[Federal Register Volume 86, Number 99 (Tuesday, May 25, 2021)]
[Proposed Rules]
[Pages 28012-28038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10487]


=======================================================================
-----------------------------------------------------------------------

SMALL BUSINESS ADMINISTRATION

13 CFR Part 121

RIN 3245-AH10


Small Business Size Standards: Wholesale Trade; Retail Trade

AGENCY: U.S. Small Business Administration.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA or the Agency) 
proposes to increase its receipts-based and employee-based small 
business size definitions (commonly referred to as ``size standards'') 
for North American Industry Classification System (NAICS) sectors 
related to Wholesale Trade and Retail Trade. SBA proposes to increase 
size standards for 49 industries in those sectors, including 14 
industries in NAICS Sector 42 (Wholesale Trade) and 35 industries in 
NAICS Sector 44-45 (Retail Trade). SBA's proposed revisions rely on its 
recently revised ``Size Standards Methodology'' (Methodology). SBA 
seeks comments on its proposed changes to size standards in the above 
sectors and the data sources it evaluated to develop the proposed size 
standards.

[[Page 28013]]


DATES: SBA must receive comments to this proposed rule on or before 
July 26, 2021.

ADDRESSES: Identify your comments by RIN 3245-AH10 and submit them by 
one of the following methods: (1) Federal eRulemaking Portal: 
www.regulations.gov. Follow the instructions for submitting comments; 
or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Office 
of Size Standards, 409 Third Street SW, Mail Code 6530, 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 U.S. Small Business Administration, 
Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third 
Street SW, Mail Code 6530, 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 determine whether it 
will make the information public.

FOR FURTHER INFORMATION CONTACT: Jorge Laboy-Bruno, Ph.D., Economist, 
Office of Size Standards, (202) 205-6618 or [email protected].

SUPPLEMENTARY INFORMATION:

Discussion of Size Standards

    To determine eligibility for Federal small business assistance, SBA 
establishes small business size definitions (usually referred to as 
``size standards'') for private sector industries in the United States. 
SBA uses two primary measures of business size for size standards 
purposes: Average annual receipts and average number of employees. SBA 
uses financial assets for certain financial industries and refining 
capacity, in addition to employees, for the petroleum refining industry 
to measure business size. In addition, SBA's Small Business Investment 
Company (SBIC), Certified Development Company (504/CDC), and 7(a) Loan 
Programs use either the industry-based size standards or tangible net 
worth and net income-based alternative size standards to determine 
eligibility for those programs.
    In September 2010, Congress passed the Small Business Jobs Act of 
2010 (Pub. L. 111-240, 124 Stat. 2504, September 27, 2010) (``Jobs 
Act''), requiring SBA to review all size standards every 5 years and 
make necessary adjustments to reflect current industry and market 
conditions. In accordance with the Jobs Act, in early 2016, SBA 
completed the first 5-year review of all size standards--except those 
for agricultural enterprises for which size standards were previously 
set by Congress--and made appropriate adjustments to size standards for 
a number of industries to reflect current industry and Federal market 
conditions.
    During this comprehensive review of size standards, SBA is 
reviewing industry size standards by groups of NAICS sectors. During 
the previous 5-year comprehensive review, SBA generally reviewed NAICS 
sectors independently and by their employee- based or receipt-based 
size standard. Thus, during the previous comprehensive review, the 
review of size standards for the industries covered by this proposed 
rule was conducted under two separate rulemakings: One for receipts-
based size standards in Sector 44-45 (75 FR 61597, October 6, 2010) and 
one for employee-based size standards in Sector 42 and two employee-
based industries in Sector 44-45 (81 FR 3941, January 25, 1016). Under 
these rulemakings, SBA reviewed the size standards for 71 industries 
within NAICS Sector 42 (Wholesale Trade) and 74 industries within NAICS 
Sector 44-45 (Retail Trade). These reviews of size standards occurred 
during October 2009 to January 2016. SBA's analyses of the relevant 
industry data available at that time supported increasing employee-
based size standards for 46 industries and maintaining current size 
standards for 25 industries in Sectors 42 and 44-45 (81 FR 3941) and 
increasing receipts-based size standards for 46 industries, maintaining 
current size standards for 27 industries and replacing the type of size 
standard from receipts-based to employee-based size standards for 1 
industry in Sector 44-45 (75 FR 61597). Table 1, Size Standards 
Revisions During the First 5-Year Review, provides a summary of these 
revisions by NAICS sector.

                                            Table 1--Size Standards Revisions During the First 5-Year Review
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          Number of type
                                                                          Number of size  Number of size  Number of size  Number of size      of size
                  Sector                             Sector name             standards       standards       standards       standards       standards
                                                                             reviewed        increased       decreased      maintained        changed
--------------------------------------------------------------------------------------------------------------------------------------------------------
42........................................  Wholesale Trade.............              71              46               0              25               0
44-45.....................................  Retail Trade *..............              74              46               0              27               1
                                                                         -------------------------------------------------------------------------------
    Total.................................  ............................             145              92               0              52               1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The evaluation of this sector used the 2007 NAICS structure.

    Currently, there are 27 different size standards levels covering 
1,023 NAICS industries and 14 subindustry activities (commonly known as 
``exceptions'' in SBA's table of size standards). Of these size levels, 
16 are based on average annual receipts, 9 are based on average number 
of employees, and 2 are based on other measures.
    SBA also adjusts its monetary-based size standards for inflation at 
least once every 5 years. An interim final rule on SBA's latest 
inflation adjustment to size standards, effective August 19, 2019, was 
published in the Federal Register on July 18, 2019 (84 FR 34261). SBA 
also updates its size standards every 5 years to adopt the Office of 
Management and Budget's (OMB) quinquennial NAICS revisions to its table 
of small business size standards. Effective October 1, 2017, SBA 
adopted the OMB's 2017 NAICS revisions to its size standards (82 FR 
44886, September 27, 2017).
    This proposed rule is one of a series of proposed rules that will 
review size standards of industries grouped by various NAICS sectors. 
Rather than review all size standards at one time, SBA is reviewing 
size standards by grouping industries within various NAICS sectors that 
use the same size measure (i.e., employees or receipts). In the current 
review, SBA will review size standards in 6 groups of NAICS sectors. 
(In the prior review, SBA reviewed size standards mostly on a sector-
by-sector basis.) Once SBA completes its review of size standards for a 
group of sectors, it issues for public comment a proposed rule to 
revise size standards for those

[[Page 28014]]

industries based on the latest available data and other factors deemed 
relevant by the SBA's Administrator.
    Below is a discussion of SBA's revised ``Size Standards 
Methodology'' (Methodology), available at www.sba.gov/size, for 
establishing, reviewing, or modifying employee-based size standards 
that SBA has applied to this proposed rule. SBA examines the structural 
characteristics of an industry as a basis to assess industry 
differences and the overall degree of competitiveness of an industry 
and of firms within the industry. Industry structure is typically 
examined by analyzing four primary factors--average firm size, degree 
of competition within an industry, start-up costs and entry barriers, 
and distribution of firms by size. To assess the ability of small 
businesses to compete for Federal contracting opportunities under the 
current size standards, as the fifth primary factor, SBA also examines, 
for each industry averaging $20.0 million or more in average annual 
Federal contract dollars, the small business share of Federal contract 
dollars relative to the small business share of total industry 
receipts. When necessary, SBA also considers other secondary factors 
that are relevant to the industries and the interests of small 
businesses, including impacts of size standards changes on small 
businesses.

Size Standards Methodology

    SBA has recently revised its Methodology for establishing, 
reviewing, or modifying size standards when necessary. See the 
notification in the April 11, 2019, edition of the Federal Register (84 
FR 14587). The revised Methodology is available on SBA's size standards 
web page at www.sba.gov/size. Prior to finalizing the revised 
Methodology, SBA issued a notification in the April 27, 2018 edition of 
the Federal Register (83 FR 18468) to solicit comments from the public 
and notify stakeholders of the proposed changes to the Methodology. SBA 
considered all public comments in finalizing the revised Methodology. 
For a summary of comments and SBA's responses, refer to the SBA's April 
11, 2019, Federal Register notification cited above.
    The revised Methodology represents a major change from the previous 
methodology, which was issued on October 21, 2009 (74 FR 53940). 
Specifically, in its revised Methodology, SBA is replacing the 
``anchor'' approach applied in the previous methodology with a 
``percentile'' approach for evaluating differences in characteristics 
among various industries. Under the ``anchor'' approach, SBA generally 
evaluated the characteristics of individual industries relative to the 
average characteristics of industries with the anchor size standard to 
determine whether they should have a higher or a lower size standard 
than the anchor. In the ``percentile'' approach, SBA ranks each 
industry among all industries with the same measure of size standards 
(such as receipts or employees) in terms of four primary industry 
factors, discussed in the Industry Analysis subsection below. The 
``percentile'' approach is explained more fully in the Industry 
Analysis section of this proposed rule. For a more detailed 
explanation, please see the revised Methodology at www.sba.gov/size.
    Additionally, as the fifth factor, SBA evaluates the difference 
between the small business share of Federal contract dollars and the 
small business share of total industry receipts to compute the size 
standard for the Federal contracting factor. The overall size standard 
for an industry is then obtained by averaging all size standards 
supported by each primary factor. The evaluation of the Federal 
contracting factor is explained more fully in the industry analysis 
section below.
    SBA does not apply all aspects of its Methodology to all proposed 
rules because not all features are relevant for every industry covered 
by each proposed rule. For example, since NAICS codes in the Wholesale 
Trade and Retail Trade sectors cannot be used to classify Government 
acquisitions for supplies, and only the applicable manufacturing code 
can be applied (13 CFR 121.402(b)(2)), the Federal contracting factor 
is not considered in evaluating industry based size standards for these 
sectors. SBA's Methodology is available on its website at www.sba.gov/size.

Industry Analysis

    Congress granted SBA's Administrator discretion to establish 
detailed small business size standards (15 U.S.C. 632(a)(2)). 
Specifically, section 3(a)(3) of the Small Business Act (15 U.S.C. 
632(a)(3)) requires that ``. . . the [SBA] Administrator shall ensure 
that the size standard varies from industry to industry to the extent 
necessary to reflect the differing characteristics of the various 
industries and consider other factors deemed to be relevant by the 
Administrator.'' Accordingly, the economic structure of an industry is 
the basis for establishing, reviewing, or modifying small business size 
standards. In addition, SBA considers current economic conditions, its 
mission and program objectives, the Administration's current policies, 
impacts on small businesses under current size and proposed or revised 
size standards, suggestions from industry groups and Federal agencies, 
and public comments on the proposed rule. SBA also examines whether a 
size standard based on industry and other relevant data successfully 
excludes businesses that are dominant in the industry.
    The goal of SBA's size standards review is to determine whether its 
existing small business size standards reflect the current industry 
structure and Federal market conditions and revise them when the latest 
available data suggest that revisions are warranted. In the past, SBA 
compared the characteristics of each industry with the average 
characteristics of a group of industries associated with the ``anchor'' 
size standard. For example, in the first 5-year comprehensive review of 
size standards under the Jobs Act, $7.0 million (now $8.0 million due 
to the inflation adjustment in 2019; see 84 FR 34261, July 18, 2019) 
was considered the ``anchor'' for receipts-based size standards and 500 
employees was the ``anchor'' for employee-based size standards. If the 
characteristics of a specific industry under review were similar to the 
average characteristics of industries in the anchor group, SBA 
generally adopted the anchor size standard for that industry. If the 
specific industry's characteristics were significantly different from 
those in the anchor group, SBA assigned a size standard that was higher 
or lower than the anchor. To determine a size standard above or below 
the anchor size standard, SBA evaluated the characteristics of a second 
comparison group of industries with higher size standards. For 
industries with receipts-based standards, including the Retail Trade 
industries, the second comparison group consisted of industries with 
size standards between $23.0 million and $35.5 million, with the 
weighted average size standard for the group equaling $29.0 million. 
For manufacturing industries and other industries with employee-based 
size standards (except for Wholesale Trade and Retail Trade), the 
second comparison group included industries with a size standard of 
1,000 employees or 1,500 employees, with the weighted average size 
standard of 1,323 employees. Using the anchor size standard and average 
size standard for the second comparison group, SBA computed a size 
standard for an industry's characteristic (factor) based

[[Page 28015]]

on the industry's position for that factor relative to the average 
values of the same factor for industries in the anchor and second 
comparison groups.
    For Wholesale Trade and Retail Trade industries using the employee-
based size standards, SBA used a different approach. The anchor 
approach was difficult to implement in reviewing the size standards of 
industries in Wholesale Trade because all the industries in the sector 
were sharing the same 100-employee size standard. SBA used a quintile 
approach in which industries were ranked and compared using each 
industry factor based on where the factor of that industry falls within 
the five ranked quintiles. The five implied size standard levels were 
50 employees, 100 employees, 150 employees, 200 employees, and 250 
employees. If the value of an industry factor fell in the first 
quintile (i.e., less than the 20th percentile), that factor would 
support a size standard of 50 employees. If the value fell in the 
second quintile (i.e., the 20th to less than the 40th percentile), it 
would support 100 employees. Similarly, if the value falls in the fifth 
quintile (i.e., the 80th or higher percentile), the factor would 
support 250 employees. Under the ``percentile'' approach, for each 
industry factor, an industry is ranked and compared with the 20th 
percentile and 80th percentile values of that factor among the 
industries sharing the same measure of size standards (i.e., receipts 
or employees). Combining that result with the 20th percentile and 80th 
percentile values of size standards among the industries with the same 
measure of size standards, SBA computes a size standard supported by 
each industry factor for each industry. In the previous Methodology, 
comparison industry groups were predetermined independent of the data, 
while in the revised Methodology they are established using the actual 
data. A more detailed description of the percentile method is provided 
in SBA's Methodology, available at www.sba.gov/size.
    The primary factors that SBA evaluates to examine industry 
structure include average firm size, startup costs and entry barriers, 
industry competition, and distribution of firms by size. SBA also 
evaluates, as an additional primary factor, small business success in 
receiving Federal contracting assistance under the current size 
standards. Specifically, for the Federal contracting factor, SBA 
examines the small business share of Federal contract dollars relative 
to small business share of total receipts within an industry. These 
are, generally, the five most important factors SBA examines when 
establishing, reviewing, or revising a size standard for an industry. 
However, SBA will also consider and evaluate other secondary factors 
that it believes are relevant to a particular industry (such as 
technological changes, growth trends, SBA financial assistance, and 
other program factors). SBA also considers possible impacts of size 
standard revisions on eligibility for Federal small business 
assistance, current economic conditions, the Administration's policies, 
and suggestions from industry groups and Federal agencies. Public 
comments on proposed rules also provide important additional 
information. SBA thoroughly reviews all public comments before making a 
final decision on its proposed revisions to size standards. Below are 
brief descriptions of each of the five primary factors that SBA has 
evaluated for each industry being reviewed in this proposed rule. A 
more detailed description of this analysis is provided in the SBA's 
Methodology, available at www.sba.gov/size.

1. Average Firm Size

    SBA computes two measures of average firm size: Simple average and 
weighted average. For industries with receipts-based size standards, 
the simple average is the total receipts of the industry divided by the 
total number of firms in the industry. The weighted average firm size 
is the summation of all the receipts of the firms in an industry 
multiplied by their share of receipts in the industry. The simple 
average weighs all firms within an industry equally regardless of their 
size. The weighted average overcomes that limitation by giving more 
weight to larger firms. The size standard supported by average firm 
size is obtained by averaging size standards supported by simple 
average firm size and weighted average firm size.
    If the average firm size of an industry is higher than the average 
firm size for most other industries, this would generally support a 
size standard higher than the size standards for other industries. 
Conversely, if the industry's average firm size is lower than that of 
most other industries, it would provide a basis to assign a lower size 
standard as compared to size standards for most other industries.

