[Federal Register Volume 70, Number 225 (Wednesday, November 23, 2005)]
[Rules and Regulations]
[Pages 70703-70707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23126]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 106

RIN 3245-AF37


Cosponsorships, Fee and Non-Fee Based SBA-Sponsored Activities, 
and Gifts

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: 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 final rule implements that authority and sets forth minimum 
requirements for these activities as well as the Agency's solicitation 
and acceptance of gifts.

DATES: This rule is effective on November 23, 2005.

FOR FURTHER INFORMATION CONTACT: Robert Gangwere, Deputy General 
Counsel, (202) 205-6642.

SUPPLEMENTARY INFORMATION: 

A. Background

    On July 11, 2005, SBA published a proposed rule in the Federal 
Register, 70 FR 39667, to solicit comments on its proposal to 
promulgate regulations required by the Small Business Reauthorization 
and Manufacturing Assistance Act of 2004 (reauthorization Act), signed 
into law on December 8, 2004. Pub. L. 108-447, Division K, 118 Stat. 
2809-644 (2004). The statute reauthorized 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. With 
this new authority added to its continuing authority under section 
8(b)(1)(a) of the Small Business Act, the Agency 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 proposed adding part 106 to title 13 of the Code 
of Federal Regulations. The proposed regulations defined each of these 
vehicles 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.

B. Discussion of Comments

    These rules were published as proposed rules on July 11, 2005 in 
the Federal Register, (70 FR 39667-39672). Comments were solicited in 
that

[[Page 70704]]

publication and could be submitted by mail, electronic means, or hand 
delivery/courier.
    No comments were received by e-mail, facsimile, TDD, mail or 
courier. However, in reviewing the proposed regulations, the Agency 
noted a redundancy in Paragraphs (d)(1) and (d)(2) of Sections 106.302 
and 106.402. In the final regulations, Paragraph (d)(1) of each of the 
proposed sections, which stated, ``SBA will not unnecessarily promote a 
Donor, or the Donor's products or services'' will be deleted. 
Paragraphs (d)(2) and (d)(3) of each proposed Section will be 
renumbered (d)(1) and (d)(2) respectively in the final regulations. 
Therefore, we are publishing the final rule with these minor technical 
changes.

C. Compliance With Executive Orders 13132, 12988 and 12866, the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork 
Reduction Act (44 U.S.C. Ch. 35)

    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 final rule has no federalism 
implications warranting preparation of a federalism assessment.
    The Office of Management and Budget (OMB) has determined that this 
rule does not constitute a significant regulatory action under 
Executive Order 12866.
    This action meets applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.
    SBA has determined that this final rule does not impose additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act, 44 U.S.C., Chapter 35.
    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 final regulations address the administrative requirements for 
Agency management of SBA outreach programs. In other words, this final 
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.

List of Subjects in 13 CFR Part 106

    Administrative practice and procedure, Authority delegations 
(Government agencies), Conflict of interests, Small businesses, 
Intergovernmental relations.


0
For the reasons stated in the preamble, SBA adds 13 CFR part 106, as 
follows:

PART 106--COSPONSORSHIPS, FEE AND NON-FEE BASED SBA-SPONSORED 
ACTIVITIES AND GIFTS

Subpart A--Scope and Definitions
Sec.
106.100 Scope.
106.101 Definitions.
Subpart B--Cosponsored Activities
106.200 Cosponsored Activity.
106.201 Who may be a Cosponsor?
106.202 What are the minimum requirements applicable to Cosponsored 
Activities?
106.203 What provisions must be set forth in a Cosponsorship 
Agreement?
106.204 Who has the authority to approve and sign a Cosponsorship 
Agreement?
Subpart C--Fee Based SBA-Sponsored Activities
106.300 Fee Based SBA-Sponsored Activity.
106.301 What are the minimum requirements applicable to Fee Based 
SBA-Sponsored Activities?
106.302 What provisions must be set forth in a Fee Based Record?
106.303 Who has the authority to approve and sign a Fee Based 
Record?
Subpart D--Non-Fee Based SBA-Sponsored Activities
106.400 Non-Fee Based SBA-Sponsored Activity.
106.401 What are the minimum requirements applicable to a Non-Fee 
Based SBA-Sponsored Activity?
106.402 What provisions must be set forth in a Non-Fee Based Record?
106.403 Who has the authority to approve and sign a Non-Fee Based 
Record?
Subpart E--Gifts
106.500 What is SBA's Gift authority?
106.501 What minimum requirements are applicable to SBA's 
solicitation and/or acceptance of Gifts?
106.502 Who has authority to perform a Gift conflict of interest 
determination?
106.503 Are there types of Gifts which SBA may not solicit and/or 
accept?

