U.S. SMALL BUSINESS ADMINISTRATION (SBA)
Statement of Regulatory Priorities
Overview
The mission of the U.S. Small Business Administration (SBA) is to maintain and strengthen the Nation's economy by enabling the establishment and viability of small businesses and by assisting in economic recovery of communities after disasters. In carrying out this mission, SBA strives to improve the economic environment for small businesses, including those in areas that have significantly higher unemployment and lower income levels than the Nation's averages and those in traditionally underserved markets. The Agency serves as a guarantor of small business loans, and also provides management and technical assistance to existing or potential small business owners through various grants, cooperative agreements or contracts. This access to capital and other assistance provides a crucial foundation for those starting a new business, or growing an existing business and ultimately helps to create new jobs. SBA also provides direct financial assistance to homeowners, renters, and small business to help in the rebuilding of communities in the aftermath of a disaster.
Reducing Burden on Small Businesses
SBA's regulatory policy reflects a commitment to developing regulations that reduce or eliminate the burden on the public, in particular the Agency's core constituents-small businesses. SBA's regulatory process generally includes an assessment of the costs and benefits of the regulations as required by Executive Order 12866, "Regulatory Planning and Review;" Executive Order 13563, "Improving Regulation and Regulatory Review;" and the Regulatory Flexibility Act. SBA's program offices are particularly invested in finding ways to reduce the burden imposed by the Agency's core activities in its loan, innovation, and procurement programs.
Openness and Transparency
SBA promotes transparency, collaboration, and public participation in its rulemaking process. To that end, SBA routinely solicits comments on its regulations. Where appropriate, SBA also conducts hearings, webinars, and other public events as part of its regulatory process.
Regulatory Framework
The SBA's FY 2014 to FY 2018 strategic plan serves as the foundation for the regulations that the Agency will develop during the next twelve months. This Strategic Plan provides a framework for strengthening, streamlining, and simplifying SBA's programs while leveraging collaborative relationships with other agencies and the private sector to maximize the tools small business owners and entrepreneurs need to drive American innovation and strengthen the economy. The plan sets out three strategic goals: (1) growing businesses and creating jobs; (2) serving as the voice for small business; and (3) building an SBA that meets the needs of today's and tomorrow's small businesses. In order to achieve these goals SBA will, among other objectives, focus on:
The regulations reported in SBA's semi-annual regulatory agenda and plan are intended to facilitate achievement of these goals and objectives. Over the next twelve months, SBA's highest regulatory priorities will be to implement the following regulations and program guidance: (1) Affiliation for Business Loan Programs and Surety Bond Guarantee Program (RIN: 3245-AG73); (2) Small Business Investment Company (SBIC) Program; Impact SBICs (RIN: 3245-AG66); (3) Small Business Mentor-Protégé Programs (RIN: 3245-AG24), (4) Small Business Government Contracting and National Defense Authorization Act of 2013 Amendments (RIN: 3245-AG58), and (5) Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive (RIN: 3245-AG64).
(1) Affiliation for Business Loan Programs and Surety Bond Guarantee Program (RIN: 3245-AG73):
This rule will propose to amend SBA's regulations to redefine how the agency determines affiliation as it relates to eligibility for its Surety Bond Guarantee (SBG) Program and the business loan programs, consisting of the 7(a) and 504 Loan Programs and the Business Disaster Loan Programs. SBA has reviewed the applicable regulations and concluded that, in order to expand the reach of these programs and increase accessibility to the benefits the programs offer for small businesses, one of the Agency's priorities will be to simplify guidelines for determining affiliation for program eligibility based on size. The proposed amendments would reduce the regulatory burden on small businesses and SBA participating lenders, streamline delivery of program assistance, and lower the costs related to program participation. As part of its process to develop this rule, SBA solicited and received public feedback in support of simplifying the rules and aligning the requirements with normal commercial industry practices.
