Lease Guarantee; Prepayment of Small Business Investment Company and Certified Development Company Debentures; Small Business Investment Company Investigations; Pollution Control; Grants for Small Business Research; Management Assistance; Discounted Prepayment of Disaster Home Loans; and Contractor Qualifications

SMALL BUSINESS ADMINISTRATION

13 CFR Parts 106, 109, 110, 111, 128, 129, and 144, and 48 CFR Part

2209

Lease Guarantee; Prepayment of Small Business Investment Company

and Certified Development Company Debentures; Small Business Investment

Company Investigations; Pollution Control; Grants for Small Business

Research; Management Assistance; Discounted Prepayment of Disaster Home

Loans; and Contractor Qualifications

AGENCY: Small Business Administration.

ACTION: Final rule.

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SUMMARY: In response to President Clinton's government-wide regulatory

reform initiative, the Small Business Administration (SBA) has

completed a page-by-page, line-by-line review of all of its existing

regulations to determine which might be revised or eliminated. SBA has

determined that eight Parts of its regulations should be entirely

eliminated as obsolete, unnecessary or duplicative. This rule

eliminates those eight Parts. The reasons for eliminating each of these

Parts are set forth below in the Supplementary Information of this

rule.

DATES: This rule is effective on October 25, 1995.

ADDRESSES: Written comments should be addressed to David R. Kohler,

Regulatory Reform Team Leader, Office of General Counsel, U.S. Small

Business Administration, 409 3rd Street, S.W., Washington, D.C. 20416.

FOR FURTHER INFORMATION CONTACT: John W. Klein, Chief Counsel for

Special Programs, Office of General Counsel, at (202) 205-6645.

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a

Memorandum to all federal agencies, directing them to simplify their

regulations. In response to this directive, SBA has completed a page-

by-page, line-by-line review of all of its existing regulations to

determine which might be revised or eliminated. SBA has identified

eight Parts of its regulations which can be completely eliminated

because they are obsolete, unnecessary or duplicative. Those eight

Parts are: 13 CFR Part 106, Lease Guarantee; 13 CFR Part 109,

Prepayment of Small Business Investment Company and Certified

Development Company Debentures; 13 CFR Part 110, Investigations; Small

Business Investment Companies; 13 CFR Part 111, Pollution Control; 13

CFR Part 128, Grants for Small Business Research; 13 CFR Part 129,

Management Assistance; 13 CFR Part 144, Discounted Prepayment of

Disaster Home Loans; and 48 CFR Part 2209, Contractor Qualifications.

Because SBA has determined that each of the Parts to be eliminated by

this rule is obsolete, SBA finds that notice of proposed rulemaking and

public comment thereon are unnecessary within the meaning of 5 U.S.C.

553(b). As such, this rule is published in final form.

Brief descriptions of each of these eight Parts and the reasons for

their elimination are set forth below.

13 CFR Part 106, Lease Guarantee: Part 106 sets forth the Agency's

policy and procedures with respect to the Lease Guarantee Program,

which is authorized by 15 U.S.C. Sec. 692. The program was designed to

assist certain qualified small business concerns to obtain leases of

commercial and industrial property by authorizing SBA to guarantee the

payment of rentals under such leases. Congress has not appropriated

funds for this program since fiscal year 1977, and no application for a

guarantee has been accepted since that time. For this reason, SBA

believes that the regulations pertaining to the program may be

eliminated as unnecessary. Moreover, there are less than a dozen lease

guarantees still in effect.

Sections 106.1 through 106.10 relate to the lease guarantee

application process prior to the granting of SBA's assistance and,

therefore, should be deleted. Although sections 106.11 through 106.18

relate to servicing provisions, SBA notes that to the extent legal

enforceability of certain servicing rights and responsibilities may be

required, the contractual documents which govern the remaining lease

guarantee transactions provide such enforceability. Thus, these

sections are unnecessary and may be eliminated.

13 CFR Part 109, Prepayment of Small Business Investment Company

and Certified Development Company Debentures: As directed by Congress,

SBA promulgated Part 109 to implement legislation allowing certain

debentures to be refinanced. The regulation allowed refinancing of

older debentures sold to the Federal Financing Bank by Small Business

Investment Companies and Certified Development Companies. These older

debentures, because they were sold when interest rates were higher,

developed large prepayment premiums when interest rates fell. These

premiums would be passed along to small business borrowers who

attempted to prepay their loans.

