Title 15 — Commerce and Trade
Part B · Chapter 14B — Small Business Investment Program
§ 694b. Surety bond guarantees
Statutory text
Authority of Administration to guarantee surety against loss from principal’s breach of bond
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 $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41.
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.
The terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety.
The Administration may authorize any surety, without further administration approval, to issue, monitor, and service such bonds subject to the Administration’s guarantee.
No such guarantee may be issued, unless—
the person who would be principal under the bond is a small business concern;
the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon;
such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; and
there is a reasonable expectation that such principal will perform the covenants and conditions of the contract with respect to which such bond is required, and the terms and conditions of such bond are reasonable in the light of the risks involved and the extent of the surety’s participation.
The Administration shall promptly act upon an application from a surety to participate in the Preferred Surety Bond Guarantee Program, authorized by paragraph (3), in accordance with criteria and procedures established in regulations pursuant to subsection (d).
The Administration is authorized to reduce the allotment of bond guarantee authority or terminate the participation of a surety in the Preferred Surety Bond Guarantee Program based on the rate of participation of such surety during the 4 most recent fiscal year quarters compared to the median rate of participation by the other sureties in the program.
Indemnification of surety against loss from avoiding breach
Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however—
prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent;
a surety must obtain approval from the Administration prior to making any payments pursuant to this subsection unless the surety is participating under the authority of subsection (a)(3); and
no payment by the Administration pursuant to this subsection shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable.
In no event shall the Administration pay a surety pursuant to this subsection an amount exceeding the guaranteed share of the bond available to such surety pursuant to subsection (a).
Limitation of liability
Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum—
not to exceed 90 per centum of the loss incurred and paid by a surety authorized to issue bonds subject to the Administration’s guarantee under subsection (a)(3);
not to exceed 90 per centum of the loss incurred and paid in the case of a surety requiring the Administration’s specific approval for the issuance of such bond, but in no event may the Administration make any duplicate payment pursuant to subsection (b) or any other subsection;
equal to 90 per centum of the loss incurred and paid in the case of a surety requiring the administration’s 1 specific approval for the issuance of a bond, if—
the total amount of the contract at the time of execution of the bond or bonds is $100,000 or less, or
the bond was issued to a small business concern owned and controlled by socially and economically disadvantaged individuals as defined by section 637(d) of this title, or to a qualified HUBZone small business concern (as defined in section 632(p) 2 of this title); or
determined pursuant to subsection (b), if applicable.
Regulations
The Administration may establish and periodically review regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios.
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—
the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation,
the total contract amount at the time of execution of the bond or bonds exceeds $6,500,000,
the surety has breached a material term or condition of such guarantee agreement, or
the surety has substantially violated the regulations promulgated by the Administration pursuant to subsection (d).
Procedure for reimbursement
The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement.
Audit
Each participating surety shall make reports to the Administration at such times and in such form as the Administration may require.
The Administration may at all reasonable times audit, in the offices of a participating surety, all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section.
Each surety participating under the authority of paragraph (3) of subsection (a) shall be audited at least once every three years by examiners selected and approved by the Administration.
Administrative provisions
The Administration shall administer this part on a prudent and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration.
Powers of Administration respecting loans
The provisions of section 693 of this title shall apply in the administration of this section.
Administration not to deny liability based on information provided as part of application
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 guarantee application.
Footnotes
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Pub. L. 85–699 title IV § 411 · 72 Stat. 689
Enacted · 15 U.S.C. § 694b
Pub. L. 85–699, title IV, § 411, as added Pub. L. 91–609, title IX, § 911(a)(4), Dec. 31, 1970, 84 Stat. 1813
Source evidence
Code source credit
Pub. L. 85–699, title IV, § 411, as added Pub. L. 91–609, title IX, § 911(a)(4), Dec. 31, 1970, 84 Stat. 1813Small Business Amendments of 1974
Pub. L. 93–386 § 6(a)(3) · 88 Stat. 742
Substituted · 15 U.S.C. § 694b(a)
Pub. L. 93–386, § 6(a)(3), substituted “$1,000,000” for “$500,000”
Source evidence
Code amendment note
Subsec. (a). Pub. L. 93–386, § 6(a)(3), substituted “$1,000,000” for “$500,000”.Enacted provision · exact public law section
(3) by striking out “$500,000” in section 411 and inserting in 15 USC 694b. lieu thereof “$1,000,000”; andSmall Business Amendments of 1974
Pub. L. 93–386 § 11 · 88 Stat. 742
Inserted · 15 U.S.C. § 694b(c)
Pub. L. 93–386, § 11, inserted provisions relating to the administration of the program on a prudent and economically justifiable basis and provisions requiring the Administration to publish the cost of the program to the Administration, to conduct a study of the program in order to determine what must be done to make the program economically sound, and to transmit a report to Congress of the findings, conclusions, and recommendations of the study
Source evidence
Code amendment note
Subsec. (c). Pub. L. 93–386, § 11, inserted provisions relating to the administration of the program on a prudent and economically justifiable basis and provisions requiring the Administration to publish the cost of the program to the Administration, to conduct a study of the program in order to determine what must be done to make the program economically sound, and to transmit a report to Congress of the findings, conclusions, and recommendations of the study.Enacted provision · exact public law section
Sec. 11. (a) The first sentence of section 411(c) of the Small Business Investment Act of 1958 is amended by inserting “administer this 15 USC 694b. program on a prudent and economically justifiable basis and shall” immediately after “shall”. (b) Section 411(c) of the Small Business Investment Act of 1958 Program costs, publication. is amended by adding at the end thereof the following: “Within 30 days after the date of enactment of this sentence and at monthly intervals thereafter, the Administration shall publish the cost of the program to the Administration for the month immediately preceding the date of publication. The Administration shall conduct a study of the Study. program in order to determine what must be done to make the program economically sound. Within one year after the date of enactment of Report to Congress. this sentence, the Administration shall transmit a report to Congress containing a detailed statement of the findings and conclusions of the study, together with its recommendations for such legislative and administrative actions as it deems appropriate.”.Pub. L. 95–507 title I § 111 · 92 Stat. 1757
