HUBZone Program Provisions for Governor-Designated Covered Areas
| Published date | 15 November 2019 |
| Citation | 84 FR 62447 |
| Record Number | 2019-24610 |
| Section | Rules and Regulations |
| Court | Small Business Administration |
Federal Register, Volume 84 Issue 221 (Friday, November 15, 2019)
[Federal Register Volume 84, Number 221 (Friday, November 15, 2019)]
[Rules and Regulations]
[Pages 62447-62449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24610]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 126
RIN 3245-AH06
HUBZone Program Provisions for Governor-Designated Covered Areas
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule; request for comments.
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SUMMARY: This direct final rule contains amendments to the regulations
governing the HUBZone Program. The U.S. Small Business Administration
(SBA) is making changes to its regulations to implement provisions of
the National Defense Authorization Act for Fiscal Year 2018 which
authorized the inclusion of ``Governor-designated covered areas'' under
the HUBZone program. This direct final rule would merely replicate
these statutory changes into SBA's regulations.
DATES: This rule is effective on January 1, 2020, without further
action, unless significant adverse comment is received by December 16,
2019. If significant adverse comment is received, SBA will publish a
timely withdrawal of the rule in the Federal Register.
ADDRESSES: You may submit comments, identified by RIN 3245-AH06, by any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
For Mail, Paper, Disk, or CD-ROM Submissions: Bruce Purdy,
U.S. Small Business Administration, Office of the HUBZone Program, 409
Third Street SW, 8th Floor, Washington, DC 20416.
Hand Delivery/Courier: Bruce Purdy, U.S. Small Business
Administration, Office of the HUBZone Program, 409 Third Street SW, 8th
Floor, Washington, DC 20416.
SBA will post all comments on www.regulations.gov. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at www.regulations.gov, please submit the information to Bruce
Purdy, U.S. Small Business Administration, Office of the HUBZone
Program, 409 Third Street SW, 8th Floor, Washington, DC 20416, or send
an email to [email protected]. Highlight the information that you
consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review the information and make
the final determination on whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Bruce Purdy, Deputy Director, Office
of the HUBZone Program, 409 Third Street SW, Washington, DC 20416, 202-
205-7554, [email protected].
SUPPLEMENTARY INFORMATION: This direct final rule implements a
conforming amendment to SBA's regulations from the National Defense
Authorization Act for Fiscal Year 2018, Public Law 115-91 (2018 NDAA).
The 2018 NDAA became effective on December 12, 2017. Section 1701(e) of
the 2018 NDAA authorized the inclusion of ``Governor-designated covered
areas'' under the HUBZone program. Section 1701(j) of the 2018 NDAA
provides that section 1701(e) shall be effective January 1, 2020.
SBA seeks to amend its HUBZone rules to mirror the changes made to
the Small Business Act, to avoid public confusion and possible
misinterpretations of SBA's HUBZone program. Since these are conforming
amendments, with no extraneous interpretation or other expanded
materials, SBA expects no significant adverse comments. Therefore, SBA
has decided to proceed with a direct final rule. If SBA receives a
significant adverse comment during the comment period, SBA will
withdraw the rule, and proceed with a new proposed rule.
In order to implement the changes made by section 1701(e) of the
2018 NDAA, SBA is amending Sec. 126.103 of its regulations by adding a
new definition for the term ``Governor-designated covered area'',
revising the definition of the term ``HUBZone'' to include Governor-
designated covered areas, and adding a new Sec. 126.104 to implement
the statutory process by which a Governor can petition and the SBA
Administrator may designate a specific covered area to be a qualified
HUBZone area. The statute provides the guidelines under which a
petition will be considered. Specifically, the Administrator will
consider the following: The potential for job creation and investment
in the covered area; the demonstrated interest of small business
concerns in the covered area to be designated as a Governor-designated
covered area; how State and local government officials have
incorporated the covered area into an economic development strategy;
and if the covered area was a HUBZone before becoming the subject of
the petition, the impact on the covered area if the Administrator did
not approve the petition. SBA anticipates that included within the
covered areas that a Governor may seek to be designated as a qualified
HUBZone area are Opportunity Zones, authorized by Section 13823 of the
Tax Cuts and Jobs Act of 2017, Public Law 115-97, that do not otherwise
qualify as HUBZones.