In response to the problem, Congress passed the Small Business

Prepayment Penalty Relief Act of 1994, Public Law 103-403, 108 Stat.

4198, found also in 15 USC 697f. This statutory provision allowed a

one-time window of opportunity for borrowers affected by the older

debenture prepayment premium to request participation in a refinancing

program which would eliminate the large premium. SBA gave notice of the

opportunity to affected borrowers. Many borrowers took advantage of the

opportunity. SBA paid the difference between the new refinanced amount

and the debenture premium, from a special $30 million fund established

by Congress for that purpose.

Because the purpose of the Small Business Prepayment Penalty Relief

Act of 1994 and Part 109 have been accomplished and the one-time window

of opportunity is now closed, SBA believes that Part 109 should be

eliminated.

13 CFR Part 110, Investigations; Small Business Investment

Companies: This Part concerns the investigation procedures for SBA's

Small Business Investment Company (SBIC) program. These regulations

were promulgated in 1962, and were authorized by Title VI of the Small

Business Investment Act of 1958. The program assists small business

concerns by providing venture capital through SBICs. However, the

regulations contained in Part 110 have not been utilized by the program

for several years. The scope of examinations and investigations has

been amended by statute for the SBIC program and through the Inspector

General Act of 1978, as amended, 5 U.S.C. Appendix. In part, these

regulations are also now redundant because they address the same

information contained in Part 134 regarding proceedings before SBA's

Office of Hearings and Appeals (OHA), a regulation promulgated long

after Part 110. Additionally, Part 101 of these regulations is

currently under revision and will cover Inspector General

investigations pertaining to agency programs.

13 CFR Part 111, Pollution Control: Part 111 sets forth the

Agency's policy and procedures with respect to the Pollution Control

Guarantee Program. Under the program, SBA was authorized to guarantee

fully (100 percent) the periodic payments due by small businesses in

connection with the purchase or lease of pollution control facilities

under a ``qualified contract.'' In 1988, funding for the program was

[[Page 54589]]

eliminated and financing of pollution control projects was transferred

to section 7(a)(12)(B) of the Small Business Act, 15 U.S.C.

636(a)(12)(B), as a guaranteed financing program.

Sections 111.1 through 111.8 relate to the application process and,

therefore, should be eliminated. Although sections 111.9 and 111.10

incorporate some servicing priorities, SBA believes that the Agency's

interests will be adequately safeguarded by the rights and

responsibilities incorporated into the contractual documents which

govern each individual transaction. As such, these sections may also be

eliminated.

13 CFR Part 128, Grants for Small Business Research: Part 128 was

first promulgated in 1959 (24 FR 7063). It describes a program for SBA-

awarded grants for studies, research and counseling concerning the

managing, financing and operation of small business enterprises, and

technical and statistical information necessary thereto. The program is

no longer in operation. Thus, the regulations describing and regulating

the program may be eliminated as obsolete.

13 CFR Part 129, Management Assistance: Part 129 pertains to the

various management assistance programs of the Agency. Subpart A merely

describes the SBA's management assistance programs. It is, however,

outdated, does not take into account reorganizations that have occurred

within the Agency over the last several years, and does not accurately

describe the management assistance program as currently being provided

by SBA. In addition, this Subpart is descriptive in nature, rather than

regulatory, and can be updated and made a part of an informational

pamphlet instead of regulatory text.

Subpart B deals with the reimbursement of travel expenses for

Service Corps of Retired Executives (SCORE) and Active Corps of

Executives (ACE) volunteers. SBA believes that this Subpart can be

eliminated as unnecessary. The reference to ACE is obsolete. Years ago,

ACE was a separate entity under the SCORE umbrella, and those

volunteers that were still employed were referred to as ACE members.

ACE no longer exists as a separate entity today. Today, all volunteers,

whether retired or still working, are considered to be members of

SCORE, and are obliged to comply with all the requirements and by-laws

of the SCORE organization. The statutory authority for the

reimbursement of travel expenses remains, but the authority has been

delegated in a formal memorandum of understanding to the SCORE

organization on behalf of its membership.

Subpart C is currently ``(Reserved)'' and can be eliminated as

obsolete and unnecessary.

Subpart D is an informative description of SBA's Office of

International Trade and the export assistance available through the

SBA. It imposes no regulatory requirements or restrictions, and can be

eliminated as unnecessary. SBA believes that Subpart D's provisions

should more appropriately be contained in an informational brochure

regarding the Agency's export assistance.