2. Startup Costs and Entry Barriers

    Startup costs reflect a firm's initial size in an industry. New 
entrants to an industry must have sufficient capital and other assets 
to start and maintain a viable business. If firms entering an industry 
under review have greater capital requirements than firms in most other 
industries, all other factors remaining the same, this would be a basis 
for a higher size standard. Conversely, if the industry has smaller 
capital needs compared to most other industries, a lower size standard 
would be considered appropriate.
    Given the lack of actual data on startup costs and entry barriers 
by industry, SBA uses average assets as a proxy for startup costs and 
entry barriers. To calculate average assets, SBA begins with the sales 
to total assets ratio for an industry from the Risk Management 
Association's Annual Statement Studies, available at https://rmau.org. 
SBA then applies these ratios to the average receipts of firms in that 
industry obtained from the Economic Census tabulation. An industry with 
average assets that are significantly higher than most other industries 
is likely to have higher startup costs; this in turn will support a 
higher size standard. Conversely, an industry with average assets that 
are similar to or lower than most other industries is likely to have 
lower startup costs; this will support either lowering or maintaining 
the size standard.

3. Industry Competition

    Industry competition is generally measured by the share of total 
industry receipts generated by the largest firms in an industry. SBA 
generally evaluates the share of industry receipts generated by the 
four largest firms in each industry. This is referred to as the ``4-
firm concentration ratio,'' a commonly used economic measure of market 
competition. Using the 4-firm concentration ratio, SBA compares the 
degree of concentration within an industry to the degree of 
concentration of the other industries with the same measure of size 
standards. If a significantly higher share of economic activity within 
an industry is concentrated among the four largest firms compared to 
most other industries, all else being equal, SBA would set a size 
standard that is relatively higher than for most other industries. 
Conversely, if the market share of the four largest firms in an 
industry is appreciably lower than the similar share for most other 
industries, the industry will be assigned a size standard that is lower 
than those for most other industries.

4. Distribution of Firms by Size

    SBA examines the shares of industry total receipts accounted for by 
firms of different receipts and employment sizes in an industry. This 
is an additional

[[Page 28016]]

factor SBA considers in assessing competition within an industry 
besides the 4-firm concentration ratio. If the preponderance of an 
industry's economic activity is attributable to smaller firms, this 
generally indicates that small businesses are competitive in that 
industry, which would support adopting a smaller size standard. A 
higher size standard would be supported for an industry in which the 
distribution of firms indicates that most of the economic activity is 
concentrated among the larger firms.
    Concentration is a measure of inequality of distribution. To 
determine the degree of inequality of distribution in an industry, SBA 
computes the Gini coefficient, using the Lorenz curve. The Lorenz curve 
presents the cumulative percentages of units (firms) along the 
horizontal axis and the cumulative percentages of receipts (or other 
measures of size) along the vertical axis. (For further detail, see 
SBA's Methodology on its website at www.sba.gov/size.) Gini coefficient 
values vary from zero to one. If receipts are distributed equally among 
all the firms in an industry, the value of the Gini coefficient will 
equal zero. If an industry's total receipts are attributed to a single 
firm, the Gini coefficient will equal one.
    SBA compares the degree of inequality of distribution for an 
industry under review with other industries with the same type of size 
standards. If an industry shows a higher degree of inequality of 
distribution (hence, a higher Gini coefficient value) compared to most 
other industries in the group, this would, all else being equal, 
warrant a size standard that is higher than the size standards assigned 
to most other industries. Conversely, an industry with lower degree of 
inequality (i.e., a lower Gini coefficient value) than most others will 
be assigned a lower size standard relative to others.

5. Federal Contracting

    As the fifth factor, SBA examines the success small businesses are 
having in winning Federal contracts under the current size standard, as 
well as the possible impact a size standard change may have on Federal 
small business contracting opportunities. The Small Business Act 
requires the Federal Government to ensure that small businesses receive 
a ``fair proportion'' of Federal contracts. The legislative history 
also discusses the importance of size standards in Federal contracting. 
To incorporate the Federal contracting factor in the size standards 
analysis, SBA evaluates small business participation in Federal 
contracting in terms of the share of total Federal contract dollars 
awarded to small businesses relative to the small business share of the 
industry's total receipts. In general, if the share of Federal contract 
dollars awarded to small businesses in an industry is significantly 
smaller than the small business share of total industry receipts, all 
else remaining the same, a justification would exist for considering a 
size standard higher than the current size standard. In cases where 
small business share of the Federal market is already appreciably high 
relative to the small business share of the overall market, SBA 
generally assumes that the existing size standard is adequate with 
respect to the Federal contracting factor.
    The disparity between the small business Federal market share and 
industry-wide small business share may be due to various factors, such 
as extensive administrative and compliance requirements associated with 
Federal contracts, the different skill set required to perform Federal 
contracts as compared to typical commercial contracting work, and the 
size of Federal contracts. These, as well as other factors, are likely 
to influence the type of firms within an industry that compete for 
Federal contracts. By comparing the small business Federal contracting 
share with the industry-wide small business share, SBA includes in its 
size standards analysis the latest Federal market conditions. In 
addition to the impact on Federal contracting, SBA also examines 
impacts on SBA's loan programs both under the current and revised size 
standards.
    As explained above, the Federal contracting factor is not evaluated 
for Sectors 42 and 44-45, because the NAICS codes in these sectors 
cannot be used to classify Government acquisitions for supplies, and 
only the applicable manufacturing NAICS codes can be applied (13 CFR 
121.402(b)(2)).

Sources of Industry and Program Data

    SBA used a tabulation of the Economic Census from the U.S. Census 
Bureau as its primary source of industry data to evaluate industry 
characteristics and develop size standards for this proposed rule 
(www.census.gov/programs-surveys/economic-census.html). The tabulation 
based on the 2012 Economic Census was the latest available at the time 
this proposed rule was developed. The special tabulation provides 
industry data on the number of firms, number of establishments, number 
of employees, annual payroll, and annual receipts of companies by 
Industry (6-digit level), Industry Group (4-digit level), Subsector (3-
digit level), and Sector (2-digit level). These data are arrayed by 
various classes of firms' size based on the overall number of employees 
and receipts of the entire enterprise (all establishments and 
affiliated firms) from all industries. The special tabulation also 
contains information for different levels of NAICS categories on 
average and median firm size in terms of both receipts and employment, 
total receipts generated by the four and eight largest firms, the 
Herfindahl-Hirschman Index (HHI), the Gini coefficient, and size 
distributions of firms by various receipts and employment size 
groupings.
    In some cases where data were not available due to disclosure 
prohibitions in the Census Bureau's tabulation, SBA either estimated 
missing values using available relevant data or examined data at a 
higher level of industry aggregation, such as at the NAICS Sector (2-
digit), Subsector (3-digit), or Industry Group (4-digit) level. In some 
instances, SBA's analysis was based only on those factors for which 
data were available or estimates of missing values were possible.
    To evaluate some industries that are not covered by the Economic 
Census, SBA used a similar special tabulation of the latest County 
Business Patterns (CBP) published by the U.S. Census Bureau 
(www.census.gov/programs-surveys/cbp.html). Similarly, to evaluate 
industries in NAICS Sector 11 that are also not covered by the Economic 
Census and CBP, SBA evaluated a similar special tabulation based on the 
2012 Census of Agriculture (www.nass.usda.gov) from the National 
Agricultural Statistics Service (NASS). Besides the Economic Census, 
Agricultural Census and CBP tabulations, SBA also evaluates relevant 
industry data from other sources when necessary, especially for 
industries that are not covered by the Economic Census or CBP. These 
include the Quarterly Census of Employment and Wages (QCEW, also known 
as ES-202 data) (www.bls.gov/cew/) and Business Employment Dynamics 
(BED) data (www.bls.gov/bdm/) from the U.S. Bureau of Labor Statistics. 
Similarly, to evaluate certain financial industries that have asset-
based size standards, SBA examines the data from the Statistics on 
Depository Institutions (SDI) database (www5.fdic.gov/sdi/main.asp) of 
the Federal Depository Insurance Corporation (FDIC) data. Finally, to 
evaluate the capacity component of the Petroleum Refiners (NAICS 
324110) size standard, SBA evaluates the petroleum production data from 
the Energy Information Administration (www.eia.gov).

[[Page 28017]]

    To calculate average assets, SBA used sales to total assets ratios 
from the Risk Management Association's Annual eStatement Studies 
(https://rmau.org). To evaluate Federal contracting trends and evaluate 
exceptions or sub-industries under different 6-digit NAICS industries, 
SBA examined the data on Federal prime contract awards from the Federal 
Procurement Data System--Next Generation (FPDS-NG) (www.fpds.gov). To 
assess the impact on financial assistance to small businesses, SBA 
examined its internal data on 7(a) and 504 loan programs. For some 
portion of impact analysis, SBA also evaluated the data from the System 
of Award Management (SAM) (www.sam.gov).
    Data sources and estimation procedures SBA uses in its size 
standards analysis are documented in detail in SBA's Methodology, which 
is available at www.sba.gov/size.

Dominance in Field of Operation

    Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a 
small business concern as one that is: (1) Independently owned and 
operated; (2) not dominant in its field of operation; and (3) within a 
specific small business definition or size standard established by the 
SBA Administrator. SBA considers as part of its evaluation whether a 
business concern at a proposed size standard would be dominant in its 
field of operation. For this, SBA generally examines the industry's 
market share of firms at the proposed or revised size standard as well 
as the distribution of firms by size. Market share and size 
distribution may indicate whether a firm can exercise a major 
controlling influence on a national basis in an industry where a 
significant number of business concerns are engaged. If a contemplated 
size standard includes a dominant firm, SBA will consider a lower size 
standard to exclude the dominant firm from being defined as small.

Selection of Size Standards

    In the 2009 Methodology, which SBA applied to the first 5-year 
comprehensive review of size standards, SBA adopted a fixed number of 
size standards levels as part of its effort to simplify size standards. 
In response to public comments to the 2009 Methodology white paper, and 
the 2013 amendment to the Small Business Act (section 3(a)(8)) under 
section 1661 of the National Defense Authorization Act for Fiscal Year 
2013 (``NDAA 2013'') (Pub. L. 112-239, January 2, 2013), in the revised 
Methodology, SBA has relaxed the limitation on the number of small 
business size standards. Specifically, section 1661 of NDAA 2013 states 
``SBA cannot limit the number of size standards, and shall assign the 
appropriate size standard to each industry identified by NAICS.''
    In the revised Methodology, SBA calculates a separate size standard 
for each NAICS industry. However, to account for errors and limitations 
associated with various data SBA evaluates in the size standards 
analysis, SBA rounds the calculated size standard value for a receipts-
based size standard to the nearest $500,000, except for agricultural 
industries in Subsectors 111 and 112 for which the calculated size 
standards will be rounded to the nearest $250,000. Similarly, the 
calculated value for an employee-based size standard is rounded to the 
nearest 50 employees for industries in manufacturing and other sectors 
(except Wholesale Trade and Retail Trade) and to the nearest 25 
employees for industries in Wholesale Trade and Retail Trade. This 
rounding procedure is applied both in calculating a size standard for 
each of the five primary factors and in calculating the overall size 
standard for the industry.
    As a policy decision, SBA continues to maintain the minimum and 
maximum levels for both receipts and employee-based size standards. 
Accordingly, SBA will not generally propose or adopt a size standard 
that is either below the minimum level or above the maximum, even 
though the calculations yield values below the minimum or above the 
maximum. The minimum size standard reflects the size an established 
small business should be to have adequate capabilities and resources to 
be able to compete for and perform Federal contracts (but does not 
account for small businesses that are newly formed or just starting 
operations). On the other hand, the maximum size standard represents 
the level above which businesses, if qualified as small, would 
outcompete much smaller businesses when accessing Federal assistance.
    With respect to employee-based size standards, SBA has established 
250 employees and 1,500 employees, respectively, as the minimum and 
maximum size standard levels for Manufacturing and other industries 
(excluding Wholesale and Retail Trade).
    The industry data suggests that a 250 employee minimum and 1,500 
employee maximum size standards would be too high for Wholesale and 
Retail Trade industries. Accordingly, SBA has established 50 employees 
as the minimum size standard and 250 employees as the maximum size 
standard for Wholesale and Retail Trade industries.

Evaluation of Industry Factors

    As mentioned earlier, to assess the appropriateness of the current 
size standards, SBA evaluates the structure of each industry in terms 
of four economic characteristics or factors: average firm size, average 
assets size as a proxy for startup costs and entry barriers, the 4-firm 
concentration ratio as a measure of industry competition, and size 
distribution of firms using the Gini coefficient. For each size 
standard type (i.e., receipts-based or employee-based), SBA ranks 
industries both in terms of each of the four industry factors and in 
terms of the existing size standard and computes the 20th percentile 
and 80th percentile values for both. SBA then evaluates each industry 
by comparing its value for each industry factor to the 20th percentile 
and 80th percentile values for the corresponding factor for industries 
under a particular type of size standard.
    If the characteristics of an industry under review within a 
particular size standard type are similar to the average 
characteristics of industries within the same size standard type in the 
20th percentile, SBA will consider adopting as an appropriate size 
standard for that industry the 20th percentile value of size standards 
for those industries. For each size standard type, if the industry's 
characteristics are similar to the average characteristics of 
industries in the 80th percentile, SBA will assign a size standard that 
corresponds to the 80th percentile in the size standard rankings of 
industries. A separate size standard is established for each factor 
based on the amount of differences between the factor value for an 
industry under a particular size standard type and 20th percentile and 
80th percentile values for the corresponding factor for all industries 
in the same type. Specifically, the actual level of the new size 
standard for each industry factor is derived by a linear interpolation 
using the 20th percentile and 80th percentile values of that factor and 
corresponding percentiles of size standards. Each calculated size 
standard is bounded between the minimum and maximum size standards 
levels, as discussed before. As noted earlier, the calculated value for 
an employee-based size standard is rounded to the nearest 50 employees 
for industries in manufacturing and other sectors (except Wholesale 
Trade and Retail Trade) and to the nearest 25 employees for industries 
in Wholesale Trade and Retail Trade. SBA rounds the calculated size 
standard value for a receipts-based

[[Page 28018]]

size standard to the nearest $500,000, except for agricultural 
industries in Subsectors 111 and 112 for which the calculated size 
standards will be rounded to the nearest $250,000.
    Table 2, 20th and 80th Percentiles of Industry Factors for 
Receipts-Based Size Standards, and Table 3, 20th and 80th Percentiles 
of Industry Factors for Employee-Based Size Standards, show the 20th 
percentile and 80th percentile values for average firm size (simple and 
weighted), average assets size, 4-firm concentration ratio, and Gini 
coefficient for industries with receipt-based and employee-based size 
standards, respectively.