Amended · 15 U.S.C. § 694b(a)
Pub. L. 95–507 amended subsec. (a) generally
Struck · 15 U.S.C. § 694b(a)
Pub. L. 95–507 striking out requirement that the Administration consult with the Secretary of Housing and Urban Development
Inserted · 15 U.S.C. § 694b(a)
Pub. L. 95–507 inserting authority to vary the terms and conditions of guarantees on the basis of experience with a particular surety and authority to guarantee bonds ancillary and conterminous with the other named bonds
Source evidence
Code amendment note
Subsec. (a). Pub. L. 95–507 amended subsec. (a) generally, striking out requirement that the Administration consult with the Secretary of Housing and Urban Development, and inserting authority to vary the terms and conditions of guarantees on the basis of experience with a particular surety and authority to guarantee bonds ancillary and conterminous with the other named bonds.Enacted provision · exact public law section
Sec. 111. Section 411 of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 411. (a) The Administration may, upon such terms and con ditions as it may prescribe, guarantee and enter into commitments to guarantee any surety (the terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety) against loss, as hereinafter provided, as the result of a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary and coterminous therewith, by a principal on any contract up to $1,000,000, subject to the following conditions: “(1) the person who would be the principal of the bond is a small business concern; “(2) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(3) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; “(4) the Administration determines that there is a reasonable expectation that such person will perform the covenants and conditions of the contract with respect to which the bond is required; “(5) the contract meets requirements established by the Administration for feasibility of successful completion and reasonableness of a cost; and “(6) the terms and conditions of any bond guaranteed under the authority of this part are reasonable in light of the risks involved and the extent of the surety’s participation. “(b) Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however— “(1) prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent; “(2) no payment by the Administration pursuant to this subsection Limitation. shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable; and “(3) no new agreements to indemnify shall be entered into pursuant to this subsection subsequent to two years after the date of its enactment. “(c) Any guarantee or agreement to indemnify under this section Limitation. shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 per centum of the loss incurred and paid by the surety to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract as the result of the breach; or (2) in a case to which subsection (b) applies, the amount determined under subsection (b). “(d) The Administration may establish and periodically review Regulations. regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios. “(e) 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 all liability if— “(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation, or “(2) the total contract amount at the time of execution of the bond or bonds exceeds $1,000,000. “(f) The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement. “(g) The Administration may at all reasonable times audit in the Audit. offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(h) The Administration shall administer this Part on a prudent Administration. and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration. “(i) The provisions of section 402 shall apply in the administration 15 USC 693. of this section.”.Pub. L. 95–507 title I § 111 · 92 Stat. 1757
Substituted · 15 U.S.C. § 694b(b)
Pub. L. 95–507 substituted provisions relating to indemnification of a surety against loss sustained in attempting to avoid or avoiding breach for provisions relating to the extent of liability of the Administration for loss incurred by a surety
Source evidence
Code amendment note
Subsec. (b). Pub. L. 95–507 substituted provisions relating to indemnification of a surety against loss sustained in attempting to avoid or avoiding breach for provisions relating to the extent of liability of the Administration for loss incurred by a surety.Enacted provision · exact public law section
Sec. 111. Section 411 of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 411. (a) The Administration may, upon such terms and con ditions as it may prescribe, guarantee and enter into commitments to guarantee any surety (the terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety) against loss, as hereinafter provided, as the result of a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary and coterminous therewith, by a principal on any contract up to $1,000,000, subject to the following conditions: “(1) the person who would be the principal of the bond is a small business concern; “(2) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(3) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; “(4) the Administration determines that there is a reasonable expectation that such person will perform the covenants and conditions of the contract with respect to which the bond is required; “(5) the contract meets requirements established by the Administration for feasibility of successful completion and reasonableness of a cost; and “(6) the terms and conditions of any bond guaranteed under the authority of this part are reasonable in light of the risks involved and the extent of the surety’s participation. “(b) Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however— “(1) prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent; “(2) no payment by the Administration pursuant to this subsection Limitation. shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable; and “(3) no new agreements to indemnify shall be entered into pursuant to this subsection subsequent to two years after the date of its enactment. “(c) Any guarantee or agreement to indemnify under this section Limitation. shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 per centum of the loss incurred and paid by the surety to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract as the result of the breach; or (2) in a case to which subsection (b) applies, the amount determined under subsection (b). “(d) The Administration may establish and periodically review Regulations. regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios. “(e) 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 all liability if— “(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation, or “(2) the total contract amount at the time of execution of the bond or bonds exceeds $1,000,000. “(f) The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement. “(g) The Administration may at all reasonable times audit in the Audit. offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(h) The Administration shall administer this Part on a prudent Administration. and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration. “(i) The provisions of section 402 shall apply in the administration 15 USC 693. of this section.”.Pub. L. 95–507 title I § 111 · 92 Stat. 1757
Substituted · 15 U.S.C. § 694b(c)
Pub. L. 95–507 substituted provisions relating to the limitation of the Administration’s guarantee liability for provisions relating to the administration of the program and a study and report to Congress regarding the economic soundness of the program
Source evidence
Code amendment note