    Authority: 15 U.S.C. 633 (g) and (h); 15 U.S.C. 637(b)(1)(A); 15 
U.S.C. 637(b)(G).

Subpart A--Scope and Definitions


Sec.  106.100  Scope.

    The regulations in this part apply to SBA-provided assistance for 
the benefit of small business through Fee Based SBA-Sponsored 
Activities or through Cosponsored Activities with Eligible Entities 
authorized under section 4(h) of the Small Business Act, and to SBA 
assistance provided directly to small business concerns through Non-Fee 
Based SBA-Sponsored Activities authorized under section 8(b)(1)(A) of 
the Small Business Act. The regulations in this part also apply to 
SBA's solicitation and acceptance of Gifts under certain sections 
(sections 4(g), 8(b)(1)(G), 5(b)(9) and 7(k)(2)) of the Small Business 
Act (15 U.S.C. 631 et seq.), including Gifts of cash, property, 
services and subsistence. Under section 4(g) of the Small Business Act, 
Gifts may be solicited and accepted for marketing and outreach purposes 
including the cost of promotional items and wearing apparel.


Sec.  106.101  Definitions.

    The following definitions apply to this part. Defined terms are 
capitalized wherever they appear.
    (a) Cosponsor means an entity or individual designated in Sec.  
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.
    (b) Cosponsored Activity means an activity, event, project or 
initiative, designed to provide assistance for the benefit of small 
business as authorized by section 4(h) of the Small Business Act, which 
has been set forth in an approved written Cosponsorship Agreement. The 
Cosponsored Activity must be planned and conducted by SBA and one or 
more Cosponsors. Assistance for purposes of Cosponsored Activity does 
not include grant or any other form of financial assistance. A 
Participant Fee may be charged by SBA or another Cosponsor at any 
Cosponsored Activity.
    (c) Cosponsorship Agreement means an approved written document (as 
outlined in Sec. Sec.  106.203 and 106.204 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.

[[Page 70705]]

    (d) Donor means an individual or entity that provides a Gift, 
bequest or devise (in cash or in-kind) to SBA.
    (e) An Eligible Entity is a potential Cosponsor. An Eligible Entity 
must be a for-profit or not-for-profit entity, or a Federal, State or 
local government official or entity.
    (f) Fee Based SBA-Sponsored Activity Record (Fee Based Record) 
means a written document, as outlined in Sec.  106.302, describing a 
Fee Based SBA-Sponsored Activity and approved in writing pursuant to 
Sec.  106.303.
    (g) Fee Based SBA-Sponsored Activity means an activity, event, 
project or initiative designed to provide assistance for the benefit of 
small business, as authorized by section 4(h) of the Small Business 
Act, at which SBA may charge a Participant Fee. Assistance for purposes 
of Fee Based SBA-Sponsored Activity does not include grant or any other 
form of financial assistance. A Fee Based SBA-Sponsored Activity must 
be planned, conducted, controlled and sponsored solely by SBA.
    (h) Gift (including a bequest or a device) is the voluntary 
transfer to SBA of something of value without the Donor receiving legal 
consideration.
    (i) Non-Fee Based SBA-Sponsored Activity Record (Non-Fee Based 
Record) means a written document describing a Non-Fee Based SBA-
Sponsored Activity which has been approved pursuant to Sec.  106.403.
    (j) Non-Fee Based SBA-Sponsored Activity means an activity, event, 
project or initiative designed to provide assistance directly to small 
business concerns as authorized by section 8(b)(1)(A) of the Small 
Business Act. Assistance for purposes of a Non-Fee Based SBA-Sponsored 
Activity does not include grant or any other form of financial 
assistance. A Non-Fee Based SBA-Sponsored Activity must be planned, 
conducted, controlled and sponsored solely by SBA. No fees including 
Participant Fees may be charged for a Non-Fee Based SBA-Sponsored 
Activity.
    (k) Participant Fee means a minimal fee assessed against a person 
or entity that participates in a Cosponsored Activity or Fee Based SBA-
Sponsored Activity and is used to cover the direct costs of such 
activity.
    (l) Responsible Program Official is an SBA senior management 
official from the originating office who is accountable for the 
solicitation and/or acceptance of a Gift to the SBA; a Cosponsored 
Activity; a Fee Based SBA-Sponsored Activity; or a Non-Fee Based SBA-
Sponsored Activity. If the originating office is a district or branch 
office, the Responsible Program Official is the district director or 
their deputy. In headquarters, the Responsible Program Official is the 
management board member or their deputy with responsibility for the 
relevant program area.

