S 1960 ISCommentsClose CommentsPermalink

To amend the Small Business Investment Act of 1958 to improve surety bond guarantees, and for other purposes.CommentsClose CommentsPermalink

August 2, 2007

Ms. SNOWE (for herself and Mr. KERRY) introduced the following bill; which was read twice and referred to the Committee on Small Business and EntrepreneurshipCommentsClose CommentsPermalink

To amend the Small Business Investment Act of 1958 to improve surety bond guarantees, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Surety Bond Improvement Act of 2007'.CommentsClose CommentsPermalink

SEC. 2. DEFINITIONS.

In this Act, the terms `Administrator' and `Administration' mean the Small Business Administration and the Administrator thereof, respectively.CommentsClose CommentsPermalink

SEC. 3. SURETY BONDS.

(a) Rates- Section 411(a) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by striking `$2,000,000' and inserting `$3,000,000'; andCommentsClose CommentsPermalink





(2) by adding at the end the following:CommentsClose CommentsPermalink





`(6) The Administrator shall authorize a surety that issues, monitors, or services bonds under paragraph (3) to use rates approved by the insurance commissioner in the State in which such contract will be performed.'.CommentsClose CommentsPermalink





(b) Payment of Guarantees- Section 411(b) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(b)) is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively, and adjusting the margins accordingly;CommentsClose CommentsPermalink





(2) by striking `Subject to the provisions' and inserting the following: `Indemnification-CommentsClose CommentsPermalink





`(1) IN GENERAL- Subject to the provisions';CommentsClose CommentsPermalink





(3) by striking `: Provided, however' and inserting `.CommentsClose CommentsPermalink





`(2) CONDITIONS- For a guarantee under this subsection--';CommentsClose CommentsPermalink





(4) by striking `In no event shall' and inserting the following:CommentsClose CommentsPermalink





`(3) MAXIMUM AMOUNT- In no event shall'; andCommentsClose CommentsPermalink





(5) by adding at the end the following:CommentsClose CommentsPermalink





`(4) PAYMENT OF GUARANTEES- The Administrator may not refuse to make payment on a guarantee under this subsection based on facts, circumstances, or defects that the Administrator reasonably should have identified during the process of making the guarantee.'.CommentsClose CommentsPermalink





(c) Reports to Congress-CommentsClose CommentsPermalink





(1) IN GENERAL- On the date on which the Administrator provides notice of a proposed change in fees under section 411(h) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(h)), the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, and make publically available, a report regarding the basis for the change in fees.CommentsClose CommentsPermalink





(2) CONTENTS- Each report submitted under paragraph (1) shall include--CommentsClose CommentsPermalink





(A) the contents of any study used by the Administrator in determining whether to change fees under section 411(h) of the Small Business Investment Act of 1958; andCommentsClose CommentsPermalink





(B) the total amount of fees received under such section 411(h) and the total cost of the program under part B of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 694a et seq.)--CommentsClose CommentsPermalink





(i) for the first report submitted under paragraph (1), during the 3-year period ending on the date of the submission of the report; andCommentsClose CommentsPermalink





(ii) for each subsequent report, during the period beginning on the date of the submission of the prior report submitted under paragraph (1) and ending on the date of submission of such subsequent report.CommentsClose CommentsPermalink





(d) Sense of Congress- It is the sense of Congress that the program under part B of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 694a et seq.) is not required to be self-funding and, therefore, the program may at times operate at a loss.CommentsClose CommentsPermalink

SEC. 4. MEDIATION.

(a) In General- Not later than 180 days after the date of enactment of this Act, and in accordance with subchapter IV of chapter 5 of title 5, United States Code, the Administrator shall promulgate regulations establishing a nonbinding, neutral, third party alternative dispute resolution procedure for mediating an issue in controversy between a participating surety and the Administration.CommentsClose CommentsPermalink





(b) Contents- The regulations promulgated under subsection (a) shall--CommentsClose CommentsPermalink





(1) permit either a participating surety or the Administration to request alternative dispute resolution proceedings; andCommentsClose CommentsPermalink





(2) establish--CommentsClose CommentsPermalink





(A) a process for selecting a neutral, third party mediator;CommentsClose CommentsPermalink





(B) a reasonable time frame for the conclusion of any mediation under this section; andCommentsClose CommentsPermalink





(C) a method for sharing the costs of any mediation under this section between a participating surety and the Administration.CommentsClose CommentsPermalink





(c) Definitions- In this section--CommentsClose CommentsPermalink





(1) the term `issue in controversy' has the meaning given that term in section 571 of title 5, United States Code;CommentsClose CommentsPermalink





(2) the term `participating surety' means a surety participating in a program under part B of title IV of the Small Business Investment Act of 1958 (15 U.S.C. 694a et seq.); andCommentsClose CommentsPermalink





(3) the term `surety' has the meaning given that term in section 410 of the Small Business Investment Act of 1958 (15 U.S.C. 694a).CommentsClose CommentsPermalink