Subsec. (c). Pub. L. 95–507 substituted provisions relating to the limitation of the Administration’s guarantee liability for provisions relating to the administration of the program and a study and report to Congress regarding the economic soundness of the program.Enacted provision · exact public law section
Sec. 111. Section 411 of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 411. (a) The Administration may, upon such terms and con ditions as it may prescribe, guarantee and enter into commitments to guarantee any surety (the terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety) against loss, as hereinafter provided, as the result of a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary and coterminous therewith, by a principal on any contract up to $1,000,000, subject to the following conditions: “(1) the person who would be the principal of the bond is a small business concern; “(2) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(3) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; “(4) the Administration determines that there is a reasonable expectation that such person will perform the covenants and conditions of the contract with respect to which the bond is required; “(5) the contract meets requirements established by the Administration for feasibility of successful completion and reasonableness of a cost; and “(6) the terms and conditions of any bond guaranteed under the authority of this part are reasonable in light of the risks involved and the extent of the surety’s participation. “(b) Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however— “(1) prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent; “(2) no payment by the Administration pursuant to this subsection Limitation. shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable; and “(3) no new agreements to indemnify shall be entered into pursuant to this subsection subsequent to two years after the date of its enactment. “(c) Any guarantee or agreement to indemnify under this section Limitation. shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 per centum of the loss incurred and paid by the surety to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract as the result of the breach; or (2) in a case to which subsection (b) applies, the amount determined under subsection (b). “(d) The Administration may establish and periodically review Regulations. regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios. “(e) 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 all liability if— “(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation, or “(2) the total contract amount at the time of execution of the bond or bonds exceeds $1,000,000. “(f) The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement. “(g) The Administration may at all reasonable times audit in the Audit. offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(h) The Administration shall administer this Part on a prudent Administration. and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration. “(i) The provisions of section 402 shall apply in the administration 15 USC 693. of this section.”.Pub. L. 95–507 title I § 111 · 92 Stat. 1757
Substituted · 15 U.S.C. § 694b(d)
Pub. L. 95–507 substituted provisions relating to regulations for participating sureties for provisions relating to the application of section 693 of this title in the administration of this section
Source evidence
Code amendment note
Subsec. (d). Pub. L. 95–507 substituted provisions relating to regulations for participating sureties for provisions relating to the application of section 693 of this title in the administration of this section.Enacted provision · exact public law section
Sec. 111. Section 411 of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 411. (a) The Administration may, upon such terms and con ditions as it may prescribe, guarantee and enter into commitments to guarantee any surety (the terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety) against loss, as hereinafter provided, as the result of a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary and coterminous therewith, by a principal on any contract up to $1,000,000, subject to the following conditions: “(1) the person who would be the principal of the bond is a small business concern; “(2) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(3) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; “(4) the Administration determines that there is a reasonable expectation that such person will perform the covenants and conditions of the contract with respect to which the bond is required; “(5) the contract meets requirements established by the Administration for feasibility of successful completion and reasonableness of a cost; and “(6) the terms and conditions of any bond guaranteed under the authority of this part are reasonable in light of the risks involved and the extent of the surety’s participation. “(b) Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however— “(1) prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent; “(2) no payment by the Administration pursuant to this subsection Limitation. shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable; and “(3) no new agreements to indemnify shall be entered into pursuant to this subsection subsequent to two years after the date of its enactment. “(c) Any guarantee or agreement to indemnify under this section Limitation. shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 per centum of the loss incurred and paid by the surety to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract as the result of the breach; or (2) in a case to which subsection (b) applies, the amount determined under subsection (b). “(d) The Administration may establish and periodically review Regulations. regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios. “(e) 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 all liability if— “(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation, or “(2) the total contract amount at the time of execution of the bond or bonds exceeds $1,000,000. “(f) The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement. “(g) The Administration may at all reasonable times audit in the Audit. offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(h) The Administration shall administer this Part on a prudent Administration. and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration. “(i) The provisions of section 402 shall apply in the administration 15 USC 693. of this section.”.Pub. L. 95–507 title I § 111 · 92 Stat. 1757
Added · 15 U.S.C. § 694b(e)(i)
Pub. L. 95–507 added subsecs. (e) to (i)
Source evidence
Code amendment note
Subsecs. (e) to (i). Pub. L. 95–507 added subsecs. (e) to (i).Enacted provision · exact public law section
