[Federal Register Volume 79, Number 68 (Wednesday, April 9, 2014)]
[Proposed Rules]
[Pages 19544-19546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07850]



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SMALL BUSINESS ADMINISTRATION

13 CFR Part 102

RIN 3245-AG01


Management and Technical Assistance Service Providers Information

AGENCY: Small Business Administration.

ACTION: Proposed rule.

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SUMMARY: The U.S. Small Business Administration (SBA or Agency) 
proposes to amend its regulations to establish for the affected public 
that existing Agency standards governing the use and disclosure of 
information also apply to information collected from SBA's resource 
partners, including Small Business Development Centers (SBDCs), Women's 
Business Centers (WBCs) and SCORE, as well as from the clients of these 
resource partners. The rule covers information collected when 
conducting financial examinations, programmatic reviews, polls, 
surveys, and any other collections of information.

DATES: SBA must receive comments to this proposed rule on or before 
June 9, 2014.

ADDRESSES: You may submit comments, identified by RIN: 3245-AG01, by 
any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail, for paper, disk, or CD/ROM submissions: Eric Won, 
Director for Performance and Program Evaluation, U.S. Small Business 
Administration, Office of Entrepreneurial Development, 409 Third Street 
SW., Washington, DC 20416.
     Hand Delivery/Courier: Eric Won, Director for Performance 
and Program Evaluation, U.S. Small Business Administration, Office of 
Entrepreneurial Development, 409 Third Street SW., Washington, DC 
20416.
    SBA will post all comments to this proposed rule on 
www.regulations.gov. If you wish to submit confidential business 
information (CBI) as defined in the User Notice at www.regulations.gov, 
you must submit such information to Eric Won, Director for Performance 
and Program Evaluation, U.S. Small Business Administration, Office of 
Entrepreneurial Development, 409 Third Street SW., Washington, DC 
20416, or send an email to [email protected]. Highlight the information 
that you consider to be CBI and explain why you believe SBA should hold 
this information as confidential. SBA will review your information and 
make the final determination on whether it will publish the information 
or not.

FOR FURTHER INFORMATION CONTACT: Eric Won, Director for Performance and 
Program Evaluation, U.S. Small Business Administration, Office of 
Entrepreneurial Development, (202) 205-6923 or [email protected].

