Transportation And Warehousing; Information; Finance And Insurance; Real Estate And Rental And Leasing – InsuranceNewsNet
Transportation And Warehousing; Information; Finance And Insurance; Real Estate And Rental And Leasing – InsuranceNewsNet

Final rule.

CFR Part: “13 CFR Part 121”

RIN Number: “RIN 3245-AG90”

Citation: “87 FR 18627”

Page Number: “18627”

728x90 | NAIFA | 2022-03 | Leaderboard

“Rules and Regulations”

Agency: “U.S. Small Business Administration.”

SUMMARY: The U.S. Small Business Administration (SBA) is increasing its receipts-based small business size definitions (commonly referred to as “size standards”) for North American Industry Classification System (NAICS) sectors related to Transportation and Warehousing, Information, Finance and Insurance, and Real Estate and Rental and Leasing. Specifically, SBA is increasing the size standards for 45 industries in those sectors, including 18 industries in NAICS Sector 48-49 (Transportation and Warehousing), eight industries in NAICS Sector 51 (Information), ten industries in NAICS Sector 52 (Finance and Insurance), and nine industries in NAICS Sector 53 (Real Estate and Rental and Leasing).

   DATES: This rule is effective May 2, 2022.

   FOR FURTHER INFORMATION CONTACT: Samuel Castilla, 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 (CDC/504), 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 five 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 five-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. SBA also adjusts its monetary-based size standards for inflation at least once every five 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 five years to adopt the Office of Management and Budget’s (OMB) quinquennial North American Industry Classification System (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). /1/

   FOOTNOTE 1 On December 21, 2021, the U. S. Office of Management and Budget (OMB) published its “Notice of NAICS 2022 Final Decisions . . . ” (86 FR 72277), accepting the Economic Classification Policy Committee (ECPC) recommendations, as outlined in the July 2, 2021, Federal Register notice (86 FR 35350), for the 2022 revisions to the North American Industry Classification System (NAICS), . . . .” In the near future, SBA will issue a proposed rule to adopt the OMB’s NAICS 2022 revisions for its table of size standards. SBA anticipates updating its size standards with the NAICS 2022 revisions, effective October 1, 2022. END FOOTNOTE

This final rule is one of a series of final rules that will revise size standards of industries grouped by various NAICS sectors. Rather than revise all size standards at one time, SBA is revising size standards by grouping industries within various NAICS sectors that use the same size measure (i.e., employees or receipts). In the prior review, SBA revised size standards mostly on a sector-by-sector basis. As part of the second five-year review of size standards, SBA reviewed all receipt-based size standards in NAICS Sectors 48-49, 51, 52, and 53 to determine whether the existing size standards should be retained or revised based on the current industry and Federal market data. After its review, SBA published in the October 2, 2020, issue of the Federal Register (85 FR 62372) a proposed rule to increase the size standards for 18 industries in NAICS Sector 48-49 (Transportation and Warehousing), eight industries in NAICS Sector 51 (Information), ten industries in NAICS Sector 52 (Finance and Insurance), and nine industries in NAICS Sector 53 (Real Estate and Rental and Leasing). In this final rule, SBA is adopting the proposed size standards from the October 2020 proposed rule without change.

In conjunction with the current comprehensive size standards review, SBA developed a revised “Size Standards Methodology” (Methodology) for developing, reviewing, and modifying size standards, when necessary. SBA’s revised Methodology provides a detailed description of its analyses of various industry and program factors and data sources, and how the agency uses the results to establish and revise size standards. In the proposed rule itself, SBA detailed how it applied its revised Methodology to review and modify where necessary, the existing size standards for industries covered in this final rule. 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 (84 FR 14587) of the issuance of the final revised Methodology. SBA’s Size Standards Methodology is available on its website at www.sba.gov/size.

In evaluating an industry’s size standard, SBA examines its characteristics (such as average firm size, startup costs, industry competition and distribution of firms by size) and the small business level and share of Federal contract dollars in that industry. SBA also examines the potential impact a size standard revision might have on its financial assistance programs, and whether a business concern under a revised size standard would be dominant in its industry. SBA analyzed the characteristics of each receipt-based industry in NAICS Sectors 48-49, 51, 52, and 53, mostly using a special tabulation obtained from the U.S. Bureau of the Census from its 2012 Economic Census (the latest available). The 2012 special tabulation 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. To evaluate average asset size, SBA combines the sales to total assets ratios by industry, obtained from the Risk Management Association’s (RMA) Annual eStatement Studies (http://www.rmahq.org/estatement-studies/) with the simple average receipts size by industry from the 2012 Economic Census tabulation to estimate the average assets size for each industry. SBA also evaluated the small business level and share of Federal contracts in each of the industries using data from the Federal Procurement Data System–Next Generation (FPDS-NG) for fiscal years 2016-2018. Table 4 of the proposed rule, Size Standards Supported by Each Factor for Each Industry (Receipts), shows the results of analyses of industry and Federal contracting factors for each industry and subindustry (exception) covered by the proposed rule. Of the 124 industries and two subindustries (exceptions) reviewed in the proposed rule, the results from analyses of the latest available data on the five primary factors from Table 4 of the proposed rule supported increasing size standards for 45 industries, decreasing size standards for 69 industries, and retaining size standards for nine industries and two subindustries. Additionally, SBA retained the size standard for NAICS 491110 (Postal Service) which the Economic Census does not cover. Table 1, Summary of Calculated Size Standards, summarizes the analytical results from the proposed rule by NAICS sector.

Table 1-Summary of Calculated Size Standards                                                                                                                                                          

NAICS sector                     Sector name                      Number of                        Number of                        Number of                        Number of                        
                                                                  size standards                   size standards                   size standards                   size standards                   
                                                                  reviewed                         increased                        decreased                        unchanged                        
48-49                            Transportation and Warehousing   43                               18                               23                               2                                
51                               Information                      19                               8                                9                                2                                
52                               Finance and Insurance *        39                               * 10                           24                               5                                
53                               Real Estate and Rental and       25                               9                                13                               3                                
                                 Leasing                                                                                                                                                              
All Sectors                      126                              45                               69                               12                                                                

* Includes five assets-based size industries.

In the October 2020 proposed rule, SBA discussed the impacts of the COVID-19 pandemic on small businesses and greater society. Recognizing the wide-ranging economic impacts of the pandemic, SBA decided not to lower any size standards for which the analysis suggested lowering them. Instead, SBA proposed to maintain all size standards for industries in which the analytical results supported a decrease or no change to size standards and adopt all size standards for which the analytical results supported an increase to size standards. To evaluate the impact of the changes to size standards adopted in this final rule on the Federal contracting market and SBA’s loan programs, SBA analyzed FPDS-NG data for fiscal years 2018-2020 and internal data on its guaranteed loan programs for fiscal years 2018-2020. The results of this analysis can be found in the Regulatory Impact Analysis section of this final rule.

In the proposed rule, SBA sought comments on its proposal to increase size standards for 45 industries and retain the current size standards for the remaining 81 industries or subindustries in Sectors 48-49, 51, 52, and 53. Specifically, SBA requested comments on whether the proposed revisions are appropriate for the industries covered by the proposed rule, whether the decision not to lower any size standards is justified by the COVID-19 pandemic, whether the equal weighting of individual factors to derive an industry size standard is appropriate, and whether the data sources used were appropriate or sufficient. SBA also sought comments on its proposal to maintain a common size standard for industries within Subsector 525 and assets-based size standards within NAICS Industry Groups 5221 and 5222. SBA also requested comments on its proposal to retain the size standard for the exception to NAICS 488510 (Non-Vessel Owning Common Carriers and Household Good Forwarders) and NAICS 491110 (Postal Service).

Discussion of Comments

SBA received a total of four comments to the proposed rule from a wide range of entities including an individual, a business, and two trade associations. Of the four comments received, one comment referenced all sectors covered by the proposed rule, one comment referenced NAICS 531210 (Offices of Real Estate Agents and Brokers), one comment referenced NAICS 522130 (Credit Unions), and one comment referenced Sector 23 (construction) which is not covered under this proposed rule. SBA did not evaluate the comment referencing Sector 23 in this final rule, instead, SBA will evaluate that comment under the final rule covering the construction industry (see RIN 3245-AG90 on www.regulations.gov). The four comments to the proposed rule are available at www.regulations.gov (RIN 3245-AG90) and are summarized and discussed below.

Comments on Proposed Changes to All Sectors

One commenter maintained that SBA’s proposed changes to size standards would allow the entry of large businesses to the SBA’s low-interest loan and contracting programs reserved by Congress for small businesses. This commenter further argued that the proposed rule is contrary to the statutory mandate given to the SBA by Congress in this regard. Citing these reasons, the commenter asserted that the proposed rule should be withdrawn.

SBA Response

In the proposed rule, SBA proposed to increase size standards for 45 industries, including eighteen (18) industries in NAICS Sector 48-49 (Transportation and Warehousing), eight (8) industries in NAICS Sector 51 (Information), ten (10) industries in NAICS Sector 52 (Finance and Insurance), and nine (9) industries in NAICS Sector 53 (Real Estate and Rental and Leasing). With an expanded pool of small businesses, it is likely that Federal agencies would set aside more contracts for small businesses under the increases to size standards, thereby increasing opportunities for all small businesses, including the smaller small businesses. Also, the Administration’s recent decision to increase the Government-wide Small Disadvantaged Business (SDB) goal from the current 5% to 11% in fiscal year 2021 (increasing to 15% by fiscal year 2025) is likely to drive agencies to set aside more contracts to small businesses in coming years.

SBA does not agree with the comment that the proposed rule is contrary to the Congressional mandate given to SBA and should not be issued. Pursuant to section 1344 of the Small Business Jobs Act of 2010 (the Jobs Act) (Pub. Law 111-240), SBA is statutorily mandated to review every five years all size standards and make necessary adjustments to reflect current industry and Federal market conditions. The proposed rule was part of the second five-year review of size standards in accordance with the Jobs Act. 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 the Federal marketplace. For the above reasons, SBA is adopting the proposed size standard without change.

Comments on Proposed Changes to NAICS 531210–Offices of Real Estate Agents and Brokers

SBA received a comment from a small business concern specializing in providing lease brokerage and other transaction services to Federal agencies. This comment was in full support of the proposed increase to the size standard for NAICS 531210 (Offices of Real Estate Agents and Brokers) from $8 million to $13 million in average annual receipts. The commenter believed that such an increase is totally consistent with the Government’s policy of providing maximum practicable opportunities to small businesses.

The commenter argued that the proposed increase to the size standard for NAICS 531210 would ensure that small businesses would be able to retain access to the Federal small business assistance programs. It would also ensure that Federal agencies have a larger pool of small businesses from which to draw for their small business procurement programs, thereby increasing competition and lowering prices to the Government. Finally, the commenter believed that the proposed increase would make the size standard for NAICS 531210 more consistent with the growth of the industry in recent years.