Sec. 111. Section 411 of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 411. (a) The Administration may, upon such terms and con ditions as it may prescribe, guarantee and enter into commitments to guarantee any surety (the terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety) against loss, as hereinafter provided, as the result of a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary and coterminous therewith, by a principal on any contract up to $1,000,000, subject to the following conditions: “(1) the person who would be the principal of the bond is a small business concern; “(2) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(3) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; “(4) the Administration determines that there is a reasonable expectation that such person will perform the covenants and conditions of the contract with respect to which the bond is required; “(5) the contract meets requirements established by the Administration for feasibility of successful completion and reasonableness of a cost; and “(6) the terms and conditions of any bond guaranteed under the authority of this part are reasonable in light of the risks involved and the extent of the surety’s participation. “(b) Subject to the provisions of this section, in connection with the issuance by the Administration of a guarantee to a surety as provided by subsection (a), the Administration may agree to indemnify such surety against a loss sustained by such surety in avoiding or attempting to avoid a breach of the terms of a bond guaranteed by the Administration pursuant to subsection (a): Provided, however— “(1) prior to making any payment under this subsection, the Administration shall first determine that a breach of the terms of such bond was imminent; “(2) no payment by the Administration pursuant to this subsection Limitation. shall exceed 10 per centum of the contract price unless the Administrator determines that a greater payment should be made as a result of a finding by the Administrator that the surety’s loss sustained in avoiding or attempting to avoid such breach was necessary and reasonable; and “(3) no new agreements to indemnify shall be entered into pursuant to this subsection subsequent to two years after the date of its enactment. “(c) Any guarantee or agreement to indemnify under this section Limitation. shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 per centum of the loss incurred and paid by the surety to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract as the result of the breach; or (2) in a case to which subsection (b) applies, the amount determined under subsection (b). “(d) The Administration may establish and periodically review Regulations. regulations for participating sureties which shall require such sureties to meet Administration standards for underwriting, claim practices, and loss ratios. “(e) 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 all liability if— “(1) the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation, or “(2) the total contract amount at the time of execution of the bond or bonds exceeds $1,000,000. “(f) The Administration may, upon such terms and conditions as it may prescribe, adopt a procedure for reimbursing a surety for its paid losses billed each month, based upon prior monthly payments to such surety, with subsequent adjustments after such disbursement. “(g) The Administration may at all reasonable times audit in the Audit. offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(h) The Administration shall administer this Part on a prudent Administration. and economically justifiable basis and establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary, to be payable at such time and under such conditions as may be determined by the Administration. “(i) The provisions of section 402 shall apply in the administration 15 USC 693. of this section.”.Pub. L. 96–302 title I § 115 · 94 Stat. 833
Struck · 15 U.S.C. § 694b(c)
Pub. L. 96–302 struck out “to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract” after “paid by the surety” in cl. (1)
Source evidence
Code amendment note
Subsec. (c). Pub. L. 96–302 struck out “to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract” after “paid by the surety” in cl. (1).Enacted provision · exact public law section
Sec. 115. surety bond guarantee Section 411(c) of the Small Business Investment Act of 1958 is amended to read as follows: 15 USC 694b. “(c) Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 percent of the loss incurred and paid by the surety as the result of the breach: or (2) in a case in which (b) applies, the amount determined under (b).”.Consolidated Omnibus Budget Reconciliation Act of 1985
Pub. L. 99–272 title XVIII § 18014 · 100 Stat. 82
Substituted · 15 U.S.C. § 694b(a); 15 U.S.C. § 694b(e)(2)
Pub. L. 99–272 substituted “$1,250,000” for “$1,000,000”
Source evidence
Code amendment note
Subsecs. (a), (e)(2). Pub. L. 99–272 substituted “$1,250,000” for “$1,000,000”.Enacted provision · exact public law section
SEC. 18014. SURETY GUARANTEES. 15 USC 694b. Section 411 of the Small Business Investment Act of 1958 is amended— (1) in subsection (a) by striking out “$1,000,000” and inserting in lieu thereof “$1,250,000”; and (2) in subsection (e)(2) by striking out “$1,000,000” and inserting in lieu thereof “$1,250,000”.Preferred Surety Bond Guarantee Program Act of 1988
Pub. L. 100–590 § 202 · 102 Stat. 2989
Amended · 15 U.S.C. § 694b(a)
Pub. L. 100–590, § 202, amended subsec. (a) generally
Substituted · 15 U.S.C. § 694b(a)
Pub. L. 100–590, § 202, substituting pars. (1) to (4) for former pars. (1) to (6)
Source evidence
Code amendment note
Subsec. (a). Pub. L. 100–590, § 202, amended subsec. (a) generally, substituting pars. (1) to (4) for former pars. (1) to (6).Enacted provision · exact public law section
SEC. 202. AUTHORITY OF THE ADMINISTRATION. Section 411(a) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)) is amended to read as follows: “(a) (1) 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 contract up to $1,250,000. “(2) The terms and conditions of said guarantees and commitments may vary from surety to surety on the basis of the Administration’s experience with the particular surety. “(3) The Administration may authorize any surety, without further administration approval, to issue, monitor, and service such bends subject to the Administration’s guarantee. “(4) No such guarantee may be issued, unless— “(A) the person who would be principal under the bond is a small business concern; “(B) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; “(C) such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; and “(D) there is a reasonable expectation that such principal will perform the covenants and conditions of the contract with respect to which such bond is required, and the terms and conditions of such bond are reasonable in the light of the risks involved and the extent of the surety’s participation.”.Preferred Surety Bond Guarantee Program Act of 1988
Pub. L. 100–590 § 203(c) · 102 Stat. 2989
Added · 15 U.S.C. § 694b(b)
Pub. L. 100–590, § 203(c), added par. (2)
Redesignated · 15 U.S.C. § 694b(b)
Pub. L. 100–590, § 203(c), redesignated former par. (2) as (3)
Struck · 15 U.S.C. § 694b(b)
Pub. L. 100–590, § 203(c), struck out former par. (3) which prohibited the making subsequent to two years after Oct. 24, 1978, of new agreements to indemnify
Inserted · 15 U.S.C. § 694b(b)
Pub. L. 100–590, § 203(c), inserted concluding provision: “In no event shall the Administration pay a surety pursuant to this subsection an amount exceeding the guaranteed share of the bond available to such surety pursuant to subsection (a).”
Source evidence
Code amendment note
Subsec. (b). Pub. L. 100–590, § 203(c), added par. (2), redesignated former par. (2) as (3), struck out former par. (3) which prohibited the making subsequent to two years after Oct. 24, 1978, of new agreements to indemnify, and inserted concluding provision: “In no event shall the Administration pay a surety pursuant to this subsection an amount exceeding the guaranteed share of the bond available to such surety pursuant to subsection (a).”Enacted provision · exact public law section
(c) Limitation of Administration’s Liability.— Section 411(e) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(e)) is amended— (1) by striking “or” at the end of paragraph (1), (2) by striking the period at the end of paragraph (2) and inserting a comma, and (3) by adding at the end thereof the following new paragraphs: “(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).”.Preferred Surety Bond Guarantee Program Act of 1988
Pub. L. 100–590 § 203(b) · 102 Stat. 2989
Amended · 15 U.S.C. § 694b(c)
Pub. L. 100–590, § 203(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 percent of the loss incurred and paid by the surety as the result of the breach; or (2) in a case in which subsection (b) of this section applies, the amount determined under subsection (b) of this section.”