Subpart B--Cosponsored Activities


Sec.  106.200  Cosponsored Activity.

    The Administrator (or designee), after consultation with the 
General Counsel (or designee), may provide assistance for the benefit 
of small business through Cosponsored Activities pursuant to section 
4(h) of the Small Business Act.


Sec.  106.201  Who may be a Cosponsor?

    (a) Except as specified in paragraph (b) of this section, SBA may 
enter into a Cosponsorship Agreement with an Eligible Entity as defined 
in Sec.  106.101(e).
    (b) SBA may not enter into a Cosponsorship Agreement with an 
Eligible Entity if the Administrator (or designee), after consultation 
with the General Counsel (or designee), determines that such agreement 
would create a conflict of interest.


Sec.  106.202  What are the minimum requirements applicable to 
Cosponsored Activities?

    While SBA may subject a Cosponsored Activity to additional 
requirements through internal policy, procedure and the Cosponsorship 
Agreement, the following requirements apply to all Cosponsored 
Activities:
    (a) Cosponsored Activities must be set forth in a written 
Cosponsorship Agreement signed by the Administrator (or designee) and 
each Cosponsor;
    (b) Appropriate recognition must be given to SBA and each Cosponsor 
but shall not constitute or imply an endorsement by SBA of any 
Cosponsor or any Cosponsor's products or services;
    (c) Any printed or electronically generated material used to 
publicize or conduct the Cosponsored Activity, including any material 
which has been developed, prepared or acquired by a Cosponsor, must be 
approved in advance by the Responsible Program Official and must 
include a prominent disclaimer stating that the Cosponsored Activity 
does not constitute or imply an endorsement by SBA of any Cosponsor or 
the Cosponsor's products or services;
    (d) No Cosponsor shall make a profit on any Cosponsored Activity. 
SBA grantees who earn program income on Cosponsored Activities must use 
that program income for the Cosponsored Activity;
    (e) Participant Fee(s) charged for a Cosponsored Activity may not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Cosponsored Activity and must be liquidated prior to other 
sources of funding for the Cosponsored Activity. If SBA charges a 
Participant Fee, the collection of the Participant Fees is subject to 
internal SBA policies and procedures as well as applicable U.S. 
Treasury rules and guidelines;
    (f) SBA may not provide a Cosponsor with lists of names and 
addresses of small business concerns compiled by SBA which are 
otherwise protected by law or policy from disclosure; and
    (g) Written approval must be obtained as outlined in Sec.  106.204.


Sec.  106.203  What provisions must be set forth in a Cosponsorship 
Agreement?