SBA Response

SBA agrees with the commenter that the proposed size standard will help to provide maximum practicable opportunities to small businesses in this industry while also expanding the pool of small businesses from which the Federal Government can draw from for their small business procurement programs. Given the expressed support for SBA’s proposed increase to the size standard for NAICS 531210 and the absence of any significant adverse comments opposing the increase, SBA is adopting $13 million in average annual receipts as the size standard for this NAICS code.

Comments on Proposed Changes to NAICS 522130–Credit Unions

SBA received one comment, on behalf of the National Association of Federally Insured Credit Unions (NAFCU), supporting SBA’s proposed increase to all size standards generally, and in particular the size standard for NAICS 522130 (Credit Unions) increasing from $600 million to $750 million in average assets. This comment is in support of SBA’s proposed size standard increase. As the commenter maintained, although credit unions are not-for-profit entities and do not qualify for the SBA’s lending programs, the proposed increases to size standards would provide credit unions that are SBA lenders with an opportunity to provide lending to more newly-qualified small businesses, thereby helping local communities to thrive, promote innovation, and provide jobs.

SBA Response

SBA agrees with the commenter that the proposed changes to size standards will increase the number of businesses eligible to participate in SBA’s financial assistance programs. SBA also agrees with the commenter that SBA’s financial assistance programs can have wide-ranging positive impacts to individuals, businesses, and communities. Given the expressed support for SBA’s proposed increase to the size standard for NAICS 522130 and the absence of any significant adverse comments opposing the increase, SBA is adopting, as proposed, 750 million in average assets as the size standard for NAICS 522130.

Summary of Adopted Revisions to Size Standards

Based on the evaluation of public comments it received on the proposed rule and on its analyses of industry and Federal contracting factors using the latest available data when the proposed rule was prepared, SBA is adopting the size standards, as proposed in the October 2020 proposed rule. Thus, SBA is increasing 45 size standards, including 18 in NAICS Sector 48-49, eight in NAICS Sector 51, ten in NAICS Sector 52, and nine in NAICS Sector 53. A summary of SBA’s size standards revisions in this rule can be found below in Table 2, Summary of Size Standards Revisions in NAICS Sectors 48-49, 51, 52, and 53.

Table 2-Summary of Size Standards Revisions in NAICS Sectors 48-49, 51, 52 and 53                                                                                                                     

NAICS code                              NAICS U.S. industry title               Current                                 Calculated                              Adopted size                            
                                                                                size standard                           size standard                           standard                                
                                                                                ( $ million)                            ( $ million)                            ( $ million)                            
481219                                  Other Nonscheduled Air Transportation   16.5                                    22.0                                    22.0                                    
484110                                  General Freight Trucking, Local         30.0                                    9.0                                     30.0                                    
484121                                  General Freight Trucking,               30.0                                    22.0                                    30.0                                    
                                        Long-Distance, Truckload                                                                                                                                        
484122                                  General Freight Trucking,               30.0                                    38.0                                    38.0                                    
                                        Long-Distance, Less Than Truckload                                                                                                                              
484210                                  Used Household and Office Goods Moving  30.0                                    21.0                                    30.0                                    
484220                                  Specialized Freight (except Used Goods) 30.0                                    15.0                                    30.0                                    
                                        Trucking, Local                                                                                                                                                 
484230                                  Specialized Freight (except Used Goods) 30.0                                    22.0                                    30.0                                    
                                        Trucking, Long-Distance                                                                                                                                         
485111                                  Mixed Mode Transit Systems              16.5                                    25.5                                    25.5                                    
485112                                  Commuter Rail Systems                   16.5                                    41.5                                    41.5                                    
485113                                  Bus and Other Motor Vehicle Transit     16.5                                    28.5                                    28.5                                    
                                        Systems                                                                                                                                                         
485119                                  Other Urban Transit Systems             16.5                                    33.0                                    33.0                                    
485210                                  Interurban and Rural Bus Transportation 16.5                                    28.0                                    28.0                                    
485310                                  Taxi Service                            16.5                                    13.0                                    16.5                                    
485320                                  Limousine Service                       16.5                                    12.5                                    16.5                                    
485410                                  School and Employee Bus Transportation  16.5                                    26.5                                    26.5                                    
485510                                  Charter Bus Industry                    16.5                                    13.0                                    16.5                                    
485991                                  Special Needs Transportation            16.5                                    13.0                                    16.5                                    
485999                                  All Other Transit and Ground Passenger  16.5                                    16.0                                    16.5                                    
                                        Transportation                                                                                                                                                  
486210                                  Pipeline Transportation of Natural Gas  30.0                                    36.5                                    36.5                                    
486990                                  All Other Pipeline Transportation       40.5                                    31.5                                    40.5                                    
487110                                  Scenic and Sightseeing Transportation   8.0                                     18.0                                    18.0                                    
                                        Land                                                                                                                                                            
487210                                  Scenic and Sightseeing                  8.0                                     12.5                                    12.5                                    
                                        TransportationWater                                                                                                                                             
487990                                  Scenic and Sightseeing Transportation   8.0                                     22.0                                    22.0                                    
                                        Other                                                                                                                                                           
488111                                  Air Traffic Control                     35.0                                    30.5                                    35.0                                    
488119                                  Other Airport Operations                35.0                                    25.5                                    35.0                                    
488190                                  Other Support Activities for Air        35.0                                    27.5                                    35.0                                    
                                        Transportation                                                                                                                                                  
488210                                  Support Activities for Rail             16.5                                    30.0                                    30.0                                    
                                        Transportation                                                                                                                                                  
488310                                  Port and Harbor Operations              41.5                                    38.0                                    41.5                                    
488320                                  Marine Cargo Handling                   41.5                                    39.0                                    41.5                                    
488330                                  Navigational Services to Shipping       41.5                                    26.5                                    41.5                                    
488390                                  Other Support Activities for Water      41.5                                    23.5                                    41.5                                    
                                        Transportation                                                                                                                                                  
488410                                  Motor Vehicle Towing                    8.0                                     7.0                                     8.0                                     
488490                                  Other Support Activities for Road       8.0                                     16.0                                    16.0                                    
                                        Transportation                                                                                                                                                  
488510                                  Freight Transportation Arrangement      16.5                                    17.5                                    17.5                                    
488510 (Exception)                      Non-Vessel Owning Common Carriers and   30.0                                    30.0                                    30.0                                    
                                        Household Goods Forwarders                                                                                                                                      
488991                                  Packing and Crating                     30.0                                    17.5                                    30.0                                    
488999                                  All Other Support Activities for        8.0                                     22.0                                    22.0                                    
                                        Transportation                                                                                                                                                  
491110                                  Postal Services                         8.0                                     8.0                                     8.0                                     
492210                                  Local Messengers and Local Delivery     30.0                                    10.5                                    30.0                                    
493110                                  General Warehousing and Storage         30.0                                    25.0                                    30.0                                    
493120                                  Refrigerated Warehousing and Storage    30.0                                    32.0                                    32.0                                    
493130                                  Farm Product Warehousing and Storage    30.0                                    13.5                                    30.0                                    
493190                                  Other Warehousing and Storage           30.0                                    32.0                                    32.0                                    
511210                                  Software Publishers                     41.5                                    40.0                                    41.5                                    
512110                                  Motion Picture and Video Production     35.0                                    33.0                                    35.0                                    
512120                                  Motion Picture and Video Distribution   34.5                                    26.0                                    34.5                                    
512131                                  Motion Picture Theaters (except         41.5                                    39.5                                    41.5                                    
                                        Drive-Ins)                                                                                                                                                      
512132                                  Drive-In Motion Picture Theaters        8.0                                     11.0                                    11.0                                    
512191                                  Teleproduction and Other Postproduction 34.5                                    19.5                                    34.5                                    
                                        Services                                                                                                                                                        
512199                                  Other Motion Picture and Video          22.0                                    25.0                                    25.0                                    
                                        Industries                                                                                                                                                      
512240                                  Sound Recording Studios                 8.0                                     9.5                                     9.5                                     
512290                                  Other Sound Recording Industries        12.0                                    20.0                                    20.0                                    
515111                                  Radio Networks                          35.0                                    41.5                                    41.5                                    
515112                                  Radio Stations                          41.5                                    36.0                                    41.5                                    
515120                                  Television Broadcasting                 41.5                                    41.5                                    41.5                                    
515210                                  Cable and Other Subscription            41.5                                    41.5                                    41.5                                    
                                        Programming                                                                                                                                                     
517410                                  Satellite Telecommunications            35.0                                    38.5                                    38.5                                    
517919                                  All Other Telecommunications            35.0                                    33.0                                    35.0                                    
518210                                  Data Processing, Hosting, and Related   35.0                                    33.0                                    35.0                                    
                                        Services                                                                                                                                                        
519110                                  News Syndicates                         30.0                                    32.0                                    32.0                                    
519120                                  Libraries and Archives                  16.5                                    18.5                                    18.5                                    
519190                                  All Other Information Services          30.0                                    26.5                                    30.0                                    
522110                                  Commercial Banking                      600 million in assets                   750 million in assets                   750 million in assets.                  
522120                                  Savings Institutions                    600 million in assets                   750 million in assets                   750 million in assets.                  
522130                                  Credit Unions                           600 million in assets                   750 million in assets                   750 million in assets.                  
522190                                  Other Depository Credit Intermediation  600 million in assets                   750 million in assets                   750 million in assets.                  
522210                                  Credit Card Issuing                     600 million in assets                   750 million in assets                   750 million in assets.                  
522220                                  Sales Financing                         41.5                                    38.0                                    41.5                                    
522291                                  Consumer Lending                        41.5                                    41.5                                    41.5                                    
522292                                  Real Estate Credit                      41.5                                    40.0                                    41.5                                    
522293                                  International Trade Financing           41.5                                    31.0                                    41.5                                    
522294                                  Secondary Market Financing              41.5                                    41.5                                    41.5                                    
522298                                  All Other Nondepository Credit          41.5                                    35.5                                    41.5                                    
                                        Intermediation                                                                                                                                                  
522310                                  Mortgage and Nonmortgage Loan Brokers   8.0                                     13.0                                    13.0                                    
522320                                  Financial Transactions Processing,      41.5                                    39.5                                    41.5                                    
                                        Reserve, and Clearinghouse Activities                                                                                                                           
522390                                  Other Activities Related to Credit      22.0                                    25.0                                    25.0                                    
                                        Intermediation                                                                                                                                                  
523110                                  Investment Banking and Securities       41.5                                    41.0                                    41.5                                    
                                        Dealing                                                                                                                                                         
523120                                  Securities Brokerage                    41.5                                    37.0                                    41.5                                    
523130                                  Commodity Contracts Dealing             41.5                                    32.5                                    41.5                                    
523140                                  Commodity Contracts Brokerage           41.5                                    26.5                                    41.5                                    
523210                                  Securities and Commodity Exchanges      41.5                                    33.0                                    41.5                                    
523910                                  Miscellaneous Intermediation            41.5                                    27.0                                    41.5                                    
523920                                  Portfolio Management                    41.5                                    35.5                                    41.5                                    
523930                                  Investment Advice                       41.5                                    27.5                                    41.5                                    
523991                                  Trust, Fiduciary, and Custody           41.5                                    41.5                                    41.5                                    
                                        Activities                                                                                                                                                      
523999                                  Miscellaneous Financial Investment      41.5                                    41.5                                    41.5                                    
                                        Activities                                                                                                                                                      
524113                                  Direct Life Insurance Carriers          41.5                                    37.5                                    41.5                                    
524114                                  Direct Health and Medical Insurance     41.5                                    38.5                                    41.5                                    
                                        Carriers                                                                                                                                                        
524127                                  Direct Title Insurance Carriers         41.5                                    41.5                                    41.5                                    
524128                                  Other Direct Insurance (except Life,    41.5                                    39.0                                    41.5                                    
                                        Health, and Medical) Carriers                                                                                                                                   
524130                                  Reinsurance Carriers                    41.5                                    39.5                                    41.5                                    
524210                                  Insurance Agencies and Brokerages       8.0                                     13.0                                    13.0                                    
524291                                  Claims Adjusting                        22.0                                    18.0                                    22.0                                    
524292                                  Third Party Administration of Insurance 35.0                                    40.0                                    40.0                                    
                                        and Pension Funds                                                                                                                                               
524298                                  All Other Insurance Related Activities  16.5                                    27.0                                    27.0                                    
525110                                  Pension Funds                           35.0                                    32.5                                    35.0                                    
525120                                  Health and Welfare Funds                35.0                                    32.5                                    35.0                                    
525190                                  Other Insurance Funds                   35.0                                    32.5                                    35.0                                    
525910                                  Open-End Investment Funds               35.0                                    31.5                                    35.0                                    
525920                                  Trusts, Estates, and Agency Accounts    35.0                                    32.5                                    35.0                                    
525990                                  Other Financial Vehicles                35.0                                    32.5                                    35.0                                    
531110 *                              Lessors of Residential Buildings and    30.0                                    23.5                                    30.0                                    
                                        Dwellings                                                                                                                                                       
531120 *                              Lessors of Nonresidential Buildings     30.0                                    28.0                                    30.0                                    
                                        (except Miniwarehouses)                                                                                                                                         
531130 *                              Lessors of Miniwarehouses and           30.0                                    20.5                                    30.0                                    
                                        Self-Storage Units                                                                                                                                              
531190 *                              Lessors of Other Real Estate Property   30.0                                    16.0                                    30.0                                    
531210                                  Offices of Real Estate Agents and       8.0                                     13.0                                    13.0                                    
                                        Brokers                                                                                                                                                         
531311                                  Residential Property Managers           8.0                                     11.0                                    11.0                                    
531312                                  Nonresidential Property Managers        8.0                                     17.0                                    17.0                                    
531320                                  Offices of Real Estate Appraisers       8.0                                     8.5                                     8.5                                     
531390                                  Other Activities Related to Real Estate 8.0                                     17.0                                    17.0                                    
532111                                  Passenger Car Rental                    41.5                                    41.5                                    41.5                                    
532112                                  Passenger Car Leasing                   41.5                                    41.0                                    41.5                                    
532120                                  Truck, Utility Trailer, and RV          41.5                                    41.5                                    41.5                                    
                                        (Recreational Vehicle) Rental and                                                                                                                               
                                        Leasing                                                                                                                                                         
532210                                  Consumer Electronics and Appliances     41.5                                    40.5                                    41.5                                    
                                        Rental                                                                                                                                                          
532281                                  Formal Wear and Costume Rental          22.0                                    12.5                                    22.0                                    
532282                                  Video Tape and Disc Rental              30.0                                    31.0                                    31.0                                    
532283                                  Home Health Equipment Rental            35.0                                    36.0                                    36.0                                    
532284                                  Recreational Goods Rental               8.0                                     7.5                                     8.0                                     
532289                                  All Other Consumer Goods Rental         8.0                                     11.0                                    11.0                                    
532310                                  General Rental Centers                  8.0                                     7.5                                     8.0                                     
532411                                  Commercial Air, Rail, and Water         35.0                                    40.0                                    40.0                                    
                                        Transportation Equipment Rental and                                                                                                                             
                                        Leasing                                                                                                                                                         
532412                                  Construction, Mining, and Forestry      35.0                                    34.0                                    35.0                                    
                                        Machinery and Equipment Rental and                                                                                                                              
                                        Leasing                                                                                                                                                         
532420                                  Office Machinery and Equipment Rental   35.0                                    32.5                                    35.0                                    
                                        and Leasing                                                                                                                                                     
532490                                  Other Commercial and Industrial         35.0                                    30.0                                    35.0                                    
                                        Machinery and Equipment Rental and                                                                                                                              
                                        Leasing                                                                                                                                                         
533110                                  Lessors of Nonfinancial Intangible      41.5                                    35.0                                    41.5                                    
                                        Assets (except Copyrighted Works)                                                                                                                               

