Comment on FR Doc # 2026-11765

This comment is submitted on behalf of CPAC. CPAC supports the Small Business Administration's proposed rule to remove the rebuttable presumption of social disadvantage for individually owned firms under 13 CFR 124.103, and to replace it with a race-neutral, evidence-based standard for establishing social disadvantage. CPAC agrees with SBA's determination that the Rebuttable Presumption is unconstitutional and supports its removal in full. The Rebuttable Presumption, in place from 1986 to 2023, categorized and favored applicants solely on the basis of race and ethnicity, in violation of the Fifth Amendment's equal protection guarantee (Ultima Servs. Corp. v. United States Dept. of Agric., 683 F. Supp. 3d 745, 774 (E.D. Tenn. 2023)). CPAC further agrees that the Department of Justice's November 25, 2025 notice to the Speaker of the House, declining to defend the Rebuttable Presumption under 28 U.S.C. 530D, confirms that continued reliance on race-based classifications in administering the 8(a) BD program cannot be reconciled with binding equal protection precedent, including Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023), and Ames v. Ohio Department of Youth Services, 605 U.S. 303 (2025). CPAC supports each of the four specific changes SBA proposes to § 124.103: •Realigning the regulatory text with the statutory definition of social disadvantage in 15 U.S.C. 637(a)(5), which on its face requires an individualized showing tied to “circumstances beyond [the individual's] control” rather than group membership alone. •A new test in § 124.103(b), under which any citizen, regardless of race or ethnicity, may establish social disadvantage through evidence of specific discriminatory government or private-entity action that caused material harm. This test is superior to the prior framework because eligibility turns on documented conduct and individualized harm rather than presumed status. SBA's cost-benefit analysis demonstrates that this change imposes no additional burden on applicants, since applicants were already required to submit a comparable narrative under the prior non-presumptive standard. •Eliminating the non-presumptive narrative test under current § 124.103(c) and making the new § 124.103(b) test the sole standard, consistent with SBA's stated goal of applying one uniform, objective standard to all individual applicants regardless of racial or ethnic background. •Removing the group-inclusion process under current § 124.103(d), which is rendered moot by elimination of the Rebuttable Presumption itself and would otherwise preserve an administrative mechanism for exactly the kind of group-based classification the rule is designed to eliminate. CPAC acknowledges that SBA's proposed rule is limited to individually owned 8(a) applicants and does not reach entity-owned firms under 15 U.S.C. 637(a)(4)(A) and 637(a)(13) or 42 U.S.C. 9815(a)(2). CPAC urges SBA to finalize the rule as proposed without weakening the evidentiary showing required under § 124.103(b)(3), and to reject any suggestion that a return to group-based presumptions would be a lawful or appropriate alternative in light of Ultima and controlling Fifth Amendment precedent.