[The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions]
[Small Business Administration Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]

Federal Register / Vol. 61, No. 231 / Friday, November 29, 1996 / The
                            Regulatory Plan

[[Page 62191]]

SMALL BUSINESS ADMINISTRATION (SBA)
Statement of Regulatory Priorities
Regulatory Streamlining
The Small Business Administration (SBA) has made a concerted effort to 
serve its customers better over the last three years by eliminating 
regulations that no longer make sense, reducing paperwork requirements, 
and streamlining internal procedures. This Regulatory Plan continues to 
highlight that initiative and responds to President Clinton's mandate 
that regulations be effective, consistent, sensible, and 
understandable.
In his memorandum of March 4, 1995, President Clinton directed the SBA 
to complete a page-by-page, line-by-line review of all of its existing 
regulations to determine which might be revised or eliminated. SBA 
conducted that review in part through Grassroots Regulatory Partnership 
Meetings held throughout the country between April 10 and April 27, 
1995. These meetings brought together more than 250 small business 
owners, contractors, lenders, loan recipients, State agencies, Service 
Core of Retired Executives (SCORE) volunteers, SBA employees, and 
others to discuss how SBA programs can be made more efficient, less 
burdensome, and more ``user-friendly.''
As announced in last year's Regulatory Plan, as a result of the review, 
SBA proposed to reinvent 100 percent of its current SBA-specific 
regulations in time for their publication in the January 1996 edition 
of 13 CFR. By clarifying and streamlining its regulations, SBA sought 
to conserve resources, improve procedures, and serve its customers more 
effectively.
The 1995 version of 13 CFR consisted of 38 parts totalling 700 pages of 
SBA-related regulations (152 pages of rules with Governmentwide 
application which SBA lacked discretion to change; 548 pages of rules 
within SBA's area of discretion). In proposing to streamline its 
regulations and convert them to a ``plain language'' format, SBA 
predicted that it would eliminate more than half the pages. The 
remaining rules would remain unchanged only because they are uniform 
rules applying to all executive branch agencies (including regulations 
relating to civil rights enforcement and the affirmative action section 
8(a) program).
CFR Elimination/Reinvention
SBA completed its CFR elimination/reinvention project on time. In doing 
so, it streamlined all of its regulations and converted them to plain 
language, while eliminating 55 percent of the pages under its control 
(302 out of 548). This represented full achievement of the regulatory 
reinvention goal announced in last year's Regulatory Plan.
Significant Initiatives
During the next 12 months, SBA hopes to obtain Department of Justice 
approval to review and revise the regulations dealing with its section 
8(a) program. These revisions would streamline and clarify the 
regulations, converting them to plain language and incorporating 
substantive changes necessary to comply with the Justice Department's 
broader affirmative action guidance.
SBA also anticipates that legislation may be enacted during September 
1996 which would alter salient features of SBA's lending and investment 
programs (13 CFR 107 and 120). Should this occur, SBA would need to 
promulgate regulations within the first 6 months of fiscal year 1997. 
These regulations would authorize the collection of fees in conjunction 
with the lending and investment programs, offsetting program costs and 
reducing corresponding subsidy rates in each case. The regulations may 
also describe methods by which certain private sector participants in 
the finance programs would liquidate the loans they make and permit 
participants to securitize the unguaranteed portion of SBA guaranteed 
loans (13 CFR section 120.420). Finally, the regulations may alter the 
size standards applicable to the small business investment company 
program and increase capital requirements for participation in that 
program (13 CFR section 121.103(b)(5)).
Whether or not such legislation is enacted, SBA expects to propose, 
early in fiscal year 1997, new regulations which would broaden the 
permissible control of an investee by a small business investment 
company and permit securitization of the unguaranteed portion of SBA 
guaranteed loans by all participating lenders.
All of the regulations referred to in this section of SBA's Regulatory 
Plan qualify for review under section 610(c) of the Regulatory 
Flexibility Act.
_______________________________________________________________________
SBA

                              -----------

                          PROPOSED RULE STAGE

                              -----------

146.  SMALL BUSINESS SIZE REGULATIONS AFFILIATION (SECTION 610 
REVIEW)
Priority:


Economically Significant. Major under 5 USC 801.


Reinventing Government:


This rulemaking is part of the Reinventing Government effort. It will 
revise text in the CFR to reduce burden or duplication, or streamline 
requirements.


Legal Authority:


 15 USC 634(b)(6); 15 USC 632(a)


CFR Citation:


 13 CFR 121.103(b)(5)


Legal Deadline:


None


Abstract:


This proposal will revise the definition of affiliation to permit small 
business investment companies and institutional investors to more 
easily coinvest in small businesses without being presumed to 
impermissibly control the investee.


Statement of Need:


The proposed regulation is intended to provide regulatory relief for 
transactions which would be impermissible without the change. It is 
needed in order to permit SBICs more opportunities to convert.


