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SBA Proposes Increase in Business Size Standards in Utilities, Construction, Arts, Entertainment, and Recreation Sectors

WASHINGTON – The U.S. Small Business Administration (SBA) is seeking comment on three proposed rules published today in The Federal Register. SBA Proposes an increase in Business Size that would revise the size definitions for small businesses in the Utilities; Construction; and Arts, Entertainment and Recreation sectors. The proposed revisions reflect changes in marketplace conditions.

The proposed rule for the Utility sector will revise the size standard for nine industries. The rule proposes changing six of the industries dealing with electric power generation, distribution, and transmission from revenue-based size standards to an employee based size standard of 500 employees.

It would also increase the size standards for the remaining three industries in the Utility sector from $7 million to $25.5 million for water supply and irrigation systems, $7 million to $19 million for sewage treatment facilities, and $12.5 million to $14 million for steam and air conditioning supply.

SBA estimates as many as 400 additional firms in this sector would become eligible for SBA programs as a result of these revisions.

SBA also proposed increases in size standards for one industry and one sub-industry in the Construction sector. Specifically, SBA proposed to increase the size standard for Land Subdivision from $7 million to $25 million and from $20 million to $30 million for businesses engaged in Dredging and Surface Cleanup activities.

SBA estimates that more than 400 additional firms will become eligible for SBA’s programs and services if adopted.

The SBA’s third proposed rule would increase the small business size standards for 17 industries in the Arts, Entertainment, and Recreation sector.

As many as 1,450, additional firms could become eligible for SBA’s programs and services if the proposed increases are adopted.

Comments can be submitted on these proposed rules on or before September 17, 2012, at, identified by the following RIN numbers:

1. Proposed Rule: Small Business Size Standards; Utilities (NAICS Sector 22) (RIN 3245-AG25)
2. Proposed Rule: Small Business Size Standards; Arts, Entertainment, and Recreation (NAICS Sector 71) (RIN 3245-AG36)
3. Proposed Rule: Small Business Size Standards; Construction (NAICS Sector 23) (RIN 3245-AG37)

You may also email comments to Khem R. Sharma, Chief, Size Standards Division, 409 3rd St., SW, Mail Code 6530, Washington, DC 20416.

As part of an ongoing review of all size standards, the SBA takes into account the structural characteristics within individual industries. This includes an average firm size, the degree of competition, and federal government contracting trends. As such, this is going to ensure that small business size definitions reflect current economic conditions within those industries. Under provisions of the Small Business Jobs Act of 2010, SBA will continue its comprehensive review of all size standards for the next several years.

The revisions to the size standards in these sectors will enable more small businesses to retain their small business status; will give federal agencies a larger pool of small businesses to choose from for small business procurement opportunities and help eligible small businesses benefit from SBA’s loan programs.

An SBA-issued White Paper entitled, “Size Standards Methodology,” which explains how the SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards can be viewed at

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