[Federal Register Volume 87, Number 151 (Monday, August 8, 2022)]
[Rules and Regulations]
[Pages 48080-48084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16875]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 115

RIN 3245-AH08


Regulatory Reform Initiative: Streamlining Surety Bond Guarantee 
Program

AGENCY: U.S. Small Business Administration.

ACTION: Final rule.

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SUMMARY: This final rule revises various regulations related to SBA's 
Surety Bond Guarantee (SBG) program because they are obsolete, 
unnecessary, ineffective, or burdensome. Additionally, this final rule 
clarifies and modernizes certain regulations and conforms them to 
industry standards.

DATES: This rule is effective September 7, 2022.

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

SUPPLEMENTARY INFORMATION: 

A. 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 
(SBG Program), see https://www.sba.gov/funding-programs/surety-bonds.
    As part of its ongoing responsibility to ensure that the rules it 
issues do not have an adverse economic impact on those affected by 
those rules, the U.S. Small Business Administration (SBA) published an 
Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register 
on June 3, 2019 (84 FR 25496) seeking input from the public in 
identifying regulations under the SBG Program that affected parties 
believed should be repealed, replaced, or modified because they are 
obsolete, unnecessary, ineffective, or burdensome. In the ANPRM, SBA 
also solicited comments from the public on how SBA can improve the 
surety bond products, procedures, forms, and reporting requirements of 
the SBG Program. SBA considered the 54 comments submitted by the public 
in response and published a proposed rule in the Federal Register on 
September 23, 2021 (86 FR 52844) to revise various regulations in part 
115 of title 13 of the Code of Federal Regulations that are obsolete, 
unnecessary, ineffective, or burdensome and to clarify and modernize 
certain regulations to conform them to industry standards. The comment 
period was open until November 22, 2021.
    In response to the request for comments, SBA received 8 comments, 
including 2 from national trade associations, 5 from surety 
organizations, and 1 was anonymous. The commenters expressed general 
support for all or some of the proposed changes, and SBA received no 
comments expressing opposition to any of the proposed changes (with one 
comment received that did not relate to any of the proposed changes).
    The comments received are summarized and addressed below in the 
section-by-section analysis.

C. Section-by-Section Analysis

    Section 115.10. Under the current definition of ``Contract'' in 
this section, a Contract may include a maintenance agreement that is 
ancillary to a Contract for which SBA is guaranteeing the bond 
(``ancillary maintenance agreement''). SBA proposed to clarify the 
definition for these ancillary maintenance agreements and to also 
expand the definition of Contract to include stand-alone maintenance 
agreements.
    Under the current definition, SBA will guarantee the bond for a 
maintenance agreement if the agreement is for 2 years or less and 
covers defective workmanship or materials only. It has been SBA's long-
standing interpretation that the maintenance agreement must be 
ancillary to the Contract for which SBA is guaranteeing the bond and 
may not cover defective workmanship or materials that is covered by a 
manufacturer's warranty. The current definition also provides that, 
with SBA's written approval, the term of a maintenance agreement can be 
longer than 2 years for defective workmanship or materials or cover 
something other than defective workmanship or materials if the 
agreement is ancillary to the Contract for which SBA is guaranteeing a 
bond, is performed by the same Principal, and is customarily required 
in the relevant trade or industry.
    For clarity, SBA proposed to modify the existing definition by 
expressly applying the following requirements to all ancillary 
maintenance agreements: (1) the agreement must be ancillary to a 
Contract for which SBA is guaranteeing a bond; (2) the agreement must 
be performed by the same Principal; and (3) the agreement may only 
cover defective workmanship or materials that are not covered by a 
manufacturer's warranty. With SBA's prior written approval, the 
agreement covering defective workmanship or materials may be for a term 
longer than 2 years, or the agreement may cover something other than 
defective workmanship or materials, if such agreement is customarily 
required in the relevant trade or industry.
    SBA received one comment from a national trade association 
expressing support for the changes to the definition, noting that the 
need for the SBG Program to cover stand-alone

