[Federal Register Volume 63, Number 81 (Tuesday, April 28, 1998)]
[Notices]
[Page 23334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11206]


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SMALL BUSINESS ADMINISTRATION


Surety Bond Guarantee Program Fees

AGENCY: Small Business Administration (SBA).

ACTION: Notice.

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SUMMARY: This Notice establishes the fees payable by Principals and 
Sureties participating in SBA's Surety Bond Guarantee Program (13 CFR 
Part 115).

EFFECTIVE DATE: Effective July 1, 1998.

FOR FURTHER INFORMATION CONTACT: Barbara Brannan, Office of Surety 
Guarantees, (202) 205-6545.

SUPPLEMENTARY INFORMATION: In a Federal Register Notice published on 
February 29, 1996, SBA increased the Principal's and Surety's fees 
charged under the Surety Bond Guarantee (SBG) Program. The increases 
took effect on May 1, 1996. The Notice also indicated that SBA would 
continue to evaluate the performance of the SBG Program to determine 
whether the increases would remain necessary. See 61 FR 7848 (February 
29, 1996). SBA has completed its review of the program and is setting 
the Principal's and Surety's fees in this Federal Register Notice. 
Capitalized terms used in this Notice have the meanings assigned such 
terms in 13 CFR 115.10.
    Currently, the guarantee fees are: (1) The guarantee fee payable by 
Principals under 13 CFR 115.32(b) and 115.66 is $7.45 per thousand 
dollars of the Contract amount. (2) The guarantee fee payable by Prior 
Approval Sureties under 13 CFR 115.32(c) and by PSB Sureties under 13 
CFR 115.66 is 23% of the bond Premium.
    Beginning on July 1, 1998, the following guarantee fees will become 
effective: (1) The guarantee fee payable by Principals under 13 CFR 
115.32(b) and 115.66 will be $6.00 per thousand dollars of the Contract 
amount. (2) The guarantee fee payable by Prior Approval Sureties under 
13 CFR 115.32(c) and by PSB Sureties under 13 CFR 115.66 will be 20% of 
the bond Premium.
    After a careful review of Program performance, SBA has determined 
that the guarantee fees can be returned to the amounts that were in 
effect prior to the increase of May 1, 1996. An analysis of the 
Program's revolving fund indicates that there are sufficient reserves 
to cover potential liabilities. Over the past several years, claims 
payments have decreased and claims recoveries have increased, resulting 
in sufficient reserves to cover unfunded Program liabilities. The fee 
decreases are not scheduled to go into effect until July 1, 1998, in 
order to allow sufficient time for Program participants to make any 
necessary adjustments to their accounting systems.
    Any future changes in the fee amounts will be published by SBA in 
the form of a Notice in the Federal Register.
    Information on other requirements concerning the fees may be found 
at 13 CFR 115.32 and 115.66.

    Dated: April 21, 1998.
Robert J. Moffitt,
Associate Administrator, Office of Surety Guarantees.
[FR Doc. 98-11206 Filed 4-27-98; 8:45 am]
BILLING CODE 8025-01-P