NAICS codes 531110, 531120, 531130, and 531190-Leasing of Building Space to the Federal Government by Owners: For Government procurement, a size standard of $ 41.5 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent. See Footnote 9 to the SBA's Table of Size Standards.

Table 3, Summary of Adopted Size Standards Revisions by Sector, below, summarizes the adopted changes to size standards by NAICS sector.

Table 3-Summary of Adopted Size Standards Revisions by Sector                                                                                                                                         

NAICS sector                     Sector name                      Number of size                   Number of size                   Number of size                   Number of size                   
                                                                  standards                        standards                        standards                        standards                        
                                                                  reviewed                         increased                        decreased                        maintained                       
48-49                            Transportation and Warehousing   43                               18                               0                                25                               
51                               Information                      19                               8                                0                                11                               
52 *                           Finance and Insurance            39                               10                               0                                29                               
53                               Real Estate and Rental and       25                               9                                0                                16                               
                                 Leasing                                                                                                                                                              
All Sectors                      126                              45                               0                                81                                                                

Evaluation of Dominance in Field of Operation

SBA determined that for the industries evaluated under this final rule, no individual firm at or below the adopted size standards would be large enough to dominate its field of operation. At the size standard levels adopted in this final rule, the small business share of total industry receipts among those industries would be, on average, 0.4%, varying from 0.005% to 4.8%. These market shares effectively preclude a firm at or below the adopted size standards from exerting control on any of the industries.

Alternatives Considered

In response to the unprecedented economic impacts of the ongoing COVID-19 pandemic on small businesses and Government response, SBA is adopting increases to size standards where the data suggests increases are warranted, and retaining all current size standards where the data suggested lowering of size standards is appropriate. SBA is also retaining all current size standards where the data suggested no changes to the current size standards.

Nonetheless, SBA considered two other alternatives. Alternative Option One was to adopt changes to size standards exactly as suggested by the analytical results. In other words, Alternative Option One would entail increasing size standards for 45 industries, decreasing them for 69 industries, and retaining them at their current levels for 12 industries. Alternative Option Two was to retain all current size standards.

SBA did not adopt Alternative Option One because it 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 small business set-aside contracts and SBA’s financial assistance in some cases. Lowering size standards in the current environment would also run counter to various measures the Federal Government has implemented to help small businesses and the overall economy recover from the ongoing COVID-19 pandemic. Considering the impacts of the Great Recession and Government actions that followed to support small businesses and the overall economy, SBA also adopted a policy of not decreasing size standards during the first five-year review of size standards, even though the data supported decreases.

Under Alternative Option Two, given the current COVID-19 pandemic, SBA considered retaining the current level of all size standards even though the analytical results suggested changing them. 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 Alternative Option Two because the results discussed in the Regulatory Impact Analysis section, below, show that retaining all size standards at their current levels would cause otherwise qualified small businesses to forgo various small business benefits becoming available to them under the option of increasing 45 and retaining 81 size standards. Such benefits would include access to Federal contracts set aside for small businesses and capital through SBA’s loan and SBIC programs, and exemptions from paperwork and other compliance requirements.

Compliance With Executive Orders 12866, the Congressional Review Act (5 U.S.C. 801-808), 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 final rule is a significant regulatory action for purposes of Executive Order 12866. Accordingly, in the next section SBA provides a Regulatory Impact Analysis of this final rule, including (1) A statement of the need for the regulatory action, (2) An examination of alternative approaches, and (3) An evaluation of the benefits and costs–both quantitative and qualitative–of the regulatory action and the alternatives considered.

Regulatory Impact Analysis

1. What is the need for this regulatory action?

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.

Under the Small Business Act (Act) (15 U.S.C. 632(a)), 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 five years all size standards and make necessary adjustments to reflect current industry and Federal market conditions. This final rule is part of the second five-year review of size standards in accordance with the Jobs Act. The first five-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 the size standards revisions adopted for industries being reviewed in this final rule will make size standards more reflective of the current economic characteristics of businesses in those industries and the latest trends in the Federal marketplace.

The revisions to the existing size standards for 45 industries in NAICS Sectors 48-49, 51, 52, and 53 are consistent with SBA’s statutory mandate 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 regulatory changes and their alternatives.

Changes to Size Standards

Based on the results from the analyses of the latest industry and Federal contracting data, as well as consideration of the impact of size standards changes on small businesses and significant adverse impacts of the COVID-19 emergency on small firms and the overall economy, of the total of 126 industries in Sectors 48-49, 51, 52, and 53 that have receipts-based size standards, SBA is adopting increases to size standards for 45 industries and maintaining current size standards for the remaining 81 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 small business benefits (such as set-aside contracts, SBA’s loans, disaster assistance, etc.) they receive under the current size standards as a baseline, one can examine the potential benefits, costs, and transfer impacts of changes to size standards on small businesses and on the overall economy.

Based on the 2012 Economic Census (the latest available when the proposed rule was prepared), of a total of about 700,544 firms in industries in Sectors 48-49, 51, 52 (except assets-based size standards), and 53 for which SBA evaluated their receipt-based size standards, 97.2% are considered small under the current size standards. That percentage varies from 95.8% in Sector 51 to 97.9% in Sector 53. Based on the data from Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA), from a total of about 5,415 depository institutions 77.3% are small and from a total of 5,492 credit unions, 91.2% are small under the current asset-based size standards. Based on the data from FPDS-NG for fiscal years 2018-2020, about 11,939 unique firms in those industries with receipt-based size standards, received at least one Federal contract during that period, of which 73.5% were small under the current size standards. For these sectors, of $20.3 billion in total average annual contract dollars awarded to businesses during that period, 21.4% went to small businesses. From the total small business contract dollars awarded during the period considered, 43.8% were awarded through various set-aside programs and 56.2% were awarded through non-set aside contracts. Based on the FDIC data, of a total of $18,034 billion in assets, 4.6% are owned by small depository institutions. With respect to Credit Unions, from a total of $1,471 billion in assets, 25.7% are owned by small credit unions.

