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Dec 13 -- This rule proposes revisions to Small Business Development Centers Program (the SBDC Program or the Program) regulations to align with current policy and guidance from the U.S. Small Business Administration (SBA or the Agency) and to incorporate updates to uniform administrative requirements, cost principles, and audit requirements for Federal awards (Uniform Guidance). This proposed rule also includes policy and procedural changes identified by the Agency as necessary to preserve the integrity and legislative intent of the Program. To be assured of consideration, written comments must be postmarked on or before February 13, 2023.

The SBDC rules were last revised in 1995 (see 60 FR 31504) (June 13, 1995). However, the statute authorizing the SBDC Program has been amended numerous times since the last rulemaking (for a full listing of amending legislation, see the history notes at 15 U.S.C. 648). For example, SBA proposes to update the regulation as required by section 21(a)(7) of the Small Business Act to protect the privacy of any individual or small business receiving assistance in the Program.

SBA believes it is now necessary to revise the regulations to outline current policies and procedures for the SBDC Program for consistency. This proposed regulation also incorporates the changes required by the 2 CFR part 200 and other grant changes that have taken place over the last 25 years. Additionally, the America's Small Business Development Centers (ASBDC), the recognized association as established in section 21(a)(3)(A), has requested changes that are consistent with the revisions made in the notice of funding opportunity and cooperative agreement. Furthermore, the SBA received 133 comments to the ANPRM that was published on April 2, 2015, some of which are incorporated in this proposed rule.

In the absence of this rule, there would be inconsistency between the regulations and Program governing documents, including the notice of funding opportunity and the cooperative agreement. Currently, SBA and the SBDCs reference three or more documents to find guidance on the Program, and the annual notice of funding opportunity and cooperative agreement have become, for all practical purposes, documents which interpret the statute. Also, SBA has limited authority to hold SBDCs accountable for low or non-performance. While low or non-performance is a rare occurrence, SBA's only current recourse is to write conditions into the SBDC notice of award. The proposed rule would strengthen SBA's oversight and accountability, as intended by Congress, and reduce burden by consolidating programmatic guidance to one document.

The potential benefits of this proposed rule are based on incorporating all the changes that have been made with the publication 2 CFR part 200, other grant changes over the past 20 years, and a streamlining of both the notice of funding opportunity and the cooperative agreement. Specifically, the rule provides guidance on the determination of the official name of the SBDC; directs minimum reporting for, and hiring of, State Directors; applying for other grants/other sources of funds; clarifies Project Officer responsibilities; clarifies matching funds, such as in-kind funds; funding expenditures; eligible entities budget justification; provides guidance regarding the collection and use of individual SBDC client data; adds new sections regarding suspension, termination, and non-renewal, payments and reimbursements, property standards, confidential information—among others.

The new regulations will simplify and streamline notice of funding opportunity language to contain only that information that the applicant organization must submit and not all the other information that will now be written into the regulations. Moreover, having the regulations in one document would make administering the Program by the SBDCs much easier by not having to reference three or more different documents.
The proposed rule revises regulations to outline current policies and procedures for the SBDC Program. Specifically, the proposed rule will clarify and define the role of the District Office regarding cooperative agreement oversight activities by adding definitions and procedures throughout the proposed regulations. Second, SBA proposes to add 23 definitions that refine and explain various roles, procedures, documents, and categories of funding and proposes to revise other definitions for clarification. Third, a section is proposed to be added to codify SBDC client confidentiality. Finally, the current process of hiring a State/Region Director is outlined in an SBA policy notice; however, the proposed regulation proposes to codify and refine this process. Most of these proposed changes are already implemented by the SBDCs, and these proposed regulations are codifying them.

The proposed rule will impact 62 SBDCs that primarily fall into the North American Industry Classification System (NAICS) codes 611210 (junior colleges) and 611310 (colleges, universities, and professional schools). In addition, seven SBDCs are hosted by state economic development organizations, such as state Departments of Trade or Commerce.
FRN: https://www.federalregister.gov/d/2022-25012 [22 pages]

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