S.2259 - Preferred Surety Bond Guarantee Program Act of 1988100th Congress (1987-1988)
|Sponsor:||Sen. Nunn, Sam [D-GA] (Introduced 03/31/1988)|
|Committees:||Senate - Small Business|
|Latest Action:||Senate - 04/12/1988 Committee on Small Business. Hearings held. Hearings printed: S.Hrg. 100-692. (All Actions)|
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Summary: S.2259 — 100th Congress (1987-1988)All Information (Except Text)
Introduced in Senate (03/31/1988)
Preferred Surety Bond Guarantee Program Act of 1988 - Title I: Amendments to the Small Business Investment Act of 1958 - Amends the Small Business Investment Act of 1958 to empower the Small Business Administration to: (1) enter into surety bond guarantee commitments under terms that vary on the basis of SBA experience with the particular surety; and (2) engage in a pilot program under which it may authorize any surety meeting specified standards to issue, monitor, and service guarantee bonds (including making indemnification payments against losses in avoiding breach) without further SBA approval. (Current law requires prior SBA approval of bond underwriting and administration decisions.)
Revises SBA guarantee liability limits to equal not more than: (1) 70 percent of any loss paid by a surety authorized to issue bonds without further SBA approval; and (2) 90 percent of both losses paid by sureties needing SBA approval for bond issuance and losses associated with bonds issued to small businesses owned and controlled by socially and economically disadvantaged individuals.
Disclaims SBA indemnification liability if a surety breaches material provisions of the guarantee agreement or substantially violates relevant SBA regulations.
Title II: Administration, Evaluation, and Termination of the Pilot Program - Sets forth reporting, recordkeeping, and annual audit requirements with respect to sureties participating in the expanded surety guarantee program.
Directs the Comptroller General to submit to specified congressional committees a report evaluating the effects during the program's first two fiscal years on both participation by standard surety firms and access to bonds by small business concerns, especially those owned and controlled by the economically disadvantaged.
Terminates on September 30 of either 1991 or the third fiscal year following this Act's enactment the program permitting sureties to issue bonds without prior SBA approval.
Title III: Miscellaneous Provisions - Provides for the deobligation, upon SBA receipt of a surety's notice of release, of amounts obligated from the revolving fund for surety bond guarantees.
Sets small business size standards with respect to pilot program participation.
Title IV: Effective Date - Makes this Act effective 180 days after enactment.