Based on the SBA’s internal data on its loan programs for fiscal years 2018-2020, small businesses in those industries received, on an annual basis, a total of 6,570 7(a) and 504 loans in that period, totaling about $2.7 billion, of which 83% was issued through the 7(a) program and 17% was issued through the CDC/504 program. During fiscal years 2018-2020, small businesses in those industries also received 749 loans through the SBA’s Economic Injury Disaster Loan (EIDL) program, totaling about $19.2 million on an annual basis. /2/ Table 4, Baseline for All Industries, provides these baseline results by NAICS sector.

   FOOTNOTE 2 The analysis of the disaster loan data excludes physical disaster loans that are available to anyone regardless of size, disaster loans issued to nonprofit entities, and EIDLs issued under the COVID-19 relief program. Effective January 1, 2022, SBA stopped accepting applications for new COVID EIDL loans or advances. Thus, the disaster loan analysis presented here pertains to the regular EIDL loans only.

    SBA estimates impacts of size standards changes on EIDL loans by calculating the ratio of businesses getting EIDL loans to total small businesses (based on the Economic Census data) and multiplying it by the number of impacted small firms. Due to data limitations, for FY 2019-20, some loans with both physical and EIDL loan components could not be broken into the physical and EIDL loan amounts. In such cases, SBA applied the ratio of EIDL amount to total (physical loan + EIDL) amount using FY 2016-18 data to the FY 2019-20 data to obtain the amount attributable to the EIDL loans. END FOOTNOTE

Increases to Size Standards

As stated above, of 126 receipts-based size standards in NAICS Sectors 48-49, 51, 52, and 53 reviewed, based on the results from analyses of latest industry and Federal market data, impacts of size standards changes on small businesses, and considerations of the impacts of the COVID-19 pandemic and public comments to the proposed rule, SBA is adopting increases to size standards for 45 industries and maintaining size standards for 79 industries and two subindustries (exceptions). Below are descriptions of the benefits, costs, and transfer impacts of the increases to size standards adopted in this final rule.

The results of regulatory impact analyses SBA provided in the October 2020 proposed rule were based on the FPDS-NG and SBA loan data for fiscal years 2016-2018. In this final rule, SBA is updating the impact analysis results by using the FPDS-NG and SBA loan data for fiscal years 2018-2020. Accordingly, there can be some differences between the proposed rule and this final rule with respect to impacts of size standards changes on Federal contracts and SBA loans.

Table 4-Baseline for All Industries                                                                                                                                                                   

                               Sector 48-49                     Sector 51                        Sector 52                        Sector 53                        Total                            
Baseline All Industries (current 43                               19                               39                               25                               126                              
size standards)                                                                                                                                                                                       
Total firms (2012 Economic       162,147                          45,821                           220,860                          271,716                          700,544                          
Census)                                                                                                                                                                                               
Total small firms under current  156,173                          43,915                           214,790                          265,977                          680,855                          
size standards (2012 Economic                                                                                                                                                                         
Census)                                                                                                                                                                                               
Small firms as % of total firms  96.3%                            95.8%                            97.3%                            97.9%                            97.2%                            
Total contract dollars ( $       $ 8,205                          $ 8,103                          $ 3,012                          $ 986                            $ 20,306                         
million) (FPDS-NG FY2018-2020)                                                                                                                                                                        
Total small business contract    $ 1,492                          $ 1,926                          $ 410.                           $ 520                            $ 4,348                          
dollars under current standards                                                                                                                                                                       
( $ million) (FPDS-NG                                                                                                                                                                                 
FY2020-2018)                                                                                                                                                                                          
Small business dollars as % of   18.2%                            23.8%                            13.6%                            52.7%                            21.4%                            
total dollars (FPDS-NG                                                                                                                                                                                
FY2018-2020)                                                                                                                                                                                          
Total no. of unique firms        3,378                            5,119                            500                              3,351                            11,939                           
getting contracts (FPDS-NG                                                                                                                                                                            
FY2018-2020)                                                                                                                                                                                          
Total no. of unique small firms  2,558                            3555                             258                              2,591                            8,777                            
getting small business contracts                                                                                                                                                                      
(FPDS-NG FY2018-2020)                                                                                                                                                                                 
Small business firms as % of     75.7%                            69.4%                            51.6%                            77.3%                            73.5%                            
total firms                                                                                                                                                                                           
No. of 7(a) and 504/CDC loans    3,406                            402                              1,165                            1,597                            6,570                            
(FY 2018-2020)                                                                                                                                                                                        
Amount of 7(a) and 504 loans ( $ $ 933                            $ 190                            $ 547                            $ 1,079                          $ 2,749                          
million) (FY 2018-2020)                                                                                                                                                                               
No. of EIDL loans (FY            87                               19                               45                               598                              749                              
2018-2020) *                                                                                                                                                                                        
Amount of EIDL loans ( $         $ 3.9                            $ 0.5                            $ 1.6                            $ 13.2                           $ 19.2                           
million) (FY 2018-2020) *                                                                                                                                                                           
Total Number of Depository       5,415                                                                                                                                                                
Institutions (FDIC, SDI) (2018)                                                                                                                                                                       
Number of Small Depository       4,188                                                                                                                                                                
Institutions (FDIC, SDI) (2018)                                                                                                                                                                       
Small firms as % of total        77.3%                                                                                                                                                                
Depository Institutions (2018)                                                                                                                                                                        
Total Assets of Depository       $ 18,034,372                                                                                                                                                         
Institutions ( $ million) (FDIC,                                                                                                                                                                      
SDI) (2018)                                                                                                                                                                                           
Total Assets of Small Depository $ 837,836                                                                                                                                                            
Institutions ( $ million) (FDIC,                                                                                                                                                                      
SDI) (2018)                                                                                                                                                                                           
SB Assets as % of Total Assets   4.6%                                                                                                                                                                 
Total Number of Credit Unions    5,492                                                                                                                                                                
(NCUA) (2018)                                                                                                                                                                                         
Number of small Credit Unions    5,010                                                                                                                                                                
(NCUA) (2018)                                                                                                                                                                                         
Small firms as % of total        91.2%                                                                                                                                                                
Depository Institutions                                                                                                                                                                               
Total Assets of Credit Unions (  $ 1,470,839                                                                                                                                                          
$ million) (NCUA) (2018)                                                                                                                                                                              
Total Assets of Small Credit     $ 377,619                                                                                                                                                            
Unions ( $ million) (NCUA)                                                                                                                                                                            
(2018)                                                                                                                                                                                                
SB Assets as % of Total Assets   25.7%                                                                                                                                                                
of Credit Unions                                                                                                                                                                                      

* Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for new COVID EIDL loans or advances.

Benefits of Increasing Size Standards

The most significant benefit to businesses from increases to size standards is gaining eligibility for Federal small business assistance programs or retaining eligibility for a longer period. These include SBA’s business loan programs, Economic Injury Disaster Loan (EIDL) program, and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted, set-aside opportunities for small businesses under SBA’s various business development and contracting programs. These include the 8(a)/Business Development (BD) Program, the Small Disadvantaged Businesses (SDB) Program, the Historically Underutilized Business Zones (HUBZone) Program, the Women-Owned Small Businesses (WOSB) Program, the Economically Disadvantaged Women-Owned Small Businesses (EDWOSB) Program, and the Service-Disabled Veteran-Owned Small Businesses (SDVOSB) Program.

Besides set-aside contracting and financial assistance 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 programs. 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 45 industries in NAICS Sectors 48-49, 51, 52, and 53 for which it is increasing size standards, about 1,790 firms not small under the current size standards, will become small under the adopted size standards increases and therefore become eligible for these programs. That represents about 0.6% of all firms classified as small under the current size standards in industries for which SBA is adopting increases to size standards. When adopted, SBA’s size standards would result in an increase to the small business share of total receipts in those industries from 29.9% to 32.7%. Table 5, Impacts of Increasing Size Standards, provides impacts of increasing 45 industries by NAICS sector.

With more businesses qualifying as small under the adopted increases to size standards, Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs. Growing small businesses that are close to exceeding the current size standards will be able to retain their small business status for a longer period under the higher size standards, thereby enabling them to continue to benefit from the small business programs.

As shown in Table 5, based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates that about 53 firms that are active in Federal contracting in those industries would gain small business status under the adopted size standards. Based on the same data, SBA estimates that those newly-qualified small businesses under the increases to 45 size standards could receive Federal small business contracts totaling about $20 million annually. That represents a 2.3% increase to small business dollars from the baseline.

Based on the FDIC data for fiscal year 2018, SBA estimates that about 200 depository institutions would gain small institution status under the adopted increases to asset-based size standards with an additional $132 billion or 15.8% increase in small depository institutions’ assets. Also, based on the NCUA data for fiscal year 2018, SBA estimates that about 85 credit unions would gain small business status under the adopted increases to size standards, with an additional $56 billion in assets or 14.9% increase for small credit unions (see Table 5).

Table 5-Impacts of Increasing Size Standards                                                                                                                                                          

                               Sector 48-49                     Sector 51                        Sector 52                        Sector 53                        Total                            
No. of industries with increases 18                               8                                10                               9                                45                               
to size standards                                                                                                                                                                                     
Total current small businesses   27,255                           5,368                            135,774                          150,404                          318,800                          
in industries with increases to                                                                                                                                                                       
size standards (2012 Economic                                                                                                                                                                         
Census)                                                                                                                                                                                               
Additional firms qualifying as   184                              13                               623                              970                              1,790                            
small under standards (2012                                                                                                                                                                           
Economic Census)                                                                                                                                                                                      
% of additional firms qualifying 0.7%                             0.2%                             0.5%                             0.6%                             0.6%                             
as small relative to current                                                                                                                                                                          
small businesses in industries                                                                                                                                                                        
with increases to size standards                                                                                                                                                                      
No. of current                   419                              267                              93                               1173                             1,943                            
unique small firms getting small                                                                                                                                                                      
business contracts in industries                                                                                                                                                                      
with increases to size standards                                                                                                                                                                      
(FPDS-NG FY2018-2020)  fn1                                                                                                                                                                          
                                                                                                                                                                                                      
Additional small                 23                               4                                5                                22                               53                               
business firms getting small                                                                                                                                                                          
business status (FPDS-NG                                                                                                                                                                              
FY2018-2020)  fn1                                                                                                                                                                                   
                                                                                                                                                                                                      
% increase to small businesses   5.5%                             1.5%                             5.4%                             1.9%                             2.7%                             
relative to current unique small                                                                                                                                                                      
firms getting small business                                                                                                                                                                          
contracts in industries with                                                                                                                                                                          
increases to size standards                                                                                                                                                                           
(FPDS-NG FY2018-2020)                                                                                                                                                                                 
Total small business contract    $ 331.4                          $ 132.1                          $ 178.3                          $ 245.6                          $ 887.3                          
dollars under current standards                                                                                                                                                                       
in industries with increases to                                                                                                                                                                       
size standards ( $ million)                                                                                                                                                                           
(FPDS-NG FY2018-2020)                                                                                                                                                                                 
Estimated                        $ 5.9                            $ 2.1                            $ 3.5                            $ 8.7                            $ 20.3                           
additional small business                                                                                                                                                                             
dollars available to                                                                                                                                                                                  
newly-qualified small firms                                                                                                                                                                           
(using avg. dollars obligated to                                                                                                                                                                      
small businesses) ( $ million)                                                                                                                                                                        
(FPDS-NG FY 2018-2020)  fn2                                                                                                                                                                         
                                                                                                                                                                                                      
