Rescinding Unnecessary Notice and Comment Procedures

Issuing agencies

Abstract

This final rule rescinds the Administration's policy of engaging in notice and comment rulemaking even where the Administrative Procedure Act does not require notice and comment rulemaking. As a result of this final rule, the Administration will follow the default requirements of the Administrative Procedure Act. The Administration will reserve the right to engage in voluntary notice and comment rulemaking even where not required by the Administrative Procedure Act as a matter of policy on a case by case basis.

Full Text

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<title>Federal Register, Volume 91 Issue 167 (Monday, August 31, 2026)</title>
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[Federal Register Volume 91, Number 167 (Monday, August 31, 2026)]
[Rules and Regulations]
[Pages 55737-55738]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17731]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 101

RIN 3245-AI74


Rescinding Unnecessary Notice and Comment Procedures

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: This final rule rescinds the Administration's policy of 
engaging in notice and comment rulemaking even where the Administrative 
Procedure Act does not require notice and comment rulemaking. As a 
result of this final rule, the Administration will follow the default 
requirements of the Administrative Procedure Act. The Administration 
will reserve the right to engage in voluntary notice and comment 
rulemaking even where not required by the Administrative Procedure Act 
as a matter of policy on a case by case basis.

DATES: The final rule is effective August 31, 2026.

FOR FURTHER INFORMATION CONTACT: Jennifer Prescott, Deputy General 
Counsel, <a href="/cdn-cgi/l/email-protection#85cfe0ebebece3e0f7abd5f7e0f6e6eaf1f1c5f6e7e4abe2eaf3"><span class="__cf_email__" data-cfemail="6329060d0d0a0506114d33110610000c1717231001024d040c15">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Administrative Procedure Act (APA) generally requires, before 
an agency promulgates a regulation through informal rulemaking, a 
``notice of proposed rule making'' to be published in the Federal 
Register. 5 U.S.C. 553(b). The agency then must ``give interested 
persons an opportunity to participate in the rule making through 
submission of written data, views, or arguments with or without 
opportunity for oral presentation.'' 5 U.S.C. 553(c). These strictures, 
however, do not apply to matters ``relating to agency management or 
personnel or to public property, loans, grants, benefits, or 
contracts.'' 5 U.S.C. 553(a)(2).
    In 1974, the Small Business Administration (SBA) promulgated a 
regulation at 13 CFR 101.9 titled ``Public participation in 
rulemaking'' that provided, in part, that, ``SBA is governed as a 
matter of policy by the public participation provisions of the 
Administrative Procedure Act, 5 U.S.C. 553, notwithstanding the 
exemptions given by such section 553 for matters relating to agency 
management or personnel, or to public property, loans, grants, 
benefits, or contracts.'' See 39 FR 43815, December 19, 1974. This rule 
was subsequently redesignated and revised in 1996 to Sec.  101.108 
titled ``Has SBA waived any of the public participation exemptions of 
the Administrative Procedure Act?'' which states, ``Yes. Despite these 
exemptions, SBA will follow the public participation requirements of 
the Administrative Procedure Act, 5 U.S.C. 553, in rulemakings relating 
to public property, loans, grants, benefits, or contracts.'' See 61 FR 
2394, January 26, 1996.

II. Analysis

    The SBA has decided to rescind the policy in Sec.  101.108. Upon 
reconsideration and in the Agency's discretion, the SBA has decided 
that it is proper to return to the text of the APA regarding its 
enumerated exceptions for matters relating to public property, loans, 
grants, benefits, and contracts. The SBA has a new policy of acting 
more nimbly in response to changing circumstances and this rescission 
will allow for that. To the extent public participation is determined 
to be advantageous, the SBA may still request public comments through 
notices of proposed rulemaking. The SBA will continue to comply with 
the APA's notice and comment requirements where required and otherwise 
has discretion to seek public input through whatever means it 
determines appropriate.

