby, Deputy Assistant 
General Counsel for Regulation and Enforcement, Department of 
Transportation, 1200 New Jersey Avenue, SE., W94-302, Washington, DC 
20590, phone numbers (202) 366-9310 (voice), (202) 366-9313 (fax), 
(202) 755-7687 (TTY), bob.ashby@dot.gov (e-mail).

SUPPLEMENTARY INFORMATION:

Background

    On April 2, 2007, the Department published a final rule revising 49 
CFR part 23, the regulation governing the airport concessions 
disadvantaged business enterprise (ACDBE) program, to require that the 
Department adjust the general ACDBE gross receipts cap for inflation. 
That rule also adjusted the gross receipts cap for the Department's 
financial assistance programs in 49 CFR part 26. This final rule 
updates the gross receipts cap for the ACDBE program and the 
Department's financial assistance program for 2009.

The DBE Airport Concession and Contracting Programs

    The DOT-assisted contracts DBE rule and airport concessions DBE 
rule are based on different statutes. Each statute applies to a 
distinct type of business that may seek DOT financial assistance. The 
ACDBE program is designed to give business opportunities to certain 
small business concerns that operate at airports and that are owned and 
controlled by socially and economically disadvantaged individuals. The 
ACDBE program is mandated by 49 U.S.C. 47107(e), originally enacted in 
1987 and amended in 1992.
    The DBE program for DOT-assisted contracts is a statutory program 
intended to ensure nondiscriminatory contracting opportunities for 
small business concerns owned and controlled by socially and 
economically disadvantaged individuals in the Department's highway, 
mass transit and airport financial assistance programs. The statutory 
provision governing the DBE program in the highway and mass transit 
financial assistance programs is 1101(b) of the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU), Public Law 109-59, August 10, 2005. The statutory 
provision governing the DBE program as it relates to the airport 
financial assistance programs is 49 U.S.C. 47113.

ACDBE Gross Receipts Size Standards

    Under the current DOT rule, if the airport concessions firm's 
annual gross receipts average over the preceding three fiscal years 
exceed $47,780,000,

[[Page 15223]]

then, it is not considered a small business eligible to be certified as 
an ACDBE. This final rule adjusts the size standards for eligibility as 
an ACDBE for inflation.
    This adjustment compensates for the rise in the general level of 
prices over time from the third quarter of 2006 through the fourth 
quarter of 2008. In order to ensure that this adjustment is made on a 
timely basis in the future, the rule was amended to provide for a 
similar adjustment every two years, using the same method. At two year 
intervals, the Department is to publish a final rule to update the size 
standard numbers. This final rule updates the ACDBE gross receipts cap 
for 2009. It should be emphasized that this action does not increase 
the size standard for ACDBEs in real dollar terms. It simply maintains 
the status quo, adjusting to 2008 dollars.
    In order to make an inflation adjustment to the gross receipts 
figures, the Department of Transportation uses a Department of Commerce 
price index. The Department of Commerce's Bureau of Economic Analysis 
prepares constant dollar estimates of state and local government 
purchases of goods and services by deflating current dollar estimates 
by suitable price indexes.\1\ These indices include purchases of 
durable and non-durable goods, and other services. Using these price 
deflators enables the Department to adjust dollar figures for past 
years' inflation. Given the nature of the Department's DBE Program and 
ACDBE Program, adjusting the gross receipts cap in the same manner in 
which inflation adjustments are made to the costs of state and local 
government purchases of goods and services is simple, accurate, and 
fair.
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    \1\ See Bureau of Economic Analysis National Income and Product 
Account Table; Table 3.10.4 Price Indexes for Government Consumption 
Expenditures and General Government Gross Output.
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    The inflation rate on purchases by state and local governments for 
the current year is calculated by dividing the price deflator for the 
fourth quarter of 2008 (140.964) by 2006's third quarter price deflator 
(128.352). The result of the calculation is 1.0982, which represents an 
inflation rate of 1.098% from the third quarter of 2006. Multiplying 
the $47,780,000 figure for small business enterprises by 1.0982 equals 
$52,471,996, which will be rounded off to the nearest $10,000, or 
$52,470,000.
    Therefore, under this new rule, if a firm's gross receipts, 
averaged over the firm's previous three fiscal years, exceeds 
$52,470,000, then it exceeds the airport concessions small business 
size limit contained in part 23.