% increase to small business     1.8%                             1.6%                             2.0%                             3.6%                             2.3%                             
dollars relative to total small                                                                                                                                                                       
business contract dollars under                                                                                                                                                                       
current standards in industries                                                                                                                                                                       
with increases to size standards                                                                                                                                                                      
Total no. of 7(a) and 504 loans  360                              49                               761                              703                              1,873                            
to small business in industries                                                                                                                                                                       
with increases to size standards                                                                                                                                                                      
(FY 2018-2020)                                                                                                                                                                                        
Total 7(a) and 504 loan amounts  $ 150.6                          $ 21.7                           $ 301.5                          $ 249.8                          $ 723.6                          
to small businesses in                                                                                                                                                                                
industries with increases to                                                                                                                                                                          
size standards ( $ million) (FY                                                                                                                                                                       
2018-2020)                                                                                                                                                                                            
Estimated no. of 7(a) and 504    4                                1                                4                                5                                14                               
loans to newly-qualified small                                                                                                                                                                        
firms                                                                                                                                                                                                 
Estimated 7(a) and 504 loan      $ 2.5                            $ 0.4                            $ 1.6                            $ 1.8                            $ 6.3                            
amounts to newly-qualified small                                                                                                                                                                      
firms ( $ million)                                                                                                                                                                                    
% increase to 7(a) and 504 loan  0.3%                             0.2%                             0.3%                             0.2%                             0.2%                             
amount relative to the total                                                                                                                                                                          
amount of 7(a) and 504 loans in                                                                                                                                                                       
industries with increases to                                                                                                                                                                          
size standards                                                                                                                                                                                        
Total no. of EIDL                59                               8                                0                                98                               165                              
loans to small businesses in                                                                                                                                                                          
industries with increases to                                                                                                                                                                          
size standards (FY 2018-2020)                                                                                                                                                                       
fn3                                                                                                                                                                                                   
Total amount of                  $ 2.7                            $ 0.2                            $ 1.5                            $ 4.3                            $ 8.6                            
EIDL loans to small businesses                                                                                                                                                                        
in industries with increases to                                                                                                                                                                       
size standards ( $ million) (FY                                                                                                                                                                       
2018-2020)  fn3                                                                                                                                                                                     
Estimated no. of                 2                                1                                1                                1                                5                                
EIDL loans to newly-qualified                                                                                                                                                                         
small firms  fn3                                                                                                                                                                                    
Estimated EIDL                   $ 0.05                           $ 0.02                           $ 0.04                           $ 0.04                           $ 0.2                            
loan amount to newly-qualified                                                                                                                                                                        
small firms ( $ million)  fn3                                                                                                                                                                       
                                                                                                                                                                                                      
% increase to                    2.0%                             12.5%                            2.4%                             1.0%                             1.8%                             
EIDL loan amount relative to the                                                                                                                                                                      
total amount of disaster loans                                                                                                                                                                        
in industries with increases to                                                                                                                                                                       
size standards  fn3                                                                                                                                                                                 
                                                                                                                                                                                                      
Total current small businesses   4,188                                                                                                                                                                
in industries with increases to                                                                                                                                                                       
size standards (FDIC) (2018)                                                                                                                                                                          
Additional firms qualifying as   198                                                                                                                                                                  
small under adopted standards                                                                                                                                                                         
(FDIC)                                                                                                                                                                                                
% Increase small institutions    4.7%                                                                                                                                                                 
with increases to size standards                                                                                                                                                                      
Total Assets of Small Depository $ 837,836                                                                                                                                                            
Institutions ( $ million) (FDIC,                                                                                                                                                                      
SDI) (2018)                                                                                                                                                                                           
Estimated increase in total      $ 132,440                                                                                                                                                            
assets of Small Depository                                                                                                                                                                            
Institutions ( $ million)                                                                                                                                                                             
% increase in total assets of    15.8%                                                                                                                                                                
small depository institutions                                                                                                                                                                         
Number of small Credit Unions    5,010                                                                                                                                                                
(NCUA) (2018)                                                                                                                                                                                         
Additional small Credit Unions   84                                                                                                                                                                   
(NCUA)                                                                                                                                                                                                
% Increase small institutions    1.7%                                                                                                                                                                 
with increases to size standards                                                                                                                                                                      
Total Assets of Small Credit     $ 377,619                                                                                                                                                            
Unions ( $ million) (NCUA)                                                                                                                                                                            
(2018)                                                                                                                                                                                                
Estimated increase in total      $ 56,327                                                                                                                                                             
assets of Small Credit Unions (                                                                                                                                                                       
$ million)                                                                                                                                                                                            
% increase in total assets of    14.9%                                                                                                                                                                
small Credit Unions                                                                                                                                                                                   

fn1              Total impact represents total unique number of firms impacted to avoid double counting as some firms are participating in more than one industry.
fn2              Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change in number of firms. Numbers of firms are calculated using the SBA current size standard, not the contracting officer's size designation.
fn3              Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for new COVID EIDL loans or advances.

The added competition from more businesses qualifying as small can result in lower prices to the Federal Government for procurements set aside or reserved for small businesses, but SBA cannot quantify this impact. Costs could be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to the availability of a larger pool of small businesses under the adopted increases to size standards, HUBZone firms might receive more set-aside contracts and fewer full and open contracts, thereby resulting in some cost savings to agencies. SBA cannot estimate such costs savings as it is impossible to determine the number and value of unrestricted contracts to be otherwise awarded to HUBZone firms will be awarded as set-asides. However, such cost savings are likely to be relatively small as only a small fraction of full and open contracts are awarded to HUBZone businesses.

Under SBA’s 7(a) and 504 loan programs, based on the data for fiscal years 2018-2020, SBA estimates up to about 14 SBA 7(a) and 504 loans totaling about $6.3 million could be made to these newly-qualified small businesses in those industries under the adopted size standards. That represents a 0.2% increase to the loan amount compared to the group baseline (see Table 5).

Newly-qualified small businesses will also benefit from the SBA’s EIDL program. Because the benefits provided through this program are 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 disaster loan program data, SBA estimates that, on an annual basis, the newly-defined small businesses under the increases to 45 size standards could receive 5 disaster loans (except physical disaster loans), totaling about $0.2 million. 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.

Costs Increasing Size Standards

Aside from taking time to register in sam.gov to be eligible to participate in Federal contracting, and update the System for Award Management (SAM) profile annually, small businesses incur no direct costs to gain or retain their small business status as a result of increases to size standards. All businesses willing to do business with the Federal Government must register in SAM and update their SAM profiles annually, regardless of their size status. SBA believes that a vast majority of businesses that are willing to participate in Federal contracting are already registered in SAM and update their SAM profiles annually. This final rule does not establish the new size standards for the very first time; rather it intends to modify the existing size standards in accordance with a statutory requirement, the latest data, and other relevant factors.

To the extent that the newly-qualified small businesses could become active in Federal procurement, the adopted increases to size standards, if adopted, may entail some additional administrative costs to the Government as a result of more businesses qualifying as small for Federal small business programs. For example, there will be more firms seeking SBA’s loans, more firms eligible for enrollment in the Dynamic Small Business Search (DSBS) database or in certify.sba.gov, more firms seeking certification as 8(a)/BD or HUBZone firms or qualifying for small business, SDB, WOSB, EDWOSB, and SDVOSB status, and more firms applying for SBA’s 8(a)/BD mentor-prote’ge’ program. With an expanded pool of small businesses, it is likely that Federal agencies would set-aside more contracts for small businesses under the adopted increases to size standards. One may surmise that this might result in a higher number of small business size protests and additional processing costs to agencies. However, the SBA’s historical data on the number of size protests processed shows that the number of size protests decreased following the increases to receipts-based size standards as part of the first five-year review of size standards. Specifically, on an annual basis, the number of size protests fell from about 600 during fiscal years 2011-2013 (review of most receipts-based size standards was completed by the end of fiscal year 2013), as compared to about 500 during fiscal years 2018-2020 when size standard increases were in effect. That represents a 17% decline.

Among those newly-defined small businesses seeking SBA’s loans, there could be some additional costs associated with verification of their small business status. 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. For these reasons, SBA believes that these added administrative costs will be minor because necessary mechanisms are already in place to handle these added requirements.

Additionally, some Federal contracts may possibly have higher costs. With a greater number of businesses defined as small due to the adopted increases to size standards, Federal agencies may choose to set aside more contracts for competition among small businesses only instead of using a full and open competition. The movement of contracts from unrestricted competition to small business set-aside contracts might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers under the adopted size standards. However, the additional costs associated with fewer bidders are expected to be minor because, by law, procurements may be set aside for small businesses under the 8(a)/BD, SDB, HUBZone, WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made at fair and reasonable prices.

Costs may also be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to the availability of a larger pool of small businesses under the adopted increases to size standards, HUBZone firms might receive fewer full and open contracts, thereby resulting in some cost savings to agencies. However, such cost savings are likely to be minimal as only a small fraction of unrestricted contracts are awarded to HUBZone businesses.

Transfer Impacts of Increasing Size Standards

The increases to 45 size standards that are adopted in this final rule may result in some redistribution of Federal contracts between the newly-qualified small businesses and large businesses and between the newly-qualified small businesses and small businesses under the current standards. However, it would have no impact on the overall economic activity because total Federal contract dollars available for businesses to compete for will not change with changes to size standards. Although SBA cannot quantify with certainty the actual outcome of the gains and losses from the redistribution contracts among different groups of businesses, it can identify several probable impacts in qualitative terms. With the availability of a larger pool of small businesses under the adopted increases to size standards, some unrestricted Federal contracts that would otherwise be awarded to large businesses may be set-aside for small businesses. As a result, large businesses may lose some Federal contracting opportunities. Similarly, some small businesses under the current size standards may obtain fewer set-aside contracts due to the increased competition from larger businesses qualifying as small under the adopted increases to size standards. This impact may be offset by a greater number of procurements being set-aside for all small businesses. With larger businesses qualifying as small under the higher size standards, smaller small businesses could face some disadvantage in competing for set-aside contracts against their larger counterparts. However, SBA cannot quantify these impacts.