SUPPLEMENTARY INFORMATION: SBA's Office of Entrepreneurial Development 
(OED) provides management and technical assistance to small businesses 
through its resource partners, including Small Business Development 
Centers (SBDCs), Women's Business Center (WBCs), and SCORE. OED 
monitors the Agency's resource partners by performing financial 
examinations and programmatic reviews to determine whether they are 
utilizing SBA financial assistance efficiently and effectively. OED 
also measures the impact of the resource partners' services by 
conducting polls and surveys of those individuals and small businesses 
that receive management and technical assistance through the resource 
partners.
    Sections 21(a)(7)(c) and 29(n)(3) of the Small Business Act, (15 
U.S.C. 648(a)(7)(c) and 656(n)(3)), direct SBA to promulgate 
regulations to establish standards for the disclosure and use of 
certain client information when the Agency conducts a financial audit 
of an SBDC or WBC or conducts surveys of SBDC clients. In the absence 
of these regulations, SBDCs and WBCs are prohibited from disclosing 
certain identifying information to SBA, without the consent of the 
resource partners' clients, unless a court orders SBA to disclose the 
information in a civil or enforcement action brought by a Federal or 
State agency or unless SBA considers the information necessary to 
conduct a financial audit. As discussed below, for purposes of this 
rule the term ``financial audits'' refers to OED conducted financial 
examinations and programmatic reviews. The definition of ``audit'' does 
not apply to audits, investigations, or other activities conducted by 
the SBA's Office of Inspector General or a financial statement audit. 
Section 21(a)(7)(c) also requires SBA to include in the regulations 
standards for the oversight of client surveys and ``to the extent 
practicable, provide for the maximum amount of privacy protection'' for 
the information collected. Until SBA issues regulations, the SBA Office 
of Inspector General must approve any client survey and information 
collected.
    This rule proposes to implement the two statutory provisions 
described above by adding a new Subpart C, consisting of sections 
102.50 through 102.56, to the Agency's Record Disclosure and Privacy 
regulations at 13 CFR part 102. This proposed rule does not set new 
standards for the disclosure and use of information because SBA already 
has standards in place. Rather, this rule would make it clear that 
those existing standards also apply to information collected from 
resource partners and their clients. This proposed rule, therefore, 
proposes to incorporate the standards in Sec.  102.7 that govern the 
protection and disclosure of confidential business information, as well 
as the standards in Sec.  102.22 that cover the protection and 
disclosure of personal information under the Privacy Act of 1974, 5 
U.S.C. 552a, and apply them to SBA's resource partners and their 
clients.
    The standards are found in 13 CFR part 102; the SBA Privacy Act 
Standard Operating Procedures (SOP) 40 04 3 (http://collab.sba.gov/sops/Documents/4004/SBASOP-40-04-3.pdf); and the Disclosure of 
Information SOP 40 03 http://collab.sba.gov/sops/Documents/4003/SOP400331.doc. SBA also has a Privacy Act System of Records that covers 
the pertinent information collected from resource partners and their 
clients. See SBA 11, Entrepreneurial Development--Management 
Information System, 74 FR 14890 (April 1, 2009), at http://www.sba.gov/sites/default/files/Federal_Register_Revision_of_Privacy_Act_System_of_Records.pdf.
    Additionally, although the Small Business Act requires the 
publication of these regulations only for SBDCs and WBCs, SBA proposes 
to extend the same disclosure and use standards to information 
collected during financial examinations and programmatic reviews, polls 
and client surveys pertaining to all of SBA's resource partners to 
ensure uniform standards for all of SBA's grantees, including SCORE, 
Veterans Business Outreach Centers (VBOCs) and Microloan 
Intermediaries.
    SBA requests comments on all aspects of this rulemaking, which as 
stated above, is intended to clearly establish that information 
collected by SBA from SBDCs, WBCs, SCORE, and other SBA grantees and 
their client small businesses is protected under the FOIA and Privacy 
Acts, as implemented by SBA in its regulations at 13 CFR part 102 and 
its standard operating procedures.

Section by Section Analysis

    Section 102.50, Purpose and Scope, proposes that the purpose of 
these regulations is to establish standards for the disclosure of 
information collected,

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including the name, address, or telephone number of any individual or 
small business concern receiving assistance from SBA through its 
resource partners. The scope of the regulations covers but is not 
limited to, SBA conducted financial examinations or programmatic 
reviews of SBA resource partners, and polls or surveys of the resource 
partners or their clients.
    Section 102.51, Definitions, sets forth terms applicable to this 
subpart, and which, in general are currently used in the various 
entrepreneurial development programs and as such are already familiar 
to the resource partners.
    Section 102.52, Standards for Disclosure and Use of Information, 
informs the public that SBA's existing standards for disclosure and use 
of information also apply to information collected from resource 
partners and their clients.
    Section 102.53, Data Collection Methodologies, would provide that 
all data collection methods will be consistent with existing federal 
regulations, policies and procedures.
    Section 102.54, Use of Program Activity or Survey and Poll Data, 
proposes that the purposes for collecting program activity data using 
surveys or polls include: (1) Measuring the effect and economic impact 
of Agency programs; (2) measuring the public benefit of such programs 
(3) evaluating customer satisfaction ; (4) assessing public and 
resource partner needs to make improvements to programs and policies; 
and (5) determining the level and types of managerial, financial, 
marketing and other business management or specialized services 
provided.
    Section 102.55, Use of Financial Examination or Programmatic Review 
Data, proposes how SBA would use the client information collected 
during a financial examination or programmatic review. Specifically, 
the information would be used to assess the quality, quantity and scope 
of the client services provided, compliance with program requirements 
and the appropriateness of program activities or costs incurred.

Compliance With Executive Orders 12866, 12988, and 13132, 13563, the 
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory 
Flexibility Act (5 U.S.C. 601-612) Executive Order 12866

    The Office of Management and Budget (OMB) determined that this 
proposed rule does not constitute a significant regulatory action for 
purposes of Executive Order 12866 and also that this is not a major 
rule under the Congressional Review Act, 5 U.S.C. 800.