    While SBA may require additional provisions in the Cosponsorship 
Agreement through internal policy and procedure, the following 
provisions must be in all Cosponsorship Agreements:
    (a) A written statement agreed to by each Cosponsor that they will 
abide by all of the provisions of the Cosponsorship Agreement, the 
requirements of this subpart as well the applicable definitions in 
Sec.  106.100;
    (b) A narrative description of the Cosponsored Activity;
    (c) A listing of SBA's and each Cosponsor's rights, duties and 
responsibilities with regard to the Cosponsored Activity;
    (d) A proposed budget demonstrating:
    (1) The type and source of financial contribution(s) (including but 
not limited to cash, in-kind, Gifts, and Participant Fees) that the SBA 
and each Cosponsor will make to the Cosponsored Activity; and
    (2) A reasonable estimation of all anticipated expenses;
    (e) A written statement that each Cosponsor agrees that they will 
not make a profit on the Cosponsored Activity; and
    (f) A written statement that Participant Fees, if charged, will not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Cosponsored Activity as outlined in the budget and will be 
liquidated prior to other sources of funding for the Cosponsored 
Activity.


Sec.  106.204  Who has the authority to approve and sign a 
Cosponsorship Agreement?

    The Administrator, or upon his/her written delegation, the Deputy 
Administrator, an associate or assistant administrator, after 
consultation with the General Counsel (or designee), has the authority 
to approve each Cosponsored Activity and sign each

[[Page 70706]]

Cosponsorship Agreement. This authority cannot be re-delegated.

Subpart C--Fee Based SBA-Sponsored Activities


Sec.  106.300  Fee Based SBA-Sponsored Activity.

    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 pursuant 
to section 4(h) of the Small Business Act.


Sec.  106.301  What are the minimum requirements applicable to Fee 
Based SBA-Sponsored Activities?

    While SBA may subject a Fee Based SBA-Sponsored Activity to 
additional requirements through internal policy and procedure, the 
following requirements apply to all Fee Based SBA-Sponsored Activities:
    (a) A Fee Based Record must be prepared by the Responsible Program 
Official in advance of the activity;
    (b) Any Participant Fees charged will not exceed the minimal amount 
needed to cover the anticipated direct costs of the activity;
    (c) Gifts of cash accepted and the collection of Participant Fees 
for Fee Based SBA-Sponsored Activities are subject to the applicable 
requirements in this part, internal SBA policies and procedures as well 
as applicable U.S. Treasury rules and guidelines; and
    (d) Written approval must be obtained as outlined in Sec.  106.303.


Sec.  106.302  What provisions must be set forth in a Fee Based Record?

    A Fee Based Record must contain the following:
    (a) A narrative description of the Fee Based SBA-Sponsored 
Activity;
    (b) A certification by the Responsible Program Official that he or 
she will abide by the requirements contained in this part, as well as 
all other applicable statutes, regulations, policies and procedures for 
Fee Based SBA-Sponsored Activities;
    (c) A proposed budget demonstrating:
    (1) All sources of funding, including annual appropriations, 
Participant Fees and Gifts, to be used in support of the Fee Based SBA-
Sponsored Activity;
    (2) A reasonable estimation of all anticipated expenses, which 
indicates that no profit is anticipated from the Fee Based SBA-
Sponsored Activity; and
    (3) A provision stating that Participant Fees, if charged, will not 
exceed the minimal amount needed to cover the anticipated direct costs 
of the Fee Based SBA-Sponsored Activity as outlined in the budget;
    (d) With regard to any donations made in support of the Fee Based 
SBA-Sponsored Activity, the Fee Based Record will reflect the 
following:
    (1) Each Donor may receive appropriate recognition for its Gift; 
and
    (2) 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.


Sec.  106.303  Who has authority to approve and sign a Fee Based 
Record?

    The Administrator, or upon his/her written delegation, the Deputy 
Administrator, an associate or assistant administrator, after 
consultation with the General Counsel (or designee), has the authority 
to approve and sign each Fee Based Record. This authority may not be 
re-delegated.

Subpart D--Non-Fee Based SBA-Sponsored Activities


Sec.  106.400  Non-Fee Based SBA-Sponsored Activity.

    The Administrator (or designee) may provide assistance directly to 
small business concerns through Non-Fee Based SBA-Sponsored Activities 
under section 8(b)(1)(A) of the Small Business Act.


Sec.  106.401  What are the minimum requirements applicable to a Non-
Fee Based SBA-Sponsored Activities?