3. What alternatives have been considered?

Under OMB Circular A-4, SBA is required to consider regulatory alternatives to the adopted changes in this final rule. In this section, SBA describes and analyzes two such alternatives. Alternative Option One to the final rule, a more stringent alternative to the adopted change, would propose adopting size standards based solely on the analytical results. In other words, the size standards of 45 industries for which the analytical results, as presented in Table 4 of the October 2020 proposed rule, suggest raising them would be raised. However, the size standards of 69 industries for which the analytical results suggest lowering them would be lowered. For the 12 remaining industries, size standards would be maintained at their current levels based on the results. Alternative Option Two would propose retaining size standards for all industries, given the uncertainty generated by the ongoing COVID-19 pandemic. Below, SBA discusses benefits, costs, and the net impacts of each option.

Alternative Option One: Adopting All Calculated Size Standards

As discussed previously in the Alternatives Considered section of this final rule, Alternative Option One 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 small business set-aside contracts and SBA’s financial assistance in some cases. These consequences could be mitigated. For example, in response to the 2008 Financial Crisis and economic conditions that followed, SBA adopted a general policy in the first five-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 adopt the same general policy of not lowering size standards in the ongoing second five-year comprehensive size standards review as well.

The primary benefits of adopting Alternative Option One would include: (1) 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; (2) Adopting the size standards based on the analytical results would also promote consistency and predictability in SBA’s implementation of its authority to set or adjust size standards; and (3) Firms who would remain small would face less competition from larger small firms for the remaining set-aside opportunities. Specifically, SBA sought public comment on the impact of adopting the size standards based on the analytical results.

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.

We have discussed already the benefits, costs, and transfer impacts of increasing 45 size standards. Below we discuss the benefits, costs, and transfer impacts of decreasing 69 size standards based on the analytical results.

Benefits of Decreasing Size Standards Under Alternative Option One

The most significant benefit to businesses from decreases to size standards when SBA’s analysis suggests such decreases is to ensure that size standards are more reflective of latest industry structure and Federal market trends and that Federal small business assistance is more effectively targeted to its intended beneficiaries. These include SBA’s business loan programs, EIDL program, and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted, set-aside opportunities for small businesses under SBA’s business development programs, such as small business, SDB, 8(a)/BD, HUBZone, WOSB, EDWOSB, and SDVOSB programs. The adoption of calculated size standards diminishes the risk of awarding contracts to firms that are not small anymore.

Decreasing size standards may reduce the administrative costs of the Government, because the risk of awarding set-aside contracts to other than small businesses may diminish when the size standards reflect better the structure of the market. This may also diminish the risks of providing SBA’s loans to firms that do not need them the most. This may provide a better chance for smaller small firms to grow and benefit from the opportunities available on the Federal marketplace, and strengthen the small business industrial base for the Federal Government.

Costs of Decreasing Size Standards Under Alternative Option One

Table 6, Impacts of Decreasing Size Standards Under Alternative Option One, below, shows the various impacts of lowering size standards in 69 industries based solely on the analytical results. Based on the 2012 Economic Census, about 5,500 (0.9%) firms would lose their small business status under Alternative Option One. Similarly, based on the FPDS-NG data for fiscal years 2018-2020, nearly 500 (5.0%) small businesses participating in Federal contracting would lose their small status and become ineligible to compete for set-aside contracts. With fewer businesses qualifying as small under the decreases to size standards, Federal agencies will have a smaller pool of small businesses from which to draw for their small business procurement programs. For example, during fiscal years 2018-2020, agencies awarded, on an annual basis, about $3,338 million in small business contracts in those 69 industries for which SBA considered decreasing size standards under Alternative Option One. Lowering size standards in 69 industries would reduce Federal contract dollars awarded to small businesses by $87 million or about 2.6% relative to the baseline level.

Table 6-Impacts of Decreasing Size Standards Under Alternative Option One                                                                                                                             

                               Sector 48-49                     Sector 51                        Sector 52                        Sector 53                        Total                            
No. of industries for which SBA  23                               9                                24                               13                               69                               
considered decreasing size                                                                                                                                                                            
standards (2012 Economic Census)                                                                                                                                                                      
Total current small businesses   133,032                          39,030                           76,036                           114,495                          510,777                          
in industries for which SBA                                                                                                                                                                           
considered decreasing size                                                                                                                                                                            
standards (2012 Economic Census)                                                                                                                                                                      
Estimated no. of firms losing    1,086                            72                               246                              234                              1,738                            
small status for which SBA                                                                                                                                                                            
considered decreasing size                                                                                                                                                                            
standards (2012 Economic Census)                                                                                                                                                                      
% of Firms losing small status   0.50%                            0.19%                            0.34%                            0.21%                            0.92%                            
relative to current small                                                                                                                                                                             
businesses in industries for                                                                                                                                                                          
which SBA considered decreasing                                                                                                                                                                       
size standards                                                                                                                                                                                        
No. of current                   2,188                            3,200                            131                              1,339                            6,744                            
unique small firms getting small                                                                                                                                                                      
business contracts in industries                                                                                                                                                                      
for which SBA considered                                                                                                                                                                              
decreasing size standards                                                                                                                                                                             
(FPDS-NG FY2018-2020)  fn1                                                                                                                                                                          
                                                                                                                                                                                                      
Estimated number                 110                              17                               5                                28                               155                              
of small business firms that                                                                                                                                                                          
would have lost small business                                                                                                                                                                        
status for Federal contracting                                                                                                                                                                        
in the decreases that SBA                                                                                                                                                                             
considered  fn1                                                                                                                                                                                     
% decrease to small business     5.0%                             0.5%                             0.0%                             2.1%                             2.3%                             
firms relative to current unique                                                                                                                                                                      
small firms getting small                                                                                                                                                                             
business contracts in industries                                                                                                                                                                      
for which SBA considered                                                                                                                                                                              
decreasing size standards                                                                                                                                                                             
(FPDS-NG FY2018-2020)                                                                                                                                                                                 
Total small business contract    $ 1,157                          $ 1,776                          $ 145                            $ 260                            $ 3,338                          
dollars under current size                                                                                                                                                                            
standards in industries for                                                                                                                                                                           
which SBA considered decreasing                                                                                                                                                                       
size standards ( $ million)                                                                                                                                                                           
(FPDS-NG FY2018-2020)                                                                                                                                                                                 
Estimated small                  $ 64.7                           $ 11.2                           $ 4.0                            $ 6.8                            $ 86.6                           
business dollars not available                                                                                                                                                                        
to firms that would have lost                                                                                                                                                                         
business status (Using avg                                                                                                                                                                            
dollars obligated to SBs) ( $                                                                                                                                                                         
million) fn 2                                                                                                                                                                                         
(FPDS-NG FY 2018-2020)                                                                                                                                                                                
                                                                                                                                                                                                      
% decrease to small business     5.6%                             0.6%                             0.0%                             2.6%                             2.6%                             
dollars relative to total small                                                                                                                                                                       
business contract dollars under                                                                                                                                                                       
current size standards in                                                                                                                                                                             
industries for which SBA                                                                                                                                                                              
considered decreasing to size                                                                                                                                                                         
standards                                                                                                                                                                                             
Total no. of 7(a) and 504 loans  3,046                            346                              372                              846                              4,610                            
to small businesses in                                                                                                                                                                                
industries for which SBA                                                                                                                                                                              
considered decreasing size                                                                                                                                                                            
standards (FY 2018-2020)                                                                                                                                                                              
Total amount of 7(a) and 504     $ 782                            $ 165                            $ 232                            $ 807                            $ 1,986                          
loans to small businesses in                                                                                                                                                                          
industries for which SBA                                                                                                                                                                              
considered decreasing size                                                                                                                                                                            
standards ( $ million) (FY                                                                                                                                                                            
2018-2020)                                                                                                                                                                                            
Estimated no. of 7(a) and 504    5                                1                                1                                1                                8                                
loans not available to firms                                                                                                                                                                          
that would have lost small                                                                                                                                                                            
business status                                                                                                                                                                                       
Estimated 7(a) and 504 loan      $ 1.6                            $ 0.5                            $ 0.6                            $ 1.0                            $ 3.6                            
amounts not available to firms                                                                                                                                                                        
that would have small status ( $                                                                                                                                                                      
million)                                                                                                                                                                                              
% decrease to 7(a)and 504 loan   0.2%                             0.3%                             0.1%                             0.1%                             0.3%                             
amounts relative to the total                                                                                                                                                                         
amount of 7(a) and 504 loans in                                                                                                                                                                       
industries for which SBA                                                                                                                                                                              
considered decreasing size                                                                                                                                                                            
standards                                                                                                                                                                                             
Total no. of EIDL                110                              19                               22                               868                              1,019                            
loans to small businesses in                                                                                                                                                                          
industries for which SBA                                                                                                                                                                              
considered decreasing size                                                                                                                                                                            
standards (FY 2018-2020)  fn3                                                                                                                                                                       
                                                                                                                                                                                                      
Total amount of                  $ 4.6                            $ 1.0                            $ 0.8                            $ 11.6                           $ 18.0                           
EIDL loans to small businesses                                                                                                                                                                        
in industries for which SBA                                                                                                                                                                           
considered decreasing size                                                                                                                                                                            
standards ( $ million) (FY                                                                                                                                                                            
2018-2020)  fn3                                                                                                                                                                                     
Estimated no. of                 2                                1                                1                                1                                5                                
EIDL loans not available to                                                                                                                                                                           
firms that would have lost small                                                                                                                                                                      
business status  fn3                                                                                                                                                                                
                                                                                                                                                                                                      
Estimated EIDL                   $ 0.08                           $ 0.05                           $ 0.04                           $ 0.01                           $ 0.18                           
loan amount not available to                                                                                                                                                                          
firms that would have lost small                                                                                                                                                                      
business status ( $ million)                                                                                                                                                                        
fn3                                                                                                                                                                                                   
% decrease to                    2.0%                             10.7%                            2.4%                             0.1%                             1.4%                             
EIDL loan amount relative to the                                                                                                                                                                      
baseline  fn3                                                                                                                                                                                       

fn1              Total impact represents total unique number of firms impacted to avoid double counting as some firms are participating in more than one industry.
fn2              Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change in number of firms. Numbers of firms are calculated using the SBA current size standard, not the contracting officer's size designation.
fn3              Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for new COVID EIDL loans or advances.

Because of the importance of these sectors for the Federal procurement, SBA may adopt mitigating measures to reduce the negative impact under the assumptions of Alternative Option One. SBA could adopt one or more of the following three actions: (1) Accept decreases in size standards as suggested by the analytical results, (2) Decrease size standards by a smaller amount than the calculated threshold, and (3) Retain the size standards at their current levels.

Nevertheless, because Federal agencies are still required to meet the statutory small business contracting goal of 23%, actual impacts on the overall set-aside activity is likely to be smaller as agencies are likely to award more set-aside contracts to small businesses that continue to remain small under the reduced size standards.

With fewer businesses qualifying as small, the decreased competition can also result in higher prices to the Government for procurements set-aside or reserved for small businesses, but SBA cannot quantify this impact. Lowering size standards may cause current small business contract or option holders to lose their small business status, thereby making those dollars unavailable to count toward the agencies’ small business procurement goals. Additionally, impacted small businesses will be unable to compete for upcoming options as small businesses.

