[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Rules and Regulations]
[Pages 80646-80648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26549]



Office of the Secretary

49 CFR Part 26

RIN No. 2105-AE92

Disadvantaged Business Enterprise Program; Inflationary 

AGENCY: Office of the Secretary (OST), Department of Transportation 

ACTION: Final rule.


SUMMARY: The United States Department of Transportation (DOT) is 
amending the small business size limit under its Disadvantaged Business 
Enterprise (DBE) program, also known as the gross receipts cap, to 
ensure that small businesses may continue to participate in the 
Department's DBE program after taking inflation into account. This 
final rule provides an inflation adjustment to the size limit on small 
businesses participating in the DBE program and implements a statutory 
change to the size standard pursuant to the Federal Aviation 
Administration (FAA) Authorization Act of 2018.

DATES: This rule is effective January 13, 2021.

FOR FURTHER INFORMATION CONTACT: Chris Cialeo, Office of the General 
Counsel (C-10), U.S. Department of Transportation, 1200 New Jersey 
Avenue SE, Washington, DC 20590, (202) 366-8789, 
[email protected].


I. Background

    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 section 1101(b) of the Fixing 
America's Surface Transportation (FAST) Act (Pub. L. 114-94, Dec. 4, 
2015), and the statutory provision governing the DBE program as it 
relates to airport financial assistance programs is 49 U.S.C. 47113.
    Under the Department's existing rules, to qualify as an eligible 
DBE firm, a firm's average annual gross receipts over the preceding 
three fiscal years cannot exceed a DOT-specific gross receipts cap. On 
April 2, 2007, in response to direction in the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU) (Pub. L. 109-59, August 10, 2005) to adjust this gross 
receipts cap annually for inflation, the Department published a final 
rule adjusting the gross receipts cap for its DBE program in 49 CFR 
part 26 from $19,570,000 to $20,410,000 (72 FR 15614). On April 3, 
2009, the Department published another final rule adjusting the gross 
receipts cap for its DBE program from $20,410,000 to $22,410,000 (74 FR 
15222). The Moving Ahead for Progress in the 21st Century (MAP-21) Act 
(Pub. L. 112-141, July 6, 2012) maintained the $22,410,000 gross 
receipts cap amount set by the April 2009 final rule. On October 2, 
2014, the Department issued a final rule that increased the gross 
receipts cap to $23,980,000 (79 FR 59565). In 2015, The FAST Act 
maintained the $23,980,000 gross receipts cap set by the October 2014 
rule. Section 1101(b)(2)(A)(ii) of the FAST Act reaffirms the Secretary 
of Transportation's requirement to adjust this amount annually for 
inflation. Accordingly, this final rule adjusts the gross receipts cap 
for inflation by increasing the gross receipts cap applicable to firms 
for purposes of Federal Highway Administration (FHWA)--and Federal 
Transit Administration (FTA)--assisted work to $26,290,000.
    The Federal Aviation Administration (FAA) Reauthorization Act of 
2018 (Pub. L. 115-254) removed the gross receipts cap for purposes of 
eligibility for FAA-assisted work. Therefore, the revised rule reflects 
that the gross receipts cap does not apply for purposes of determining 
a firm's eligibility for FAA-assisted work.

II. Business Size Standards for the DBE Program

    To make an inflation adjustment to the gross receipts figures, DOT 
uses the Department of Commerce's price index for State and local 
consumption expenditures (gross output of general government). The 
Bureau of Economic Analysis at the Department of Commerce prepares 
constant dollar estimates of State and local government purchases of 
goods and services by deflating current dollar estimates by suitable 
price indexes. These indexes include purchases of durable and non-
durable goods, and other services. Using these price deflators enables 
the Department to adjust dollar figures for inflation from past years.
    The current inflation rate on purchases by State and local 
governments is calculated by dividing the price deflator for the fourth 
quarter of 2019 (116.030) by 2015's fourth quarter price deflator 
(105.829). See Bureau of Economic Analysis Table 3.10.4, Price Indexes 
for Government Consumption Expenditures and General Government Gross 
Output (January 30, 2020). The result of the calculation is 1.09639, 
which represents an inflation rate of 10.9639% from the fourth quarter 
of 2015. Multiplying the FAST Act's $23,980,000 standard for 
disadvantaged business enterprises in DOT financial assistance programs 
by 1.09639 equals $26,291,465, which will be rounded off to the nearest 
$10,000 is $26,290,000. Therefore, if a firm's gross receipts averaged 
over the firm's previous three fiscal years exceeds $26,290,000, it 
exceeds the small business size limit for participation in FHWA and 
FTA-assisted work under the Department's DBE program. The Department 
will adjust this amount for inflation on an annual basis. In subsequent 
years, the revised amount will be published on the Departmental Office 
of Civil Rights' website.