                                Table 2--20th and 80th Percentiles of Industry Factors for Receipts-Based Size Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Simple average    Weighted average                         Four-firm
                  Industries/percentiles                    receipts size ($   receipts size ($    Average assets     concentration     Gini coefficient
                                                                million)           million)       size ($ million)      ratio (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industries, excluding Subsectors 111 and 112:
    20th percentile......................................               0.83              19.42               0.34                7.9              0.686
    80th percentile......................................               7.52             830.65               5.19               42.4              0.834
Industries in Subsectors 111 and 112:
    20th percentile......................................               0.06               1.48               0.07                1.7              0.608
    80th percentile......................................               0.83              13.32               0.88               12.3              0.908
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                Table 3--20th and 80th Percentiles of Industry Factors for Employee-Based Size Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Simple average    Weighted average                         Four-firm
                  Industries/percentiles                   firm size (no. of  firm size (no. of    Average assets     concentration     Gini coefficient
                                                               employees)         employees)      size ($ million)      ratio (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturing and other industries, excluding Sectors 42
 and 44-45:
    20th percentile......................................               29.5              250.7               4.18               24.7              0.760
    80th percentile......................................              118.3            1,629.0               45.4               61.3              0.853
Industries in Sectors 42 and 44-45:
    20th percentile......................................               12.6              199.8               3.19               16.1              0.794
    80th percentile......................................               27.9            1,693.8              11.99               38.9              0.865
--------------------------------------------------------------------------------------------------------------------------------------------------------

Estimation of Size Standards Based on Industry Factors

Receipts-Based Size Standards

    An estimated size standard supported by each industry factor is 
derived by comparing its value for a specific industry to the 20th 
percentile and 80th percentile values for that factor. If an industry's 
value for a particular factor is near the 20th percentile value in the 
distribution, the supported size standard will be one that is close to 
the 20th percentile value of size standards for industries in the size 
standards group, which is $8.0 million. If a factor for an industry is 
close to the 80th percentile value of that factor, it would support a 
size standard that is close to the 80th percentile value in the 
distribution of size standards, which is $35.0 million. For a factor 
that is within, above, or below the 20-80th percentile range, the size 
standard is calculated using linear interpolation based on the 20th 
percentile and 80th percentile values for that factor and the 20th 
percentile and 80th percentile values of size standards.
    For example, if an industry's simple average receipts are $1.9 
million, that would support a size standard of $12.5 million. According 
to Table 2, the 20th percentile and 80th percentile values of average 
receipts are $0.83 million and $7.52 million, respectively. The $1.9 
million is 15.9% between the 20th percentile value ($0.83 million) and 
the 80th percentile value ($7.52 million) of simple average receipts 
(($1.9 million - $0.83 million) / ($7.52 million - $0.83 million) = 
0.159 or 15.9%). Applying this percentage to the difference between the 
20th percentile value ($8 million) and 80th percentile ($35.0 million) 
value of size standards and then adding the result to the 20th 
percentile size standard value ($8.0 million) yields a calculated size 
standard value of $12.32 million ([{$35.0 million - $8.0 million{time}  
* 0.159] + $8.0 million = $12.32 million). The final step is to round 
the calculated $12.32 million size standard to the nearest $500,000, 
which in this example yields $12.5 million. This procedure is applied 
to calculate size standards supported by other industry factors.

Employee-Based Size Standards

    An estimated size standard supported by each industry factor is 
derived by comparing its value for a specific industry to the 20th 
percentile and 80th percentile values for that factor. If an industry's 
value for a particular factor is near the 20th percentile value in the 
distribution, the supported size standard will be one that is close to 
the 20th percentile value of size standards for industries in the size 
standards group, which is 50 employees for Sector 42, Wholesale Trade 
and 2 industries from sector 44-45, Retail Trade that have employee-
based size standards. If a factor for an industry is close to the 80th 
percentile value of that factor, it would support a size standard that 
is close to the 80th percentile value in the distribution of size 
standards, which is 250 employees. For a factor that is within, above, 
or below the 20-80th percentile range, the size standard is calculated 
using linear interpolation based on the 20th percentile and 80th 
percentile values for that factor and the 20th percentile and 80th 
percentile values of size standards.
    For example, if an industry's simple average firm size in number of 
employees is 19 employees, that would support a size standard of 125 
employees. According to Table 3, the 20th percentile and 80th 
percentile values of average number of employees are 12.6 and 27.9 
employees, respectively. The 19 employee average firm size is 41.8% 
between the 20th percentile value (12.6 employees) and

[[Page 28019]]

the 80th percentile value (27.9 employees) of simple average firm size 
in number of employees ((19 employees - 12.6 employees) / (250 
employees - 50 employees) = 0.4183 or 41.8%). Applying this percentage 
to the difference between the 20th percentile value (50 employees) and 
80th percentile (250 employees) value of size standards and then adding 
the result to the 20th percentile size standard value (50 employees) 
yields a calculated size standard value of 125 employees ([{250 
employees - 50 employees{time}  * 0.4183] + 50 employees = 134 
employees). The final step is to round the calculated 134 employee size 
standard to the nearest 25 employees, which in this example yields 125 
employees. This procedure is applied to calculate size standards 
supported by other industry factors. Detailed formulas involved in 
these calculations are presented in SBA's Methodology, which is 
available on its website at www.sba.gov/size.

Derivation of Size Standards Based on Federal Contracting Factor

    Besides industry structure, SBA also evaluates Federal contracting 
data to assess the success of small businesses in getting Federal 
contracts under the existing size standards. For each industry with 
$20.0 million or more in annual Federal contract dollars, SBA evaluates 
the small business share of total Federal contract dollars relative to 
the small business share of total industry receipts. However, since 
NAICS codes in the Wholesale Trade and Retail Trade sectors cannot be 
used to classify Government acquisitions for supplies, and only the 
applicable manufacturing code can be applied, the Federal contracting 
factor is not considered in evaluating industry-based size standards 
for these sectors (13 CFR 121.402(b)). For a detail explanation of the 
evaluation of the Federal Contracting Factor, see the SBA Methodology 
at www.sba.gov/size.
    The SBA's Methodology presented above results in five separate size 
standards based on evaluation of the five primary factors (i.e., four 
industry factors and one Federal contracting factor). As discussed in 
more detail above, the Federal contracting factor is not considered in 
evaluating the Wholesale Trade and Retail Trade sectors. SBA typically 
derives an industry's overall size standard by assigning equal weights 
to size standards supported by each of these five factors. However, if 
necessary, SBA's Methodology would allow assigning different weights to 
some of these factors in response to its policy decisions and other 
considerations. For detailed calculations, see SBA's Methodology, 
available on its website at www.sba.gov/size.

Calculated Size Standards Based on Industry Factors

    Table 5 and Table 6 below, Size Standards Supported by Each Factor 
for Each Industry (Employees) and Size Standards Supported by Each 
Factor for Each Industry (Receipts), show the results of analyses of 
industry by measure of size for each industry covered by this proposed 
rule. NAICS industries in columns 3, 4, 5, 6 and 7 show two numbers. 
The upper number is the value for the industry factor on the top of the 
column and the lower number is the size standard supported by that 
factor (number of employees in Table 5 and receipts in Table 6). Column 
8 shows a calculated new size standard for each industry. This is the 
average of the size standards supported by each factor (the size 
standard for average firm size is an average of size standards 
supported by simple average firm size, and weighted average firm size), 
rounded to the nearest 25 employees for industries using employee-based 
size standards in Wholesale Trade and Retail Trade, and to the nearest 
$500,000 for industries in retail trade using receipts-based size 
standards. Analytical details involved in the averaging procedure are 
described in SBA's Methodology, which is available on its website at 
www.sba.gov/size. For comparison with the calculated new size 
standards, the current size standards are in column 9 of Table 5 and 
Table 6.

                                     Table 5--Size Standards Supported by Each Factor for Each Industry (Employees)
                        [For Columns 3-7: Upper value = Calculated factor; Lower value = size standard supported by that factor]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Simple      Weighted                                           Calculated    Current
                                                                 average      average      Average                                  size         size
   NAICS code NAICS industry title              Type            firm size    firm size   assets size   Four-firm       Gini       standard     standard
                                                                (number of   (number of  ($ million)   ratio (%)   coefficient   (number of   (number of
                                                                employees)   employees)                                          employees)   employees)
(1)                                   (2)....................          (3)          (4)          (5)          (6)          (7)          (9)         (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
423110 Automobile and Other Motor     Factor.................         21.4        657.2         37.1         47.4        0.883          225          250
 Vehicle Merchant Wholesalers.        Size Std...............          175          100          250          250          250
423120 Motor Vehicle Supplies and     Factor.................         21.5        749.6          7.8         19.4        0.847          150          200
 New Parts Merchant Wholesalers.      Size Std...............          175          125          150           75          200
423130 Tire and Tube Merchant         Factor.................         28.2        580.6          9.5         24.8        0.828          175          200
 Wholesalers.                         Size Std...............          250          100          200          125          150
423140 Motor Vehicle Parts (Used)     Factor.................          9.9        767.5          1.0         39.3        0.759          125          100
 Merchant Wholesalers.                Size Std...............           50          125           50          250           50
423210 Furniture Merchant             Factor.................         12.0        103.0          2.3         16.1        0.798           50          100
 Wholesalers.                         Size Std...............           50           50           50           50           75
423220 Home Furnishing Merchant       Factor.................         14.1        225.1          3.8         17.7        0.794           75          100
 Wholesalers.                         Size Std...............           75           50           75           75           50
423310 Lumber, Plywood, Millwork,     Factor.................         18.8        396.0          4.3         13.0        0.802           75          150
 and Wood Panel Merchant Wholesalers. Size Std...............          125           75           75           50           75

[[Page 28020]]

 
423320 Brick, Stone, and Related      Factor.................         12.7        220.9          4.7         30.1        0.815          100          150
 Construction Material Merchant       Size Std...............           50           50           75          175          100
 Wholesalers.
423330 Roofing, Siding, and           Factor.................         32.6       1403.0         11.5         46.6        0.847          225          200
 Insulation Material Merchant         Size Std...............          250          200          250          250          200
 Wholesalers.
423390 Other Construction Material    Factor.................         14.9        168.2          2.4         18.5        0.749           75          100
 Merchant Wholesalers.                Size Std...............           75           50           50           75           50
423410 Photographic Equipment and     Factor.................         17.8        399.7          6.2         56.1        0.832          150          200
 Supplies Merchant Wholesalers.       Size Std...............          125           75          125          250          150
423420 Office Equipment Merchant      Factor.................         49.4      10864.6          5.2         49.2        0.849          200          200
 Wholesalers.                         Size Std...............          250          250          100          250          200
423430 Computer and Computer          Factor.................         31.0       4333.1         10.1         31.9        0.872          225          250
 Peripheral Equipment and Software    Size Std...............          250          250          200          200          250
 Merchant Wholesalers.
423440 Other Commercial Equipment     Factor.................         12.8        164.2          2.2         12.4        0.775           50          100
 Merchant Wholesalers.                Size Std...............           50           50           50           50           50
423450 Medical, Dental, and Hospital  Factor.................         26.9       2500.2          8.4         22.6        0.873          200          200
 Equipment and Supplies Merchant      Size Std...............          225          250          175          100          250
 Wholesalers.
423460 Ophthalmic Goods Merchant      Factor.................         24.3       1532.8          4.0         35.0        0.839          175          150
 Wholesalers.                         Size Std...............          200          225           75          225          175
423490 Other Professional Equipment   Factor.................         17.0        417.9          3.5         36.7        0.823          125          150
 and Supplies Merchant Wholesalers.   Size Std...............          100           75           50          225          125
423510 Metal Service Centers and      Factor.................         19.7        653.7         12.0         15.9        0.842          150          200
 Other Metal Merchant Wholesalers.    Size Std...............          150          100          250           50          175
423520 Coal and Other Mineral and     Factor.................          8.5         64.6         27.0         58.9        0.866          200          100
 Ore Merchant Wholesalers.            Size Std...............           50           50          250          250          250
423610 Electrical Apparatus and       Factor.................         20.7       1693.8          5.5         16.1        0.836          125          200
 Equipment, Wiring Supplies, and      Size Std...............          150          250          100           50          175
 Related Equipment Merchant
 Wholesalers.
423620 Household Appliances,          Factor.................         20.8        442.3         14.4         36.0        0.870          225          200
 Electric Housewares, and Consumer    Size Std...............          150           75          250          225          250
 Electronics Merchant Wholesalers.
423690 Other Electronic Parts and     Factor.................         31.5       6181.3         11.4         32.8        0.871          225          250
 Equipment Merchant Wholesalers.      Size Std...............          250          250          225          200          250
423710 Hardware Merchant Wholesalers  Factor.................         15.9        425.2          3.6         19.8        0.812           75          150
                                      Size Std...............          100           75           50           75          100
423720 Plumbing and Heating           Factor.................         24.2       2136.3          5.6         32.6        0.811          150          200
 Equipment and Supplies (Hydronics)   Size Std...............          200          250          100          200          100
 Merchant Wholesalers.

[[Page 28021]]

 
423730 Warm Air Heating and Air-      Factor.................         28.3       1400.6          6.4         39.2        0.821          175          150
 Conditioning Equipment and Supplies  Size Std...............          250          200          125          250          125
 Merchant Wholesalers.
423740 Refrigeration Equipment and    Factor.................         18.5        431.0          3.7         29.5        0.790          100          100
 Supplies Merchant Wholesalers.       Size Std...............          125           75           50          175           50
423810 Construction and Mining        Factor.................         30.4        603.3         18.2         32.7        0.840          200          250
 (except Oil Well) Machinery and      Size Std...............          250          100          250          200          175
 Equipment Merchant Wholesalers.
423820 Farm and Garden Machinery and  Factor.................         19.0        168.8          8.3         22.6        0.794          100          100
 Equipment Merchant Wholesalers.      Size Std...............          125           50          175          100           50
423830 Industrial Machinery and       Factor.................         15.1        498.3          4.1         10.8        0.795           75          100
 Equipment Merchant Wholesalers.      Size Std...............           75          100           75           50           50
423840 Industrial Supplies Merchant   Factor.................         17.6        654.3          5.1         18.5        0.805          100          100
 Wholesalers.                         Size Std...............          125          100          100           75           75
423850 Service Establishment          Factor.................         14.9        885.3          1.9         27.9        0.789          100          100
 Equipment and Supplies Merchant      Size Std...............           75          150           50          150           50
 Wholesalers.
423860 Transportation Equipment and   Factor.................         17.2        223.1         10.4         34.9        0.829          175          150
 Supplies (except Motor Vehicle)      Size Std...............          100           50          225          225          150
 Merchant Wholesalers.
423910 Sporting and Recreational      Factor.................         10.9        199.8          3.1         11.0        0.806           50          100
 Goods and Supplies Merchant          Size Std...............           50           50           50           50           75
 Wholesalers.
423920 Toy and Hobby Goods and        Factor.................         16.2        559.8          6.2         37.8        0.841          175          150
 Supplies Merchant Wholesalers.       Size Std...............          100          100          125          250          175
423930 Recyclable Material Merchant   Factor.................         16.0        291.3          4.5         19.9        0.816          100          100
 Wholesalers.                         Size Std...............          100           50           75           75          125
423940 Jewelry, Watch, Precious       Factor.................          7.1        183.5          4.0         27.4        0.817          100          100
 Stone, and Precious Metal Merchant   Size Std...............           50           50           75          150          125
 Wholesalers.
423990 Other Miscellaneous Durable    Factor.................          9.5        273.5          1.9         16.8        0.805           50          100
 Goods Merchant Wholesalers.          Size Std...............           50           50           50           50           75
424110 Printing and Writing Paper     Factor.................         22.4        589.6         12.5         42.5        0.876          225          200
 Merchant Wholesalers.                Size Std...............          175          100          250          250          250
424120 Stationery and Office          Factor.................         18.6       2997.2          3.1         29.5        0.845          150          150
 Supplies Merchant Wholesalers.       Size Std...............          125          250           50          175          200
424130 Industrial and Personal        Factor.................         16.4        267.5          5.3         29.7        0.832          125          150
 Service Paper Merchant Wholesalers.  Size Std...............          100           50          100          175          150
424210 Drugs and Druggists' Sundries  Factor.................         44.8       3002.2         36.8         43.5        0.890          250          250
 Merchant Wholesalers.                Size Std...............          250          250          250          250          250

[[Page 28022]]

