II 

109TH CONGRESS 

2D SESSION S. 3785 

To amend the Small Business Investment Act of 1958 to improve surety 

bond guarantees, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 3, 2006 

Ms. SNOWE introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To amend the Small Business Investment Act of 1958 to 

improve surety bond guarantees, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Surety Bond Improve5 ment Act of 2006’’. 

6 SEC. 2. SURETY BONDS. 

7 (a) RATES.—Section 411(a) of the Small Business 

8 Investment Act of 1958 (15 U.S.C. 694b(a)) is amend9 ed— 


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1 (1) in paragraph (1), by striking ‘‘$2,000,000’’ 

2 and inserting ‘‘$3,000,000’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(6) The Administrator may authorize a surety that 

5 issues, monitors, or services bonds under paragraph (3) 

6 to use rates approved by the insurance commissioner in 

7 the State in which such contract will be performed.’’. 

8 (b) PAYMENT OF GUARANTEES.—Section 411(b) of 

9 the Small Business Investment Act of 1958 (15 U.S.C. 

10 694b(b)) is amended— 

11 (1) by redesignating paragraphs (1) through 

12 (3) as subparagraphs (A) through (C), respectively, 

13 and adjusting the margins accordingly; 

14 (2) by striking ‘‘Subject to the provisions’’ and 

15 inserting the following: 

16 ‘‘(1) IN GENERAL.—Subject to the provisions’’; 

17 (3) by striking ‘‘: Provided, however’’ and in18 serting ‘‘. 

19 ‘‘(2) CONDITIONS.—For a guarantee under this 

20 subsection—’’; 

21 (4) by striking ‘‘In no event shall’’ and insert22 ing the following: 

23 ‘‘(3) MAXIMUM AMOUNT.—In no event shall’’; 

24 and 

25 (5) by adding at the end the following: 


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1 ‘‘(4) PAYMENT OF GUARANTEES.—The Admin2 istrator may not refuse to make payment on a guar3 antee under this subsection based on facts, cir4 cumstances, or defects that the Administrator rea5 sonably should have identified during the process of 

6 making the guarantee.’’. 

7 (c) REPORTS TO CONGRESS.— 

8 (1) IN GENERAL.—On the date on which the 

9 Administrator of the Small Business Administration 

10 provides notice of a proposed change in fees under 

11 section 411(h) of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 694b(h)), the Administrator 

13 shall submit to the Committee on Small Business 

14 and Entrepreneurship of the Senate and the Com15 mittee on Small Business of the House of Rep16 resentatives, and make publically available, a report 

17 regarding the basis for the change in fees. 

18 (2) CONTENTS.—Each report submitted under 

19 paragraph (1) shall include— 

20 (A) the contents of any study used by the 

21 Administrator in determining whether to 

22 change fees under section 411(h) of the Small 

23 Business Investment Act of 1958; and 

24 (B) the total amount of fees received under 

25 such section 411(h) and the total cost of the 


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1 program under part B of title IV of the Small 

2 Business Investment Act of 1958 (15 U.S.C. 

3 694a et seq.)— 

4 (i) for the first report submitted 

5 under paragraph (1), during the 3-year pe6 riod ending on the date of the submission 

7 of the report; and 

8 (ii) for each subsequent report, during 

9 the period beginning on the date of the 

10 submission of the prior report submitted 

11 under paragraph (1) and ending on the 

12 date of submission of such subsequent re13 port. 

14 (d) SENSE OF CONGRESS.—It is the sense of Con15 gress that the program under part B of title IV of the 

16 Small Business Investment Act of 1958 (15 U.S.C. 694a 

17 et seq.) is not required to be self-funding and, therefore, 

18 the program may at times operate at a loss. 

Æ 


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