As shown in Table 6, decreasing 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 2018-2020, SBA estimates that about 8 of SBA’s 7(a) and 504 loans with total amounts of $3.6 million could not be made to those small businesses that would lose eligibility under the reduced size standards. That represents about 0.3% decrease of the loan amounts compared to the baseline. 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 by way of access to loans through SBA’s EIDL loan 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 2018-2020. For example, based on the disaster loan data for fiscal years 2018-2020, SBA estimates that, under Alternative Option One, about 5 EIDL loans with total amounts of $0.2 million could not be made to those small businesses that would lose eligibility under the reduced size standards (before mitigation). That represents about 1.4% decrease of the loan amounts compared to the baseline. Because this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a more meaningful estimate of this impact.

Small businesses becoming other than small if size standards were decreased might lose benefits through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through the Federal Government programs, but SBA has no data to quantify this impact. However, if agencies determine that SBA’s size standards do not adequately serve such 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.

Transfer Impacts of Decreasing Size Standards Under Alternative Option One

If the size standards were decreased under Alternative Option One, it may result in a redistribution of Federal contracts between small businesses losing their small business status and large businesses and between small businesses losing their small business status and small businesses remaining small under the reduced size standards. However, as under the adopted increases to size standards, it would have no impact on the overall economic activity because the total Federal contract dollars available for businesses to compete for will stay the same. Although SBA cannot estimate with certainty the actual outcome of the gains and losses among different groups of businesses from contract redistribution resulting from decreases to size standards, it can identify several probable impacts. With a smaller pool of small businesses under the decreases to size standards, some set-aside Federal contracts to be otherwise awarded to small businesses may be competed on an unrestricted basis. As a result, large businesses may have more Federal contracting opportunities. However, because agencies are still required by law to award 23% of Federal dollars to small businesses, SBA expects the movement of set-aside contracts to unrestricted competition to be limited. For the same reason, small businesses under the reduced size standards are likely to obtain more set-aside contracts due to the reduced competition from fewer businesses qualifying as small under the decreases to size standards. With some larger small businesses losing small business status under the decreases to size standards, smaller small businesses would likely become more competitive in obtaining set-aside contracts. However, SBA cannot quantify these impacts.

Net Impact of Alternative Option One

To estimate the net impacts of Alternative Option One, SBA followed the same methodology used to evaluate the impacts of the increasing size standards (see Table 5). However, under Alternative Option One, SBA used the calculated size standards instead of the adopted ones to determine the impacts of changes to current thresholds. The impact of the increases of size standards were already shown in Table 5. Table 6 and Table 7, Net Impacts of Size Standards Changes under Alternative Option One, below, present the impact of the decreases of size standards and the net impact of adopting the calculated results under Alternative Option One, respectively.

Based on the 2012 Economic Census, SBA estimates that in 114 industries in NAICS Sectors 48-49, 51, 52 and 53 for which the analytical results suggested to change size standards, about 50 firms (see Table 7), would become small under Alternative Option One. That represents about 0.01% of all firms classified as small under the current size standards in those industries. That is about 1,740 fewer firms qualifying as small under Alternative Option One, which represents a 97.0% reduction from about 1,790 firms that would qualify as small (see Table 5) under the proposal being adopted in this final rule (i.e., increasing 45 and retaining 81 size standards).

Table 7-Net Impacts of Size Standards Changes Under Alternative Option One                                                                                                                            

                               Sector 48-49                     Sector 51                        Sector 52                        Sector 53                        Total                            
No. of industries with changes   41                               17                               34                               22                               114                              
to size standards                                                                                                                                                                                     
Total no. of small business      156,173                          42,803.4                         208,456                          265,559                          669,991                          
under the current size standards                                                                                                                                                                      
(2012 Economic Census)                                                                                                                                                                                
Additional firms qualifying as    - 1,002                          - 60                            377                              736                              52                               
small under size standards (2012                                                                                                                                                                      
Economic Census)                                                                                                                                                                                      
% of additional firms qualifying  - 0.6%                           - 0.1%                          0.2%                             0.3%                             0.01%                            
as small relative to total                                                                                                                                                                            
current small businesses                                                                                                                                                                              
No. of current                   2,538                            3428                             218                              2,481                            8,504                            
unique small firms getting small                                                                                                                                                                      
business contracts (FPDS-NG                                                                                                                                                                           
FY2018-2020)  fn1                                                                                                                                                                                   
                                                                                                                                                                                                      
Additional small                  - 88                             - 14                            0                                 - 7                              - 109                           
firms getting small business                                                                                                                                                                          
status (FPDS-NG FY2018-2020)                                                                                                                                                                        
fn1                                                                                                                                                                                                   
% increase to small firms         - 3.5%                           - 0.4%                          0.0%                              - 0.3%                           - 1.3%                          
relative to current unique small                                                                                                                                                                      
firms getting small business                                                                                                                                                                          
contracts (FPDS-NG FY2018-2020)                                                                                                                                                                       
Total small business contract    $ 1,488                          $ 1,908                          $ 324                            $ 505                            $ 4,225                          
dollars under current size                                                                                                                                                                            
standards ( $ million) (FPDS-NG                                                                                                                                                                       
FY2018-2020)                                                                                                                                                                                          
Estimated small                   - $ 59                           - $ 9                            - $ 0.5                          - $ 2                            - $ 66                          
business dollars available to                                                                                                                                                                         
newly-qualified small firms ( $                                                                                                                                                                       
million) (FPDS-NG FY                                                                                                                                                                                  
2018-2020)  fn2                                                                                                                                                                                     
% increase to dollars relative    - 3.9%                           - 0.5%                           - 0.1%                          0.4%                              - 1.6%                          
to total small business contract                                                                                                                                                                      
dollars under current size                                                                                                                                                                            
standards                                                                                                                                                                                             
Total no. of 7(a) and 504 loans  3,406                            402                              1,165                            1,597                            6,570                            
to small businesses (FY                                                                                                                                                                               
2018-2020)                                                                                                                                                                                            
Total amount of 7(a) and 504     $ 933                            $ 190                            $ 547                            $ 1,079                          $ 2,749                          
loans to small businesses (FY                                                                                                                                                                         
2018-2020)                                                                                                                                                                                            
Estimated no. of additional 7(a)  - 1                             0                                3                                4                                6                                
and 504 loans to newly-qualified                                                                                                                                                                      
small firms                                                                                                                                                                                           
Estimated additional 7(a) and    $ 0.9                            $ 0.0                            $ 1.0                            $ 0.8                            $ 2.6                            
504 loan amount to                                                                                                                                                                                    
newly-qualified small firms ( $                                                                                                                                                                       
million)                                                                                                                                                                                              
% increase to 7(a)and 504 loan   0.1%                             0.0%                             0.18%                            0.08%                            0.08%                            
amount relative to the total                                                                                                                                                                          
amount of 7(a) and 504 loans to                                                                                                                                                                       
small businesses                                                                                                                                                                                      
Total no. of EIDL                87                               19                               45                               598                              749                              
loans to small businesses (FY                                                                                                                                                                         
2018-2020)  fn3                                                                                                                                                                                     
Total amount of                  $ 3.9                            $ 0.5                            $ 1.6                            $ 13.2                           $ 19.2                           
EIDL loans to small businesses                                                                                                                                                                        
(FY 2018-2020)  fn3                                                                                                                                                                                 
                                                                                                                                                                                                      
Estimated no. of                 0                                0                                0                                0                                0                                
additional EIDL loans to                                                                                                                                                                              
newly - qualified small firms                                                                                                                                                                       
fn3                                                                                                                                                                                                   
Estimated                         - $ 0.02                         - $ 0.03                        $ 0.01                           $ 0.03                            - $ 0.03                        
additional EIDL loan amount to                                                                                                                                                                        
newly-qualified small firms ( $                                                                                                                                                                       
million)  fn3                                                                                                                                                                                       
% increase to                     - 0.6%                           - 5.9%                           - 0.1%                          0.2%                              - 0.1%                          
EIDL loan amount relative to the                                                                                                                                                                      
total amount of EIDL loans to                                                                                                                                                                         
small businesses  fn3                                                                                                                                                                               
                                                                                                                                                                                                      
Total current small businesses   4,188                                                                                                                                                                
in industries with proposed                                                                                                                                                                           
increases to size standards                                                                                                                                                                           
(FDIC) (2018)                                                                                                                                                                                         
Additional firms qualifying as   198                                                                                                                                                                  
small under adopted standards                                                                                                                                                                         
(FDIC)                                                                                                                                                                                                
% increase small institutions    4.7%                                                                                                                                                                 
with increases to size standards                                                                                                                                                                      
Total Assets of Small Depository $ 837,836                                                                                                                                                            
Institutions (FDIC, SDI) (2018)                                                                                                                                                                       
Estimated increase in total      $ 132,440                                                                                                                                                            
assets of Small Depository                                                                                                                                                                            
Institutions                                                                                                                                                                                          
% increase in total assets of    15.8%                                                                                                                                                                
small depository institutions                                                                                                                                                                         
Number of small Credit Unions    5,010                                                                                                                                                                
(NCUA) (2018)                                                                                                                                                                                         
Additional small Credit Unions   84                                                                                                                                                                   
(NCUA)                                                                                                                                                                                                
% increase small institutions    1.7%                                                                                                                                                                 
with increases to size standards                                                                                                                                                                      
Total Assets of Small Credit     $ 377,619                                                                                                                                                            
Unions (NCUA) (2018)                                                                                                                                                                                  
Estimated increase in total      $ 56,327                                                                                                                                                             
assets of Small Credit Unions                                                                                                                                                                         
% increase in total assets of    14.9%                                                                                                                                                                
small Credit Unions                                                                                                                                                                                   

fn1              Total impact represents total unique number of firms impacted to avoid double counting as some firms are participating in more than one industry.
fn2              Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change in number of firms. Numbers of firms are calculated using the SBA current size standard, not the contracting officer's size designation.
fn3              Excludes COVID-19 related EIDL loans due to their temporary nature. Effective January 1, 2022, SBA stopped accepting applications for new COVID EIDL loans or advances.

As shown in Table 7, based on the FPDS-NG data for fiscal years 2018-2020, SBA estimates that, in aggregate, about 109 active firms in Federal contracting in those industries would lose small business status under Alternative Option One, most of them from Sector 48-49. This represents a decrease of about 1.3% of the total number of small businesses participating in Federal contracting under the current size standards. Based on the same data, SBA estimates that about $660 million of Federal procurement dollars would not be available to firms losing their small status. That is a decrease of 1.6% from the baseline. A large portion of these losses is accounted for by Sector 48-49.

Based on the SBA’s loan data for fiscal years 2018-2020, the total number of 7(a) and 504 loans will increase by six loans, while the total loan amount will increase by about $2.6 million. This is a 0.08% rise of the loan amounts relative to the baseline. Firms’ participation under the SBA’s EIDL loan program will be affected as well. Because 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 loan program data, SBA estimates that there will be no change to the total number of EIDL loans, while the total loan amount will be reduced by about $.03 million. This represents a 0.1% decrease of the loan amounts relative to the baseline. Table 7 provides these results by NAICS sector.

