Rule2023-08458
Surety Bond Guarantee Program: Removing Obsolete Forms
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 21, 2023
Effective
June 20, 2023
Issuing agencies
Small Business Administration
Abstract
The Small Business Administration (SBA) is issuing this direct final rule to remove references to SBA Form 990A in the regulations of the Surety Bond Guarantee (SBG) Program. SBA Form 990A is obsolete and has been discontinued.
Full Text
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<title>Federal Register, Volume 88 Issue 77 (Friday, April 21, 2023)</title>
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[Federal Register Volume 88, Number 77 (Friday, April 21, 2023)]
[Rules and Regulations]
[Pages 24471-24474]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-08458]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 115
RIN 3245-AH96
Surety Bond Guarantee Program: Removing Obsolete Forms
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
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SUMMARY: The Small Business Administration (SBA) is issuing this direct
final rule to remove references to SBA Form 990A in the regulations of
the Surety Bond Guarantee (SBG) Program. SBA Form 990A is obsolete and
has been discontinued.
[[Page 24472]]
DATES: This rule is effective June 20, 2023, without further action,
unless significant adverse comment is received by May 22, 2023. If
significant adverse comment is received, SBA will publish a timely
withdrawal of the Rule in the Federal Register.
ADDRESSES: You may submit comments, identified by RIN 3245-AH96, using
any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Search for the rule by RIN number 3245-AH08 and follow the instructions
for submitting comments.
<bullet> Mail: Jermaine Perry, Management Analyst, Office of Surety
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th
Floor, Washington, DC 20416.
<bullet> SBA will post all comments on <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
If you wish to submit confidential business information (CBI) as
defined in the User Notice at <a href="http://www.regulations.gov">http://www.regulations.gov</a>, please submit
the information to Jermaine Perry, Management Analyst, Office of Surety
Guarantees, U.S. Small Business Administration, 409 3rd Street SW, 8th
Floor, Washington, DC 20416. Highlight the information that you
consider to be CBI and explain why you believe this information should
be held confidential. SBA will review the information and make the
final determination as to whether to publish the information.
FOR FURTHER INFORMATION CONTACT: Jermaine Perry, Director of Surety
Guarantees at (202) 401-8275 or <a href="/cdn-cgi/l/email-protection#5e143b2c333f37303b702e3b2c2c271e2d3c3f70393128"><span class="__cf_email__" data-cfemail="b2f8d7c0dfd3dbdcd79cc2d7c0c0cbf2c1d0d39cd5ddc4">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
A. General Information
The U.S. Small Business Administration (SBA) amending its Surety
Bond Guaranty (SGB) rules to remove references to Quick Bond Guarantee
Application and Agreement (SBA Form 990A). Form 990A was integrated
with the current version of Form 990 and therefore discontinued. 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 an authorized surety company (``Surety'') an incentive to provide
bonding for small businesses; thereby assisting small businesses in
obtaining access to more contracting opportunities. SBA's guarantee is
an agreement between SBA and a Surety that SBA will assume a certain
percentage of the Surety's loss should a contractor default on the
underlying contract. SBA is authorized to guarantee a Surety for a
contract up to $6.5 million and, with the certification of a
contracting officer of a federal agency, up to $10 million. For more
information about SBA's Surety Bond Guarantee Program, see <a href="https://www.sba.gov/funding-programs/surety-bonds">https://www.sba.gov/funding-programs/surety-bonds</a>.
SBA issued a Final Rule on Streamlining the Surety Bond Guarantee
Program to address regulations that were obsolete, unnecessary,
ineffective, or burdensome. That final rule was published in the
Federal Register on August 8, 2022 (87 FR 48080). SBA also received
approval from Office of Management and Budget (OMB) to revise the
information collections language in the SBG Program's various forms,
which were revised in accordance with that Final Rule, and are set to
expire November 25, 2022.
