Source: https://www.federalregister.gov/documents/2005/07/11/05-13508/cosponsorships-fee-and-non-fee-based-sba-sponsored-activities-and-gifts
Timestamp: 2017-09-23 22:09:30
Document Index: 632880641

Matched Legal Cases: ['art 106', 'art 106', 'art 106', 'art 106', '§\u2009106', '§\u2009106']

A Proposed Rule by the Small Business Administration on 07/11/2005
The Agency must receive comments on or before September 9, 2005.
70 FR 39667
39667-39672 (6 pages)
05-13508
1. Subpart A: Scope and Definitions
2. Subpart B: Cosponsored Activities
3. Subpart C: Fee Based SBA-Sponsored Activity
4. Subpart D: Non-Fee Based SBA-Sponsored Activity
5. Subpart E: Gifts
Subpart B—Cosponsored Activity
Subpart C—Fee Based SBA-Sponsored Activity
Subpart D—Non-Fee Based SBA-Sponsored Activity
https://www.federalregister.gov/d/05-13508 https://www.federalregister.gov/d/05-13508
Start Preamble Start Printed Page 39667
The Small Business Reauthorization and Manufacturing Assistance Act of 2004 requires the U.S. Small Business Administration (SBA or Agency) to promulgate regulations to carry out the Agency's statutory authority to provide assistance for the benefit of small business through activities sponsored with outside entities (for-profit and not-for-profit entities and Federal, state and local government officials or entities) as well as activities solely sponsored by SBA. This proposed rule implements that authority and sets forth minimum requirements for these activities as well as the Agency's solicitation and acceptance of gifts.
You may submit comments, identified by agency name and RIN 3245-AF37, by any of the following methods: Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. E-mail: robert.gangwere2@sba.gov. Include RIN 3245-AF37 in the subject line of the message. Fax: (202) 205-6846. Mail or Hand Delivery/Courier: Robert Gangwere, Deputy General Counsel, U.S. Small Business Administration, 409 Third Street, SW., Suite 7200, Washington, DC 20416.
As part of its mission to assist small business entrepreneurs, SBA has long provided training and carried out marketing and outreach through SBA-sponsored activities as well as activities conducted in cooperation with:
Voluntary, business, professional, educational, and other nonprofit organizations, associations and institutions and with other Federal and State agencies * * *
Sec. 207(e), Pub. L. 83-163, 67 Stat. 278 (1953). The Agency's statutory authority was later expanded to include for-profit organizations, referred to as cosponsors, thus giving SBA cosponsorship authority. Sec. 59, Pub. L. 98-362, 98 Stat. 431 (1984), amended by Sec. 504 (a), Pub. L. 106-554, 114 Stat. 2763 (2000) (SBA's cosponsorship authority sunsetted in fiscal year 2004). In addition, under section 8(b)(1)(A) of the Small Business Act (Act), SBA has had authority to engage in SBA-sponsored activities (referred to herein as Non-Fee Based SBA-Sponsored Activities) to “provide technical, managerial and informational aids to small business concerns.” 15 U.S.C. 637(b).
The Small Business Reauthorization and Manufacturing Assistance Act of 2004 (Reauthorization Act) was signed into law on December 8, 2004. Pub. L. 108-447, Division K, 118 Stat. 2809-644 (2004). The statute reauthorized and expanded SBA's cosponsorship authority, provided SBA with authority to conduct and charge fees for certain SBA-sponsored activities (Fee Based SBA-Sponsored Activities), and expanded SBA's authority to use certain gift funds for marketing and outreach activities. The statute also made significant changes to the approval process for outreach activities and gift acceptance. In addition, the Reauthorization Act requires the Agency to issue regulations to carry out Cosponsored and Fee Based SBA-Sponsored Activities.
With the renewal of its cosponsorship authority and the added authority for Fee Based SBA-Sponsored Activities, the Agency now has three major vehicles by which it may provide information, training, and/or conduct marketing and outreach for the benefit of or to small businesses: Cosponsored Activities, Fee Based SBA-Sponsored Activities, and Non-Fee Based SBA-Sponsored Activities.
To facilitate these activities and to implement the recent statutory changes, SBA proposes this rule adding part 106 to title 13 of the Code of Federal Regulations. The proposed regulations define each of these vehicles, identify the statutory authority underlying them, and set forth the minimum requirements applicable to each. In addition, the proposed regulations set forth minimum requirements and the conflict of interest authority for solicitation and acceptance of gifts under certain Agency gift authorities.