ACDBE Car Rental Company Size Standards

    Under the existing rule, car rental companies are not eligible to 
participate in the ACDBE program if their average gross receipts over 
the three previous fiscal years exceed $63,710,000. This final rule 
adjusts the size standard for car rental companies to reflect the 
effects of inflation on the real dollar value.
    The inflation rate on purchases by state and local governments for 
the current year is calculated by dividing the price deflator for the 
fourth quarter of 2008 (140.964) by 2006's third quarter price deflator 
(128.352). The result of the calculation is 1.0982, which represents an 
inflation rate of 1.098% from the third quarter of 2006. Multiplying 
the $63,710,000 figure for car rental companies by 1.0982 equals 
$69,966,322, which will be rounded off to the nearest $10,000, or 
$69,970,000.
    Therefore, under this new rule, if a car rental company's gross 
receipts, averaged over the company's previous three fiscal years, 
exceeds $69,970,000, then it exceeds the airport concessions car rental 
company size limit contained in part 23.

Business Size Standards for the DBE DOT Financial Assistance Programs

    This rule also adjusts the gross receipts cap for the Department's 
financial assistance programs in 49 CFR part 26. Under the existing 
rule, if a firm's average annual gross receipts, as defined by Small 
Business Administration (SBA) regulations (see 13 CFR 121.402), over 
the preceding three fiscal years exceed $20,410,000, then it cannot 
qualify as an eligible DBE firm. SAFETEA-LU Section 1101(b)(1)(a) 
instructs the Secretary of Transportation to adjust this amount 
annually for inflation.
    The inflation rate on purchases by state and local governments for 
the current year is calculated by dividing the price deflator for the 
fourth quarter of 2008 (140.964) by 2006's third quarter price deflator 
(128.352). The result of the calculation is 1.0982, which represents an 
inflation rate of 1.098% from the third quarter of 2005. Multiplying 
the $20,410,000 figure for disadvantaged business enterprises in 
Department of Transportation financial assistance programs by 1.0982 
equals $22,414,262, which will be rounded off to the nearest $10,000, 
or $22,410,000.
    Therefore, if a firm's gross receipts, averaged over the firm's 
previous three fiscal years, exceeds $22,410,000, then it exceeds the 
small business size limit for participation by disadvantaged business 
enterprises in Department of Transportation financial assistance 
programs contained in part 26.

Regulatory Analyses and Notices

    Under the Administrative Procedure Act (5 U.S.C. 553(b)), an agency 
may waive the normal notice and comment requirements if it finds, for 
good cause, that they are impracticable, unnecessary, or contrary to 
the public interest. The Department finds that notice and comment for 
this rule is unnecessary and contrary to the public interest because it 
relates only to ministerial updates of business size standards and 
gross receipts caps to account for inflation, which does not change the 
standards or caps in real dollar terms. These updates will assist 
entities attempting to be part of the Department's DBE program and 
should not be unnecessarily delayed. Accordingly, the Department finds 
good cause under 5 U.S.C. 553(b)(B) to waive notice and opportunity for 
public comment. The Department also finds good cause under 5 U.S.C. 
553(d)(3) to make this rule effective upon publication.

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    This rule is nonsignificant for purposes of the Executive Order 
12866 and the Department of Transportation's Regulatory Policies and 
Procedures. The rule is a ministerial adjustment for inflation of a 
statutory small business size standard that does not change the 
standard in real dollar terms. It will not impose burdens on any 
regulated parties. In addition, this rule would not create a serious 
inconsistency with any other agency's action or materially alter the 
budgetary impact of any entitlements, grants, user fees, or loan 
programs. Consequently, a full regulatory evaluation is not required.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), we have evaluated the effects of this action on 
small entities and have determined that the action will not have a 
significant economic impact on a substantial number of small entities. 
Therefore, the Department certifies that this rule would not have a 
significant economic impact on a substantial number of small entities.
    The rule is a ministerial update to the dollar limits and size 
limits to define small businesses for the Department's Airport 
Concessions Disadvantaged

[[Page 15224]]

Business Enterprise Program and for the Department's Financial 
Assistance Program for Disadvantaged Business Enterprises. The only 
effect of the rule on small entities is to allow some small businesses 
to continue to participate in the ACDBE and the DBE programs by 
adjusting for inflation. Therefore, the rule will not have a 
significant economic impact on a substantial number of small entities.

Executive Order 13132 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, and the Department has 
determined that this action would not have sufficient federalism 
implications to warrant the preparation of a federalism assessment. The 
Department has also determined that this action would not preempt any 
State law or State regulation or affect the States' ability to 
discharge traditional State governmental functions.

Executive Order 13084

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this rule would 
not significantly or uniquely affect the Indian tribal communities, and 
would not impose substantial direct compliance costs, the funding and 
consultation requirements of the Executive Order do not apply.

