II 111th CONGRESS 2d Session S. 3835 IN THE SENATE OF THE UNITED STATES September 23, 2010 Mr. Cardin (for himself, Ms. Landrieu, and Mr. Baucus) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To reinstate the increase in the surety bond guarantee limits for the Small Business Administration.

1.

Surety bonds

(a)

Maximum bond amount

Section 411(a)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended by striking (1) and all that follows and inserting the following: “(1)(A) The Administration may, upon such terms and conditions as it may prescribe, guarantee and enter into commitments to guarantee any surety against loss resulting from a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary thereto, by a principal on any total work order or contract amount at the time of bond execution that does not exceed $5,000,000. (B)The Administrator may guarantee a surety under subparagraph (A) for a total work order or contract amount that does not exceed $10,000,000, if a contracting officer of a Federal agency certifies that such a guarantee is necessary. . (b)

Denial of liability

Section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694b) is amended— (1)by striking subsection (e) and inserting the following: (e)

Reimbursement of Surety; Conditions

Pursuant to any such guarantee or agreement, the Administration shall reimburse the surety, as provided in subsection (c) of this section, except that the Administration shall be relieved of liability (in whole or in part within the discretion of the Administration) if— (1)the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation; (2)the total contract amount at the time of execution of the bond or bonds exceeds $5,000,000; (3)the surety has breached a material term or condition of such guarantee agreement; or (4)the surety has substantially violated the regulations promulgated by the Administration pursuant to subsection (d). ; (2)by striking subsection (k); and (3)by adding after subsection (i) the following: (j)

Denial of liability

For bonds made or executed with the prior approval of the Administration, the Administration shall not deny liability to a surety based upon material information that was provided as part of the guaranty application. . (c)

Size standards

Section 410 of the Small Business Investment Act of 1958 (15 U.S.C. 694a) is amended— (1)by striking paragraph (9); and (2)adding after paragraph (8) the following: (9)Notwithstanding any other provision of law or any rule, regulation, or order of the Administration, for purposes of sections 410, 411, and 412 the term small business concern means a business concern that meets the size standard for the primary industry in which such business concern, and the affiliates of such business concern, is engaged, as determined by the Administrator in accordance with the North American Industry Classification System. . (d)

Conforming amendment

Section 508(f) of division A of the American Recovery and Reinvestment Act of 2009 (15 U.S.C. 694a note) is repealed.