B. Section-by-Section Analysis
Section 115.10. The definition of ``Prior Approval Agreement'' is
being revised because Form 990A is being discontinued. The information
collected on Form 990A has been integrated into current Form 990. SBA
is removing the phrase ``or Quick Bond Guarantee Application and
Agreement (SBA Form 990A)'' from the definition of ``Prior Approval
Agreement.''
Section 115.30. SBA is removing references to the Quick Bond
Guarantee Application and Agreement (SBA Form 990A), which is now
discontinued. SBA is amending the remainder of paragraph (d) to remove
the references to a choice of form.
Section 115.32. SBA is making a technical amendment to paragraph
(b) to remove cross references to Sec. 115.30(d)(1) and (2) because
they are redundant.
SBA is amending paragraph (d)(1) to state that SBA Form 990 must be
submitted to SBA when a surety notifies SBA of any increase or decrease
in the contract or bond amount, even if the original application was on
a Form 990A, Quick Bond Guaranty Application and Agreement form.
C. 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
is not a ``significant regulatory action'' under Executive Order 12866.
Executive Order 12988
This direct final rule 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. SBA has developed
this rule in a manner consistent with these requirements.
Previously, SBA engaged the public in rulemaking to revise,
streamline, and modernize the Surety Bond Guaranty program. That final
rule published in the Federal Register on August 8, 2022 (87 FR 48080).
While developing that rule, SBA responded to specific inquiries from
government officials and the public regarding changes in response to
the notice of proposed rulemaking published in the Federal Register on
September 23, 2021 (86 FR 52844).
This direct final rule revises some information collection language
in SBG Program forms that conformed with the final rule published on
August 8, 2022; that is set to expire November 30, 2025.
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 proposed rule would not impose new
reporting or recordkeeping requirements under the Paperwork Reduction
Act. The rule aligns the regulations with the discontinuation of SBA
Form 990A, Quick Bond Application and
[[Page 24473]]
Agreement, currently approved under OMB Control Number 3245-0378.
Regulatory Flexibility Act, 5 U.S.C. 601-612
When an agency issues a proposed 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 proposed
rulemaking is not expected to have a significant economic impact on a
substantial number of small entities.
This direct final rule only removes references to SBA Form 990A in
the regulations of the Surety Bond Guarantee (SBG) Program, as SBA Form
990A is obsolete and has been discontinued. Accordingly, the
Administrator of the SBA hereby certifies that this proposed rule would
not have a significant economic impact on a substantial number of small
entities.
Justification for Direct Final Rule--Administrative Procedures Act
In general, SBA publishes a rule for public comment before issuing
a final rule, in accordance with the Administrative Procedure Act. 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule without prior public participation. 5 U.S.C.
553(b)(3)(B). The good cause requirement is satisfied when prior public
participation is impracticable, unnecessary, or contrary to the public
interest.
SBA is publishing this rule as a direct final rule because public
participation is unnecessary. SBA views this as a non-controversial
administrative action because it merely removes references to SBA Form
990A in the regulations of the Surety Bond Guarantee (SBG) Program; as
SBA Form 990A is obsolete and has been discontinued. This rule will be
effective on the date shown in the DATES section unless SBA receives
significant adverse comment on or before the deadline for comments.
Significant adverse comments are comments that provide strong
justifications why the rule should not be adopted or for changing the
rule. SBA does not expect to receive any significant adverse comments
because removes references to a discontinued form, with no extraneous
interpretation or other expanded text.
If SBA receives significant adverse comment, SBA will publish a
notice in the Federal Register withdrawing this rule before the
effective date. If SBA receives no significant adverse comments, the
rule will be effective 60 days after publication without further
notice.
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
Subpart A--Provisions for All Surety Bond Guarantees
0
1. The authority citation for part 115 continues to read as follows:
Authority: 5 U.S.C. app 3; 15 U.S.C. 687b, 687c, 694a, 694b
note; and Pub. L. 110-246, Sec. 12079, 122 Stat. 1651.
