DATE: May 23, 2001
SUBJECT: Small Business Administration; New Markets Venture Capital Program
SOURCE: Federal Register, May 23, 2001, Vol. 66, No. 100, page 28601
AGENCIES: Small Business Administration (SBA)
ACTION: Final Rule and Withdrawal of Interim Final Rule
SYNOPSIS: SBA is withdrawing the January 22, 2001, interim final rule which added new Title 13 of the Code of Federal Regulations (CFR), Part 108, New Markets Venture Capital ("NMVC") Program, and is replacing it with a final rule that was proposed on April 23, 2001.
EDITOR'S NOTE: For more on the interim final rule, see the January 22, 2001, FEDERAL CONTRACTS DISPATCH "Small Business Administration; New Markets Venture Capital Program."
For more on the initial delay of the interim final rule's effective date, see the February 20, 2001, FEDERAL CONTRACTS DISPATCH "Small Business Administration; Delay of Effective Date of New Markets Venture Capital Program Rule."
For more on the additional delay and proposed withdrawal of the interim final rule's effective date, and the proposed replacement rule, see the April 23, 2001, FEDERAL CONTRACTS DISPATCH "Small Business Administration; New Markets Venture Capital Program."
DATES: The effective date of the final rule is May 23, 2001, and the January 22, 2001, interim final rule is withdrawn effective May 23, 2001.
FOR FURTHER INFORMATION CONTACT: Austin Belton, Director, Office of New Markets Venture Capital, Investment Division, or Louis Cupp, Policy Analyst, Investment Division, 202-205-6510.
SUPPLEMENTAL INFORMATION: Between 1997 and 1998, the median income for the nation's households rose 3.5% in real terms, yet 12.7% of Americans (34.5 million people) still lived below the poverty line. Many of these Americans live in inner city and rural areas, where job opportunities are scarce and there is little to attract small business investors. In rural and urban communities, poverty remains a persistent problem. Job growth is well below the national average, with unemployment at or above 14%. Unemployment is 7.5% in the African American urban community, and is 6.4% in the Hispanic urban population; both are nearly double the national average.
Congress decided that it is not enough to create jobs in these pockets of poverty, but that these communities need a new economic infrastructure to enable them to develop their full potential and participate fully in the economic mainstream, so it enacted the NMVC program as part of the Consolidated Appropriations Act of 2001 (Public Law 106-554, enacted December 21, 2000). The NMVC is intended to help create an economic infrastructure in underserved areas by encouraging business growth through program-supported investment. The NMVC program will encourage the growth of such an infrastructure by supporting new equity capital investments by NMVC companies and Specialized Small Business Investment Companies (SSBICs) and by providing operational assistance to smaller enterprises located in low-income geographic areas whose growth will foster the creation of wealth and job opportunities in such areas.
SBA published an interim final rule implementing the NMVC program on January 22, 2001, with an effective date of February 21, 2001, and comments on the interim final rule were due on March 23, 2001. However, on January 20, 2001, the day President Bush was inaugurated, the Executive Office of the President issued a memorandum to the heads of all federal agencies directing them to withdraw all rules and regulations that had been sent to the Federal Register but not published, and to postpone for 60 days the effective date of all rules and regulations that have been published in the Federal Register but have not taken effect. Therefore, to comply with President Bush's direction, SBA delayed the effective date of the interim final rule from February 21, 2001, to April 23, 2001, then further delayed the effective date until June 22, 2001. In addition, the SBA also published on April 23, 2001, a proposal to withdraw the interim final rule and replace it with a substitute that was based in large part on the interim final rule's 13 CFR Part 108, but which had many technical and substantive changes. One comment was received, and SBA is adopting the proposed rule as final with some minor changes.
FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.
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