Executive Order 12988

    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 a retroactive or preemptive effect.

Executive Order 13132

    For purposes of Executive Order 13132, SBA has determined that this 
proposed rule 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, SBA has determined that this proposed 
rule has no federalism implications warranting preparation of a 
federalism assessment.

Executive Order 13563

    As part of its ongoing efforts to engage stakeholders in the 
development of its regulations, SBA conducted a series of conference 
calls with resource partner representatives (Small Business Development 
Centers, Women's Business Centers and SCORE) to review the intent of 
the new rule and various components related to it. No concerns were 
raised during those calls and no comments were raised that needed to be 
addressed in this rule. SBA also coordinated development of this rule 
with its Office of Inspector General, which has statutory approval 
responsibility to approve client surveys until this rule is finalized.

Paperwork Reduction Act, 44 U.S.C., Ch. 35

    For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, 
SBA has determined that this proposed rule will not impose any 
reporting or recordkeeping requirements. SBA will continue to follow 
the Paperwork Reduction Act requirements, including obtaining OMB's 
review and approval, for any current or future surveys, polls and other 
collections of information from the resource partners and their 
clients.

Regulatory Flexibility Act, 5 U.S.C. 601-612

    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 Fiscal Year 2013 (the most current year for which complete 
information is available), there were 63 SBDCs serving 332,421 clients; 
102 WBCs serving 136,951 clients; SCORE served 458,773 clients; and 
VBOCS served 80,000 clients. For Fiscal Year 2014, SBA received 
$113,625,000 for SBDCs; $14,000,000 for WBCs; $7,000,000 for SCORE; and 
$2,500,000 for VBOCs. SBA does not have data on how many of these 
entities are small under the applicable North American Industry 
Classification System (NAICS) codes set forth in 13 CFR part 121. 
Therefore, SBA requests information on how many of the SBDCs, WBCs, 
SCORE, and VBOC entities are considered small under the NAICS codes.
    Even if all of these entities are small, SBA believes that this 
rule would not have a significant economic impact on them. The rule 
would not require additional expenditures or impose any new 
requirements on these entities, including collection of information 
requirements as that term is defined by the Paperwork Reduction Act. 
Rather, as stated above, the rule would merely establish how SBA would 
handle any information the Agency collects from the resource partners 
and their clients. Specifically, the rule would make it clear that 
existing SBA standards for the disclosure and use of information would 
also apply to any such information collected. SBA is responsible for 
complying with the requirements of the proposed rule, not the SBDCs, 
WBCs, SCORE, or VBOCs. Nonetheless, SBA also requests public comments 
on any impact this proposed rule would have on these organizations.
    With respect to the small businesses that obtain counseling and 
training from these entities, there would be no economic impact from 
this proposed rule as well. The disclosure and protection standards 
discussed in the rule applies to the information collected from all 
such businesses that obtain services from an SBDC, WBC, SCORE or VBOC 
entity; however, the rule would not impose any requirements on these 
businesses to provide the information or to take any other action.
    Based on the reasons stated above and for purposes of the RFA, SBA 
certifies that this rule would not have a significant economic impact 
on a substantial number of the SBDCs, WBCS, SCORE or VBOC entities, and

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the small businesses that receive services from them.

List of Subjects in 13 CFR Part 102

    Freedom of information, Privacy, Grants.

    For the reasons set forth in the preamble, SBA proposes to amend 13 
CFR part 102 as follows:

PART 102--RECORD DISCLOSURE AND PRIVACY

0
1. The authority citation for part 102 is revised to read as follows:

    Authority: 5 U.S.C. 301, 552, 552a, 15 U.S.C. 648(a)(7) and 
656(n); 31 U.S.C. 9701; 44 U.S.C. 3501, E.O. 12600, 52 FR 23781, 3 
CFR, 1987 Comp., p. 235.

0
2. Add subpart C to read as follows:

Subpart C--Standards for Collection and Use of Program Activity 
Data and Surveys

Sec.
102.50 Purpose and scope.
102.51 Definitions.
102.52 Standards for disclosure and use of information.
102.53 Data collection methodologies.
102.54 Use of program activity or survey and poll data.
102.55 Use of financial examination and programmatic review data.