III. Justification for Final Rule

    This rule is exempt from the prior notice and comment requirements 
of the Administrative Procedure Act (APA) because it is a general 
statement of policy. 5 U.S.C. 553(b)(A). This policy was originally 
published in the Federal Register as a notice from the Administrator, 
36 FR 16716 (August 25, 1971), and only subsequently codified in the 
Code of Federal Regulations as an organizational matter, 39 FR 43815 
(December 19, 1974). Alternatively, it is a rule of agency 
organization, procedure, and practice because it is not binding on 
outside parties and only affects the manner in which they may present 
their views to the agency. 5 U.S.C. 553(b)(A). Further, because it is 
not a substantive rule, and because it relieves a restriction, this 
rule is exempt from the APA's requirement of a 30-day delay in the 
effective date. See 5 U.S.C. 553(d).

IV. Compliance With Executive Orders 12866, 12988, 13132, 14192, 14219, 
and the Paperwork Reduction Act (44 U.S.C. Ch. 35), the Congressional 
Review Act (5 U.S.C. 801-808), and the Regulatory Flexibility Act (5 
U.S.C. 601-612).

Executive Orders 12866 and 13563

    Executive Order (E.O.) 12866, Regulatory Planning and Review, and 
E.O. 13563, Improving Regulation and Regulatory Review, direct agencies 
to assess costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
The Office of Management and Budget determined that this rule will be a 
``significant regulatory action,'' and therefore, is subject to review 
under section 6(b) of E.O. 12866, dated September 30, 1993. 
Accordingly, this rule has been submitted to OMB for review.

Cost-Benefit Analysis

    This rule rescinds 13 CFR 101.108, an SBA policy that voluntarily 
imposed APA notice-and-comment procedures even where such procedures 
were not legally required. The rescission returns the SBA to the 
default rulemaking requirements of the APA (5 U.S.C. 553), aligning 
internal procedure with statute and eliminating SBA's self-imposed 
procedural burden. The rule has the primary benefit of increasing 
regulatory efficiency and responsiveness by removing an internal 
requirement that is not required by law, which slows down regulatory 
and deregulatory actions. Specifically, removing the requirement to 
solicit comments on rulemakings involving public property, loans, 
grants, benefits, or contracts:
    <bullet> Allows policy changes and their associated benefits to be 
implemented more quickly, enhancing agility in responding to evolving 
programmatic or operational needs in areas where Congress has given the 
SBA broad discretion.
    <bullet> Streamlines agency decision-making for programs relating 
to public property, loans, grants, benefits, or contracts.
    <bullet> Saves staff time and resources that would otherwise be 
devoted to preparing, publishing, and responding to public comments.
    The benefits of more quickly adopting new policy changes cannot be 
quantified as they will depend on the impact of future rules which are 
unknown. Depending on the nature of

[[Page 55738]]

future proposed rules, quicker policy adoption may benefit the 
Administration, the general public, or both. The benefits of the rule 
are also expected to result in streamlined decision-making and 
meaningful reductions in implementation costs and time burdens for the 
SBA, some of which are difficult to quantify. The cost savings of 
reducing agency resources expenditures, however, can be quantified. 
Between 2021 and 2025, the Administration proposed 33 rules.\1\ 
Assuming response to comments on a proposed rule requires an average of 
40 hours of an employee at GS-13 Step 5 this will be $4,247 per avoided 
proposed rule.\2\ Assuming the Administration will continue rulemaking 
at a similar rate as before this change, the annual cost savings of 
this change would be $28,029. The general public will also see cost 
savings in avoided time drafting and submitting public comments. 
Assuming the public spends an average of 20 hours writing comments on 
each rule and their time is valued at the average U.S. hourly wage of 
$32.66,\3\ the public will be expected to save $4,311 per year. In 
total, the quantified annual cost savings of this rule is $32,340.
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    \1\ Federal Register :: Document Search Note semiannual 
regulatory agendas were excluded.
    \2\ The Salary of a GS 13 Step 5 in the Washington, DC area is 
$138,024 in 2026 (SALARY TABLE 2026-DCB), so 40 hours of time is 
$2,654. This is then multiplied by 1.6 to account for benefits and 
overhead.
    \3\ 2024 Occupational Employment and Wage Statistics
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    There may be potential disbenefits of avoiding the public comment 
period, if the public comments offer information and suggestions that 
improve the SBA's regulations. The associated disbenefits are expected 
to be minor as the SBA can still solicit public comments on a case by 
case basis whenever it perceives the benefits of doing so are expected 
to exceed the costs.
    The SBA has considered maintaining the current policy or replacing 
it with a narrower procedural commitment (e.g., limiting it to certain 
programs). However, the SBA believes its rescission offers a clearer 
legal and operational baseline in line with the APA.