[[Page 48081]]

maintenance bonds was raised by a small contractor participant at a 
bonding awareness education program. The commenter also suggested that 
maintenance bonds can be structured as an annual renewable performance 
bond. However, annually renewable multi-year stand-alone maintenance 
agreements would be covered by SOP 50 45 3, section 5.5, which states 
that such contracts are eligible for SBA's guarantee provided that the 
contract amount does not exceed the statutory limit and provided that 
each option year following the initial contract year is treated as a 
separate obligation for which a new guarantee application must be 
submitted. SBA is adopting the changes as proposed.
    Section 115.12. Under section 411(a)(1)(B) of the Small Business 
Investment Act of 1958, SBA may guarantee a surety bond for a total 
work order or contract amount that is greater than $6,500,000 (as 
adjusted for inflation under 41 U.S.C. 1908), but not exceeding 
$10,000,000, if a Contracting Officer (CO) of a Federal agency 
certifies that such a guarantee is necessary. Paragraph (e)(3) of 
section 115.12 currently requires the CO's certification to include a 
statement that the small business is experiencing difficulty obtaining 
a bond and that an SBA bond guarantee would be in the best interests of 
the Government. In response to comments received in response to the 
ANPRM ((84 FR 25496), SBA proposed to streamline paragraph (e)(3) to 
remove the requirement of this statement and require only that the CO 
certify that the guarantee is necessary, which as noted above is the 
standard set forth in the statute. SBA also proposed to update the 
manner in which this certification may be submitted to SBA by providing 
that it may be either express mailed to SBA, Office of Surety 
Guarantees, 409 Third Street SW, Washington, DC 20416, or submitted by 
email to [email protected], along with additional information that 
identifies the small business and the contract. SBA received two 
comments from two national trade associations expressing support for 
these changes, and 4 other comments expressing general support for the 
proposed rule. SBA is adopting the changes as proposed.
    Section 115.14. Paragraph (a) of this section provides that, if one 
of the six events listed in paragraph (a) occurs under an SBA-
guaranteed bond, the Principal and its Affiliates lose eligibility for 
further SBA bond guarantees. One such event, described in paragraph 
(a)(3), is when the Surety has established a claim reserve for an SBA-
guaranteed bond of at least $1,000, an amount which was set by the SBG 
Program in 1996. As SBA explained in the proposed rule, SBA considered 
the purpose of this provision, which is to exclude Principals that have 
demonstrated an unacceptable financial risk under a current SBA-
guaranteed bond from receiving future SBA bond guarantees and 
determined that the $1,000 claim reserve threshold no longer reflects a 
degree of financial risk that should trigger the Principal's 
ineligibility for future SBA bond guarantees. After evaluating several 
factors, including inflation since 1996, the increase in the maximum 
contract amount for which SBA can issue a bond guarantee (from 
$1,250,000 in 1996 to $6,500,000 today), and historical claim reserve 
data, SBA proposed to increase the amount of the claim reserve that 
would result in the Principal and its Affiliates losing eligibility for 
further SBA bond guarantees from at least $1,000 to at least $10,000. 
SBA received five comments in general support of this change, and SBA 
is adopting this change as proposed.
    Sections 115.19 and 115.64. Under Sec.  115.19(f)(1)(ii), SBA is 
relieved of liability under the bond guarantee if the bond was executed 
``after the work under the Contract had begun'' unless the Surety 
submitted, and SBA executed, SBA Form 991, ``Surety Bond Guarantee 
Agreement Addendum'' with the evidence and certifications required by 
Sec.  115.19(f)(1)(ii). Paragraph (f)(2)(i) currently provides that 
work under a contract is considered to have begun when a Principal 
``takes any action at the job site which would have exposed the Surety 
to liability under applicable law had a bond been Executed (or 
approved, if the Surety is legally bound by such approval) at the 
time.'' In addition, under 13 CFR 115.64, a Surety participating in the 
Preferred Surety Bond Program (PSB Surety) is prohibited from executing 
or approving a bond ``after commencement of work under a contract'' 
unless the Surety obtains written approval from the Director of Office 
of Surety Guarantees (OSG). To apply for such approval, the Surety must 
submit a completed SBA Form 991 with the evidence and certifications 
required under Sec.  115.19(f)(1)(ii).
    SBA proposed to clarify what constitutes ``commencement of work'' 
under Sec.  115.64 by amending both Sec. Sec.  115.19(f)(2)(i) and 
115.64 to state that work under a contract is considered to have begun 
or commenced when the contractor takes any action related to the 
contract or bond that would have exposed its Surety to liability under 
applicable law had a bond been executed (or approved, if the Surety is 
legally bound by such approval) at the time. The work would not have to 
occur ``at the job site'' to find that work has begun or commenced 
under the contract. For example, SBA explained that work would be 
deemed to have begun or commenced when the contractor takes any 
financial action that would be typically covered under the bond, such 
as purchasing supplies that will be used to complete the contract.
    SBA received five comments expressing general support for this 
change, and SBA is adopting the change as proposed.
    Section 115.30. SBA proposed to revise the introductory language of 
paragraph (d)(2) to increase the maximum amount of the contracts for 
which a Prior Approval Surety would be permitted to use the Quick Bond 
Guarantee Application and Agreement (SBA Form 990A) (Quick Bond 
Application) from $400,000 to $500,000. As explained in the proposed 
rule, SBA conducted a risk assessment, considered factors such as the 
increasing average contract value, and considered the potential 
decrease in overall application burden on small businesses. SBA 
determined that increasing the maximum contract value for using the 
Quick Bond Application would minimally increase program risk while 
reducing costs to Sureties and small businesses by $36,343 per year. In 
addition to reducing costs, SBA expressed hope that this change would 
result in the additional benefit of increasing overall access to the 
SBG Program.
    SBA received three comments expressly supporting this change. A 
commenter stated this change aligns with current surety industry 
practices for quick/fast bond application limits. The commenter noted 
that participating sureties may still want to review financial 
information should a contractor have questionable credit history, and 
SBA agrees that such review would be necessary to ensure that sureties 
apply standards generally accepted by the surety industry for all of 
its bonds, including its Quick Bond applications. The commenter stated 
that the proposed change makes the approval process easier and faster 
and provides greater opportunity for small businesses. Another 
commenter stated that the increase will allow businesses with simple 
accounting needs to pursue qualified work, and the third commenter 
expressed general support for the change. SBA is adopting this change 
as proposed.