 
424310 Piece Goods, Notions, and      Factor.................          9.0         83.8          2.3         15.4        0.775           50          100
 Other Dry Goods Merchant             Size Std...............           50           50           50           50           50
 Wholesalers.
424320 Men's and Boys' Clothing and   Factor.................         15.7        281.1          5.8         21.3        0.836          125          150
 Furnishings Merchant Wholesalers.    Size Std...............          100           50          100          100          175
424330 Women's, Children's, and       Factor.................         12.4        182.2          3.4         15.9        0.814           75          100
 Infants' Clothing and Accessories    Size Std...............           50           50           50           50          100
 Merchant Wholesalers.
424340 Footwear Merchant Wholesalers  Factor.................         17.8        439.7          9.6         41.0        0.849          200          200
                                      Size Std...............          125           75          200          250          200
424410 General Line Grocery Merchant  Factor.................         62.9       9786.9         16.6         38.2        0.883          250          250
 Wholesalers.                         Size Std...............          250          250          250          250          250
424420 Packaged Frozen Food Merchant  Factor.................         27.5        871.9          8.3         21.4        0.822          150          200
 Wholesalers.                         Size Std...............          250          150          175          100          125
424430 Dairy Product (except Dried    Factor.................         27.9        952.2          8.7         28.4        0.862          200          200
 or Canned) Merchant Wholesalers.     Size Std...............          250          150          175          150          250
424440 Poultry and Poultry Product    Factor.................         24.5        334.4          4.9         26.5        0.783          125          150
 Merchant Wholesalers.                Size Std...............          200           75          100          150           50
424450 Confectionery Merchant         Factor.................         30.5      11213.6          7.7         60.3        0.873          225          200
 Wholesalers.                         Size Std...............          250          250          150          250          250
424460 Fish and Seafood Merchant      Factor.................         11.2         90.0          2.0         10.9        0.725           50          100
 Wholesalers.                         Size Std...............           50           50           50           50           50
424470 Meat and Meat Product          Factor.................         19.9        271.3          4.3         22.7        0.813          100          150
 Merchant Wholesalers.                Size Std...............          150           50           75          100          100
424480 Fresh Fruit and Vegetable      Factor.................         24.0        293.2          3.2         12.2        0.767           75          100
 Merchant Wholesalers.                Size Std...............          200           75           50           50           50
424490 Other Grocery and Related      Factor.................         27.7       7804.5          8.9         25.8        0.874          200          250
 Products Merchant Wholesalers.       Size Std...............          250          250          175          125          250
424510 Grain and Field Bean Merchant  Factor.................         21.8        375.0         42.3         31.6        0.831          175          200
 Wholesalers.                         Size Std...............          175           75          250          175          150
424520 Livestock Merchant             Factor.................          7.9         31.8          4.4         21.5        0.817          100          100
 Wholesalers.                         Size Std...............           50           50           75          100          125
424590 Other Farm Product Raw         Factor.................          9.6         54.3         10.2         35.0        0.857          175          100
 Material Merchant Wholesalers.       Size Std...............           50           50          200          225          225
424610 Plastics Materials and Basic   Factor.................         12.6        117.2          5.9         26.4        0.825          125          150
 Forms and Shapes Merchant            Size Std...............           50           50          100          150          150
 Wholesalers.
424690 Other Chemical and Allied      Factor.................         18.6       1443.2          9.9         13.7        0.857          175          150
 Products Merchant Wholesalers.       Size Std...............          125          225          200           50          225
424710 Petroleum Bulk Stations and    Factor.................         26.1        425.6         58.6         38.9        0.865          225          200
 Terminals.                           Size Std...............          225           75          250          250          250
424720 Petroleum and Petroleum        Factor.................         15.4        253.7         49.9         33.6        0.881          200          200
 Products Merchant Wholesalers        Size Std...............           75           50          250          200          250
 (except Bulk Stations and
 Terminals).
424810 Beer and Ale Merchant          Factor.................         70.4        498.2         14.7         14.5        0.733          125          200
 Wholesalers.                         Size Std...............          250          100          250           50           50

[[Page 28023]]

 
424820 Wine and Distilled Alcoholic   Factor.................         40.9       3125.0         15.2         31.7        0.872          225          250
 Beverage Merchant Wholesalers.       Size Std...............          250          250          250          175          250
424910 Farm Supplies Merchant         Factor.................         20.2       1343.1         15.0         20.3        0.838          175          200
 Wholesalers.                         Size Std...............          150          200          250           75          175
424920 Book, Periodical, and          Factor.................         24.8       1541.6          4.7         41.9        0.868          200          200
 Newspaper Merchant Wholesalers.      Size Std...............          200          225           75          250          250
424930 Flower, Nursery Stock, and     Factor.................         14.9        200.8          1.2          9.2        0.749           50          100
 Florists' Supplies Merchant          Size Std...............           75           50           50           50           50
 Wholesalers.
424940 Tobacco and Tobacco Product    Factor.................         41.4       2419.0         11.6         55.4        0.859          250          250
 Merchant Wholesalers.                Size Std...............          250          250          250          250          225
424950 Paint, Varnish, and Supplies   Factor.................         16.7        359.6          5.4         41.0        0.829          150          150
 Merchant Wholesalers.                Size Std...............          100           75          100          250          150
424990 Other Miscellaneous            Factor.................          7.2         92.2          1.4         14.4        0.799           50          100
 Nondurable Goods Merchant            Size Std...............           50           50           50           50           75
 Wholesalers.
425110 Business to Business           Factor.................          3.8         20.1          3.0         33.7        0.792          100          100
 Electronic Markets.                  Size Std...............           50           50           50          200           50
425120 Wholesale Trade Agents and     Factor.................          6.9       5713.0          4.3         24.9        0.834          125          100
 Brokers.                             Size Std...............           50          250           75          125          150
441110 New Car Dealers..............  Factor.................         54.5        870.2         12.1          5.8        0.632          150          200
                                      Size Std...............          250          150          250           50           50
454310 Fuel Dealers.................  Factor.................         14.8       1890.5          2.1         17.4        0.723           75          100
                                      Size Std...............           75          250           50           50           50
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                      Table 6--Size Standards Supported by Each Factor for Each Industry (Receipts)
                        [For columns 3-7: Upper value = Calculated factor; Lower value = size standard supported by that factor]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Simple      Weighted                                           Calculated    Current
                                                                 average      average      Average     Four-firm       Gini         size         size
   NAICS code NAICS industry title              Type            firm size    firm size   assets size   ratio (%)   coefficient  standard ($  standard ($
                                                               ($ million)  ($ million)  ($ million)                              million)     million)
(1)                                   (2)....................          (3)          (4)          (5)          (6)          (7)          (9)         (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
441120 Used Car Dealers.............  Factor.................          3.0      1,604.2          0.8         18.0        0.704  ...........  ...........
                                      Size Std...............         16.5         41.5         10.5         16.0         11.5         17.0         27.0
441210 Recreational Vehicle Dealers.  Factor.................          6.4        219.3          2.8         18.8        0.724  ...........  ...........
                                      Size Std...............         30.5         14.5         21.5         16.5         15.0         19.0         35.0
441222 Boat Dealers.................  Factor.................          2.7         79.2          1.3         14.4        0.677  ...........  ...........
                                      Size Std...............         15.5         10.0         13.0         13.0          6.5         11.5         35.0
441228 Motorcycle, ATV, and All       Factor.................          3.4         25.8          1.5          4.4        0.656  ...........  ...........
 Other Motor Vehicle Dealers.         Size Std...............         18.5          8.0         14.5          6.0          6.0         10.0         35.0
441310 Automotive Parts and           Factor.................          2.7      2,949.6          1.0         45.1        0.767  ...........  ...........
 Accessories Stores.                  Size Std...............         15.5         41.5         12.0         37.0         22.5         25.0         16.5
441320 Tire Dealers.................  Factor.................          3.0      1,312.0          1.0         33.7        0.759  ...........  ...........
                                      Size Std...............         16.5         41.5         11.5         28.0         21.5         22.5         16.5
442110 Furniture Stores.............  Factor.................          3.3        631.2          1.2         17.3        0.774  ...........  ...........
                                      Size Std...............         18.0         28.5         13.0         15.5         24.0         19.0         22.0
442210 Floor Covering Stores........  Factor.................          1.5         18.1          0.4          4.7        0.616  ...........  ...........
                                      Size Std...............         10.5          8.0          8.5          6.0          6.0          7.5          8.0
442291 Window Treatment Stores......  Factor.................          0.6         17.2          0.2         21.7        0.621  ...........  ...........
                                      Size Std...............          7.0          8.0          7.5         19.0          6.0         10.0          8.0
442299 All Other Home Furnishings     Factor.................          2.9      3,614.3          1.1         59.8        0.836  ...........  ...........
 Stores.                              Size Std...............         16.0         41.5         12.0         41.5         35.5         29.5         22.0

[[Page 28024]]

 
443141 Household Appliance Stores...  Factor.................          2.5        513.0          0.8         28.2        0.767  ...........  ...........
                                      Size Std...............         14.5         24.5         10.5         24.0         23.0         19.5         12.0
443142 Electronics Stores...........  Factor.................          4.4     15,362.2          1.3         63.8        0.854  ...........  ...........
                                      Size Std...............         22.5         41.5         13.0         41.5         38.5         31.5         35.0
444110 Home Centers.................  Factor.................         61.9  ...........         23.8  ...........  ...........  ...........  ...........
                                      Size Std...............         41.5  ...........         41.5  ...........  ...........         41.5         41.5
444120 Paint and Wallpaper Stores...  Factor.................          5.1  ...........          1.8  ...........  ...........  ...........  ...........
                                      Size Std...............         25.5  ...........         16.0  ...........  ...........         21.0         30.0
444130 Hardware Stores..............  Factor.................          1.9        493.3          0.9         25.9        0.674  ...........  ...........
                                      Size Std...............         12.5         24.0         11.0         22.0          6.0         14.5          8.0
444190 Other Building Material        Factor.................          3.3        271.8          1.1          9.1        0.729  ...........  ...........
 Dealers.                             Size Std...............         18.0         16.5         12.5          9.0         16.0         14.0         22.0
444210 Outdoor Power Equipment        Factor.................          1.5         17.9          0.7          8.2        0.612  ...........  ...........
 Stores.                              Size Std...............         11.0          8.0         10.0          8.0          6.0          8.5          8.0
444220 Nursery, Garden Center, and    Factor.................          3.0        755.2          1.2         21.6        0.749  ...........  ...........
 Farm Supply Stores.                  Size Std...............         17.0         32.5         12.5         18.5         19.5         19.0         12.0
445110 Supermarkets and Other         Factor.................         12.7     20,298.0          2.5         31.1        0.863  ...........  ...........
 Grocery (except Convenience) Stores. Size Std...............         41.5         41.5         20.0         26.0         40.0         32.0         35.0
445120 Convenience Stores...........  Factor.................          1.0        126.3          0.2         12.5        0.606  ...........  ...........
                                      Size Std...............          8.5         11.5          7.0         11.5          6.0          8.5         32.0
445210 Meat Markets.................  Factor.................          1.2          9.2          0.3          5.5        0.583  ...........  ...........
                                      Size Std...............          9.5          7.5          7.5          6.0          6.0          7.0          8.0
445220 Fish and Seafood Markets.....  Factor.................          1.1          6.0          0.3          5.8        0.622  ...........  ...........
                                      Size Std...............          9.0          7.5          7.5          6.5          6.0          7.0          8.0
445230 Fruit and Vegetable Markets..  Factor.................          1.3         13.0          0.2          7.9        0.677  ...........  ...........
                                      Size Std...............         10.0          8.0          7.0          8.0          6.5          7.5          8.0
445291 Baked Goods Stores...........  Factor.................          0.6         83.7          0.2         35.8        0.694  ...........  ...........
                                      Size Std...............          7.0         10.0          7.0         30.0          9.5         14.0          8.0
445292 Confectionery and Nut Stores.  Factor.................          0.9        104.7          0.3         37.6        0.741  ...........  ...........
                                      Size Std...............          8.5         11.0          8.0         31.0         18.0         17.0          8.0
445299 All Other Specialty Food       Factor.................          0.7         23.8          0.2         15.6        0.659  ...........  ...........
 Stores.                              Size Std...............          7.5          8.0          7.5         14.0          6.0          9.0          8.0
445310 Beer, Wine, and Liquor Stores  Factor.................          1.5        163.9          0.5         10.1        0.607  ...........  ...........
                                      Size Std...............         10.5         13.0          8.5          9.5          6.0          9.0          8.0
446110 Pharmacies and Drug Stores...  Factor.................         12.1     41,475.3          2.5         69.5        0.797  ...........  ...........
                                      Size Std...............         41.5         41.5         19.5         41.5         28.5         33.0         30.0
446120 Cosmetics, Beauty Supplies,    Factor.................          2.1      1,347.4          0.8         56.3        0.817  ...........  ...........
 and Perfume Stores.                  Size Std...............         13.0         41.5         10.5         41.5         32.0         28.0         30.0
446130 Optical Goods Stores.........  Factor.................          2.0      1,672.9          0.6         57.2        0.780  ...........  ...........
                                      Size Std...............         13.0         41.5          9.5         41.5         25.0         26.0         22.0
446191 Food (Health) Supplement       Factor.................          1.2        518.0          0.4         45.0        0.734  ...........  ...........
 Stores.                              Size Std...............          9.5         24.5          8.0         37.0         17.0         20.0         16.5
446199 All Other Health and Personal  Factor.................          1.4         28.4          0.5          7.6        0.681  ...........  ...........
 Care Stores.                         Size Std...............         10.5          8.5          8.5          8.0          7.0          8.5          8.0
447110 Gasoline Stations with         Factor.................          7.7      3,327.0          1.5         13.2        0.746  ...........  ...........
 Convenience Stores.                  Size Std...............         36.0         41.5         14.5         12.0         19.0         21.0         32.0
447190 Other Gasoline Stations......  Factor.................         10.5      7,328.2          2.2         38.7        0.784  ...........  ...........
                                      Size Std...............         41.5         41.5         18.0         32.0         26.0         29.5         16.5
448110 Men's Clothing Stores........  Factor.................          2.0        495.9          0.9         42.4        0.780  ...........  ...........
                                      Size Std...............         13.0         24.0         11.0         35.0         25.0         22.5         12.0
448120 Women's Clothing Stores......  Factor.................          3.2      1,087.6          1.2         25.8        0.839  ...........  ...........
                                      Size Std...............         17.5         41.5         12.5         22.0         36.0         25.0         30.0
448130 Children's and Infants'        Factor.................          4.4      1,116.2          1.7         61.1        0.871  ...........  ...........
 Clothing Stores.                     Size Std...............         22.5         41.5         15.5         41.5         41.5         32.5         35.0
448140 Family Clothing Stores.......  Factor.................         12.8      6,648.7          5.1         49.6        0.882  ...........  ...........
                                      Size Std...............         41.5         41.5         34.5         40.5         41.5         39.5         41.5
448150 Clothing Accessories Stores..  Factor.................          2.3      1,314.2          1.0         58.3        0.840  ...........  ...........
                                      Size Std...............         14.0         41.5         11.5         41.5         36.0         29.5         16.5
448190 Other Clothing Stores........  Factor.................          2.0      1,894.8          0.8         51.3        0.806  ...........  ...........
                                      Size Std...............         12.5         41.5         10.5         41.5         30.0         27.5         22.0

[[Page 28025]]