Source evidence
Code amendment note
Subsec. (c). Pub. L. 100–590, § 203(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 percent of the loss incurred and paid by the surety as the result of the breach; or (2) in a case in which subsection (b) of this section applies, the amount determined under subsection (b) of this section.”Enacted provision · exact public law section
(b) Amount of Indemnification.— Section 411(c) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(c)) is amended to read as follows: “(c) Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum— “(1) not to exceed 70 per centum of the loss incurred and paid by a surety authorized to issue bonds subject to the Administration’s guarantee under subsection (a)(3) “(2) not to exceed 90 per centum of the loss incurred and paid in the case of a surety requiring the Administration’s specific approval for the issuance of such bond, but in no event may the Administration make any duplicate payment pursuant to subsection (b) or any other subsection; “(3) equal to 90 per centum of the loss incurred and paid in the case of a surety requiring the administration’s specific approval for the issuance of a bond, if— “(A) the total amount of the contract at the time of execution of the bond or bonds is $100,000 or less, or “(B) the bond was issued to a small business concern owned and controlled by socially and economically dis-advantaged individuals as defined by section 8(d) of the Small Business Act; or “(4) determined pursuant to subsection (b), if applicable.”,Preferred Surety Bond Guarantee Program Act of 1988
Pub. L. 100–590 § 203(c) · 102 Stat. 2989
Added · 15 U.S.C. § 694b(e)(3); 15 U.S.C. § 694b(e)(4)
Pub. L. 100–590, § 203(c), added pars. (3) and (4)
Source evidence
Code amendment note
Subsec. (e)(3), (4). Pub. L. 100–590, § 203(c), added pars. (3) and (4).Enacted provision · exact public law section
(c) Limitation of Administration’s Liability.— Section 411(e) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(e)) is amended— (1) by striking “or” at the end of paragraph (1), (2) by striking the period at the end of paragraph (2) and inserting a comma, and (3) by adding at the end thereof the following new paragraphs: “(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).”.Preferred Surety Bond Guarantee Program Act of 1988
Pub. L. 100–590 § 204 · 102 Stat. 2989
Amended · 15 U.S.C. § 694b(g)
Pub. L. 100–590, § 204, amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows: “The Administration may at all reasonable times audit in the offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section.”
Source evidence
Code amendment note
Subsec. (g). Pub. L. 100–590, § 204, amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows: “The Administration may at all reasonable times audit in the offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section.”Enacted provision · exact public law section
SEC. 204. REPORTS AND AUDITS OF PARTICIPATING SURETIES. Section 411(g) of the Small Business Investment Act (15 U.S.C. 694b(g)) is amended to read as follows: “(g) (1) Each participating surety shall make reports to the Administration at such times and in such form as the Administration may require. “(2) The Administration may at all reasonable times audit, in the offices of a participating surety, all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section. “(3) Each surety participating under the authority of paragraph (3) of subsection (a) shall be audited at least once each year by examiners selected and approved by the Administration.”.Department of Commerce and Related Agencies Appropriations Act, 1997
Pub. L. 104–208 div. D title II § 206(a) · 110 Stat. 3009
Added · 15 U.S.C. § 694b(a)(5)
Pub. L. 104–208 added par. (5)
Source evidence
Code amendment note
Subsec. (a)(5). Pub. L. 104–208 added par. (5).Enacted provision · exact public law section
(a) Should legislation be enacted to dismantle or reorganize the Department of Commerce, the Secretary of Commerce, no later than 90 days thereafter, shall submit to the Committees on Appropriations of the House and the Senate a plan for transferring funds provided in this Act to the appropriate successor organizations: Provided, That the plan shall include a proposal for transferring or rescinding funds appropriated herein for agencies or programs terminated under such legislation: Provided further, That such plan shall be transmitted in accordance with section 605 of this Act.Small Business Reauthorization Act of 1997
Pub. L. 105–135 title VI § 604(d) · 111 Stat. 2592
Inserted · 15 U.S.C. § 694b(c)(3)(B)
Pub. L. 105–135 inserted “, or to a qualified HUBZone small business concern (as defined in section 632(p) of this title)” before semicolon
Source evidence
Code amendment note
Subsec. (c)(3)(B). Pub. L. 105–135 inserted “, or to a qualified HUBZone small business concern (as defined in section 632(p) of this title)” before semicolon.Enacted provision · exact public law section
(d) Small Business Investment Act of 1958.— Section 411(c)(3)(B) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(c)(3)(B)) is amended by inserting before the semicolon the following: “, or to a qualified HUBZone small business concern (as defined in section 3(p) of the Small Business Act)”.Consolidated Appropriations Act, 2001
Pub. L. 106–554 § 1(a)(9)(tVIII)(s805)(a) · 114 Stat. 2763
Substituted · 15 U.S.C. § 694b(a)(1); 15 U.S.C. § 694b(e)(2)
Pub. L. 106–554 substituted “$2,000,000” for “$1,250,000”
Source evidence
Code amendment note
Subsecs. (a)(1), (e)(2). Pub. L. 106–554 substituted “$2,000,000” for “$1,250,000”.Enacted provision · exact public law section
(9) H.R. 5667, as introduced on December 15, 2000.Department of Commerce and Related Agencies Appropriations Act, 2005
Pub. L. 108–447 § 203(a) · 118 Stat. 2809
Substituted · 15 U.S.C. § 694b(a)(1)
Pub. L. 108–447, § 203(a), substituted “total work order or contract amount at the time of bond execution that does not exceed” for “contract up to”
Source evidence
Code amendment note
Subsec. (a)(1). Pub. L. 108–447, § 203(a), substituted “total work order or contract amount at the time of bond execution that does not exceed” for “contract up to”.Enacted provision · exact public law section
Sec. 203. Not to exceed 5 percent of any appropriation made available for the current fiscal year for the Department of Commerce in this Act may be transferred between such appropriations, but no such appropriation shall be increased by more than 10 percent by any such transfers: Provided, That any transfer pursuant to this section shall be treated as a reprogramming of funds under section 605 of this Act and shall not be available for obligation or expenditure except in compliance with the procedures set forth in that section: Provided further, Notification. Deadline. That the Secretary of Commerce shall notify the Committees on Appropriations at least 15 days in advance of the acquisition or disposal of any capital asset (including land, structures, and equipment) not specifically provided for in this or any other Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act.Department of Commerce and Related Agencies Appropriations Act, 2005
Pub. L. 108–447 § 203(b) · 118 Stat. 2809
Substituted · 15 U.S.C. § 694b(g)(3)
Pub. L. 108–447, § 203(b), substituted “every three years” for “each year”