[[Page 48082]]

    In addition, SBA proposed to allow this streamlined form to be used 
in additional circumstances. Paragraph (d)(2)(ii) lists the 
circumstances under which the Quick Bond Application may not be used. 
Under paragraph (d)(2)(ii)(D), the Quick Bond Application may not be 
used if the contract includes a provision for liquidated damages that 
exceeds $1,000 per day. In response to comments received in response to 
the ANPRM, SBA proposed to increase this amount to $2,500 per day to 
align with current industry standards. In response to the NPRM, SBA 
received one comment suggesting that SBA consider using a sliding scale 
approach based on contract size for liquidated damages instead of 
increasing the maximum to $2,500 per day, stating that this approach 
would align with surety industry practices. However, SBA does not agree 
with creating a sliding scale based on contract sizes and believes that 
SBA's approach of creating a maximum amount reduces program complexity 
and provides clear guidelines allowing surety partners to easily assess 
program requirements. In addition, SBA received 5 comments in response 
to the ANPRM requesting that the maximum amount of liquidated damages 
be set at $2,500. SBA is adopting this change as proposed.
    In addition, paragraph (d)(2)(ii)(E) provides that the Quick Bond 
Application may not be used for demolition contracts. As SBA explained 
in the NPRM, SBA proposed, in response to comments received on the 
ANPRM, to remove demolition contracts from the list of categories that 
are excluded from using the Quick Bond Application. However, as stated 
in the NPRM, SBA expects that Sureties will, in their underwriting, 
ensure that the Principal has obtained any permit that is required for 
demolition pursuant to Federal, State or local law and that SBA will 
provide further guidance on the underwriting of demolition contracts in 
its Standard Operating Procedures. SBA received five comments 
expressing general support for this change, and SBA is adopting this 
change as proposed.
    Sections 115.32 and 115.67. Paragraph (d) of Sec.  115.32 governs 
when a Prior Approval Surety must notify SBA of any increase or 
decrease in the contract or bond amount. It also governs when any 
increase or decrease in the Principal and Surety fees that results from 
a change in the contract amount must be remitted to SBA by the 
Principal or Surety or will be refunded by SBA. In addition, for the 
PSB Program, Sec.  115.67(a) and (b) govern when any increase or 
decrease in the Principal and Surety fees resulting from a change in 
the contract amount must be remitted or will be refunded or adjusted. 
Currently, the payment for any increase in either the Principal's or 
the Surety's fee is due to SBA when the total amount of the change in 
that fee equals or exceeds $40, and any decrease in the fee is refunded 
to the Principal or rebated/adjusted to the Surety by SBA when the 
total amount of the change in the fee equals or exceeds $40.
    SBA proposed to revise Sec. Sec.  115.32(d) and 115.67 to increase 
the threshold amount for when an increase in the Principal or Surety 
fee would be due, or for when SBA would refund or rebate/adjust any 
decrease in these fees, from $40 to $250. SBA received five comments 
expressing general support of this change, with one commenter 
suggesting that this increase will save the SBA money in the long run 
by reducing the administrative costs involved in processing small 
increases in contract amounts. SBA is adopting this change as proposed.
    Section 115.33. Under this section, SBA may approve a surety 
bonding line for a Prior Approval Surety under which the Surety may 
execute multiple bonds for a specified small business. SBA proposed to 
revise paragraph (d)(1), which addresses the form that must be 
submitted for a Bid Bond executed under a bonding line, to remove the 
reference to SBA Form 994B, ``Surety Bond Guarantee Underwriting 
Review'', and replace it with SBA Form 990, ``Surety Bond Guarantee 
Agreement''. SBA Form 990 is the agreement between SBA and the Surety 
for SBA's guarantee of the bond and is, therefore, the appropriate form 
for Sureties to submit for SBA approval of a bond under a bonding line. 
There is no need to separately refer to SBA Form 994B in this 
regulation because that form, as the Surety indicates in its 
certification in SBA Form 990, is submitted with SBA Form 990 as a 
supporting document. In addition, for Final Bonds executed under a 
bonding line, paragraph (d)(2) of this section currently states that 
the Surety is to submit both SBA Forms 990 and 994B to SBA for 
approval. For consistency and for the same reasons described above, SBA 
proposed to remove the reference to SBA Form 994B in paragraph (d)(2). 
In response to the NPRM, SBA received five comments expressing general 
support for these changes and SBA is adopting the changes as proposed.