 
448210 Shoe Stores..................  Factor.................          5.2      1,301.1          2.2         34.3        0.841  ...........  ...........
                                      Size Std...............         25.5         41.5         18.0         28.5         36.5         29.0         30.0
448310 Jewelry Stores...............  Factor.................          1.7        580.1          1.0         24.0        0.752  ...........  ...........
                                      Size Std...............         11.5         26.5         12.0         20.5         20.0         18.0         16.5
448320 Luggage and Leather Goods      Factor.................          5.0        983.0          3.1         75.0        0.848  ...........  ...........
 Stores.                              Size Std...............         24.5         40.0         23.0         41.5         37.5         33.5         30.0
451110 Sporting Goods Stores........  Factor.................          2.5      1,481.1          1.0         32.6        0.782  ...........  ...........
                                      Size Std...............         15.0         41.5         12.0         27.5         25.5         23.5         16.5
451120 Hobby, Toy, and Game Stores..  Factor.................          3.5      3,091.1          1.4         77.4        0.851  ...........  ...........
                                      Size Std...............         18.5         41.5         14.0         41.5         38.0         31.0         30.0
451130 Sewing, Needlework, and Piece  Factor.................          1.1      1,257.0          0.5  ...........        0.776  ...........  ...........
 Goods Stores.                        Size Std...............          9.0         41.5          8.5  ...........         24.5         19.5         30.0
451140 Musical Instrument and         Factor.................          1.4        536.2          0.7         41.8        0.734  ...........  ...........
 Supplies Stores.                     Size Std...............         10.5         25.0         10.0         34.5         17.0         20.0         12.0
451211 Book Stores..................  Factor.................          3.9      3,005.3          1.6         69.7        0.853  ...........  ...........
                                      Size Std...............         20.5         41.5         14.5         41.5         38.5         31.5         30.0
451212 News Dealers and Newsstands..  Factor.................          1.0        242.4          0.4         57.3        0.742  ...........  ...........
                                      Size Std...............          8.5         15.5          8.5         41.5         18.0         20.0          8.0
452210 Department Stores............  Factor.................     11,030.9     25,982.4      5,014.0         82.7        0.555  ...........  ...........
                                      Size Std...............         41.5         41.5         41.5         41.5          6.0         32.5         35.0
452311 Warehouse Clubs and            Factor.................     44,853.1    210,447.9     15,466.6         93.6  ...........  ...........  ...........
 Supercenters.                        Size Std...............         41.5         41.5         41.5         41.5  ...........         41.5         32.0
452319 All Other General Merchandise  Factor.................          7.1      7,543.1          2.4         66.1        0.876  ...........  ...........
 Stores.                              Size Std...............         33.0         41.5         19.5         41.5         41.5         35.0         35.0
453110 Florists.....................  Factor.................          0.3          1.5          0.1          1.6        0.527  ...........  ...........
                                      Size Std...............          6.0          7.5          6.5          6.0          6.0          6.5          8.0
453210 Office Supplies and            Factor.................          5.0      4,645.9          1.4         85.1        0.862  ...........  ...........
 Stationery Stores.                   Size Std...............         24.5         41.5         14.0         41.5         40.0         32.0         35.0
453220 Gift, Novelty, and Souvenir    Factor.................          0.8        165.7          0.3         18.8        0.713  ...........  ...........
 Stores.                              Size Std...............          8.0         13.0          8.0         16.5         13.0         12.0          8.0
453310 Used Merchandise Stores......  Factor.................          0.9         73.6          0.4         12.7        0.756  ...........  ...........
                                      Size Std...............          8.5         10.0          8.5         11.5         21.0         12.5          8.0
453910 Pet and Pet Supplies Stores..  Factor.................          2.8      3,479.3          0.8         69.0        0.814  ...........  ...........
                                      Size Std...............         16.0         41.5         10.5         41.5         31.0         28.0         22.0
453920 Art Dealers..................  Factor.................          1.4         55.3          0.7         14.4        0.779  ...........  ...........
                                      Size Std...............         10.0          9.0         10.0         13.0         25.0         14.5          8.0
453930 Manufactured (Mobile) Home     Factor.................          2.4        235.3          1.4         31.4        0.696  ...........  ...........
 Dealers.                             Size Std...............         14.5         15.0         14.0         26.5         10.0         16.5         16.5
453991 Tobacco Stores...............  Factor.................          1.2         17.1          0.4          5.7        0.656  ...........  ...........
                                      Size Std...............          9.5          8.0          8.0          6.5          6.0          7.5          8.0
453998 All Other Miscellaneous Store  Factor.................          1.2         55.7          0.4         10.1        0.712  ...........  ...........
 Retailers (except Tobacco Stores).   Size Std...............          9.5          9.0          8.5          9.5         13.0         10.0          8.0
454110 Electronic Shopping and Mail-  Factor.................         11.4      9,493.0          3.3         30.2        0.868  ...........  ...........
 Order Houses.                        Size Std...............         41.5         41.5         24.5         25.5         41.0         33.0         41.5
454210 Vending Machine Operators....  Factor.................          1.6        254.9          0.6         28.2        0.787  ...........  ...........
                                      Size Std...............         11.0         16.0          9.5         24.0         26.5         18.5         12.0
454390 Other Direct Selling           Factor.................          1.1        202.5          0.4         15.1        0.749  ...........  ...........
 Establishments.                      Size Std...............          9.0         14.0          8.0         13.5         19.5         13.0          8.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

Summary of Calculated Size Standards

    Of the 137 industries reviewed in this proposed rule, the results 
from analyses of the latest available data on the four primary industry 
factors (i.e., average firm size, average assets size, four-firm ratio, 
and Gini coefficient) from Table 5 and Table 6 above support increasing 
size standards for 49 industries, decreasing size standards for 66 
industries, and maintaining size standards for 22 industries. Table 7, 
Summary of Calculated Size Standards, summarizes these results by NAICS 
sector.

[[Page 28026]]



                                  Table 7--Summary of Calculated Size Standards
----------------------------------------------------------------------------------------------------------------
                                                  Number of size  Number of size  Number of size  Number of size
            Sector                 Sector name       standards       standards       standards       standards
                                                     reviewed        increased       decreased      maintained
----------------------------------------------------------------------------------------------------------------
42............................  Wholesale Trade.              71              14              38              19
44-45.........................  Retail Trade....              66              35              28               3
                                                 ---------------------------------------------------------------
    Total.....................  ................             137              49              66              22
----------------------------------------------------------------------------------------------------------------

Evaluation of SBA Loan Data

    Before proposing or deciding on an industry's size standard 
revision, SBA also considers the impact of size standards revisions on 
SBA's loan programs. Accordingly, SBA examined its internal 7(a) and 
504 loan data for fiscal years 2016-2018 to assess whether the 
calculated size standards in Table 5 and Table 6 need further 
adjustments to ensure credit opportunities for small businesses through 
those programs. For the industries reviewed in this rule, the data 
shows that it is mostly businesses much smaller than the current or 
proposed size standards that receive SBA's 7(a) and 504 loans. For 
example, for industries covered by this rule, more than 96.9% of 7(a) 
and 504 loans in fiscal years 2016-2018 went to businesses below the 
current or proposed size standards.

Special Considerations

    On March 13, 2020, the ongoing Coronavirus Disease 2019 (COVID-19) 
was declared a pandemic of enough severity and magnitude to warrant an 
emergency declaration for all states, territories, and the District of 
Columbia. With the COVID-19 emergency, many small businesses nationwide 
are experiencing economic hardship as a direct result of the Federal, 
State, and local public health measures that are being taken to 
minimize the public's exposure to the virus. In addition, based on the 
advice of public health officials, other measures, such as keeping a 
safe distance from others or even stay-at-home orders, are being 
implemented, resulting in a dramatic decrease in economic activity as 
the public avoids malls, retail stores, and other businesses.
    The Coronavirus Aid, Relief, and Economic Security Act (the CARES 
Act or the Act) (Pub. L. 116-136) was signed on March 27, 2020, to 
provide emergency assistance and health care response for individuals, 
families, and businesses affected by the coronavirus pandemic. Section 
1102 of the Act temporarily permits SBA to guarantee 100% of 7(a) loans 
under a new program titled the Paycheck Protection Program (PPP). 
Section 1106 of the Act provides for forgiveness of up to the full 
principal amount of qualifying loans guaranteed under the PPP. The PPP 
and loan forgiveness are intended to provide economic relief to small 
businesses nationwide adversely impacted by COVID-19. On April 24, 
2020, additional funding for the CARES Act, including for the PPP, was 
provided (see The Paycheck Protection Program and Health Care 
Enhancement Act, Pub. L. 116-139). On December 27, 2020, Congress 
passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and 
Venues Act as part of the Consolidation Appropriations Act, approving 
additional funding for the PPP loans program and allowing the hardest-
hit small businesses to receive a second draw PPP loan (Pub. L. 116-
260). Additionally, the law approved grants for shuttered-venue 
operators. On March 11, 2021, the American Rescue Plan Act of 2021 
(Pub. L. 117-2) was signed into law. This act provides additional 
relief for the nation's small businesses and hard-hit industries by 
adding new support to the recovery effort, including additional funding 
for the Paycheck Protection Program and the Shuttered Venue Operators 
Grant program. The act also adds additional funding for targeted 
Economic Injury Disaster Loan (EIDL) Advance payments.
    The Agency is following closely the development of the pandemic and 
the economic situation. A variety of economic indicators such as the 
Gross Domestic Product (GDP) and the unemployment rate show that this 
recession is significantly worse than any other recession since World 
War II. According to the Bureau of Economic Analysis (BEA), real GDP 
decreased 5% and real personal consumption in goods and services 
decreased 6.9% in the first quarter of 2020. In the second quarter, 
real GDP decreased 31.4% and real personal consumption in goods and 
services decreased 33.2%. In the third quarter, real GDP increased 
33.4%, and real personal consumption in goods and services increased 
41.0%. Real GDP showed a more moderate increase of 4.3% and real 
personal consumption expenditures increased 2.3% in the fourth quarter 
of 2020. Real GDP decreased 3.5% in 2020 from 2019 (from the 2019 
annual level to the 2020 annual level), compared with an increase of 
2.2 percent in 2019 from 2018. According to the BEA's `advance' 
estimate, real GDP increased 6.4% and real personal consumption 
expenditures increased 10.7% in the first quarter of 2021.
    In April 2021, both the unemployment rate, at 6.1%, and the number 
of unemployed persons, at 9.8 million, were little changed from the 
previous month. These measures are down considerably from their April 
2020 highs (14.8% and 23.1 million, respectively) but remain well above 
their pre-pandemic levels in February 2020 (3.5% and 5.7 million, 
respectively). Specifically, for the sectors evaluated in this proposed 
rule, in April 2021, the unemployment rate for the Wholesale Trade 
sector was 3.3%, and the unemployment rate for the Retail Trade sector 
was 6.8%. In April 2020, the unemployment rates for these sectors were 
9.9% and 18.6%, respectively. The Federal Reserve Board's Monetary 
Policy Report, published in June 2020, shows that, in general, the most 
impacted firms in these sectors are small businesses.\1\
---------------------------------------------------------------------------

    \1\ See the special section titled ``Small Businesses during the 
COVID-19 Crisis'' on page 24 of the Monetary Policy Report prepared 
by the Board of Governors of the Federal Reserve System in June 
2020. (https://www.federalreserve.gov/monetarypolicy/files/20200612_mprfullreport.pdf). The latest publication of the Monetary 
Policy Report was published on February 19, 2021. Also, see https://portal.census.gov/pulse/data. This report is a recent survey created 
by the Census Bureau to provide high-frequency, detailed information 
on participation in small business-specific initiatives such as the 
PPP.
---------------------------------------------------------------------------

Proposed Changes to Size Standards

    Accordingly, in view of the analytical data discussed above and the 
economic impacts of the COVID-19 pandemic, SBA proposes to adopt 
increases to size standards for 49 industries and to retain the current 
size standards for 88 industries.
    The proposed size standards are presented by measure of size in 
Table 8, Proposed Size Standards Revisions (Employees) and Table 9, 
Proposed Size

[[Page 28027]]

Standards Revisions (Receipts). Also presented in Table 8 and Table 9 
are current and calculated size standards for comparison.

                             Table 8--Proposed Size Standards Revisions (Employees)
----------------------------------------------------------------------------------------------------------------
                                                                    Calculated     Proposed size   Current size
             NAICS code                  NAICS industry title      size standard     standard        standard
                                                                    (employees)     (employees)     (employees)
----------------------------------------------------------------------------------------------------------------
423140.............................  Motor Vehicle Parts (Used)              125             125             100
                                      Merchant Wholesalers.
423330.............................  Roofing, Siding, and                    225             225             200
                                      Insulation Material
                                      Merchant Wholesalers.
423460.............................  Ophthalmic Goods Merchant               175             175             150
                                      Wholesalers.
423520.............................  Coal and Other Mineral and              200             200             100
                                      Ore Merchant Wholesalers.
423620.............................  Household Appliances,                   225             225             200
                                      Electric Housewares, and
                                      Consumer Electronics
                                      Merchant Wholesalers.
423730.............................  Warm Air Heating and                    175             175             150
                                      Air[dash]Conditioning
                                      Equipment and Supplies
                                      Merchant Wholesalers.
423860.............................  Transportation Equipment                175             175             150
                                      and Supplies (except Motor
                                      Vehicle) Merchant
                                      Wholesalers.
423920.............................  Toy and Hobby Goods and                 175             175             150
                                      Supplies Merchant
                                      Wholesalers.
424110.............................  Printing and Writing Paper              225             225             200
                                      Merchant Wholesalers.
424450.............................  Confectionery Merchant                  225             225             200
                                      Wholesalers.
424590.............................  Other Farm Product Raw                  175             175             100
                                      Material Merchant
                                      Wholesalers.
424690.............................  Other Chemical and Allied               175             175             150
                                      Products Merchant
                                      Wholesalers.
424710.............................  Petroleum Bulk Stations and             225             225             200
                                      Terminals.
425120.............................  Wholesale Trade Agents and              125             125             100
                                      Brokers.
----------------------------------------------------------------------------------------------------------------


                              Table 9--Proposed Size Standards Revisions (Receipts)
----------------------------------------------------------------------------------------------------------------
                                                                    Calculated     Proposed size   Current size
             NAICS code                  NAICS industry title      size standard    standard ($     standard ($
                                                                    ($ million)      million)        million)
----------------------------------------------------------------------------------------------------------------
441310.............................  Automotive Parts and                   25.0            25.0            16.5
                                      Accessories Stores.
441320.............................  Tire Dealers...............            22.5            22.5            16.5
442291.............................  Window Treatment Stores....            10.0            10.0             8.0
442299.............................  All Other Home Furnishings             29.5            29.5            22.0
                                      Stores.
443141.............................  Household Appliance Stores.            19.5            19.5            12.0
444130.............................  Hardware Stores............            14.5            14.5             8.0
444210.............................  Outdoor Power Equipment                 8.5             8.5             8.0
                                      Stores.
444220.............................  Nursery, Garden Center, and            19.0            19.0            12.0
                                      Farm Supply Stores.
445291.............................  Baked Goods Stores.........            14.0            14.0             8.0
445292.............................  Confectionery and Nut                  17.0            17.0             8.0
                                      Stores.
445299.............................  All Other Specialty Food                9.0             9.0             8.0
                                      Stores.
445310.............................  Beer, Wine, and Liquor                  9.0             9.0             8.0
                                      Stores.
446110.............................  Pharmacies and Drug Stores.            33.0            33.0            30.0
446130.............................  Optical Goods Stores.......            26.0            26.0            22.0
446191.............................  Food (Health) Supplement               20.0            20.0            16.5
                                      Stores.
446199.............................  All Other Health and                    8.5             8.5             8.0
                                      Personal Care Stores.
447190.............................  Other Gasoline Stations....            29.5            29.5            16.5
448110.............................  Men's Clothing Stores......            22.5            22.5            12.0
448150.............................  Clothing Accessories Stores            29.5            29.5            16.5
448190.............................  Other Clothing Stores......            27.5            27.5            22.0
448310.............................  Jewelry Stores.............            18.0            18.0            16.5
448320.............................  Luggage and Leather Goods              33.5            33.5            30.0
                                      Stores.
451110.............................  Sporting Goods Stores......            23.5            23.5            16.5
451120.............................  Hobby, Toy, and Game Stores            31.0            31.0            30.0
451140.............................  Musical Instrument and                 20.0            20.0            12.0
                                      Supplies Stores.
451211.............................  Book Stores................            31.5            31.5            30.0
451212.............................  News Dealers and Newsstands            20.0            20.0             8.0
452311.............................  Warehouse Clubs and                    41.5            41.5            32.0
                                      Supercenters.
453220.............................  Gift, Novelty, and Souvenir            12.0            12.0             8.0
                                      Stores.
453310.............................  Used Merchandise Stores....            12.5            12.5             8.0
453910.............................  Pet and Pet Supplies Stores            28.0            28.0            22.0
453920.............................  Art Dealers................            14.5            14.5             8.0
453998.............................  All Other Miscellaneous                10.0            10.0             8.0
                                      Store Retailers (except
                                      Tobacco Stores).
454210.............................  Vending Machine Operators..            18.5            18.5            12.0
454390.............................  Other Direct Selling                   13.0            13.0             8.0
                                      Establishments.
----------------------------------------------------------------------------------------------------------------


[[Page 28028]]

    Table 10, Summary of Proposed Size Standards Revisions by Sector, 
below, summarizes the proposed changes to size standards by NAICS 
sector.