Source evidence
Code amendment note
Subsec. (g)(3). Pub. L. 108–447, § 203(b), substituted “every three years” for “each year”.Enacted provision · exact public law section
Sec. 203. Not to exceed 5 percent of any appropriation made available for the current fiscal year for the Department of Commerce in this Act may be transferred between such appropriations, but no such appropriation shall be increased by more than 10 percent by any such transfers: Provided, That any transfer pursuant to this section shall be treated as a reprogramming of funds under section 605 of this Act and shall not be available for obligation or expenditure except in compliance with the procedures set forth in that section: Provided further, Notification. Deadline. That the Secretary of Commerce shall notify the Committees on Appropriations at least 15 days in advance of the acquisition or disposal of any capital asset (including land, structures, and equipment) not specifically provided for in this or any other Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act.American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 508(a) · 123 Stat. 115
Amended · 15 U.S.C. § 694b(a)(1)
Pub. L. 111–5, § 508(a), (f), temporarily amended par. (1) by designating existing provisions as subpar. (A)
Substituted · 15 U.S.C. § 694b(a)(1)
Pub. L. 111–5, § 508(a), (f), temporarily substituting “$5,000,000” for “$2,000,000”
Added · 15 U.S.C. § 694b(a)(1)
Pub. L. 111–5, § 508(a), (f), temporarily adding subpar. (B) which read as follows: “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.” See Termination Date of 2009 Amendment note below
Source evidence
Code amendment note
Subsec. (a)(1). Pub. L. 111–5, § 508(a), (f), temporarily amended par. (1) by designating existing provisions as subpar. (A), substituting “$5,000,000” for “$2,000,000”, and adding subpar. (B) which read as follows: “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.” See Termination Date of 2009 Amendment note below.Enacted provision · exact public law section
(a) Maximum Bond Amount .— Sec tion 411(a)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended— (1) by inserting “(A)” after “(1)”; (2) by striking “$2,000,000” and inserting “$5,000,000”; and (3) by adding at the end the following: “(B) The Administrator may guarantee a surety under s ubparagraph (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.” .American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 508(b)(1) · 123 Stat. 115
Added · 15 U.S.C. § 694b(e)
Pub. L. 111–5, § 508(b)(1), (f), temporarily added subsec. (e), the text of which read as follows:
Source evidence
Code amendment note
Subsec. (e). Pub. L. 111–5, § 508(b)(1), (f), temporarily added subsec. (e), the text of which read as follows:“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 reinbursement, 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).” See Termination Date of 2009 Amendment note below.
Enacted provision · exact public law section
(1) by striking subsect ion (e) and inserting the following: “(e) Reimbursement of Surety; Conditions.— Pursuant to any such gua rantee 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—American Recovery and Reinvestment Act of 2009
Pub. L. 111–5 § 508(b)(2) · 123 Stat. 115
Added · 15 U.S.C. § 694b(k)
Pub. L. 111–5, § 508(b)(2), (f), temporarily added subsec. (k) which read as follows: “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.” See Termination Date of 2009 Amendment note below
Source evidence
Code amendment note
Subsec. (k). Pub. L. 111–5, § 508(b)(2), (f), temporarily added subsec. (k) which read as follows: “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.” See Termination Date of 2009 Amendment note below.Enacted provision · exact public law section
(2) the total contract amount at the time of execution of the bond or bonds exceeds $5,000,000,National Defense Authorization Act for Fiscal Year 2013
Pub. L. 112–239 § 1695(a) · 126 Stat. 1632
Amended · 15 U.S.C. § 694b(a)(1)
Pub. L. 112–239, § 1695(a), designated existing provisions as subpar. (A)
Substituted · 15 U.S.C. § 694b(a)(1)
Pub. L. 112–239, § 1695(a), substituted “does not exceed $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41.” for “does not exceed $2,000,000.”
Added · 15 U.S.C. § 694b(a)(1)
Pub. L. 112–239, § 1695(a), added subpar. (B)
Source evidence
Code amendment note
Subsec. (a)(1). Pub. L. 112–239, § 1695(a), designated existing provisions as subpar. (A), substituted “does not exceed $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41.” for “does not exceed $2,000,000.”, and added subpar. (B).Enacted provision · exact public law section
(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— (1) by inserting “(A)” after “(1)”; (2) by striking “does not exceed” and all that follows through the period at the end, and inserting “does not exceed $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41, United States Code.”; and (3) by adding at the end the following: “(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.” .National Defense Authorization Act for Fiscal Year 2013
Pub. L. 112–239 § 1695(b)(1) · 126 Stat. 1632
Added · 15 U.S.C. § 694b(e)
Pub. L. 112–239, § 1695(b)(1), added subsec. (e)
Struck · 15 U.S.C. § 694b(e)
Pub. L. 112–239, § 1695(b)(1), struck out former subsec. (e). Prior to amendment, text read as follows: “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 all liability if—
Source evidence
Code amendment note
Subsec. (e). Pub. L. 112–239, § 1695(b)(1), added subsec. (e) and struck out former subsec. (e). Prior to amendment, text read as follows: “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 all liability 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 $2,000,000, “(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) of this section.”
Enacted provision · exact public law section
(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 $6,500,000, “(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).” ; andNational Defense Authorization Act for Fiscal Year 2013
Pub. L. 112–239 § 1695(b)(2) · 126 Stat. 1632
Added · 15 U.S.C. § 694b(j)
Pub. L. 112–239, § 1695(b)(2), added subsec. (j)
Source evidence
Code amendment note
Subsec. (j). Pub. L. 112–239, § 1695(b)(2), added subsec. (j).Enacted provision · exact public law section
(2) by inserting after subsection (i) the following: “(j) 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 guarantee application.” .National Defense Authorization Act for Fiscal Year 2016
Pub. L. 114–92 div. A title VIII § 874(b) · 129 Stat. 726
Substituted · 15 U.S.C. § 694b(c)(1)
Pub. L. 114–92 substituted “90” for “70”
Source evidence
Code amendment note
Subsec. (c)(1). Pub. L. 114–92 substituted “90” for “70”.Enacted provision · exact public law section
(b) Amount of Surety Bond Guarantee From Small Business Administration.— Section 411(c)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(c)(1)) is amended by striking “70” and inserting “90”.Effective date note
Pub. L. 114–92, div. A, title VIII, § 874(c), Nov. 25, 2015, 129 Stat. 941, provided that: “The amendments made by this section [enacting section 9310 of Title 31, Money and Finance, and amending this section] shall take effect 1 year after the date of the enactment of this Act [Nov. 25, 2015].”