Compliance With Executive Orders 12866, 12988, 13132, and 13563, the 
Congressional Review Act (5 U.S.C. 801-808), the Paperwork Reduction 
Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act (5 U.S.C. 
601-612)

Executive Order 12866

    The Office of Management and Budget has determined that this rule 
does not constitute a ``significant regulatory action'' under Executive 
Order 12866.

Executive Order 12988

    This action meets applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. This action does 
not have preemptive effect or retroactive effect.

Executive Order 13132

    This rule does not have federalism implications as defined in 
Executive Order 13132. 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 13563

    Executive Order 13563, Improving Regulation and Regulatory Review 
(January 18, 2011), requires agencies to adopt regulations through a 
process that involves public participation, and to the extent feasible, 
base regulations on the open exchange of information and perspectives 
from affected stakeholders and the public as a whole. As discussed 
above, SBA published an ANPRM in the Federal Register (84 FR 25496) on 
June 3, 2019 seeking input from the public in identifying regulations 
under the SBG Program that affected parties believed should be 
repealed, replaced, or modified because they are obsolete, unnecessary, 
ineffective, or burdensome. SBA also solicited comments from the public 
on how SBA can improve the surety bond products, procedures, forms, and 
reporting requirements of the SBG Program. The comment period for the 
ANPRM ended on August 2, 2019, and SBA considered the 54 comments 
submitted by the public in response to prepare the Notice of Proposed 
Rulemaking published in the Federal Register on September 23, 2021 (86 
FR 52844). Further, in issuing this final rule, SBA considered the 8 
comments SBA received in response to

[[Page 48083]]

the request for comments on the proposed rule.

Congressional Review Act, 5 U.S.C. 801-808

    The Office of Management and Budget has determined that this is not 
a major rule under 5 U.S.C. 804(2).

Paperwork Reduction Act, 44 U.S.C., Ch. 35

    SBA has determined that this final rule would not impose new 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act. However, the rule will require a minor revision to SBA Form 990A, 
Quick Bond Application (OMB Control No: 3245-0378), to conform to the 
change in 13 CFR 115.30 increasing the maximum amount of the contracts 
for which a Prior Approval Surety may use this streamlined application. 
Revising the form to change the amount from $400,000 to $500,000 will 
not have any impact on the burden for this information collection, 
which is currently approved under OMB Control Number 3245-0378. OMB 
approved SBA's request to make this non-substantive change to the form.