                        Table 10--Summary of Proposed Size Standards Revisions by Sector
----------------------------------------------------------------------------------------------------------------
                                                  Number of size  Number of size  Number of size  Number of size
            Sector                 Sector name       standards       standards       standards       standards
                                                     reviewed        increased       decreased      maintained
----------------------------------------------------------------------------------------------------------------
42............................  Wholesale Trade.              71              14               0              57
44-45.........................  Retail Trade....              66              35               0              31
                                                 ---------------------------------------------------------------
    Total.....................  ................             137              49               0              88
----------------------------------------------------------------------------------------------------------------

Evaluation of Dominance in Field of Operation

    SBA has determined that for the industries that it has evaluated in 
this proposed rule, no individual firm at or below the proposed size 
standard would be large enough to dominate its field of operation. At 
the proposed size standards levels, if adopted, the small business 
share of total industry receipts would be, on average, 0.4%, varying 
from 0.01% to 3.4%.

Alternatives Considered

    By law, SBA is required to develop numerical size standards for 
establishing eligibility for Federal small business assistance programs 
and to review every five years all size standards and make necessary 
adjustments to reflect the current industry structure and Federal 
market conditions. Other than varying the levels of size standards by 
industry and changing the measures of size standards (e.g., using 
annual receipts vs. the number of employees), no practical alternatives 
exist to the systems of numerical size standards.
    The proposal is to increase size standards where the data suggested 
increases are warranted, and to retain, in response to COVID-19 
emergency and resultant economic impacts on small businesses, all 
current size standards where the data suggested lowering is 
appropriate.
    Nonetheless, SBA considered two other alternatives. Alternative 
Option 1 was to propose changes exactly as suggested by the analytical 
results. In other words, Option 1 would entail increasing size 
standards for 49 industries, decreasing them for 66 industries, and 
retaining them at their current levels for 22 industries. Alternative 
Option 2 was to retain all current size standards.
    Alternative Option 1 would cause a substantial number of currently 
small businesses to lose their small business status and hence to lose 
their access to Federal small business assistance, especially SBA's 
financial assistance in some cases.
    However, in the present situation with the global COVID-19 pandemic 
resulting in high levels of risk and dramatic reductions in economic 
activity of unprecedented nature, SBA presents the impacts of adopting 
the analytical results without adjustment in Alternative Option 1 and 
proposes to retain all size standards for which the evaluation of 
principal factors suggested reductions, and to adopt only the increases 
suggested by the evaluation. SBA will adopt this approach temporarily 
and may reevaluate as the economic situation evolves.
    Under Option 2, given the current COVID-19 pandemic, SBA considered 
retaining the current level of all size standards even though the 
current analysis may suggest changing them. SBA considers that the 
option of retaining all size standards at this moment provides the 
opportunity to reassess the economic situation once the economic 
recovery starts. Under this option, as the current situation develops, 
SBA will be able to assess new data available on economic indicators, 
federal procurement, and SBA loans before adopting changes to size 
standards. However, SBA is not adopting Option 2 because the Regulatory 
Impact Analysis conducted for this rule in accordance with Executive 
Order 12866 (see below) shows that retaining all size standards at 
their current levels is more onerous for the small businesses than the 
option of adopting 49 increases and retaining 88 size standards. SBA 
may reevaluate this approach as the current economic situation evolves.

Request for Comments

    SBA invites public comments on this proposed rule, especially on 
the following issues:
    1. SBA seeks feedback on whether SBA's proposal to increase 49 size 
standards and retain 88 size standards is appropriate given the results 
from the latest available industry and Federal contracting data of each 
industry and subindustry (exception) reviewed in this proposed rule, 
along with ongoing uncertainty and dramatic contraction in economic 
activity due to the global COVID-19 pandemic. SBA also seeks 
suggestions, along with supporting facts and analysis, for alternative 
standards, if they would be more appropriate than the proposed size 
standards.
    2. SBA also seeks comments on whether SBA should not lower any size 
standards in view of the COVID-19 pandemic and its adverse impacts on 
small businesses as well as on the overall economic situation when 
analytical results suggest some size standards could be lowered. SBA 
believes that lowering size standards under the current economic 
environment would run counter to Congress's and the Federal 
Government's efforts to aid and provide relief to the nation's small 
businesses impacted by the COVID-19 pandemic.
    3. Given the uncertainty produced by the global COVID-19 pandemic 
and the economic consequences, SBA would like to receive comments from 
the public on the possibility of lowering size standards while 
mitigating the consequences of the lower standards, instead of not 
lowering any size standards at all.
    4. In calculating the overall industry size standard, SBA has 
assigned equal weight to each of the four primary factors in all 
industries and subindustries covered by this proposed rule. SBA seeks 
feedback on whether it should assign equal weight to each factor or 
whether it should give more weight to one or more factors for certain 
industries or subindustries. Recommendations to weigh some factors 
differently than others should include suggested weights for each 
factor along with supporting facts and analysis.
    5. Finally, SBA seeks comments on data sources it used to examine 
industry and Federal market conditions, as well as suggestions on 
relevant alternative data sources that the Agency should evaluate in 
reviewing or modifying size

[[Page 28029]]

standards for industries covered by this proposed rule.
    Public comments on the above issues are very valuable to SBA for 
validating its proposed size standards revisions in this proposed rule. 
Commenters addressing size standards for a specific industry or a group 
of industries should include relevant data and/or other information 
supporting their comments.

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

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
proposed rule is a significant regulatory action for purposes of 
Executive Order 12866. However, this rule is not a ``major rule'' under 
the Congressional Review Act, 5 U.S.C. 800. Accordingly, in the next 
section SBA provides a Regulatory Impact Analysis of this proposed 
rule, including: (1) A statement of the need for the proposed action, 
(2) an evaluation of the benefits and costs--both quantitative and 
qualitative--of the proposed action, and (3) an examination of the 
alternative approaches considered.

Regulatory Impact Analysis

1. What is a need for this regulatory action?
    Under the Small Business Act, SBA's Administrator is responsible 
for establishing small business size definitions (or ``size 
standards'') and ensuring that such definitions vary from industry to 
industry to reflect differences among various industries. The Jobs Act 
requires SBA to review every 5 years all size standards and make 
necessary adjustments to reflect current industry and Federal market 
conditions. This proposed rule is part of the second 5-year review of 
size standards in accordance with the Jobs Act. The first 5-year review 
of size standards was completed in early 2016. Such periodic reviews of 
size standards provide SBA with an opportunity to incorporate ongoing 
changes to industry structure and Federal market environment into size 
standards and to evaluate the impacts of prior revisions to size 
standards on small businesses. This also provides SBA with an 
opportunity to seek and incorporate public input to the size standards 
review and analysis. SBA believes that proposed size standards 
revisions for industries being reviewed in this rule will make size 
standards more reflective of the current economic characteristics of 
businesses in those industries and the latest trends in Federal 
marketplace.
    SBA's mission is to aid and assist small businesses through a 
variety of financial, procurement, business development and counseling, 
and disaster assistance programs. To determine the actual intended 
beneficiaries of these programs, SBA establishes numerical size 
standards by industry to identify businesses that are deemed small.
    The proposed revisions to the existing size standards for 49 
industries or subindustries in NAICS Sectors 42 and 44-45 are 
consistent with SBA's statutory mandates to help small businesses grow 
and create jobs and to review and adjust size standards every five 
years. This regulatory action promotes the Administration's goals and 
objectives as well as meets the SBA's statutory responsibility. One of 
SBA's goals in support of promoting the Administration's objectives is 
to help small businesses succeed through fair and equitable access to 
capital and credit, Federal Government contracts and purchases, and 
management and technical assistance. Reviewing and modifying size 
standards, when appropriate, ensures that intended beneficiaries are 
able to access Federal small business programs that are designed to 
assist them to become competitive and create jobs.
2. What are the potential benefits and costs of this regulatory action?
    OMB directs agencies to establish an appropriate baseline to 
evaluate any benefits, costs, or transfer impacts of regulatory actions 
and alternative approaches considered. The baseline should represent 
the agency's best assessment of what the world would look like absent 
the regulatory action. For a new regulatory action promulgating 
modifications to an existing regulation (such as modifying the existing 
size standards), a baseline assuming no change to the regulation (i.e., 
making no changes to current size standards) generally provides an 
appropriate benchmark for evaluating benefits, costs, or transfer 
impacts of proposed regulatory changes and their alternatives.
Proposed Changes to Size Standards
    Based on the results from analyses of latest industry data, as well 
as consideration of impact of size standards changes on small 
businesses and significant adverse impacts of the COVID-19 emergency on 
small businesses and the overall economic activity, of the total of 137 
industries in Sectors 42 and 44-45, SBA proposes to increase size 
standards for 49 industries and maintain current size standards for 
remaining 88 industries.
The Baseline
    For purposes of this regulatory action, the baseline represents 
maintaining the ``status quo,'' i.e., making no changes to the current 
size standards. Using the number of small businesses and levels of 
benefits (such as SBA's loans, disaster assistance, etc.) they receive 
under the current size standards, one can examine the potential 
benefits, costs, and transfer impacts of proposed changes to size 
standards on small businesses and on the overall economy.
    Based on the 2012 Economic Census (the latest available), of a 
total of about 975,569 businesses in industries in Sectors 42 and 44-
45, 97.4% are considered small under the current size standards. That 
percentage varies from 96.6% in Sector 42 to 97.9% in Sector 44-45. 
Based on the SBA's internal data on its loan programs for fiscal years 
2016-2018, small businesses in those industries received, on an annual 
basis, a total of 11,666 7(a) and 504 loans in that period, totaling 
about $5.5 billion, of which 84.7% was issued through the 7(a) program 
and 15.3% was issued through the 504/CDC program. During fiscal years 
2016-2018, small businesses in those industries also received 667 loans 
through the SBA's EIDL program, totaling about $63.2 million on an 
annual basis. Table 11, Baseline for All Industries, below, provides 
these baseline results by sector.

                                      Table 11--Baseline for All Industries
----------------------------------------------------------------------------------------------------------------
                                                             Sector 42         Sector 44-45          Total
----------------------------------------------------------------------------------------------------------------
Baseline All Industries (current size standards).......                 71                 66                137
Total firms (Economic Census)..........................            319,716            655,853            975,569
Total small firms under current size standards                     308,710            641,995            950,705
 (Economic Census).....................................
Small firms as % of total firms........................               96.6               97.9               97.5

[[Page 28030]]

 
No. of 7(a) and 504/CDC loans (FY 2016-2018)...........              3,249              8,417             11,666
Amount of 7(a) and 504 loans ($ million) (FY 2016-2018)           $1,836.7           $3,692.9           $5,529.6
No. of EIDL loans (FY 2016-2018).......................                137                530                667
Amount of EIDL loans ($ million) (FY 2016-2018)........              $16.7              $46.6              $63.2
----------------------------------------------------------------------------------------------------------------
Totals may not sum due to rounding.

Increases to Size Standards
    As stated above, of the 137 employee-based and receipts-based size 
standards in Sectors 42 and 44-45 that were reviewed in preparation for 
this rule, based on the results from analyses of latest industry data 
as well as impacts of size standards changes on small businesses, SBA 
proposes to increase 49 size standards. Below are descriptions of the 
benefits, costs, and transfer impacts of these proposed increases to 
size standards.
A. Benefits of Increases to Size Standards
    The most significant benefit to businesses from proposed increases 
to size standards would be gaining eligibility for Federal small 
business assistance programs or retaining that eligibility for a longer 
period. These include SBA's business loan programs, such as the 7(a) 
and EIDL loan programs. SBA's regulations specify that NAICS codes for 
the Wholesale and Retail Trade industries shall not be used to classify 
Government acquisition for supplies (13 CFR 121.402(b)). As such, for 
purposes of federal contracts set-aside for small businesses the size 
standard for all industries included in the Wholesale Trade and Retail 
Trade sectors is 500 employees under the nonmanufacturer rule (see 13 
CFR 121.406). SBA is not evaluating the size standard for the 
nonmanufacturer rule in this rulemaking. Thus, SBA estimates that the 
proposed increases to size standards as part of this rulemaking will 
not impact the market for federal contracts using small business set-
asides.
    Besides the access to SBA financial assistance programs discussed 
above, small businesses also benefit through reduced fees, less 
paperwork, and fewer compliance requirements that are available to 
small businesses through the Federal Government. However, SBA has no 
data to estimate the number of small businesses receiving such 
benefits.
    Based on the 2012 Economic Census (latest available), SBA estimates 
that in 49 industries in NAICS Sectors 42 and 44-45 for which it has 
proposed to increase size standards, 1,839 firms (see Table 12, below) 
not considered small under the current size standards will become small 
under the proposed size standards increases and therefore would become 
eligible for SBA assistance programs. That represents about 0.5% of all 
firms classified as small under the current size standards in 
industries for which SBA has proposed increasing size standards. If the 
proposed increase is adopted, SBA estimates that this would result in 
an increase to the small business share of total receipts in those 
industries from 30.4% to 31.5%.
    Based on the data for fiscal years 2016-2018, SBA estimates up to 
29 SBA 7(a) and 504 loans totaling about $10.9 million could be made to 
these newly qualified small businesses. That represents a 0.6% increase 
to the loan amount compared to the Group baseline.\2\
---------------------------------------------------------------------------

    \2\ Note that these figures refer to the standard 7(a) and 504 
loans, not the Paycheck Protection Program (PPP) under the CARES 
Act, the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and 
Venues Act, and the American Rescue Plan Act of 2021.
---------------------------------------------------------------------------

    Newly qualified small businesses could also benefit from the SBA's 
EIDL program. Since the benefit provided through this program is 
contingent on the occurrence and severity of a disaster in the future, 
SBA cannot make a meaningful estimate of this impact. However, based on 
the historical trends of the EIDL data, SBA estimates that, on an 
annual basis, the newly defined small businesses under the proposed 
increases to size standards, if adopted, could receive 3 EIDL loans, 
totaling about $0.31 million.\3\
---------------------------------------------------------------------------

    \3\ Note that these figures refer to the standard EIDL loans, 
not COVID EIDL loans under the CARES Act, the Economic Aid to Hard-
Hit Small Businesses, Non-Profits, and Venues Act, and the American 
Rescue Plan Act of 2021.
---------------------------------------------------------------------------

    Additionally, the newly defined small businesses would also benefit 
through reduced fees, less paperwork, and fewer compliance requirements 
that are available to small businesses through the Federal Government, 
but SBA has no data to quantify this impact. Table 12, Impacts of 
Proposed Increases to Size Standards, provides these results by NAICS 
sector.

