[Federal Register Volume 84, Number 106 (Monday, June 3, 2019)]
[Proposed Rules]
[Pages 25496-25497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11509]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 115

[Docket No. SBA-2019-0001]
RIN 3245-AH08


Streamlining Surety Bond Guarantee Program

AGENCY: U.S. Small Business Administration.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The U.S. Small Business Administration (SBA) is soliciting 
comments from the public on identifying which of SBA's regulations 
relating to SBA's Surety Bond Guarantee Program (SBG) should be 
repealed, replaced, or modified because they are obsolete, unnecessary, 
ineffective, or burdensome. SBA is also soliciting comments from the 
public on how SBA can improve the surety bond products, procedures, 
forms, and reporting requirements of the SBG Program.

DATES: Comments must be received on or before August 2, 2019.

ADDRESSES: You may submit comments, identified by RIN 3245-AH08, docket 
number [SBA-2019-0001] by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Jermanne Perry, Management Analyst, Office of Surety 
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th 
floor, Washington, DC 20416.
     Hand Delivery/Courier: Jermanne Perry, Management Analyst, 
Office of Surety Guarantees, U.S. Small Business Administration, 409 
3rd Street SW, 8th floor, Washington, DC 20416.
    All comments will be posted on http://www.regulations.gov. If you 
wish to submit confidential business information (CBI) as defined in 
the User Notice at http://www.regulations.gov, please submit the 
information to Jermanne Perry, Management Analyst, Office of Surety 
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th 
Floor, Washington, DC 20416, or send an email to 
[email protected]. Highlight the information that you consider to 
be CBI and explain why you believe SBA should hold this information as 
confidential. SBA will review the information and make the final 
determination on whether it will publish the information.

FOR FURTHER INFORMATION CONTACT: Jermanne Perry, Management Analyst, 
Office of Surety Guarantees, at (202) 401-8275 or 
[email protected].

[[Page 25497]]


SUPPLEMENTARY INFORMATION:

I. General Information

    The U.S. Small Business Administration (SBA) guarantees bid, 
payment, and performance bonds for small and emerging contractors who 
cannot obtain surety bonds through regular commercial channels. SBA's 
guarantee, authorized pursuant to Part B of Title IV of the Small 
Business Investment Act of 1958, 15 U.S.C. 694a et seq., gives Sureties 
an incentive to provide bonding for small businesses and, thereby, 
assists small businesses in obtaining greater access to contracting 
opportunities. SBA's guarantee is an agreement between a Surety and SBA 
that SBA will assume a certain percentage of the Surety's loss should a 
contractor default on the underlying contract. SBA is authorized to 
guarantee a Surety for a contract up to $6.5 million and, with the 
certification of a contracting officer of a Federal agency, up to $10 
million. For more information about SBA's Surety Bond Guarantee 
Program, see https://www.sba.gov/funding-programs/surety-bonds.
    The regulations governing the Surety Bond Guarantee (SBG) Program 
are codified in 13 CFR part 115: Subpart A of part 115 contains 
provisions that apply to all surety bond guarantees; subpart B contains 
provisions that apply to the bond guarantees subject to prior approval 
by SBA; and subpart C contains provisions that apply to the bond 
guarantees that Preferred Surety Bond Sureties may issue under 
delegated authority. SBA is inviting comments from the public on 
identifying which of these regulations should be repealed, replaced, or 
modified because they are obsolete, unnecessary, ineffective, or 
burdensome. (In 2017, SBA published a similar request that covered all 
the agency's programs and regulations, see 82 FR 38618 (August 15, 
2017), but SBA received no comments on part 115. By focusing only on 
the SBG Program, SBA believes that this request is more likely to 
receive the attention of interested parties.) In addition, SBA is 
interested in receiving comments from the public on how SBA can improve 
the surety bond products, procedures, forms, and reporting requirements 
of the SBG Program.
    SBA is also considering whether to make changes to certain specific 
regulations and invites comments from the public on these issues. For 
example, SBA has received requests from Prior Approval Sureties to 
change the criteria in Sec.  115.30(d)(2) for using the Quick Bond 
Guarantee Application and Agreement (SBA Form 990A), including 
increasing the maximum contract amount of $400,000, the maximum 
contract period of 12 months, the $1,000 per day limit on liquidated 
damages, and eliminating the prohibition against contracts involving 
demolition.
    In addition, under Sec.  115.14(a)(3), a contractor loses 
eligibility for future SBA assistance if the Surety has established a 
claim reserve of at least $1,000 for an outstanding SBA-guarantee bond. 
SBA is considering whether the claim reserve amount is set at the 
correct amount to mitigate future risk and, if not, what the amount 
should be. SBA is also considering whether the regulations that set the 
minimum amount for collecting or refunding the Principal and Surety 
guarantee fees, including Sec. Sec.  115.32(d)(2) and (3) and 115.67(a) 
and (b), should be changed by increasing the amount from the current 
$40.

II. List of Questions for Commenters

    The list of questions below is meant to assist in the formulation 
of public comments and is not intended to restrict the issues that may 
be addressed. SBA requests that commenters identify the specific 
regulation at issue and explain, in as much detail as possible, why the 
regulation should be streamlined, expanded, or repealed, including 
estimated cost savings and benefits to small businesses and other 
stakeholders.
    1. Are there regulations in 13 CFR part 115 that have become 
unnecessary or ineffective and, if so, what are they?
    2. Are there regulations in 13 CFR part 115 that can be repealed 
without impairing SBA's Surety Bond Guarantee Program and, if so, what 
are they?
    3. Are there regulations in 13 CFR part 115 that have become 
outdated and, if so, how can they be modernized to better accomplish 
their regulatory objectives?
    4. Are there regulations in 13 CFR part 115 that are still 
necessary, but which have not operated as well as expected such that a 
modified approach is justified, and what is that approach?
    5. Are there regulations or regulatory processes in 13 CFR part 115 
that are too complicated or could be streamlined to achieve regulatory 
objectives more efficiently?
    6. Are there any technological developments that can be leveraged 
to modify, streamline, or repeal any existing regulatory requirements 
in 13 CFR part 115?
    7. Should SBA make changes to any of the criteria set forth in 
Sec.  115.30(d)(2) under which a Prior Approval Surety may use the 
Quick Bond Guarantee Application and Agreement (SBA Form 990A)? If yes, 
describe the change and provide the reason for your response.
    8. Under Sec.  115.14(a)(3), a contractor (and its affiliates) 
loses eligibility for further SBA bond guarantees if the Surety has 
established a claim reserve for an SBA-guaranteed bond of at least 
$1,000. Should SBA change the claim reserve amount? If so, describe the 
change and provide the reasons for your response.
    9. Should SBA increase the minimum amount for collecting or 
refunding Principal and Surety guarantee fees from $40? If yes, what 
should the amount be? Please provide reasons for your response.
    10. In addition to the types of bonds that are currently offered 
through the SBG Program, are there any other surety bond products that 
you would like SBA to offer through its SBG Program that would assist 
small businesses in need of government assistance? If so, describe the 
product and how it would benefit small businesses.
    Interested parties are invited to provide any other comments that 
they may have relating to the concerns described in this advance notice 
of proposed rulemaking. We ask that you provide a brief justification 
for any suggested changes.

    Authority: 15 U.S.C. 692, 694 and 695; Sec. 12079, Pub. L. 110-
246, 122 Stat. 1651; E.O. 13771; E.O. 13777.

    Dated: May 23, 2019.
Christopher M. Pilkerton,
Acting Administrator.
[FR Doc. 2019-11509 Filed 5-31-19; 8:45 am]
BILLING CODE 8026-03-P