Regulatory Flexibility Act, 5 U.S.C. 601-612

    When an agency issues a final rule, the Regulatory Flexibility Act 
(RFA) requires the agency to ``prepare and make available for public 
comment an initial regulatory flexibility analysis'' which will 
``describe the impact of the proposed rule on small entities.'' (5 
U.S.C. 603(a)). However, section 605 of the RFA allows an agency to 
certify a rule, in lieu of preparing an analysis, if the rulemaking is 
not expected to have a significant economic impact on a substantial 
number of small entities.
    In the NPRM (86 FR 52844), SBA solicited comments from the public 
to identify which of SBA's regulations relating to the SBG program 
should be repealed, replaced, or modified because they are obsolete, 
unnecessary, ineffective, or burdensome. SBA also solicited comments 
from the public on how SBA can improve the surety bond products, 
procedures, forms, and reporting requirements of the SBG Program. SBA's 
proposed revisions in response to comments received are consistent with 
these goals and with increasing the consistency of these regulations 
with industry standards.
    Under 13 CFR 115.11, Sureties participating in SBA's SBG Program 
must be a corporation listed by the U.S. Treasury as eligible to issue 
bonds in connection with Federal procurement contracts. There are 256 
Treasury-listed Sureties, of which 41 are program partners in the SBG 
Program. SBA estimates that 12 of these 41 Surety companies are small 
under SBA's size standards. In addition, most small businesses that 
receive an SBA-guaranteed bond operate within the 236220 NAICS industry 
code (Commercial and Institutional Building Construction). According to 
the U.S. Census Bureau, there are a total of 38,079 small business 
companies that operate within the 236220 NAICS code, and SBA provided 
guarantees in 2017 for 1,602 of these small businesses. Even if the 
number of entities that may be affected by this rule is considered 
significant, SBA has determined that the economic impact on these 
entities would not be substantial. The rules would repeal, replace, or 
modify obsolete or outdated SBG Program requirements that will have the 
effect of reducing the burden on Sureties and small businesses that 
receive bonds under the SBG Program. In addition, SBA anticipates that 
the rules would streamline outdated procedures and increase small 
business access to bond guarantees. Further, the rule would reduce 
costs \1\ to Sureties and small businesses receiving an SBA-guaranteed 
bond while any costs of adjustment to revisions are de minimis. Thus, 
SBA does not expect that this rule would have a significant economic 
impact on its program participants. Accordingly, the Administrator of 
the SBA hereby certifies that this rule would not have a significant 
economic impact on a substantial number of small entities.
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    \1\ An example is the reduction in cost mentioned in the 
analysis of Sec.  115.30.
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List of Subjects in 13 CFR Part 115

    Claims, Reporting and recordkeeping requirements, Small businesses, 
Surety bonds.

    For the reasons stated in the preamble, SBA amends 13 CFR part 115 
as follows:

PART 115--SURETY BOND GUARANTEE

0
1. The authority citation for part 115 is revised to read as follows:

    Authority:  5 U.S.C. app 3; 15 U.S.C. 636i, 687b, 687c, 694a, 
and 694b note.


0
2. Amend Sec.  115.10 by revising the definition of ``Contract'' to 
read as follows:


Sec.  115.10   Definitions.

* * * * *
    Contract means a written obligation of the Principal, including an 
Order, requiring the furnishing of services, supplies, labor, 
materials, machinery, equipment or construction. A Contract:
    (1) Must not prohibit a Surety from performing the Contract upon 
default of the Principal;
    (2) Does not include a permit, subdivision contract, lease, land 
contract, evidence of debt, financial guarantee (e.g., a contract 
requiring any payment by the Principal to the Obligee, except for 
contracts in connection with bid and performance bonds for the sale of 
timber and/or other forest products, such as biomass, that require the 
Principal to pay the Obligee), warranty of performance or efficiency, 
warranty of fidelity, or release of lien (other than for claims under a 
guaranteed bond); and
    (3) May include a maintenance agreement under the following 
circumstances:
    (i) The maintenance agreement is ancillary to a Contract for which 
SBA is guaranteeing a bond, is performed by the same Principal, is for 
a period of 2 years or less, and only covers defective workmanship or 
materials that are not covered by a manufacturer's warranty. With SBA's 
prior written approval, the agreement may cover a period longer than 2 
years, or cover something other than defective workmanship or 
materials, if a longer period or something other than defective 
workmanship or materials is customarily required in the relevant trade 
or industry; or
    (ii) The maintenance agreement is stand-alone and is entered into 
in connection with a Contract for which a bond was not required and 
only covers defective workmanship or materials that are not covered by 
a manufacturer's warranty. The agreement must cover a period of 3 years 
or less that begins immediately after the Contract is complete and must 
be executed prior to the completion of the Contract. It must also be 
entered into with the same Principal that completed the Contract. With 
SBA's prior written approval, the agreement may cover a period longer 
than 3 years if a longer period is customarily required in the relevant 
trade or industry.
* * * * *