                            Table 12--Impacts of Proposed Increases to Size Standards
----------------------------------------------------------------------------------------------------------------
                                                             Sector 42         Sector 44-45          Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed increases to size                       14                 35                 49
 standards.............................................
Total current small businesses in industries with                   63,984            286,758            350,742
 Proposed increases to size standards (Economic Census
 2012).................................................
Additional firms qualifying as small under proposed                    145              1,694              1,839
 standards (2012 Economic Census)......................
Percentage of additional firms qualifying as small                     0.2                0.6                0.5
 relative to current small businesses in industries
 with proposed increases to size standards.............
Total no. of 7(a) and 504 loans to small business in                   349              4,510              4,859
 industries with proposed increases to size standards
 (FY 2016-2018)........................................
Total amount of 7(a) and 504 loans to small businesses              $182.8           $1,633.1           $1,815.9
 in industries with proposed increases to size
 standards ($ million) (FY 2016-2018)..................
Estimated no. of 7(a) and 504 loans to newly qualified                   1                 28                 29
 small firms...........................................
Estimated 7(a) and 504 loan amount to newly qualified                 $0.5              $10.3              $10.9
 small firms ($ million)...............................
% increase to 7(a) and 504 loan amount relative to the                 0.3                0.6                0.6
 total amount of 7(a) and 504 loans in industries with
 proposed increases to size standards..................

[[Page 28031]]

 
Total no. of EIDL loans to small businesses in                          12                288                300
 industries with proposed increases to size standards
 (FY 2016-2018)........................................
Total amount of EIDL loans to small businesses in                     $1.9              $21.5              $23.4
 industries with proposed increases to size standards
 ($ million) (FY 2016-2018)............................
Estimated no. of EIDL loans to newly qualified small                     1                  2                  3
 firms.................................................
Estimated EIDL loan amount to newly qualified small                  $0.15              $0.15              $0.31
 firms ($ million).....................................
% increase to EIDL loan amount relative to the total                   8.3                0.7                1.3
 amount of EIDL loans in industries with proposed
 increases to size standards...........................
----------------------------------------------------------------------------------------------------------------
Totals may not sum due to rounding.

B. Costs of Increases to Size Standards
    To the extent that newly qualified small businesses could seek 
assistance from SBA's financial assistance programs, the proposed 
increases to size standards, if adopted, may entail some additional 
administrative costs to the Government. However, small business lenders 
have an option of using the tangible net worth and net income-based 
alternative size standard instead of using the industry-based size 
standards to establish eligibility for SBA's loans. Moreover, this 
proposed rule does not establish new size standards for the very first 
time; rather it intends to modify the existing size standards in 
accordance with a statutory requirement and the latest data and other 
relevant factors. For these reasons, SBA believes that these added 
administrative costs will be minor because necessary mechanisms are 
already in place to handle the additional burden.
C. Transfer Impacts of Increases to Size Standards
    The proposed increases to size standards, if adopted, may result in 
some redistribution of SBA loans between the newly qualified small 
businesses and small businesses under the current size standards. 
However, SBA estimates this impact to be de minimus because the vast 
majority of the SBA loans go to small businesses that are much smaller 
than the current size standards. Moreover, SBA estimates that this rule 
would not have any impact on Federal contract dollars awarded to small 
businesses since SBA's regulations specify that NAICS codes for the 
Wholesale and Retail Trade industries shall not be used to classify 
Government acquisition for supplies.
3. What alternatives have been considered?
    Under OMB Circular A-4, SBA is required to consider alternative 
regulatory approaches. In this section, SBA describes and analyzes two 
such alternatives to the proposed rule. Under Alternative Option 1, SBA 
would propose adopting size standards based solely on the analytical 
results. In other words, SBA would raise the size standards of 49 
industries for which the analytical results suggest raising size 
standards and would lower the size standards of 66 industries for which 
the analytical results suggest lowering size standards. For the 22 
remaining industries, size standards would be maintained at their 
current levels. Under Alternative Option 2, SBA would propose retaining 
all size standards for all industries, given the uncertainty generated 
by the ongoing COVID-19 pandemic. Below, SBA discusses and presents the 
net impacts of each option.
Alternative Option 1: Consider Adopting All Calculated Size Standards
    As discussed before, in this proposed rule, Alternative Option 1 
would cause a substantial number of currently small businesses to lose 
their small business status and hence to lose their access to Federal 
small business assistance, including SBA's financial assistance in some 
cases. Because we have discussed already the benefits and costs of 
increasing 49 size standards, here we will emphasize the discussion on 
the benefits and costs of decreasing 66 size standards.
    The primary benefit of adopting Alternative Option 1 is that SBA's 
procurement, management, technical and financial assistance resources 
would be targeted to the most appropriate beneficiaries of such 
programs according to the analytical results. Adopting the size 
standards suggested by the analytical results would also promote 
consistency with analytical results in SBA's exercise of its authority 
to determine size standards.
    As explained in the Size Standards Methodology White Paper, in 
addition to adopting all results of the primary analysis, SBA evaluates 
other relevant factors as needed such as the impact of the reductions 
or increases of size standards on the distribution of contracts awarded 
to small businesses, and may adopt different results with the intention 
of mitigating potential negative impacts.
A. Benefits of Decreases to Size Standards
    The most significant benefit to businesses from decreases to size 
standards when SBA's analysis suggests such decreases, is that it may 
help ensure that size standards are more reflective of latest industry 
structure and that Federal small business assistance is more 
effectively targeted to its intended beneficiaries. The adoption of 
smaller size standards when the results support them diminishes the 
risk of providing assistance to firms that are not small anymore.
    Decreasing size standards may reduce the administrative costs of 
the Government, because the risk of providing assistance to other than 
small businesses may diminish when the size standards better reflect 
the structure of the market. The risks of providing SBA's loans to 
firms that are not in need of financial assistance will provide for a 
better chance for smaller firms to benefit from the opportunities 
available to them through the Federal Government. Although SBA did not 
quantify the impact associated with this risk, SBA considers the 
impacts associated with this risk to be small since the majority of 
firms receiving financial assistance from SBA are below the calculated 
size standards.
B. Costs of Decreases to Size Standards
    Decreases to size standards would have a very minor impact on small 
businesses applying for SBA's 7(a) and 504 loans because a vast 
majority of such loans are issued to businesses that are far below the 
reduced size standards. For example, based on the loan data for fiscal 
years 2016-2018, SBA estimates that 67 of SBA's 7(a) and 504 loans, 
totaling $38.0 million, could not be made to those small businesses 
that would lose eligibility under the reduced size standards (before

[[Page 28032]]

mitigation). That represents a 1.2% decrease of the loan amounts 
compared to the baseline. Table 13, below, shows these results by 
sector. However, the actual impact could be much less as businesses 
losing small business eligibility under the decreases to industry-based 
size standards could still qualify for SBA's loans under the tangible 
net worth and net income-based alternative size standard.
    Businesses losing small business status would also be impacted in 
terms of access to loans through the SBA's EIDL program. However, SBA 
expects such impact to be minimal as only a small number of businesses 
in those industries received such loans during fiscal years 2016-2018. 
Additionally, the majority of those businesses were below the reduced 
size standards. Since this program is contingent on the occurrence and 
severity of a disaster in the future, SBA cannot make a meaningful 
estimate of this impact. However, based on the historical trends of the 
available EIDL data, SBA estimates that, on an annual basis, 5 EIDL 
loans, totaling about $0.5 million, would be made unavailable to firms 
that no longer qualify as small based on the industry size standard.
    Small businesses becoming other than small if size standards were 
decreased might lose the benefits of reduced fees, paperwork and 
compliance requirements that are available to small businesses through 
the Federal Government, but SBA has no data to quantify this impact. 
However, if agencies determine that SBA's size standards do not 
adequately serve their purposes, they can establish a different size 
standard with an approval from SBA if they are required to use SBA's 
size standards for their programs.
    SBA may adopt mitigating measures to reduce the negative impact 
under the assumptions of Option 1. SBA could adopt one or more of the 
following three actions: 1. To accept decreases in size standards as 
suggested by the analytical results; 2. to decrease size standards by a 
smaller amount than the calculated values; and 3. to retain the size 
standards at their current levels. For example, in response to the 2008 
Financial Crisis, SBA adopted a general policy in the first 5-year 
comprehensive size standards review to not lower any size standard 
(except to exclude one or more dominant firms) even when the analytical 
results suggested the size standard should be lowered. Currently, 
because of the economic challenges presented by the COVID-19 pandemic 
and the measures taken to protect public health, SBA has decided to 
propose the same general policy of not lowering size standards in the 
ongoing second 5-year comprehensive size standards review as well.
    Nevertheless, the impact on the overall loan activity is likely to 
be de minimus because SBA estimates that the majority of firms 
currently eligible for its loan programs would continue to remain 
eligible under the reduced size standards. SBA's regulations specify 
that NAICS codes for the Wholesale and Retail Trade industries shall 
not be used to classify Government acquisition for supplies (13 CFR 
121.402(b)). As such, for purposes of federal contracting, the size 
standard for all industries included in the Wholesale and Retail Trade 
industries is 500 employees (13 CFR 121.406). Thus, SBA estimates that 
any decreases to size standards as part of this rulemaking will not 
impact the market for federal contracts.

                   Table 13--Impacts of Decreases to Size Standards Under Alternative Option 1
----------------------------------------------------------------------------------------------------------------
                                                             Sector 42         Sector 44-45          Total
----------------------------------------------------------------------------------------------------------------
No. of industries for which SBA considered decreasing                   38                 28                 66
 size standards (2012 Economic Census).................
Total current small businesses in industries for which             184,837            343,639            528,476
 SBA considered decreasing size standards (2012
 Economic Census)......................................
Estimated no. of firms losing small status for which                 2,735              2,774              5,509
 SBA considered decreasing size standards (2012
 Economic Census)......................................
% of Firms losing small status relative to current                     1.5                0.8                1.0
 small businesses in industries for which SBA
 considered decreasing size standards..................
Total no. of 7(a) and 504 loans to small businesses in               2,236              3,859              6,095
 industries for which SBA considered decreasing size
 standards (FY 2016-2018)..............................
Total amount of 7(a) and 504 loans to small businesses            $1,300.2           $1,931.0           $3,231.2
 in industries for which SBA considered decreasing size
 standards ($ million) (FY 2016-2018)..................
Estimated no. of 7(a) and 504 loans not available to                    34                 33                 67
 firms that would have lost small business status......
Estimated 7(a) and 504 loan amount not available to                  $19.8              $18.2              $38.0
 firms that would have lost small business status ($
 million)..............................................
% decrease to 7(a) and 504 loan amount relative to the                 1.5                0.9                1.2
 total amount of 7(a) and 504 loans in industries for
 which SBA considered decreasing size standards........
Total no. of EIDL loans to small businesses in                          86                239                325
 industries for which SBA considered decreasing size
 standards (FY 2016-2018)..............................
Total amount of EIDL loans to small businesses in                    $10.0              $24.4              $34.4
 industries for which SBA considered decreasing size
 standards ($ million) (FY 2016-2018)..................
Estimated no. of EIDL loans not available to firms that                  2                  3                  5
 would have lost small business status.................
Estimated EIDL loan amount not available to firms that               $0.23              $0.27              $0.50
 would have lost small business status ($ million).....
% decrease to EIDL loan amount relative to the baseline                2.3                1.1                1.5
----------------------------------------------------------------------------------------------------------------
Totals may not sum due to rounding.

C. Transfer Impacts of Decreases to Size Standards
    If the size standards were decreased under Alternative Option 1, it 
may result in a redistribution of loans between the newly qualified 
small businesses and large businesses and between the newly qualified 
small businesses and small businesses under the current standards. 
However, SBA estimates this impact to be de minimus. Moreover, SBA 
estimates that this rule would not have an impact on Federal contract 
dollars awarded to small businesses since SBA's regulations

[[Page 28033]]

specify that NAICS codes for the Wholesale and Retail Trade industries 
shall not be used to classify Government acquisition for supplies. 
While SBA cannot estimate with certainty the actual outcome of the 
gains and losses among different groups of businesses from this 
redistribution, it can identify several probable impacts. With a 
smaller pool of small businesses under the decreases to size standards, 
some Federal assistance to be otherwise awarded to small businesses may 
be diverted to other uses or programs. However, since the total benefit 
provided through this program is contingent on the availability of 
funds and the occurrence and severity of a disaster in the future, SBA 
cannot make a meaningful estimate of this impact.
D. Net Impact of Alternative Option 1
    To estimate the net impacts of Alternative Option 1, SBA followed 
the same methodology used to evaluate the impacts of the proposed size 
standards (see Table 12 above). However, under Alternative Option 1, 
SBA used the calculated size standards instead of the proposed ones to 
determine the impacts of changes to current thresholds. The impact of 
the increases of size standards were already shown in Table 12 above. 
Table 13, above, and Table 14, Net Impacts of Size Standards Changes 
under Alternative Option 1, below, present the impact of the decreases 
of size standards and the net impact of adopting the calculated results 
under Alternative Option 1, respectively.
    Based on the 2012 Economic Census, SBA estimates that in 100 
industries in NAICS Sectors 42 and 44-45 for which the analytical 
results suggested to change size standards, about 3,625 firms (see 
Table 14, below), would become other-than-small under Alternative One. 
That represents about 0.4% of all firms classified as small under the 
current size standards.
    Based on the SBA's loan data for fiscal years 2016-2018, the total 
number of 7(a) and 504 loans may decrease by 38 loans, and the loan 
amounts by about $27.1 million. This represents a 0.5% decrease of the 
loan amounts relative to the Group baseline.
    Firms' participation under SBA's EIDL program will be affected as 
well. Since the benefit provided through this program is contingent on 
the occurrence and severity of a disaster in the future, SBA cannot 
make a meaningful estimate of this impact. However, based on the 
historical trends of the EIDL data, SBA estimates that the total number 
of EIDL loans may decrease by about 2 loans, and the loan amount by 
about $0.19 million. This represents a 0.3% decrease of the loan 
amounts relative to the Group baseline. Table 14, below, provides these 
results by NAICS sector.

                   Table 14--Net Impacts of Size Standards Changes Under Alternative Option 1
----------------------------------------------------------------------------------------------------------------
                                                             Sector 42         Sector 44-45          Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed changes to size                         52                 63                115
 standards.............................................
Total no. of small businesses under the current size               248,821            630,396            879,217
 standards (2012 Economic Census)......................
Additional firms qualifying as small (2012 Economic                 -2,591             -1,079             -3,670
 Census)...............................................
% of additional firms qualifying as small relative to                 -1.0               -0.2               -0.4
 total current small businesses........................
Total no. of 7(a) and 504 loans to small businesses (FY              3,249              8,417             11,666
 2016-2018)............................................
Total amount of 7(a) and 504 loans to small businesses            $1,836.7           $3,692.9           $5,529.6
 (FY 2016-2018)........................................
Estimated no. of additional 7(a) and 504 loans to newly                -33                 -5                -38
 qualified small firms.................................
Estimated additional 7(a) and 504 loan amount to newly              -$19.2              -$7.9             -$27.1
 qualified small firms ($ million).....................
% increase to 7(a)and 504 loan amount relative to the                 -1.0               -0.2               -0.5
 total amount of 7(a) and 504 loans to small businesses
Total no. of EIDL loans to small businesses (FY 2016-                  137                530                667
 2018).................................................
Total amount of EIDL loans to small businesses (FY 2016-             $16.7              $46.6              $63.2
 2018).................................................
Estimated no. of additional EIDL loans to newly                         -1                 -1                 -2
 qualified small firms.................................
Estimated additional EIDL loan amount to newly                      -$0.08             -$0.12             -$0.19
 qualified small firms ($ million).....................
% increase to EIDL loan amount relative to the total                  -0.5               -0.3               -0.3
 amount of EIDL loans to small businesses..............
----------------------------------------------------------------------------------------------------------------
Totals may not sum due to rounding.