SBA proposes to implement the amended statutory requirements by adding part 106 to SBA's regulations. Part 106 is divided into five subparts: A, B, C, D and E. Subpart A sets forth the scope of the proposed regulations and provides definitions. The regulatory subparts B, C and D distinguish the three types of activity vehicles and clarify the specific minimum requirements for each vehicle. Subpart B specifically addresses Cosponsored Activities. Subparts C and D, in turn, relate to SBA-Sponsored Activities. To distinguish between the two authorities, SBA is calling one a Fee Based SBA-Sponsored Activity and the other a Non-Fee Based SBA-Sponsored Activity. Subpart C deals with SBA's new statutory authority that allows the Agency to provide assistance for the benefit of small business through Fee Based SBA-Sponsored Activities. Subpart D addresses the Agency's retained authority under section 8(b)(1)(A) of the Act to provide technical and managerial assistance directly to small business concerns through SBA-Sponsored Activities for which the Agency has no authority to charge participant fees. Subpart E relates to the Agency's gift acceptance authorities and sets forth minimum requirements and procedures applicable to SBA.
Subpart A contains Sections 106.100 and 101. Section 106.100 states the scope of the proposed regulations. Section 106.101 provides definitions. For clarity, the Agency has defined and distinguished the three major outreach vehicles: Cosponsored Activities, Fee Based SBA-Sponsored Activities and Non-Fee Based SBA-Sponsored Start Printed Page 39668Activities. The terms “Cosponsor,” “Cosponsored Activity,” and “Cosponsorship Agreement” are familiar terms that have been used by the Agency under its prior cosponsorship authority. The terms have been redefined to the extent required by the expanded authority of the Reauthorization Act. The terms “Fee Based SBA-Sponsored Activity” and “Non-Fee Based SBA-Sponsored Activity” are new terms used to distinguish between the two vehicles available for SBA-Sponsored activities. Written documentation of Fee Based and Non-Fee Based SBA-Sponsored Activities are defined as Fee Based and Non-Fee Based SBA-Sponsored Activity Records. The term “Eligible Entity” is defined in the Reauthorization Act. The definitions of the remaining terms (i.e., Donor, Gift, Responsible Program Official, Participant Fee) are consistent with current Agency policy.
Subpart B proposes five sections relating to SBA's cosponsorship authority. Section 106.200 mirrors the requirements of the Reauthorization Act, which expanded the purpose of Cosponsored Activities from providing training directly to small businesses to providing assistance for the benefit of small business. The Reauthorization Act also requires consultation with the Agency's General Counsel before a Cosponsored Activity is approved. Section 106.200 reiterates the Reauthorization Act and provides that the SBA Administrator (or designee), after consultation with the General Counsel (or designee), may provide assistance for the benefit of small business through Cosponsored Activities.
Section 106.201 outlines who is eligible to be a Cosponsor. As set forth in the Reauthorization Act, only Eligible Entities may be Cosponsors. The Agency adds a further restriction that SBA may not enter into a Cosponsorship Agreement with an otherwise Eligible Entity if the Administrator, after consultation with the General Counsel, determines that such an agreement would create a conflict of interest. This restriction is consistent with current SBA policy.
Section 106.202 sets forth the minimum requirements applicable to all Cosponsored Activities. Paragraph (a) requires a written Cosponsorship Agreement. The Agency's prior statutory authority mandated a written Cosponsorship Agreement for Cosponsored Activities with for-profit entities. In the proposed regulations the Agency maintains the requirement for a written Cosponsorship Agreement, but for uniformity and better record keeping, broadens the requirement to all Cosponsored Activities, whether or not a for-profit entity is involved.
Paragraph (b) incorporates the statutory requirement in the Reauthorization Act that requires that appropriate recognition be given to SBA and each Cosponsor. As stated in the legislative history to the Reauthorization Act, Congress required that:
[T]he Administration * * * recognize the co-sponsors of such events but only to the extent of their contributions. No endorsements of the co-sponsors products or services are permitted.
Joint Explanatory Statement, “Congressional Record,” H10198 (November 20, 2004).
Paragraph (c) embodies current SBA policy (which was also statutorily mandated, in part, under the Agency's prior cosponsorship authority) by requiring advance approval by SBA for all printed or electronically generated material used to publicize or conduct the cosponsored activities, including the use of a disclaimer. Paragraph (d) also incorporates current SBA policy, which prohibits Cosponsors from making a profit on any Cosponsored Activity.