Sec.  102.50  Purpose and scope.

    The purpose of these regulations is to establish standards for the 
disclosure of information collected from any individual or small 
business concern receiving assistance from SBA through its resource 
partners. The scope of these regulations is limited to SBA conducted 
financial examinations or programmatic reviews of a resource partner, 
or a survey or poll conducted of an SBA resource partner's clients.


Sec.  102.51  Definitions

    Audit means a financial examination or programmatic review 
conducted by the Office of Entrepreneurial Development. This provision 
does not apply to audits, investigations or other activities conducted 
by the SBA's Office of Inspector General (OIG) or a financial statement 
audit.
    Client means a person or small business that receives management or 
technical assistance from SBA, an SBA resource partner, an approved SBA 
lender, or any other provider participating in any of SBA's programs. 
The assistance is direct or indirect and may also include loans, or 
investments or other such activities as enumerated in agreements or 
funding documents between the resource partner and SBA.
    Customer Satisfaction means the degree to which clients would 
recommend the service received to other small business individuals and/
or that they were generally pleased with the service provided to them 
and would use the service again.
    Examination means a financial examination or programmatic review. 
This provision does not apply to audits conducted by the SBA's Office 
of Inspector General (OIG) or a financial statement audit.
    Poll means an informal, voluntary data collection that contains 
broad based questions that place little to no burden on the respondent. 
A Poll is anecdotal and not statistical in nature, and is used to gain 
a quick view of a particular issue. A Poll does not collect information 
protected under the Privacy Act of 1974.
    Program Activity Data means data collected through any methods 
established by or on behalf of SBA concerning a resource partner's 
client activity, including but not limited to, counseling, training, 
and other technical assistance activities.
    Resource Partner means any grantee, subrecipient, or system of 
grantees and subrecipients that enters into a formal agreement with SBA 
to deliver small business management and technical assistance to the 
general public, small business concerns and/or any specialized 
assistance related thereto.
    Submitter means any person or entity that provides information to 
SBA through a data collection system, survey, poll, financial 
examination, programmatic review or other data collection activity.
    Survey means a collection of data whose purposes include the 
description, estimation, or analysis of the characteristics of groups, 
organizations, segments, activities, or geographic areas.


Sec.  102.52  Standards for disclosure and use of information.

    The standards in subparts A and B of 13 CFR part 102 relating to 
privacy and disclosure of information collected and maintained by the 
SBA apply to the disclosure and use of information collected from 
resource partners and their clients.


Sec.  102.53  Data collection methodologies.

    All data collection methodologies utilized will be consistent with 
relevant Federal rules and regulations, including the Paperwork 
Reduction Act, and SBA standard operating procedures.


Sec.  102.54  Use of program activity or survey and poll data.

    Program activity and client survey or poll data are collected for 
the purposes of:
    (a) Measuring the effect and economic or other impact of Agency 
programs;
    (b) Assessing public and resource partner needs;
    (c) Measuring customer satisfaction;
    (c) Guiding program policy development;
    (d) Improving grant-making processes;
    (e) Improving relationship management with these entities; and
    (f) Other areas SBA determines would be valuable to strengthen 
programs and/or enhance support for clients.


Sec.  102.55  Use of financial examination or programmatic review data.

    Financial examination or programmatic review data regarding client 
information is collected, to the extent necessary, for the purposes of:
    (a) Assessing the quality, quantity and scope of client service 
provided;
    (b) Ensuring compliance with the governing rules and program 
requirements;
    (c) Determining the appropriateness of activities conducted under 
the program and/or cost incurred by submitters such as grantees, 
resource partners, contractors, lenders and other program stakeholders; 
and
    (d) Other areas relevant to SBA oversight of its programs.
    This data is separate from ongoing program activity data and does 
not interfere with the collection of that information.

    Dated: March 31, 2014.
Marianne O'Brien Markowitz,
Acting Administrator.
[FR Doc. 2014-07850 Filed 4-8-14; 8:45 am]
BILLING CODE 8025-01-P