0
3. Amend Sec.  115.12 by revising paragraph (e)(3) to read as follows:


Sec.  115.12   General program policies and provisions.

* * * * *
    (e) * * *
    (3) Federal Contracts or Orders in excess of $6,500,000 (as 
adjusted for inflation in accordance with section 1908 of title 41, 
United States Code). SBA is authorized to guarantee bonds

[[Page 48084]]

on Federal Contracts or Orders greater than $6,500,000 (as adjusted for 
inflation in accordance with 41 U.S.C. 1908), but not exceeding 
$10,000,000, upon a signed certification of a Federal contracting 
officer that the SBA guarantee is necessary. The certification must be 
either express mailed to SBA, Office of Surety Guarantees, 409 Third 
Street SW, Washington, DC 20416 or sent by email to 
[email protected], and include the following additional information:
    (i) Name, address and telephone number of the small business;
    (ii) Offer or Contract number and brief description of the 
contract; and
    (iii) Estimated Contract value and date of anticipated award 
determination.
* * * * *


Sec.  115.14   [Amended]

0
4. Amend Sec.  115.14 in paragraph (a)(3) by removing ``$1000'' and 
adding in its place ``$10,000''.

0
5. Amend Sec.  115.19 by revising paragraph (f)(2)(i) to read as 
follows:


Sec.  115.19   Denial of liability.

* * * * *
    (f) * * *
    (2)(i) For purposes of paragraph (f)(1)(ii) of this section, work 
under a Contract is considered to have begun when a Principal takes any 
action related to the contract or bond that would have exposed its 
Surety to liability under applicable law had a bond been Executed (or 
approved, if the Surety is legally bound by such approval) at the time.
* * * * *


Sec.  115.30   [Amended]

0
6. Amend Sec.  115.30:
0
a. In paragraph (d)(2)(i) by removing ``$400,000'' and adding in its 
place ``$500,000'';
0
b. In paragraph (d)(2)(ii)(D) by removing ``$1,000'' and adding in its 
place ``$2,500''; and
0
c. In paragraph (d)(2)(ii)(E) by removing ``demolition,''.


Sec.  115.32   [Amended]

0
7. Amend Sec.  115.32 in paragraphs (d)(2) and (3) by removing ``$40'' 
wherever it appears and adding in its place ``$250''.


Sec.  115.33   [Amended]

0
8. Amend Sec.  115.33:
0
a. In paragraph (d)(1) by removing the phrase '' ``Surety Bond 
Guarantee Underwriting Review'' (SBA Form 994B)'' and adding in its 
place the phrase '' ``Surety Bond Guarantee Agreement'' (Form 990)''; 
and
0
b. In paragraph (d)(2) by removing the phrase ``a Surety Bond Guarantee 
Underwriting Review (SBA Form 994B) and'' in the first sentence, and 
removing the phrase ``these forms'' in the second sentence and adding 
in its place the phrase ``this form''.

0
9. Amend Sec.  115.64 by adding a new last sentence to read as follows:


Sec.  115.64   Timeliness requirement.

    * * * For purposes of this section, work has commenced under a 
Contract when a Principal takes any action related to the contract or 
bond that would have exposed its Surety to liability under applicable 
law had a bond been Executed (or approved, if the Surety is legally 
bound by such approval) at the time.


Sec.  115.67   [Amended]

0
10. Amend Sec.  115.67 by removing ``$40'' wherever it appears and 
adding in its place ``$250''.

Isabella Casillas Guzman,
Administrator.
[FR Doc. 2022-16875 Filed 8-5-22; 8:45 am]
BILLING CODE 8026-03-P