Paragraph (e) is based upon the Reauthorization Act, which allows the Agency to charge participants a minimal fee to cover the cost of the Cosponsored Activity. The regulation also allows Cosponsors to charge Participant Fees. This is consistent with prior cosponsorship authority and current Agency policy and practice. The second part of paragraph (e) requiring that Participant Fees must be liquidated prior to other sources of funding is also based on current Agency policy.
Paragraph (f) continues the Agency's current practice, required under the prior cosponsorship authority, which states that SBA may not provide a Cosponsor with preexisting lists of small business concerns, otherwise protected by law or policy from disclosure. Paragraph (g) requires written approval of the Cosponsorship Agreement. This paragraph implements in part the limited delegation of authority in the Reauthorization Act and the requirement to consult with the General Counsel.
Section 106.203 provides minimum guidelines as to what provisions must be set forth in a Cosponsorship Agreement. Paragraphs (a)(d) require a written agreement with a narrative description of the activity, a list of the parties' duties and responsibilities, and a proposed budget setting forth the contributions of each Cosponsor, the sources of funding and an estimate of anticipated expenses. Paragraphs (e) and (f) require that each Cosponsor agree in writing that they will not make a profit, that any Participant Fees charged may not exceed anticipated direct costs and that Participant Fees will be liquidated prior to other sources of funding. These provisions embody current Agency policy.
Finally, Section 106.204, implementing the requirements of the Reauthorization Act, establishes that the Administrator has the authority to approve a Cosponsorship Agreement and that such authority may only be re-delegated to the Deputy Administrator, associate administrators and assistant administrators. In the legislative history to the Reauthorization Act, Congress made clear that:
No personnel located in district or regional offices are permitted to approve cosponsorships. Congress adopted this restriction to ensure close cooperation with the General Counsel of the Administration.
Joint Explanatory Statement, “Congressional Record,” H10199 (November 20, 2004).
Subpart C addresses SBA's new authority under the Reauthorization Act which allows the Agency to provide assistance for the benefit of small business through SBA-Sponsored Activities whereby the Agency may charge a Participant Fee during activities planned and conducted solely by SBA. 15 U.S.C. 633(h). Section 106.300 reiterates the Reauthorization Act and provides that the Administrator (or designee), after consultation with the General Counsel (or designee), may provide assistance for the benefit of small business through Fee Based SBA-Sponsored Activities.
Section 106.301 sets forth minimum requirements for Fee Based SBA-Sponsored Activities. For uniformity, these requirements, where possible, mirror the requirements for Cosponsored Activities. Section 106.301 (a) requires a written record of the activity; (b) restricts Participant Fees to anticipated direct costs of the activity; (c) subjects collection of money to U.S. Treasury rules and (d) requires advance written approval.
Section 106.302 sets forth the provisions that are required in a Fee Based Record. Again, many of these are borrowed from current Agency policies and requirements for Cosponsored Activities. SBA proposes paragraph (a) requiring a written narrative description of the activity. SBA proposes paragraph Start Printed Page 39669(b) to document the commitment of the Agency official responsible for the activity to abide by all applicable laws and policies. SBA also requires that all sources and uses of funds be documented in a budget pursuant to paragraph (c), including a provision requiring that no profit be anticipated from the activity and that any Participant Fees charged will not exceed the minimal amount needed to cover the anticipated direct costs. Paragraph (d) addresses the application of any Gifts made in support of the activity and follows current Agency policies.
Finally, Section 106.303, implementing the requirements of the Reauthorization Act, establishes that the Administrator has the authority to approve and sign a Fee Based Record after consultation with the General Counsel (or designee) and that such authority may only be re-delegated to the Deputy Administrator, associate administrators and assistant administrators. This requirement is the same for Cosponsorship Agreements.
Unlike subpart C, subpart D does not represent new authority, rather it has been renamed for clarity. Section 106.400 states the authority for SBA to conduct Non-Fee Based SBA-Sponsored Activities.
Section 106.401 sets forth the minimum requirements for Non-Fee Based SBA-Sponsored Activities. Consistent with the requirements for Cosponsored and Fee Based SBA-Sponsored Activities, the regulations require a written record. In addition, in accordance with applicable law, paragraph (b) states that Gifts of cash are subject to SBA policies and U.S. Treasury rules and guidelines. Paragraph (c) requires written approval.