Executive Order 12988

    This action meets applicable standards set forth in section 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate drafting errors and ambiguity, reduce burden, and 
provide a clear legal standard for affected conduct. The action does 
not have retroactive or preemptive effect.

Executive Order 13132

    This rule does not have Federalism implications as defined in 
Executive Order 13132, Federalism. It will not have substantial direct 
effects 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, as specified 
in the Executive Order. As such, it does not warrant the preparation of 
a Federalism Assessment.

Executive Order 14192

    This final rule is expected to be an Executive Order 14192 
deregulatory action with a quantified annualized net savings of $32,340 
in 2026 dollars. This rule will remove 13 CFR 101.108 in its entirety.

Executive Order 14219

    On February 19, 2025, the President issued Executive Order 14219, 
Ensuring Lawful Governance and Implementing the President's 
``Department of Government Efficiency'' Deregulatory Initiative, which 
further emphasized the goal of the Administration to alleviate the 
regulatory burdens placed on the public. Under Executive Order 14219, 
agencies must evaluate their existing regulations to determine which 
ones should be repealed, replaced, or modified. SBA has engaged in this 
process and has identified 13 CFR 101.108 as appropriate for removal in 
accordance with Executive Order 14219.

Paperwork Reduction Act

    The SBA has determined that this rule does not impose additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act, 44 U.S.C. chapter 35.

Congressional Review Act

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996, also known as the Congressional Review Act, 5 U.S.C. 801 
et seq., provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. SBA will submit a report containing this 
rulemaking and other required information to the U.S. Senate, the U.S. 
House of Representatives, and the Comptroller General of the United 
States. The Office of Information and Regulatory Affairs has reviewed 
this rulemaking and found that it does not meet the criteria set forth 
in 5 U.S.C. 804(2).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires 
administrative agencies to consider the effect of their actions on 
small entities, small nonprofit 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, the RFA 
requires such analysis only where notice and comment rulemaking is 
required. As discussed above, SBA is not required to publish the rule 
for notice and comment in accordance with Section 553(b)(A) of the APA. 
Accordingly, SBA is not required to conduct a regulatory flexibility 
analysis and is publishing this rule as a final rule without advance 
notice and public comment.

List of Subjects in 13 CFR Part 101

    Administrative practice and procedures, Authority delegations 
(Government agencies), Intergovernmental relations, Investigations, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, SBA amends 13 CFR part 
101 as follows:

PART 101--ADMINISTRATION

0
1. The authority citation for part 101 continues to read as follows:

    Authority: 5 U.S.C. 552 and App. 3, secs. 2, 4(a), 6(a), and 
9(a)(1)(T); 15 U.S.C. 633, 634, 687; 31 U.S.C. 6506; 44 U.S.C. 3512; 
42 U.S.C. 6307(d); 15 U.S.C. 657h; E.O. 12372 (July 14, 1982), 47 FR 
30959, 3 CFR, 1982 Comp., p. 197, as amended by E.O. 12416 (April 8, 
1983), 48 FR 15887, 3 CFR, 1983 Comp., p. 186.


Sec.  101.108  [Removed and Reserved]

0
Remove and reserve Sec.  101.108.

Kelly Loeffler,
Administrator.
[FR Doc. 2026-17731 Filed 8-28-26; 8:45 am]
BILLING CODE 8026-09-P


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