(2) Small Business Investment Company (SBIC) Program; Impact SBICs (RIN: 3245-AG66):
This rule proposes to establish a regulatory structure for the SBIC program's Impact Investment Fund initiative, which is currently implemented via policy memorandum. The goal of the Impact Investment Fund is to support small business investment strategies that maximize financial returns while also yielding enhanced social, environmental, or economic impacts as part of the SBIC program's overall effort to supplement the flow of private equity and long-term loan funds to small businesses in underserved communities and the innovative sectors whose capital needs are not being met. The proposed rule supports the development of America's growing impact investing industry by making available a new type of SBIC license called an Impact SBIC to investment funds meeting the SBIC program's licensing qualifications, provides application and examination fee considerations to incentivize impact investing participation, establishes leverage eligibility requirements, and establishes reporting and performance measures for licensed funds to maintain Impact SBIC designation. The proposed rule would require an Impact SBIC to invest at least 50% of its total invested capital in one or both categories of impact investment: (a) SBA-identified impact investments, which are investments in small businesses located in geographic areas and sectors of national priority designated by SBA, such as Low- and Moderate- Income Zones (LMI); and/or (b) fund-identified impact investments, which are investments that meet an SBIC's own definition, subject to SBA's approval, of an "Impact Investment," such as small businesses operating in the clean energy, education or healthcare sectors.
(3) Small Business Mentor-Protégé Programs (RIN: 3245-AG24):
SBA currently has a mentor-protégé program for the 8(a) Business Development Program that is intended to enhance the capabilities of the protégé and to improve its ability to successfully compete for Federal contracts. The Small Business Jobs Act authorized SBA to use this model to establish similar mentor-protégé programs for the Service Disabled Veteran Owned, HUBZone and Women-Owned Small Business Programs. The National Defense Authorization Act for FY 2013 further authorized SBA to extend the availability of mentor-protégé programs to all small business concerns. During the next twelve months, one of SBA's priorities will be to issue final regulations establishing these mentor-protégé programs. The various types of assistance that a mentor will be expected to provide to a protégé include technical and/or management assistance; financial assistance in the form of equity investment and/or loans; subcontracts and/or assistance in performing prime contracts with the Government in the form of joint venture arrangements. The regulatory action would enhance the ability of small business concerns to obtain larger prime contracts that would be normally out of the reach of these businesses. The small business mentor-protégé programs would allow all small businesses to tap into the expertise and capital of larger firms, which in turn would help small business concerns become more competitive in the Federal procurement arena.
(4) Small Business Government Contracting and National Defense Authorization Act of 2013 Amendments (RIN: 3245-AG58)
SBA proposed amending its regulations to implement provisions of the National Defense Authorization Act of 2013, which pertain to performance requirements applicable to small business and socioeconomic program set aside contracts and small business subcontracting. SBA also proposed to amend SBA's regulations concerning the nonmanufacturer rule and affiliation rules. Further, SBA proposed to allow a joint venture to qualify as small for any government procurement as long as each partner to the joint venture qualifies individually as small.
(5) Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive (RIN: 3245-AG64):
This proposal seeks to revise the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Policy Directives. Specifically, SBA proposes to combine the two directives into one integrated Directive, clarify the Phase III preference afforded to SBIR and STTR small business awardees, add definitions relating to data rights, clarify the benchmarks for progress towards commercialization, and update language regarding the calculations of extramural Research/Research & Development budgets used to fund the SBIR/STTR programs.
Retrospective Review of Existing Regulations
Pursuant to section 6 of Executive Order 13563 "Improving Regulation and Regulatory Review" (Jan. 18, 2011), SBA developed a plan for the retrospective review of its regulations. Since that date SBA has issued several updates to this plan to reflect the Agency's ongoing efforts in carrying out this executive order. The final agency plan and review updates, which can be found at http://www.sba.gov/about-sba/sba_performance/open_government/retrospective_review_of_regulations, currently identify the three rules and the policy directive discussed above.