Alternative Option Two: Retaining All Current Size Standards

Under this option, given the current COVID-19 pandemic, as discussed elsewhere, SBA considered retaining the current levels of all size standards even though the analytical results suggested changing them. 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 as well. When compared to the baseline, there is a net impact of zero (i.e., zero benefit and zero cost) for retaining all size standards. However, this option would cause otherwise qualified small businesses to forgo various small business benefits (e.g., access to set-aside contracts and capital) that become available to them under the option of increasing 45 and retaining 81 size standards adopted in this final rule. Moreover, retaining all size standards under this option would also be contrary to the SBA’s statutory mandate to review and adjust, every five years, all size standards to reflect current industry and Federal market conditions. Retaining all size standards without required periodic adjustments would increasingly exclude otherwise eligible small firms from small business benefits.

Congressional Review Act

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (codified at 5 U.S.C. 801-808), also known as the Congressional Review Act or CRA, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. SBA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States. A major rule under the CRA cannot take effect until 60 days after it is published in the Federal Register. OMB’s Office of Information and Regulatory Affairs has determined that this rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Final 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 final rule may have a significant impact on a substantial number of small businesses in the industries covered by this final rule. As described above, this final rule may affect small businesses seeking Federal contracts, loans under SBA’s 7(a), 504 and disaster loan programs, and assistance under other Federal small business programs.

Immediately below, SBA sets forth a final regulatory flexibility analysis (FRFA) of this final 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? (5) What alternatives will allow SBA to accomplish its regulatory objectives while minimizing the impact on small businesses?

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 final 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 size standards adopted in this final 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 319,000 small firms covered by this rulemaking under industries with changes to size standards. Under this final rule, SBA estimates that an additional 1,790 businesses will be defined as small.

3. What are the projected reporting, record keeping and other compliance requirements of the rule?

The size standard changes in this final rule impose no additional reporting or record keeping requirements on small businesses. However, qualifying for Federal procurement and a number of other programs requires that businesses register in SAM and self-certify that they are small at least once annually (FAR 52.204-13). For existing contracts, small business contractors are required to update their SAM registration as necessary, to ensure that they reflect the Contractor’s current status (FAR 52.219-28). Businesses are also required to verify that their SAM registration is current, accurate, and complete with the submission of an offer for every new contract (FAR 52.204-7 and 52.204-8).). Therefore, businesses opting to participate in those programs must comply with SAM requirements. Changes in small business size standards do not result in additional costs associated with SAM registration or certification. Changing size standards alters the access to SBA’s programs that assist small businesses but does not impose a regulatory burden because they neither regulate nor control business behavior.

4. What are the relevant Federal Rules that 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 SBA 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 increasing 45 and maintaining 81 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 45 industries for which the analytical results suggest raising size standards would be raised. However, the size standards of 69 industries for which the analytical results suggest lowering them would be lowered. This would cause a significant number of small businesses to lose their small business status, particularly in Sector 48-49 (see Table 6). 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 45 and decreasing 69 size standards. SBA believes retaining all size standards at their current levels would be more onerous for small businesses than the option of increasing 45 and retaining 35 size standards. Postponing the adoption of the higher calculated size standards would be detrimental for otherwise small businesses in terms of access to various small business benefits, including access to set-aside contracts and capital through SBA contracting and financial programs, and exemptions from paperwork and other compliance requirements.

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 final 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 five 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 early 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 is available for public review. The “Size Standards Methodology” white paper explains how SBA establishes, reviews, and modifies its receipts-based and employee-based small business size standards. SBA considered 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 final rule. SBA received a total of four comments to the proposed rule. In the Discussion of Comments section of this final rule, SBA summarizes and provides responses to the comments received on the 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, 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 final 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 final 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 final 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 amends 13 CFR part 121 as follows:

   PART 121–SMALL BUSINESS SIZE REGULATIONS

   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.

   2. In SEC 121.201, amend the table “Small Business Size Standards by NAICS Industry” as follows:

   a. Revise the entries for “481219”, “484122”, “485111” through “485113”, “485119”, “485210”, “485410”, “486210”, “487110”, “487210”, “487990”, “488210”, “488490”, “488510”, “488510 (Exception)”, “488999”, “493120”, “493190”, “512132”, “512199”, “512240”, “512290”, “515111”, “517410”, “519110”, “519120”, “522110”, “522120”, “522130”, “522190”, “522210”, “522310”, “522390”, “524210”, “524292”, “524298”, “531210”, “531311”, “531312”, “531320”, “531390”, “532282”, “532283”, “532289”, and “532411”, and

   b. Revise footnote 10.

The revisions read as follows:

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

*****

Small Business Size Standards by NAICS Industry                                                                                                                                                         

NAICS codes                                       NAICS U.S. industry title                         Size standards                                    Size standards                                    
                                                                                                    in millions of dollars                            in number of                                      
                                                                                                                                                      employees                                         
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Sectors 48-49-Transportation and Warehousing                                                                                                                                                         

Subsector 481-Air Transportation                                                                                                                                                                     

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

481219                                            Other Nonscheduled Air Transportation             $ 22.0                                                                                              
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 484-Truck Transportation                                                                                                                                                                   

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

484122                                            General Freight Trucking, Long-Distance, Less     38.0                                                                                                
                                                  Than Truckload                                                                                                                                        
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 485-Transit and Ground Passenger Transportation                                                                                                                                            

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

485111                                            Mixed Mode Transit Systems                        25.5                                                                                                
485112                                            Commuter Rail Systems                             41.5                                                                                                
485113                                            Bus and Other Motor Vehicle Transit Systems       28.5                                                                                                
485119                                            Other Urban Transit Systems                       33.0                                                                                                
485210                                            Interurban and Rural Bus Transportation           28.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

485410                                            School and Employee Bus Transportation            26.5                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 486-Pipeline Transportation                                                                                                                                                                

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

486210                                            Pipeline Transportation of Natural Gas            36.5                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 487-Scenic and Sightseeing Transportation                                                                                                                                                  

487110                                            Scenic and Sightseeing Transportation, Land       18.0                                                                                                
487210                                            Scenic and Sightseeing Transportation, Water      12.5                                                                                                
487990                                            Scenic and Sightseeing Transportation, Other      22.0                                                                                                
Subsector 488-Support Activities for Transportation                                                                                                                                                  

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

488210                                            Support Activities for Rail Transportation        30.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

488490                                            Other Support Activities for Road Transportation  16.0                                                                                                
488510                                            Freight Transportation                            fn10                    17.5                                                                     
                                                  Arrangement  fn10                                                                                                                                   
488510 (Exception)                                Non-Vessel Owning Common Carriers and Household   30.0                                                                                                
                                                  Goods Forwarders                                                                                                                                      
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

488999                                            All Other Support Activities for Transportation   22.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 493-Warehousing and Storage                                                                                                                                                                

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

493120                                            Refrigerated Warehousing and Storage              32.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

493190                                            Other Warehousing and Storage                     32.0                                                                                                
Sector 51-Information                                                                                                                                                                                

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 512-Motion Picture and Sound Recording Industries                                                                                                                                          

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

512132                                            Drive-In Motion Picture Theaters                  11.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

512199                                            Other Motion Picture and Video Industries         25.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

512240                                            Sound Recording Studios                           9.5                                                                                                 
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

512290                                            Other Sound Recording Industries                  20.0                                                                                                
Subsector 515-Broadcasting (except Internet)                                                                                                                                                         

515111                                            Radio Networks                                    41.5                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 517-Telecommunications                                                                                                                                                                     

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

517410                                            Satellite Telecommunications                      38.5                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 519-Other Information Services                                                                                                                                                             

519110                                            News Syndicates                                   32.0                                                                                                
519120                                            Libraries and Archives                            18.5                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Sector 52-Finance and Insurance                                                                                                                                                                      

Subsector 522-Credit Intermediation and Related Activities                                                                                                                                           

522110                                            Commercial Banking  fn8                         750 million in assets  fn8                                                                        
                                                                                                                                                                                                        
522120                                            Savings Institutions  fn8                       750 million in assets  fn8                                                                        
                                                                                                                                                                                                        
522130                                            Credit Unions  fn8                              750 million in assets  fn8                                                                        
                                                                                                                                                                                                        
522190                                            Other Depository Credit                           750 million in assets  fn8                                                                        
                                                  Intermediation  fn8                                                                                                                                 
522210                                            Credit Card Issuing  fn8                        750 million in assets  fn8                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

522310                                            Mortgage and Nonmortgage Loan Brokers             13.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

522390                                            Other Activities Related to Credit Intermediation 25.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Subsector 524-Insurance Carriers and Related Activities                                                                                                                                              

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

524210                                            Insurance Agencies and Brokerages                 13.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

524292                                            Third Party Administration of Insurance and       40.0                                                                                                
                                                  Pension Funds                                                                                                                                         
524298                                            All Other Insurance Related Activities            27.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Sector 53-Real Estate and Rental and Leasing                                                                                                                                                         

Subsector 531-Real Estate                                                                                                                                                                            

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

531210                                            Offices of Real Estate Agents                     fn10                    13.0                                                                     
                                                  and Brokers  fn10                                                                                                                                   
531311                                            Residential Property Managers                     11.0                                                                                                
531312                                            Nonresidential Property Managers                  17.0                                                                                                
531320                                            Offices of Real Estate Appraisers                 8.5                                                                                                 
531390                                            Other Activities Related to Real Estate           17.0                                                                                                
Subsector 532-Rental and Leasing Services                                                                                                                                                            

                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

532282                                            Video Tape and Disc Rental                        31.0                                                                                                
532283                                            Home Health Equipment Rental                      36.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

532289                                            All Other Consumer Goods Rental                   11.0                                                                                                
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

532411                                            Commercial Air, Rail, and Water Transportation    40.0                                                                                                
                                                  Equipment Rental and Leasing                                                                                                                          
                                                                                                                                                                                                      
* * * * * * *                                                                                                                                                                                           

Footnotes
    *         *         *         *         *         *         *
fn8                                  NAICS Codes 522110, 522120, 522130, 522190, and 522210                -A financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. "Assets" for the purposes of this size standard means the assets defined according to the Federal Financial Institutions Examination Council 041 call report form for NAICS Codes 522110, 522120, 522190, and 522210 and the National Credit Union Administration 5300 call report form for NAICS code 522130.
    *         *         *         *         *         *         *
fn10                                  NAICS codes 488510 (excluding the exception), 531210, 541810, 561510, 561520 and 561920                -As measured by total revenues, but excluding funds received in trust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions received are included as revenues.
    *         *         *         *         *         *         *

Isabella Casillas Guzman,

Administrator.

[FR Doc. 2022-06609 Filed 3-30-22; 8:45 am]

BILLING CODE 8026-03-P

LEAVE A REPLY

Please enter your comment!
Please enter your name here