Compliance With Executive Orders 12866, 13771, 13563, 12988, 13132,
13175, the Paperwork Reduction Act (44 U.S.C. Ch. 35), the Regulatory
Flexibility Act (5 U.S.C. 601-612), and the Administrative Procedure
Act
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
direct final rule does not constitute a significant regulatory action
under Executive Order 12866. This rule is also
[[Page 62448]]
not a major rule under Congressional Review Act.
Executive Order 13771
This rule is not an Executive Order 13771 regulatory action because
this rule is not significant under Executive Order 12866.
Executive Order 13563
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. The executive order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible,
and consistent with regulatory objectives. Executive Order 13563 also
requires that regulations be based on the open exchange of information
and perspectives among state and local officials, affected stakeholders
in the private sector, and the public as a whole. SBA has developed
this rule in a manner consistent with these requirements. While
developing this rule, SBA responded to specific inquiries from
government officials and the public regarding the implementation of the
statutory authority for Governor-designated covered areas and discussed
the implementation of the authority at nationwide conferences,
including the HUBZone Council Conference. SBA continues to communicate
with the public by responding to inquiries regarding this new
authority.
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 113132
A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect 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. This direct final rule would allow State Governors to
petition SBA to designate as HUBZones certain areas that would
otherwise not qualify as HUBZones. A Governor's petition must delineate
the areas to be included and show: (1) The potential for job creation
and investment in the covered area; (2) the demonstrated interest of
small business concerns in the covered area to be designated as a
Governor-designated covered area; (3) how State and local government
officials have incorporated the covered area into an economic
development strategy; and (4) if the covered area was a HUBZone before
becoming the subject of the petition, the impact on the covered area if
the Administrator did not approve the petition. Governors may only
submit one petition for their State every year and must annually
provide data on Governor-designated covered areas previously approved
by the SBA Administrator.
We have analyzed this direct final rule and have determined that it
is consistent with the fundamental federalism principles and preemption
requirements described in Executive Order 13132.
Executive Order 13175
This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it would not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
Paperwork Reduction Act, 44 U.S.C. Ch. 35
SBA has determined that this direct final rule imposes reporting
requirements under the Paperwork Reduction Act (PRA). Specifically, the
rule would require State Governors to submit petitions to SBA in order
for SBA to determine whether to designate certain areas as Governor-
designated covered areas. At a minimum, such petitions would provide a
list of covered areas for which the Governor requests designation and
information on the potential for job creation and investment in the
covered area, the demonstrated interest of small business concerns in
the covered area to be designated as a Governor-designated covered
area, how State and local government officials have incorporated the
covered area into an economic development strategy, and if the covered
area was a HUBZone before becoming the subject of the petition, the
impact on the covered area if the Administrator did-not approve the
petition. As permitted by 13 CFR 1320.13, SBA sought emergency PRA
review and approval of this information collection, including waiver of
the required 60-day public comment notice, from the Office of
Management and Budget (OMB). OMB approved SBA's request and assigned
OMB Control Number 3245-0403. Before this approval expires on April 30,
2020, SBA will publish the 60-day notice in the Federal Register and
resubmit this information collection to OMB for standard review. The
disposition of any comments received will be addressed with that
resubmission.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, small non-profit enterprises, and small local
governments. Pursuant to the RFA, when an agency issues a rulemaking,
the agency must prepare a regulatory flexibility analysis which
describes the impact of the rule on small entities. However, section
605 of the RFA allows an agency to certify a rule, in lieu of preparing
an analysis, if the rulemaking is not expected to have a significant
economic impact on a substantial number of small entities. Within the
meaning of the RFA, SBA certifies that this direct rule will not have a
significant economic impact on a substantial number of small entities.
Administrative Procedure Act--Justification for Direct Final Rule
In general, SBA publishes a rule for public comment before issuing
a final rule, in accordance with the Administrative Procedure Act, 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule without prior public participation. 5 U.S.C.
553(b)(3)(B). The good cause requirement is satisfied when prior public
participation is impracticable, unnecessary, or contrary to the public
interest.
