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Small Business Size Regulations, HUBZone Program; Correction

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

U.S. Small Business Administration.

ACTION:

Correcting amendments.

SUMMARY:

The U.S. Small Business Administration (SBA) is correcting amendments to regulations governing SBA's Small Business Innovation Research (SBIR) Program and its Historically Underutilized Business Zone (HUBZone) Program. These regulations addressed Employee Stock Ownership Plans, or ESOPs, but incorrectly referred to the ESOP as an Employee Stock Option Plan.

EFFECTIVE DATE:

These corrections are effective on November 30, 2006.

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FOR FURTHER INFORMATION CONTACT:

Carl Jordan, Office of Size Standards, (202) 205-6618 or by e-mail at sizestandards@SBA.gov; Michael P. McHale, Associate Administrator for the HUBZone Program, (202) 205-8885 or by e-mail, at hubzone@sba.gov.

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SUPPLEMENTARY INFORMATION:

The SBA published a final rule in the December 3, 2004 Federal Register (69 FR 70180) that amended the regulations governing size for the SBIR program. In the preamble to the regulation, SBA stated that it received comments supporting ownership and control of SBIR concerns by Employee Stock Ownership Plans, or ESOPs, for investment and employee incentive purposes. In the final rule, however, SBA inadvertently referred to the ESOP as an Employee Stock Option Plan. An ESOP is a retirement plan in which the small business contributes its stock to the plan for the benefit of the company's employees. Hence, SBA's regulations provide that it will consider each stock trustee and plan member to be an owner of an SBIR concern, since with an ESOP all employees that are part of the plan own the stock in the company. In comparison, an employee stock option plan is merely a right given to an employee to buy the company's stock at a set price within a certain period of time. To avoid confusion on this issue, SBA is correcting this error.

SBA published in the May 24, 2004 Federal Register (69 FR 29411) a final rule that amended the regulations governing the HUBZone Program. In the final rule, SBA inadvertently referred to an ESOP as an Employee Stock Option Plan. Again, SBA meant to state that an ESOP is an Employee Stock Ownership Plan. Therefore, SBA is correcting this regulation as well.

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List of Subjects

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Accordingly,

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PART 121—SMALL BUSINESS SIZE REGULATIONS

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

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Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 637(a), 644, and 662(5); and Pub. L. 105-135, sec. 401 et seq., 111 Stat. 2592.

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2. Amend § 121.702 by revising paragraph (a)(2) to read as follows:

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What size standards are applicable to the SBIR program?
* * * * *

(a) * * *

(2) If an Employee Stock Ownership Plan owns all or part of the concern, SBA considers each stock trustee and plan member to be an owner.

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PART 126—HUBZONE PROGRAM

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3. The authority citation for part 126 continues to read as follows:

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Authority: 15 U.S.C. 632(a), 632(j), 632(p) and 657a.

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4. Amend § 126.201 by revising the second sentence of the introductory text to read as follows:

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Who does SBA consider to own a HUBZone SBC?

* * * If an Employee Stock Ownership Plan owns all or part of the concern, SBA considers each stock trustee and plan member to be an owner. * * *

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Dated: November 17, 2006.

Anthony Martoccia,

Associate Deputy Administrator, Government Contracting and Business Development.

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[FR Doc. E6-20268 Filed 11-29-06; 8:45 am]

BILLING CODE 8025-01-P