Alternative Option 2: To Retain All Current Size Standards
    As discussed elsewhere in this rule, SBA considered retaining the 
current levels of all size standards, despite the results of its 
analytical data, due to the ongoing pandemic. SBA considered this 
option because it would provide the opportunity to reassess the 
economic situation once the economic recovery starts. Under this 
option, SBA would be able to assess new data on economic indicators, 
federal procurement, and SBA loans before making any changes to size 
standards. When compared to the baseline, Alternative Option 2 has a 
net impact of zero. As described previously, SBA believes the proposed 
increases in size standards will generate positive net benefits. Thus, 
SBA is not proposing Alternative Option 2.
Initial Regulatory Flexibility Analysis
    According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-
612, when an agency issues a rulemaking, it must prepare a regulatory 
flexibility analysis to address the impact of the rule on small 
entities.
    This proposed rule, if adopted, may have a significant impact on a 
substantial number of small businesses in the industries covered by 
this proposed rule. As described above, this rule may affect small 
businesses seeking financial assistance under SBA's 7(a), 504 and EIDL 
Programs, and assistance under other Federal small business programs.
    Immediately below, SBA sets forth an initial regulatory flexibility 
analysis (IRFA) of this proposed rule addressing the following 
questions: (1) What is the need for and objective of the rule?; (2) 
What is SBA's description and estimate of the number of small 
businesses to which the rule will apply?; (3) What are the projected 
reporting, record keeping, and other compliance requirements of the 
rule?; (4) What are the relevant Federal rules that may duplicate, 
overlap, or conflict with the rule?; and (5) What alternatives will 
allow the Agency to accomplish its regulatory objectives while 
minimizing the impact on small businesses?

[[Page 28034]]

1. What is the need for and objective of the rule?
    Changes in industry structure, technological changes, productivity 
growth, mergers and acquisitions, and updated industry definitions have 
changed the structure of many the industries covered by this proposed 
rule. Such changes can be enough to support revisions to current size 
standards for some industries. Based on the analysis of the latest data 
available, SBA believes that the revised standards in this proposed 
rule more appropriately reflect the size of businesses that need 
Federal assistance. The 2010 Jobs Act also requires SBA to review all 
size standards and make necessary adjustments to reflect market 
conditions.
2. What is SBA's description and estimate of the number of small 
businesses to which the rule will apply?
    Based on data from the 2012 Economic Census, SBA estimates that 
there are about 350,742 small firms covered by this rulemaking under 
industries with proposed changes to size standards. If the proposed 
rule is adopted in its present form, SBA estimates that an additional 
1,839 businesses will be defined as small.
3. What are the projected reporting, record keeping and other 
compliance requirements of the rule?
    The proposed size standard changes impose no additional reporting 
or record keeping requirements on small businesses. Changing size 
standards alters the access to SBA's programs that assist small 
businesses but does not impose a regulatory burden because size 
standards neither regulate nor control business behavior. Moreover, 
SBA's regulations specify that NAICS codes for the Wholesale Trade and 
Retail Trade sectors shall not be used to classify Government 
acquisition for supplies (13 CFR 121.402(b)). As such, SBA estimates 
that there will be no additional costs as a result of this rule for 
firms to update their entity registrations in the Federal Government's 
System for Award Management (SAM).
4. What are the relevant Federal rules, which may duplicate, overlap or 
conflict with the rule?
    Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 
632(a)(2)(c), Federal agencies must use SBA's size standards to define 
a small business, unless specifically authorized by statute to do 
otherwise. In 1995, SBA published in the Federal Register a list of 
statutory and regulatory size standards that identified the application 
of SBA's size standards as well as other size standards used by Federal 
agencies (60 FR 57988 (November 24, 1995)). SBA is not aware of any 
Federal rule that would duplicate or conflict with establishing size 
standards.
    However, the Small Business Act and SBA's regulations allow Federal 
agencies to develop different size standards if they believe that SBA's 
size standards are not appropriate for their programs, with the 
approval of SBA's Administrator (13 CFR 121.903). The Regulatory 
Flexibility Act authorizes an Agency to establish an alternative small 
business definition, after consultation with the Office of Advocacy of 
the U.S. Small Business Administration (5 U.S.C. 601(3)).
5. What alternatives will allow the Agency to accomplish its regulatory 
objectives while minimizing the impact on small entities?
    By law, SBA is required to develop numerical size standards for 
establishing eligibility for Federal small business assistance 
programs. Other than varying size standards by industry and changing 
the size measures, no practical alternative exists to the systems of 
numerical size standards.
    However, SBA considered two alternatives to its proposal to 
increase 49 size standards and maintain 88 size standards at their 
current levels. The first alternative SBA considered was adopting size 
standards based solely on the analytical results. In other words, the 
size standards of 49 industries for which the analytical results 
suggest raising size standards would be raised. However, the size 
standards of 66 industries for which the analytical results suggest 
lowering size standards would be lowered. This would cause a 
significant number of small businesses to lose their small business 
status. Under the second alternative, in view of the COVID-19 pandemic, 
SBA considered retaining all size standards at the current levels, even 
though the analytical results may suggest increasing 49 size standards 
and decreasing 66. Retaining all size standards at their current levels 
would be more onerous for small businesses than the option of adopting 
increases to size standards in 49 industries and retaining the current 
size standards for the rest of the industries, because the net benefit 
from adopting the proposal is greater than the net benefit of 
maintaining all size standards at their current levels.

Executive Order 13563

    Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. A description of the need for this regulatory action and 
benefits and costs associated with this action, including possible 
distributional impacts that relate to Executive Order 13563, is 
included above in the Regulatory Impact Analysis under Executive Order 
12866. Additionally, Executive Order 13563, section 6, calls for 
retrospective analyses of existing rules.
    The review of size standards in the industries covered by this 
proposed rule is consistent with section 6 of Executive Order 13563 and 
the 2010 Jobs Act, which requires SBA to review all size standards and 
make necessary adjustments to reflect market conditions. Specifically, 
the 2010 Jobs Act requires SBA to review at least one-third of all size 
standards during every 18-month period from the date of its enactment 
(September 27, 2010) and to review all size standards not less 
frequently than once every 5 years, thereafter. SBA had already 
launched a comprehensive review of size standards in 2007. In 
accordance with the Jobs Act, SBA completed the comprehensive review of 
the small business size standard for each industry, except those for 
agricultural enterprises previously set by Congress, and made 
appropriate adjustments to size standards for a number of industries to 
reflect current Federal and industry market conditions. The first 
comprehensive review was completed in 2016. Prior to 2007, the last 
time SBA conducted a comprehensive review of all size standards was 
during the late 1970s and early 1980s.
    SBA issued a White Paper entitled ``Size Standards Methodology'' 
and published a notice in the April 11, 2019, edition of the Federal 
Register (84 FR 14587) to advise the public that the document was 
available for public review and comments. The ``Size Standards 
Methodology'' White Paper explains how SBA establishes, reviews, and 
modifies its receipts-based and employee-based small business size 
standards. SBA gave appropriate consideration to all input, 
suggestions, recommendations, and relevant information obtained from 
industry groups, individual businesses, and Federal agencies in 
developing size standards for those industries covered by this proposed 
rule.

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,

[[Page 28035]]

eliminate ambiguity, and reduce burden. The action does not have 
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.

Paperwork Reduction Act

    For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, 
SBA has determined that this rule will not impose any new reporting or 
record keeping requirements.

List of Subjects in 13 CFR Part 121

    Administrative practice and procedure, Government procurement, 
Government property, Grant programs--business, Individuals with 
disabilities, Loan programs--business, Reporting and recordkeeping 
requirements, Small businesses.

    For the reasons set forth in the preamble, SBA proposes to amend 13 
CFR part 121 as follows:

PART 121--SMALL BUSINESS SIZE REGULATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and 
694a(9); Pub. L. 116-136, Section 1114.

0
2. In Sec.  121.201, amend the table ``Small Business Size Standards by 
NAICS Industry'' by revising entries ``423140,'' ``423330,'' 
``423460,'' ``423520,'' ``423620,'' ``423730,'' ``423860,'' ``423920,'' 
424110,'' ``424450,'' ``424590,'' ``424690,'' ``424710,'' ``425120,'' 
``441310,'' ``441320,'' ``442291,'' ``442299,'' ``443141,'' ``444130,'' 
``444210,'' ``444220,'' ``445291,'' ``445292,'' ``445299,'' ``445310,'' 
``446110,'' ``446130,'' ``446191,'' ``446199,'' ``447190,'' ``448110,'' 
``448150,'' ``448190,'' ``448310,'' ``448320,'' ``451110,'' ``451120,'' 
``451140,'' ``451211,'' ``451212,'' ``452311,'' ``453220,'' ``453310,'' 
``453910,'' ``453920,'' ``453998,'' ``454210,'' and ``454390'' to read 
as follows:


Sec.  121.201  What size standards has SBA identified by North American 
Industry Classification System codes?

* * * * *

                                 Small Business Size Standards by Naics Industry
----------------------------------------------------------------------------------------------------------------
                                                                            Size standards in  Size standards in
               NAICS                       NAICS U.S. industry title           millions of         number of
                                                                                 dollars           employees
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                           Sector 42--Wholesale Trade
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                               Subsector 423--Merchant Wholesalers, Durable Goods
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423140............................  Motor Vehicle Parts (Used) Merchant     .................                125
                                     Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423330............................  Roofing, Siding, and Insulation         .................                225
                                     Material Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423460............................  Ophthalmic Goods Merchant Wholesalers.  .................                175
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423520............................  Coal and Other Mineral and Ore          .................                200
                                     Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423620............................  Household Appliances, Electric          .................                225
                                     Housewares, and Consumer Electronics
                                     Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423730............................  Warm Air Heating and Air-Conditioning   .................                175
                                     Equipment and Supplies Merchant
                                     Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423860............................  Transportation Equipment and Supplies   .................                175
                                     (except Motor Vehicle) Merchant
                                     Wholesalers.
 

[[Page 28036]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
423920............................  Toy and Hobby Goods and Supplies        .................                175
                                     Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                              Subsector 424--Merchant Wholesalers, Nondurable Goods
----------------------------------------------------------------------------------------------------------------
424110............................  Printing and Writing Paper Merchant     .................                225
                                     Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
424450............................  Confectionery Merchant Wholesalers....  .................                225
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
424590............................  Other Farm Product Raw Material         .................                175
                                     Merchant Wholesalers.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
424690............................  Other Chemical and Allied Products      .................                175
                                     Merchant Wholesalers.
424710............................  Petroleum Bulk Stations and Terminals.  .................                225
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                       Subsector 425--Wholesale Electronic Markets and Agents and Brokers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
425120............................  Wholesale Trade Agents and Brokers....  .................                125
----------------------------------------------------------------------------------------------------------------
                                           Sector 44-45--Retail Trade
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                 Subsector 441--Motor Vehicle and Parts Dealers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
441310............................  Automotive Parts and Accessories                     25.0  .................
                                     Stores.
441320............................  Tire Dealers..........................               22.5  .................
----------------------------------------------------------------------------------------------------------------
                              Subsector 442--Furniture and Home Furnishings Stores
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
442291............................  Window Treatment Stores...............               10.0  .................
442299............................  All Other Home Furnishings Stores.....               29.5  .................
----------------------------------------------------------------------------------------------------------------
                                 Subsector 443--Electronics and Appliance Stores
----------------------------------------------------------------------------------------------------------------
443141............................  Household Appliance Stores............               19.5  .................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                   Subsector 444--Building Material and Garden Equipment and Supplies Dealers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
444130............................  Hardware Stores.......................               14.5  .................
 
                                                  * * * * * * *
444210............................  Outdoor Power Equipment Stores........                8.5  .................
444220............................  Nursery, Garden Center, and Farm                     19.0  .................
                                     Supply Stores.
----------------------------------------------------------------------------------------------------------------

[[Page 28037]]

 
                                     Subsector 445--Food and Beverage Stores
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
445291............................  Baked Goods Stores....................               14.0  .................
445292............................  Confectionery and Nut Stores..........               17.0  .................
445299............................  All Other Specialty Food Stores.......                9.0  .................
445310............................  Beer, Wine, and Liquor Stores.........                9.0  .................
----------------------------------------------------------------------------------------------------------------
                                 Subsector 446--Health and Personal Care Stores
----------------------------------------------------------------------------------------------------------------
446110............................  Pharmacies and Drug Stores............               33.0  .................
 
                                                  * * * * * * *
446130............................  Optical Goods Stores..................               26.0  .................
446191............................  Food (Health) Supplement Stores.......               20.0  .................
446199............................  All Other Health and Personal Care                    8.5  .................
                                     Stores.
----------------------------------------------------------------------------------------------------------------
                                        Subsector 447--Gasoline Stations
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
447190............................  Other Gasoline Stations...............               29.5  .................
----------------------------------------------------------------------------------------------------------------
                             Subsector 448--Clothing and Clothing Accessories Stores
----------------------------------------------------------------------------------------------------------------
448110............................  Men's Clothing Stores.................               22.5  .................
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
448150............................  Clothing Accessories Stores...........               29.5  .................
448190............................  Other Clothing Stores.................               27.5  .................
 
                                                  * * * * * * *
448310............................  Jewelry Stores........................               18.0  .................
448320............................  Luggage and Leather Goods Stores......               33.5  .................
----------------------------------------------------------------------------------------------------------------
                           Subsector 451--Sporting Good, Hobby, Book and Music Stores
----------------------------------------------------------------------------------------------------------------
451110............................  Sporting Goods Stores.................               23.5  .................
----------------------------------------------------------------------------------------------------------------
451120............................  Hobby, Toy, and Game Stores...........               31.0  .................
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
451140............................  Musical Instrument and Supplies Stores               20.0  .................
451211............................  Book Stores...........................               31.5  .................
451212............................  News Dealers and Newsstands...........               20.0  .................
----------------------------------------------------------------------------------------------------------------
                                    Subsector 452--General Merchandise Stores
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
452311............................  Warehouse Clubs and Supercenters......               41.5  .................
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                                                  * * * * * * *
                                  Subsector 453--Miscellaneous Store Retailers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
453220............................  Gift, Novelty, and Souvenir Stores....               12.0  .................
453310............................  Used Merchandise Stores...............               12.5  .................
453910............................  Pet and Pet Supplies Stores...........               28.0  .................
453920............................  Art Dealers...........................               14.5  .................
 

[[Page 28038]]

 
                                                  * * * * * * *
453998............................  All Other Miscellaneous Store                        10.0  .................
                                     Retailers (except Tobacco Stores).
----------------------------------------------------------------------------------------------------------------
                                        Subsector 454--Nonstore Retailers
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
454210............................  Vending Machine Operators.............               18.5  .................
 
                                                  * * * * * * *
454390............................  Other Direct Selling Establishments...               13.0  .................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------


    Dated: May 13, 2021.
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2021-10487 Filed 5-24-21; 8:45 am]
BILLING CODE 8026-03-P