Regulatory Analyses and Notices

    Under the Administrative Procedure Act (5 U.S.C. 553(b)(B)), an 
agency may waive notice and comment procedures if it finds good cause 
that such procedures are impracticable, unnecessary, or contrary to the 
public interest. The Department finds that notice and comment for this 
rule is unnecessary because it only relates 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. Accordingly, the Department finds good cause under 5 U.S.C. 
553(b)(B) to waive notice and opportunity for public comment.

[[Page 80647]]

A. Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs), Executive Order 12866 (Regulatory Planning and 
Review), Executive Order 13563 (Improving Regulation and Regulatory 
Review), and 49 CFR Part 5 (DOT Administrative Rulemaking, Guidance, 
and Enforcement Procedures)

    This rule is not a significant regulatory action under Executive 
Order 12866, Regulatory Planning and Review, as supplemented by 
Executive Order 13563, Improving Regulation and Regulatory Review. It 
is also not significant within the meaning of DOT regulatory policies 
and procedures. This rule is issued in accordance with the Department's 
rulemaking procedures found in 49 CFR part 5 and DOT Order 2100.6.
    The Department does not anticipate that this rulemaking will have 
an economic impact on regulated entities. The rule is a ministerial 
adjustment for inflation of a statutory small business size standard. 
It will not impose burdens on any regulated parties.
    This rule is not an Executive Order 13771 regulatory action because 
this rule is not significant under Executive Order 12866.

B. Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), DOT has 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. 
The rule is a ministerial update to the size limits to define small 
businesses 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 DBE programs by adjusting for inflation, and to 
align the regulation with a change to the part 26 size standard for 
FAA-assisted work pursuant to the FAA Reauthorization Act of 2018. 
Therefore, the Department certifies that this rule would not have a 
significant economic impact on a substantial number of small entities.

C. Executive Order 13132 (Federalism)

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

D. Executive Order 13175 (Tribal Consultation)

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13175 (Consultation and 
Coordination with Indian Tribal Governments). Because this rule will 
not significantly or uniquely affect the Indian tribal communities, and 
will not impose substantial direct compliance costs, the funding and 
consultation requirements of the Executive Order do not apply.

E. 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 
$148.1 million or more in any one year (2 U.S.C. 1532). 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 Reform Act does not apply.

F. 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.

G. 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.

H. National Environmental Policy Act

    The agency has analyzed the environmental impacts of this action 
pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 
U.S.C. 4321, et seq.) and has determined that it is categorically 
excluded pursuant to DOT Order 5610.1C, ``Procedures for Considering 
Environmental Impacts'' (44 FR 56420, October 1, 1979). Categorical 
exclusions are actions identified in an agency's NEPA implementing 
procedures that do not normally have a significant impact on the 
environment and therefore do not require either an environmental 
assessment or environmental impact statement. The purpose of this 
rulemaking is to make an inflation adjustment of the size limit on 
small businesses participating in the DBE program. The agency does not 
anticipate any environmental impacts, and there are no extraordinary 
circumstances pertaining to this rulemaking.

List of Subjects in 49 CFR Part 26

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

    For the reasons stated in the preamble, the Department of 
Transportation amends 49 CFR part 26 as follows:


1. The authority citation for part 26 is revised to read as follows:

    Authority: 23 U.S.C. 324; 42 U.S.C. 2000d, et seq.; Sec. 
1101(b), Pub. L. 114-94, 129 Stat. 1312, 1324; 49 U.S.C. 47113, 
47123; Sec. 150, Pub. L. 115-254, 132 Stat. 3215.

2. In Sec.  26.65, revise paragraph (b) to read as follows:

Sec.  26.65  What rules govern business size determinations?

* * * * *
    (b) Even if it meets the requirements of paragraph (a) of this 
section, a firm is not an eligible DBE for the purposes of Federal 
Highway Administration and Federal Transit Administration-assisted work 
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 121.104), over the firm's previous three fiscal years, in excess 
of $26.29 million. The Department will adjust this amount for inflation 
on an annual basis. The adjusted amount will be published on the 
Department's website in subsequent years.
* * * * *

[[Page 80648]]

    Issued this 25th day of November, 2020, at Washington, DC, under 
authority delegated in 49 CFR 1.27(a).
Steven G. Bradbury,
General Counsel.
[FR Doc. 2020-26549 Filed 12-11-20; 8:45 am]