13 CFR Part 144, Discounted Prepayment of Disaster Home Loans: Part

144 covers a one-time program for fiscal year 1987 authorizing SBA to

provide a discount for the prepayment of disaster home loans. This

entire Part may be deleted as obsolete.

48 CFR Part 2209, Contractor Qualifications: SBA's supplement to

the Federal Acquisition Regulation (FAR) is contained in Chapter 22 of

Title 48 of the Code of Federal Regulations. The only substantive area

of the FAR that SBA has supplemented is that dealing with the policies

and procedures governing the debarment and suspension of contractors by

SBA. Thus, SBA's entire supplement to the FAR is contained in Subpart

2209.4, Debarment, Suspension, and Eligibility, and corresponds to the

general provisions of the FAR on this subject contained in Subpart 9.4.

SBA's FAR supplement largely repeats the debarment and suspension

provisions contained in Subpart 9.4, and is, thus, unnecessary. The

only portions that need to be retained from Subpart 2209.4 in SBA's

regulations are (1) the identification of SBA's debarring and

suspending official, and (2) the identification of SBA's Office of

Hearings and Appeals (OHA) as the forum where debarment and suspension

actions may be appealed. Neither need be retained in Subpart 2209.4.

SBA's debarring and suspending official can be identified elsewhere in

SBA's regulations at 13 CFR Part 101, and OHA's involvement in the

debarment or suspension process can also be provided for elsewhere in

SBA's regulations at 13 CFR Part 134. Pending such changes, the

Administrator can make designations on a case-by-case basis if

necessary.

Subpart 2209.4 also contains SBA's internal procedures pertaining

to a debarment or suspension action. Because these are internal

procedures only, they need not be set forth in regulatory form.

Instead, SBA believes that such procedures would be more appropriate as

part of SBA Standard Operating Procedures.

Compliance With Executive Orders 12612, 12778, and 12866, the

Regulatory Flexibility Act (5 U.S.C. 601, et seq.), and the Paperwork

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

SBA certifies that this rule will not have a significant economic

impact on a substantial number of small entities within the meaning of

Executive Order 12866 or the Regulatory Flexibility Act, 5 U.S.C. 601,

et seq. This rule eliminates eight Parts of SBA's regulations that SBA

has determined to be obsolete, unnecessary or duplicative. Contracting

opportunities and financial assistance for small business will not be

affected by this proposed rule. Therefore, it is not likely to have an

annual economic effect of $100 million or more, result in a major

increase in costs or prices, or have a significant adverse effect on

competition or the United States economy.

For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA

certifies that this rule contains no new reporting or record keeping

requirements.

For purposes of Executive Order 12612, SBA certifies that this rule

does not have any federalism implications warranting the preparation of

a Federalism Assessment.

For purposes of Executive Order 12778, SBA certifies that this rule

is drafted, to the extent practicable, in accordance with the standards

set forth in Section 2 of that Order.

List of Subjects

13 CFR Part 106

Rent subsidies; Reporting and recordkeeping requirements; Small

businesses.

13 CFR Part 109

Investment companies; Loan programs--business; Small businesses.

13 CFR Part 110

Investigations; Investment companies; Small businesses.

13 CFR Part 111

Environmental protection; Loan programs--business; Reporting and

recordkeeping requirements.

13 CFR Part 128

Grant programs--business; Research; Small businesses.

13 CFR Part 129

Active Corps of Executives (ACE); Exports; Service Corps of Retired

[[Page 54590]]

Executives (SCORE); Small businesses; Technical assistance; Volunteers.

13 CFR Part 144

Disaster assistance; Loan programs--business; Small businesses.

48 CFR Part 2209

Administrative practice and procedure; Government procurement.

For the reasons set forth above and the authority of 15 U.S.C.

634(b)(6), SBA hereby amends Title 13 of the Code of Federal

Regulations by removing parts 106, 109, 110, 111, 128, 129 and 144; and

Title 48 of the Code of Federal Regulations by removing part 2209, and

chapter 22, consisting of subchapter B, part 2209 is vacated.

Dated: September 14, 1995.

Philip Lader,

Administrator.

[FR Doc. 95-24826 Filed 10-24-95; 8:45 am]

BILLING CODE 8025-01-P