Unfunded Mandates Reform Act of 1995

    This rule does not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 109 Stat. 48). 
This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$128.1 million or more in any one year (2 U.S.C. 1532). Further, in 
compliance with the Unfunded Mandates Reform Act of 1995, the 
Department will evaluate any regulatory action that might be proposed 
in subsequent stages of the proceeding to assess the effects on State, 
local, and tribal governments and the private sector. Additionally, the 
definition of ``Federal Mandate'' in the Unfunded Mandates Reform Act 
excludes financial assistance of the type in which State, local, or 
tribal governments have authority to adjust their participation in the 
program in accordance with changes made in the program by the Federal 
Government. Since this rule pertains to a nondiscrimination requirement 
and affects only Federal financial assistance programs, the Unfunded 
Mandates Act does not apply.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this program.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501), 
Federal agencies must obtain approval from the Office of Management and 
Budget (OMB) for each collection of information they conduct, sponsor, 
or require through regulations. The Department has determined that this 
rule does not contain collection of information requirements for the 
purposes of the PRA.

National Environmental Policy Act

    The Department has analyzed this rule for the purpose of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has 
determined that the inflationary adjustment for dollar limits and size 
limits used to define small businesses that can participate in the 
Department's Disadvantaged Business Enterprises programs, would not 
have any effect on the quality of the environment.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects

49 CFR Part 23

    Administrative practice and procedure, Airports, Civil rights, 
Concessions, Government contracts, Grant programs--transportation, 
Minority businesses, Reporting and recordkeeping requirements.

49 CFR Part 26

    Administrative practice and procedure, Airports, Civil rights, 
Concessions, Government contracts, Grant programs--transportation, 
Highways and roads, Mass transportation, Minority business, Reporting 
and recordkeeping requirements.

0
For the reasons stated in the preamble, the Department of 
Transportation amends 49 CFR parts 23 and 26 as follows:

PART 23--PARTICIPATION OF DISADVANTAGED BUSINESS ENTERPRISE IN 
AIRPORT CONCESSIONS

0
1. The authority citation for part 23 continues to read as follows:

    Authority:  49 U.S.C. 47107; 42 U.S.C. 2000d; 49 U.S.C. 322; 
Executive Order 12138.

0
2. Revise Sec.  23.33 to read as follows:

Sec.  23.33   What size standards do recipients use to determine the 
eligibility of ACDBEs?

    (a) As a recipient, you must, except as provided in paragraph (b) 
of this section, treat a firm as a small business eligible to be 
certified as an ACDBE if its gross receipts, averaged over the firm's 
previous three fiscal years, do not exceed $52.47 million.
    (b) The following types of businesses have size standards that 
differ from the standard set forth in paragraph (a) of this section:
    (1) Banks and financial institutions: $1 billion in assets;
    (2) Car rental companies: $69.97 million average annual gross 
receipts over the firm's three previous fiscal years, as adjusted by 
the Department for inflation every two years from April 3, 2009.
    (3) Pay telephones: 1,500 employees;
    (4) Automobile dealers: 350 employees.
    (c) The Department adjusts the numbers in paragraphs (a) and (b)(2) 
of this section using the Department of Commerce price deflators for 
purchases by State and local governments as the basis for this 
adjustment. The Department publishes a Federal Register document 
informing the public of each adjustment.

PART 26--PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN 
DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS

0
3. The authority citation for 49 CFR part 26 continues to read as 
follows:

    Authority:  23 U.S.C. 324; 42 U.S.C. 2000d, et seq.; 49 U.S.C 
1615, 47107, 47113, 47123; Sec. 1101(b), Pub. L. 105-178, 112 Stat. 
107, 113.

0
4. Revise Sec.  26.65 to read as follows:

Sec.  26.65   What rules govern business size determinations?

    (a) To be an eligible DBE, a firm (including its affiliates) must 
be an existing small business, as defined by

[[Page 15225]]

Small Business Administration (SBA) standards. As a recipient, you must 
apply current SBA business size standard(s) found in 13 CFR part 121 
appropriate to the type(s) of work the firm seeks to perform in DOT-
assisted contracts.
    (b) Even if it meets the requirements of paragraph (a) of this 
section, a firm is not an eligible DBE in any Federal fiscal year if 
the firm (including its affiliates) has had average annual gross 
receipts, as defined by SBA regulations (see 13 CFR 121.402), over the 
firm's previous three fiscal years, in excess of $22.41 million.
    (c) The Department adjusts the number in paragraph (b) of this 
section annually using the Department of Commerce price deflators for 
purchases by State and local governments as the basis for this 
adjustment.

    Issued this 22nd day of March, 2009, at Washington, DC.
Ray LaHood,
Secretary of Transportation.
[FR Doc. E9-7118 Filed 4-2-09; 8:45 am]

BILLING CODE 4910-9X-P