37 of 38 references resolved to an enrolled provision · 1 partial
Editorial Notes
References in Text
Section 632(p) of this title, referred to in subsec. (c)(3)(B), was redesignated section 657a(b) of this title by Pub. L. 115–91, div. A, title XVII, § 1701(a)(2), , 131 Stat. 1795.
Amendments1974–2015 · 12 rounds
2015
Subsec. (c)(1). Pub. L. 114–92 substituted “90” for “70”.
2013
Subsec. (a)(1). Pub. L. 112–239, § 1695(a), designated existing provisions as subpar. (A), substituted “does not exceed $6,500,000, as adjusted for inflation in accordance with section 1908 of title 41.” for “does not exceed $2,000,000.”, and added subpar. (B).
Subsec. (e). Pub. L. 112–239, § 1695(b)(1), added subsec. (e) and struck out former subsec. (e). Prior to amendment, text read as follows: “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 all liability 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 $2,000,000,
“(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) of this section.”
Subsec. (j). Pub. L. 112–239, § 1695(b)(2), added subsec. (j).
2009
Subsec. (a)(1). Pub. L. 111–5, § 508(a), (f), temporarily amended par. (1) by designating existing provisions as subpar. (A), substituting “$5,000,000” for “$2,000,000”, and adding subpar. (B) which read as follows: “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.” See Termination Date of 2009 Amendment note below.
Subsec. (e). Pub. L. 111–5, § 508(b)(1), (f), temporarily added subsec. (e), the text of which read as follows:
“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 reinbursement, 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).”
See Termination Date of 2009 Amendment note below.
Subsec. (k). Pub. L. 111–5, § 508(b)(2), (f), temporarily added subsec. (k) which read as follows: “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.” See Termination Date of 2009 Amendment note below.
2004
Subsec. (a)(1). Pub. L. 108–447, § 203(a), substituted “total work order or contract amount at the time of bond execution that does not exceed” for “contract up to”.
Subsec. (g)(3). Pub. L. 108–447, § 203(b), substituted “every three years” for “each year”.
2000
Subsecs. (a)(1), (e)(2). Pub. L. 106–554 substituted “$2,000,000” for “$1,250,000”.
1997
Subsec. (c)(3)(B). Pub. L. 105–135 inserted “, or to a qualified HUBZone small business concern (as defined in section 632(p) of this title)” before semicolon.
1996
Subsec. (a)(5). Pub. L. 104–208 added par. (5).
1988
Subsec. (a). Pub. L. 100–590, § 202, amended subsec. (a) generally, substituting pars. (1) to (4) for former pars. (1) to (6).
Subsec. (b). Pub. L. 100–590, § 203(c), added par. (2), redesignated former par. (2) as (3), struck out former par. (3) which prohibited the making subsequent to two years after , of new agreements to indemnify, and inserted concluding provision: “In no event shall the Administration pay a surety pursuant to this subsection an amount exceeding the guaranteed share of the bond available to such surety pursuant to subsection (a).”
Subsec. (c). Pub. L. 100–590, § 203(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum not to exceed (1) in the case of a breach of contract, 90 percent of the loss incurred and paid by the surety as the result of the breach; or (2) in a case in which subsection (b) of this section applies, the amount determined under subsection (b) of this section.”
Subsec. (e)(3), (4). Pub. L. 100–590, § 203(c), added pars. (3) and (4).
Subsec. (g). Pub. L. 100–590, § 204, amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows: “The Administration may at all reasonable times audit in the offices of a participating surety all documents, files, books, records, and other material relevant to the Administration’s guarantee, commitments to guarantee, or agreements to indemnify any surety pursuant to this section.”
1986
Subsecs. (a), (e)(2). Pub. L. 99–272 substituted “$1,250,000” for “$1,000,000”.
1980
Subsec. (c). Pub. L. 96–302 struck out “to or on behalf of the obligee, or to labor and materialmen, in fulfilling the terms of the contract” after “paid by the surety” in cl. (1).
1978
Subsec. (a). Pub. L. 95–507 amended subsec. (a) generally, striking out requirement that the Administration consult with the Secretary of Housing and Urban Development, and inserting authority to vary the terms and conditions of guarantees on the basis of experience with a particular surety and authority to guarantee bonds ancillary and conterminous with the other named bonds.
Subsec. (b). Pub. L. 95–507 substituted provisions relating to indemnification of a surety against loss sustained in attempting to avoid or avoiding breach for provisions relating to the extent of liability of the Administration for loss incurred by a surety.
Subsec. (c). Pub. L. 95–507 substituted provisions relating to the limitation of the Administration’s guarantee liability for provisions relating to the administration of the program and a study and report to Congress regarding the economic soundness of the program.
Subsec. (d). Pub. L. 95–507 substituted provisions relating to regulations for participating sureties for provisions relating to the application of section 693 of this title in the administration of this section.
Subsecs. (e) to (i). Pub. L. 95–507 added subsecs. (e) to (i).
1974
Subsec. (a). Pub. L. 93–386, § 6(a)(3), substituted “$1,000,000” for “$500,000”.
Subsec. (c). Pub. L. 93–386, § 11, inserted provisions relating to the administration of the program on a prudent and economically justifiable basis and provisions requiring the Administration to publish the cost of the program to the Administration, to conduct a study of the program in order to determine what must be done to make the program economically sound, and to transmit a report to Congress of the findings, conclusions, and recommendations of the study.
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Pub. L. 114–92, div. A, title VIII, § 874(c), , 129 Stat. 941, provided that: “The amendments made by this section [enacting section 9310 of Title 31, Money and Finance, and amending this section] shall take effect 1 year after the date of the enactment of this Act [].”