    While SBA may subject Non-Fee Based SBA-Sponsored Activities to 
additional requirements through internal policy and procedure, the 
following requirements apply to all Non-Fee Based SBA-Sponsored 
Activity:
    (a) A Non-Fee Based Record must be prepared and approved by the 
Responsible Program Official in advance of the activity;
    (b) Gifts of cash accepted for Non-Fee Based SBA-Sponsored 
Activities are subject to Sec.  106.500, internal SBA policies and 
procedures as well as applicable U.S. Treasury rules and guidelines; 
and
    (c) Written approval must be obtained as outlined in Sec.  106.403.


Sec.  106.402  What provisions must be set forth in a Non-Fee Based 
Record?

    A Non-Fee Based Record must contain the following:
    (a) A narrative description of the Non-Fee Based SBA-Sponsored 
Activity;
    (b) A certification by the Responsible Program Official that he or 
she will abide by the requirements contained in this part, as well as 
all other applicable statutes, regulations, policies and procedures for 
Non-Fee Based SBA-Sponsored Activities;
    (c) If applicable, a list of Donors supporting the activity; and
    (d) With regard to any donations made in support of a Non-Fee Based 
SBA-Sponsored Activity, the Non-Fee Based Record will reflect the 
following:
    (1) Each Donor may receive appropriate recognition for its Gift; 
and
    (2) 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.


Sec.  106.403  Who has authority to approve and sign a Non-Fee Based 
Record?

    The appropriate Responsible Program Official, after consultation 
with the designated legal counsel, has authority to approve and sign 
each Non-Fee Based Record.

Subpart E--Gifts


Sec.  106.500  What is SBA's Gift authority?

    This section covers SBA's Gift acceptance authority under sections 
4(g), 8(b)(1)(G), 5(b)(9) and 7(k)(2) of the Small Business Act.


Sec.  106.501  What minimum requirements are applicable to SBA's 
solicitation and/or acceptance of Gifts?

    While SBA may subject the solicitation and/or acceptance of Gifts 
to additional requirements through internal policy and procedure, the 
following requirements must apply to all Gift solicitations and/or 
acceptances under the authority of the Small Business Act sections 
cited in Sec.  106.500:
    (a) SBA is required to use the Gift (whether cash or in-kind) in a 
manner consistent with the original purpose of the Gift;
    (b) There must be written documentation of each Gift solicitation 
and/or acceptance signed by an authorized SBA official;
    (c) Any Gift solicited and/or accepted must undergo a 
determination, prior to solicitation of the Gift or prior to acceptance 
of the Gift if unsolicited, of whether a conflict of interest exists 
between the Donor and SBA; and
    (d) All cash Gifts donated to SBA under the authority cited in 
Sec.  106.500 must be deposited in an SBA trust account at the U.S. 
Department of the Treasury.


Sec.  106.502  Who has authority to perform a Gift conflict of interest 
determination?

    (a) For Gifts solicited and/or accepted under sections 4(g), 
8(b)(1)(G), and

[[Page 70707]]

7(k)(2) of the Small Business Act, the General Counsel, or designee, 
must make the final conflict of interest determination. No Gift shall 
be solicited and/or accepted under these sections of the Small Business 
Act if such solicitation and/or acceptance would, in the determination 
of the General Counsel (or designee), create a conflict of interest.
    (b) For Gifts of services and facilities solicited and/or accepted 
under section 5(b)(9), the conflict of interest determination may be 
made by designated disaster legal counsel.


Sec.  106.503  Are there types of Gifts which SBA may not solicit and/
or accept?

    Yes. SBA shall not solicit and/or accept Gifts of or for (or use 
cash Gifts to purchase or engage in) the following:
    (a) Alcohol products;
    (b) Tobacco products;
    (c) Pornographic or sexually explicit objects or services;
    (d) Gambling (including raffles and lotteries);
    (e) Parties primarily for the benefit of Government employees; and
    (f) Any other product or service prohibited by law or policy.

    Dated: November 16, 2005.
Hector V. Barreto,
Administrator.
[FR Doc. 05-23126 Filed 11-22-05; 8:45 am]
BILLING CODE 8025-01-P