0
2. Amend Sec. 115.10 by revising the definition of ``Prior Approval
Agreement'' to read as follows:
Sec. 115.10 Definitions.
* * * * *
Prior Approval Agreement means the Surety Bond Guarantee Agreement
(SBA Form 990) entered into between a Prior Approval Surety and SBA
under which SBA agrees to guarantee a specific bond.
* * * * *
0
3. Amend Sec. 115.30 by revising paragraph (d) to read as follows.
Sec. 115.30 Submission of Surety's guarantee application.
* * * * *
(d) Prior Approval Agreement. To apply for a bond guarantee, a
Prior Approval Surety must submit a Surety Bond Guarantee Agreement
(SBA Form 990) and select one of the following application types:
(1) Regular. A Prior Approval Surety may complete and submit a
Surety Bond Guarantee Agreement (SBA Form 990) indicating a Regular
application type to SBA for each Bid Bond or Final Bond. This Form must
be approved by SBA prior to the Surety's Execution of the bond. The
guarantee fees owed in connection with Final Bonds must be paid in
accordance with Sec. 115.32.
(2) Quick Bond Agreement--(i) General procedures. Except as
provided in paragraph (d)(2)(ii) of this section, a Prior Approval
Surety may complete and submit a SBA Form 990 indicating a Quick Bond
Agreement application type for each Bid Bond or Final Bond. This form
must be approved by SBA prior to the Surety's Execution of the bond.
The Quick Bond application type is used only for contract amounts that
do not exceed $500,000 at the time of application. The guarantee fees
owed in connection with Final Bonds must be paid in accordance with
Sec. 115.32.
(ii) Exclusions. The Quick Bond application type may not be used
under the following circumstances:
(A) The Principal has previously defaulted on any contract or has
had any claims or complaints filed against it with any court or
administrative agency;
(B) Work on the Contract commenced before a bond was Executed;
(C) The time for completion of the Contract exceeds 12 months;
(D) The Contract includes a provision for liquidated damages that
exceed $2,500 per day;
(E) The Contract involves asbestos abatement, hazardous waste
removal, or timber sales; or
(F) The bond would be issued under a surety bonding line approved
under Sec. 115.33.
0
4. Amend Sec. 115.32 by revising paragraphs (b) and (d)(1) to read as
follows:
Sec. 115.32 Fees and Premiums.
* * * * *
(b) SBA charge to Principal. SBA does not charge Principals
application or Bid Bond guarantee fees. If SBA guarantees a Final Bond,
the Principal must pay a guarantee fee equal to a certain percentage of
the Contract amount. The percentage is determined by SBA and is
published in Notices in the Federal Register from time to time. The
Principal's fee is rounded to the nearest dollar and is to be remitted
to SBA with the form submitted under Sec. 115.30(d). See paragraph (d)
of this section for additional requirements when the Contract amount
changes.
* * * * *
(d) * * *
(1) Notification and approval. The Prior Approval Surety must
notify SBA of any increases or decreases in the Contract or bond amount
that aggregate 25% or $500,000 of the original contract or bond amount,
whichever is less, as soon as the Surety acquires knowledge of the
change. Whenever the original bond amount increases as a result of a
single change order of at least 25% or $500,000 of the original
contract or bond amount, whichever is less, the prior written approval
of such increase by SBA is required on a supplemental Prior Approval
Agreement and is conditioned upon payment by the Surety of the increase
in the Principal's
[[Page 24474]]
guarantee fee as set forth in paragraph (d)(2) of this section. In
notifying SBA of any increase or decrease in the Contract or bond
amount, the Prior Approval Surety must use SBA Form 990 and select the
application type that it used in applying for the original bond
guarantee.
* * * * *
Isabella Casillas Guzman,
Administrator.
[FR Doc. 2023-08458 Filed 4-20-23; 8:45 am]
BILLING CODE 8026-09-P
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