SBA Sets Roadshow To Hear Feedback on 8(a) Rules SBA has set a series of public hearings on its proposed changes in 8(a) rules as it extended the comment period for an additional month, to Jan. 28. After hearings this week in New York, Boston and Seattle, the “listening tour” will stop in January in Dallas, Atlanta, Albuquerque and Chicago. Agency officials said additional hearings are planned during January in Miami and Los Angeles, but they have not yet been scheduled. (For dates and registration information, see Calendar, p. 5.) In its first overhaul of 8(a) regulations in a decade, SBA has proposed sweeping changes ranging from new restrictions on joint ventures to changes in compensation and income limits for business owners and executives. (SAA, 11/6) Joe Jordan, associate administrator for government contracting and business development, said the agency views the comment period as a “collaborative” process to aid in fine-tuning the rules. At the first public hearing in Washington Dec. 10, several 8(a) business owners and executives criticized the proposed limits on compensation. The proposed rule would limit an 8(a) owner’s annual income to $250,000. The commenters said that cap, coupled with the requirement that the owner must be the highest paid employee of the company, would make it difficult to hire top executive talent in some cities. “I keep my salary low to put the money back into the business,” said Angela Harpalani, owner of an IT company. Another 8(a) owner, Kiho Kang, said a $250,000 compensation package is too low to attract sales and business development professionals in major metropolitan areas. Kang also objected to the proposal limiting an 8(a) business owner’s total assets to $4 million. He said the cap will discourage investment in expanding the business. Another provision of the proposed rules would terminate a company from the 8(a) program if its revenues exceeded the size standard for its primary NAICS code in two consecutive years. “That’s a terrible idea,” said Jessica Graham, general counsel of Afognak Native Corp. Commenters pointed out that the proposed rule conflicts with the rule for other small businesses. A company is considered small as long as the three-year average of its revenues does not exceed its size standard. SBA is proposing no change in net-worth limits for 8(a) applicants and participants. Currently the limit for an applicant is $250,000, not counting the value of a home or business; the limit for continued participation in the program is $750,000. However, Rep. G.K. Butterfield, D-NC, has introduced legislation to index the $750,000 cap for inflation. The bill would raise it to $978,722 immediately. Both the House and Senate small business committees have previously proposed raising the cap, but Congress has not approved an increase. SBA says no increase is necessary because the average net worth of an 8(a) applicant is just $70,000.