SBA is publishing this rule as a direct final rule because public
participation is unnecessary. SBA views this as a non-controversial
administrative action because it merely implements a change required by
the Small Business Act, as amended by section 1701(e) of the National
Defense Authorization Act for Fiscal Year 2018, Public Law 115-91 (2018
NDAA). This rule will be effective on the date shown in the DATES
section unless SBA receives any significant adverse comments on or
before the deadline for comments set forth in the DATES section.
Significant adverse comments are comments that provide
[[Page 62449]]
strong justifications why the rule should not be adopted or for
changing the rule. SBA does not expect to receive any significant
adverse comments because the rule simply mirrors the statutory language
contained in section 1701(e) of the 2018 NDAA, with no extraneous
interpretation or other expanded text. Implementation of this change
will benefit the public by expanding the HUBZone program and will allow
SBA to meet the statutory deadline mandated by section 1701(j) of the
2018 NDAA, which provides that this change is effective January 1,
2020. If SBA receives any significant adverse comments, SBA will
publish a notice in the Federal Register withdrawing this rule before
the effective date. If SBA receives no significant adverse comments,
SBA will publish a document in the Federal Register confirming the
effective date.
List of Subjects in 13 CFR Part 126
Administrative practice and procedure, Government procurement,
Small businesses.
Accordingly, for the reasons stated in the preamble, SBA amends 13
CFR part 126 as follows:
PART 126--HUBZONE PROGRAM
0
1. The authority for 13 CFR part 126 continues to read as follows:
Authority: 15 U.S.C. 632(a), 632(j), 632(p), 644 and 657a.
0
2. Amend Sec. 126.103 by adding a definition alphabetically for the
term ``Governor-designated covered area'' and revising the definition
of the term ``HUBZone'' to read as follows:
Sec. [thinsp]126.103 What definitions are important in the HUBZone
program?
* * * * *
Governor-designated covered area means an area that the
Administrator has designated as a HUBZone by approving a Governor-
generated petition as described in Sec. 126.104.
HUBZone means a historically underutilized business zone, which is
an area located within one or more:
(1) Qualified census tracts;
(2) Qualified non-metropolitan counties;
(3) Lands within the external boundaries of an Indian reservation;
(4) Redesignated areas;
(5) Qualified base closure areas;
(6) Qualified disaster areas; or
(7) Governor-designated covered areas.
* * * * *
0
3. Add Sec. 126.104 to read as follows:
Sec. 126.104 How can a Governor petition for the designation of a
Governor-designated covered area?
(a) For a specific covered area to receive a designation as a
Governor-designated covered area, the Governor of the State in which
the identified covered area is wholly contained shall include such area
in a petition to the Administrator requesting such a designation. In
reviewing a request for designation included in such a petition, the
Administrator may consider--
(1) The potential for job creation and investment in the covered
area;
(2) The demonstrated interest of small business concerns in the
covered area to be designated as a Governor-designated covered area;
(3) How State and local government officials have incorporated the
covered area into an economic development strategy; and
(4) If the covered area was a HUBZone before becoming the subject
of the petition, the impact on the covered area if the Administrator
did not approve the petition.
(b) Each calendar year, a Governor may submit not more than 1
petition described in this section. Such petition shall include all
covered areas in a State for which the Governor seeks designation as a
Governor-designated covered area, except that the total number of
covered areas included in such petition may not exceed 10 percent of
the total number of covered areas in the State.
(c) If the Administrator grants a petition described in this
section, the Governor of the Governor-designated covered area shall,
not less frequently than annually, submit data to the Administrator
certifying that each Governor-designated covered area continues to meet
the requirements of paragraph (d)(1) of this section.
(d) In this section:
(1) The term ``covered area'' means an area in a State--
(i) That is located outside of an urbanized area, as determined by
the Bureau of the Census;
(ii) With a population of not more than 50,000; and
(iii) For which the average unemployment rate is not less than 120
percent of the average unemployment rate of the United States or of the
State in which the covered area is located, whichever is less, based on
the most recent data available from the American Community Survey
conducted by the Bureau of the Census.
(2) The term ``Governor'' means the chief executive of a State.
(3) The term ``State'' means each of the States of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, the Commonwealth of the Northern
Mariana Islands, or American Samoa.
Christopher Pilkerton,
Acting Administrator.
[FR Doc. 2019-24610 Filed 11-14-19; 8:45 am]
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