Termination Date of 2009 Amendment
Amendment by Pub. L. 111–5 to remain in effect until , see section 508(f) of Pub. L. 111–5, set out as a note under section 694a of this title.
Effective Date of 1997 Amendment
Amendment by Pub. L. 105–135 effective , see section 3 of Pub. L. 105–135, set out as a note under section 631 of this title.
Effective Date of 1996 Amendment
Pub. L. 104–208, div. D, title II, § 206(b), , 110 Stat. 3009–739, provided that: “The amendments made by subsection (a) [amending this section] shall apply with respect to applications received (or pending substantive evaluation) on or after .”
Effective and Termination Dates of 1988 Amendment
Pub. L. 100–590, title II, § 207, , 102 Stat. 3009, as amended by Pub. L. 101–574, title II, § 216(a), , 104 Stat. 2822; Pub. L. 103–403, title III, § 302, , 108 Stat. 4188; Pub. L. 104–36, § 7, , 109 Stat. 297; Pub. L. 105–135, title V, § 503, , 111 Stat. 2624; Pub. L. 106–554, § 1(a)(9) [title VIII, § 805(b)], , 114 Stat. 2763, 2763A–706, which provided that the provisions contained in section 694b(a)(3) of this title would cease to be effective after , was repealed by Pub. L. 108–447, div. K, title II, § 203(c), , 118 Stat. 3466.
Pub. L. 100–590, title II, § 209, , 102 Stat. 3010, provided that: “Except as otherwise provided in this title, the provisions of this title [amending this section and section 694c of this title and enacting provisions set out as notes under this section], shall become effective upon expiration of one hundred and eighty days after the date of its enactment [].”
Effective Date of 1980 Amendment
Amendment by Pub. L. 96–302 effective , see section 507 of Pub. L. 96–302, set out as a note under section 631 of this title.
Regulations
Pub. L. 100–590, title II, § 205, , 102 Stat. 3009, provided that: “The Administration shall promulgate final regulations to implement the amendments made by this title [amending this section and section 694c of this title] not later than one hundred and eighty days after the date of the enactment of this Act [].”
Small Business Access to Surety Bonding Survey
Pub. L. 102–366, title III, subtitle A, , 106 Stat. 1002–1005, known as the Small Business Access to Surety Bonding Survey Act of 1992, directed Comptroller General to conduct a comprehensive survey of business firms, from a statistically valid sample of business firms developed from the most recent list of construction firms maintained by Dun and Bradstreet Company and using a questionnaire with specifically designated questions, to obtain data on the experiences of such firms, and especially the experiences of small business concerns, in obtaining surety bonds from corporate surety firms and to submit a report to Congress, not later than 18 months after , which report was to contain a summary of responses of business firms to the survey and a description of any trends found by Comptroller General in such responses, which specific information on responses and trends of small business concerns, small business concerns owned and controlled by women, and small business concerns owned and controlled by socially and economically disadvantaged individuals.
Evaluation of Preferred Surety Bond Guarantee Program; Report
Pub. L. 100–590, title II, § 206, , 102 Stat. 3009, as amended by Pub. L. 101–574, title II, § 216(b), , 104 Stat. 2823, directed Comptroller General, not later than 3 years after , to transmit a report to Congress evaluating the preferred surety bond guarantee program, with such report to be transmitted not later than , and cover the period , through .
Credits
1970–2015 · 13 acts
- 1970Pub. L. 85–699, title IV, § 411, as added Pub. L. 91–609, title IX, § 911(a)(4), , 84 Stat. 1813
- 1974amended Pub. L. 93–386, §§ 6(a)(3), 11, , 88 Stat. 747, 749
- 1978Pub. L. 95–507, title I, § 111, , 92 Stat. 1758
- 1980Pub. L. 96–302, title I, § 115, , 94 Stat. 839
- 1986Pub. L. 99–272, title XVIII, § 18014, , 100 Stat. 370
- 1988Pub. L. 100–590, title II, §§ 202–204, , 102 Stat. 3007–3009
- 1996Pub. L. 104–208, div. D, title II, § 206(a), , 110 Stat. 3009–738
- 1997Pub. L. 105–135, title VI, § 604(d), , 111 Stat. 2633
- 2000Pub. L. 106–554, § 1(a)(9) [title VIII, § 805(a)], , 114 Stat. 2763, 2763A–705
- 2004Pub. L. 108–447, div. K, title II, § 203(a), (b), , 118 Stat. 3465, 3466
- 2009Pub. L. 111–5, div. A, title V, § 508(a), (b), , 123 Stat. 158
- 2013Pub. L. 112–239, div. A, title XVI, § 1695(a), (b), , 126 Stat. 2089, 2090
- 2015Pub. L. 114–92, div. A, title VIII, § 874(b), , 129 Stat. 941.
Show as published
(Pub. L. 85–699, title IV, § 411, as added Pub. L. 91–609, title IX, § 911(a)(4), , 84 Stat. 1813; amended Pub. L. 93–386, §§ 6(a)(3), 11, , 88 Stat. 747, 749; Pub. L. 95–507, title I, § 111, , 92 Stat. 1758; Pub. L. 96–302, title I, § 115, , 94 Stat. 839; Pub. L. 99–272, title XVIII, § 18014, , 100 Stat. 370; Pub. L. 100–590, title II, §§ 202–204, , 102 Stat. 3007–3009; Pub. L. 104–208, div. D, title II, § 206(a), , 110 Stat. 3009–738; Pub. L. 105–135, title VI, § 604(d), , 111 Stat. 2633; Pub. L. 106–554, § 1(a)(9) [title VIII, § 805(a)], , 114 Stat. 2763, 2763A–705; Pub. L. 108–447, div. K, title II, § 203(a), (b), , 118 Stat. 3465, 3466; Pub. L. 111–5, div. A, title V, § 508(a), (b), , 123 Stat. 158; Pub. L. 112–239, div. A, title XVI, § 1695(a), (b), , 126 Stat. 2089, 2090; Pub. L. 114–92, div. A, title VIII, § 874(b), , 129 Stat. 941.)