Section 106.402 sets forth the provisions that must be in a Non-Fee Based Record. Again, these track the requirements for Cosponsorship Agreements and Fee Based Records, except a budget is not required. SBA proposes paragraph (a) to require a written narrative description of the activity. SBA proposes paragraph (b) to document the commitment of the Agency official responsible for the activity to abide by all applicable laws and policies. Paragraphs (c) and (d) address the application of any Gifts made in support of the activity.
Finally, Section 106.403 establishes who has authority to approve a Non-Fee Based SBA-Sponsored Activity. Unlike the authority to approve Cosponsored and Fee Based SBA-Sponsored Activities, which authority is dictated by the Reauthorization Act, Agency policy places authority to approve Non-Fee Based SBA-Sponsored Activity with the Responsible Program Official who may be an official in a district or regional office.
Subpart E has four sections which relate to the Agency's Gift acceptance authorities. Section 106.500 identifies the Agency's multiple Gift acceptance authorities. Section 106.501 sets forth minimum requirements applicable to SBA's solicitation and acceptance of Gifts. SBA proposes Section 106.501 in order to provide a uniform Gift solicitation and acceptance policy for all Gifts regardless of which authority is being used. These minimum requirements include: (a) Use of the Gift in the manner consistent with Donor intent; (b) written documentation of each Gift solicited and/or accepted; (c) a conflict of interest determination; and (d) use of the Agency's designated trust account for all cash Gifts. These provisions simply restate current Agency policies.
Section 106.502 outlines who is authorized to perform a Gift conflict of interest determination. For Gifts accepted under sections 4(g), 8(b)(1)(G), and 7(k)(2) of the Act, the conflict of interest determination must be done by the General Counsel (or designee). 15 U.S.C. 633(g). Current Agency policy requires that this conflict of interest determination be made by appropriately designated counsel in the Office of General Counsel in Headquarters. The conflict of interest determination for Gifts of services or facilities accepted under section 5(b)(9) of the Act may be made by designated disaster counsel.
Finally, Section 106.503 identifies the types of Gifts the Agency may not solicit or accept. This provision was incorporated to provide all SBA employees with a consistent understanding of existing law and Agency policy.
This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA determines that this proposed rule has no federalism implications warranting preparation of a federalism assessment.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires administrative agencies to consider the effect of their actions on small entities, small non-profit enterprises, and small local governments. Pursuant to the RFA, when an agency issues a rulemaking, the agency must prepare a regulatory flexibility analysis which describes the impact of the rule on small entities. However, section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities. In this case, the proposed regulations address the administrative requirements for Agency management of SBA outreach programs. In other words, this proposed rule will not result in the direct regulation of small entities, so no further analysis is required by the RFA. Therefore, SBA certifies that this rule will not have a significant economic impact on a substantial number of small entities within the meaning of RFA.
For the reasons stated in the preamble, SBA proposes to add 13 CFR part 106, as follows:
Who may be a Cosponsor? Start Printed Page 39670
(a) Cosponsor means an entity or individual designated in section 106.201 that has signed a written Cosponsorship Agreement with SBA and who actively and substantially participates in planning and conducting an agreed upon Cosponsored Activity.
(c) Cosponsorship Agreement means an approved written document (as outlined in sections 106.203-04) which has been duly executed by SBA and one or more Cosponsors. The Cosponsorship Agreement shall contain the parties' respective rights, duties and responsibilities regarding implementation of the Cosponsored Activity.
Start Printed Page 39671
(g) Written approval must be obtained as outlined in § 106.204 of this subpart.
(d) Written approval must be obtained as outlined in § 106.303 of this subpart.
(1) SBA will not unnecessarily promote a Donor, or the Donor's products or services;
(2) Each Donor may receive appropriate recognition for its Gift; and
(3) Any printed or electronically generated material recognizing a Donor will include a prominent disclaimer stating that the acceptance of the Gift does not constitute or imply an endorsement by SBA of the Donor or the Donor's products or services.
Start Printed Page 39672
(3) Any printed or electronically generated material recognizing a Donor will include a prominent disclaimer stating that the acceptance of the Gift does not constitute or imply an endorsement by SBA of the Donor, or the Donor's products or services.
[FR Doc. 05-13508 Filed 7-8-05; 8:45 am]