Summary of the Legal Basis:


Not required by statute or court order.


Alternatives:


The alternatives include retaining varying restrictions on coinvestment 
because of affiliation with large coinvestors.


Anticipated Costs and Benefits:


The anticipated benefit to SBICs is to open up more opportunities for 
investment. It is anticipated that these opportunities could amount to 
over $100 million per year with attendant benefits to the economy as a 
whole.


Risks:


There are no tangible economic risks to this proposal.

[[Page 62192]]

Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           01/00/97
Small Entities Affected:


Businesses


Government Levels Affected:


None


Agency Contact:
Donald Christensen
Associate Administrator for Investment
Small Business Administration
409 Third Street SW.
Suite 6300
Washington, DC 20416
Phone: 202 205-6510
Fax: 202 205-6959
RIN: 3245-AD82
_______________________________________________________________________
SBA
147.  MINORITY SMALL BUSINESS AND CAPITAL OWNERSHIP 
DEVELOPMENT/ SMALL DISADVANTAGED BUSINESS STATUS PROTEST AND APPEAL 
PROCEDURE (SECTION 610 REVIEW)
Priority:


Economically Significant. Major under 5 USC 801.


Reinventing Government:


This rulemaking is part of the Reinventing Government effort. It will 
revise text in the CFR to reduce burden or duplication, or streamline 
requirements.


Legal Authority:


 15 USC 634(b)(6); 15 USC 637(a); 15 USC 636(j)


CFR Citation:


 13 CFR 124


Legal Deadline:


None


Abstract:


This proposal will represent a complete revision and streamlining of 
the regulations pertinent to the provision of contractual and 
managerial assistance to small businesses owned and operated by 
socially and economically disadvantaged individuals.


Statement of Need:


On March 4, 1996, President Clinton issued a memorandum to each Federal 
agency directing them to simplify their regulations and eliminate those 
that were unnecessary. This proposed rule would reorganize Part 124 
which governs the minority small business and capital ownership 
development program as well as streamline procedures for entering and 
participating in the program.


Summary of the Legal Basis:


Not required by statute or court order.


Alternatives:


The revision proposed will amend administrative provisions in existent 
regulations.


Anticipated Costs and Benefits:


This proposal will create no additional cost to the Government or the 
public.


Risks:


This proposal addresses no risks to the public health or safety or the 
environment.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           01/00/97
Small Entities Affected:


Businesses


Government Levels Affected:


State, Tribal, Federal


Analysis:


Regulatory Flexibility Analysis


Procurement:


This is a procurement-related action for which there is no statutory 
requirement. There is no paperwork burden associated with this action.


Agency Contact:
John W. Klein
Chief Counsel for Special Programs
Small Business Administration
409 Third Street SW.
7th Floor
Washington, DC 20416
Phone: 202 205-6645
RIN: 3245-AD83
_______________________________________________________________________
SBA
148.  BUSINESS LOANS FINANCING NON-DEPOSITORY INSTITUTIONS 
(SECTION 610 REVIEW)
Priority:


Economically Significant. Major under 5 USC 801.


Unfunded Mandates:


This action may affect State, local or tribal governments and the 
private sector.


Legal Authority:


 15 USC 634(b)(6); 15 USC 636(a)


CFR Citation:


 13 CFR 120.420


Legal Deadline:


None


Abstract:


This proposal will modify present regulations to permit depository as 
well as nondepository lenders to borrow against and securitize the 
unguaranteed portions of SBA guaranteed loans.


Statement of Need:


This proposed regulation is intended to provide the same opportunity to 
borrow against or securitize unguaranteed portions to all of SBA's 
participating lenders as is presently provided to nondepository 
lenders.


Summary of the Legal Basis:


Not required by statute or court order.


Alternatives:


The alternatives are to continue a policy of permitting only selected 
participants attain the benefits of borrowing against or securitizing 
unguaranteed portions.


Anticipated Costs and Benefits:


The economic benefit to participating lenders is difficult to quantify 
because it depends upon how many avail themselves of the ability to 
borrow or securitize provided by the proposal. SBA anticipates that 
many lenders will utilize the proposal if finalized, and that the 
transaction covered by the regulation could amount to over $100 million 
per year, which would be available to relend to small businesses.


Risks:


The proposal will address no risks to the public health and safety or 
to the environment. The economic risks to SBA of a transaction which 
fails would be minimized by the substance of the regulation.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM                                                           01/00/97
Small Entities Affected:


Businesses


Government Levels Affected:


None


Analysis:


Regulatory Flexibility Analysis

[[Page 62193]]

Agency Contact:
James Hammersley
Deputy Assistant Administrator for
Portfolio Management
Small Business Administration
409 Third Street SW.
8th Floor
Washington, DC 20416
Phone: 202 205-6490
RIN: 3245-AD84
BILLING CODE 8025-01-F