Security in Bonding Act of 2015

Bill: 114-hr-838
Sponsor: full_name: Rep. Hanna, Richard L. [R-NY-22]
Introduced: 2015-02-10
Policy area: Finance and Financial Sector
Subjects: Congressional oversight

Contracts and agency

Financial services and investments

Government studies and investigations

Minority and disadvantaged businesses

Public contracts and procurement

Small business
Latest action: action_date: 2015-03-16
text: Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law.

Summaries:
action_date: 2015-02-10
action_desc: Introduced in House
text: <p><b>Security in Bonding Act of 2015</b></p> <p>Revises requirements related to assets pledged by a surety and to surety bond guarantees subject to the Small Business Investment Act of 1958. (A surety bond is a three-party instrument between a surety who agrees to be responsible for the debt or obligation of another, a contractor, and a project owner.)</p> <p>Declares that if another applicable law or regulation permits the acceptance of a bond from a surety that is not subject to specified federal law, and is based on a pledge of assets by the surety, the assets pledged by such surety shall: (1) consist of eligible obligations given as security instead of surety bonds; and (2) be submitted to the government official required to approve or accept the bond, who shall deposit the assets with a depository (the Secretary of the Treasury, a federal reserve bank, or a depository designated by the Secretary).</p> <p>Amends the Small Business Investment Act of 1958 to increase from 70% to 90% of the loss incurred and paid by a surety authorized to issue bonds (subject to Small Business Administration [SBA] guarantee) the SBA's guarantee of surety bonds. The SBA is required, under the guarantee, to indemnify a surety, under the Small Business Investment Program, against loss from a breach of the terms of a bid bond, payment bond, performance bond, or ancillary bonds, by a principal on any total work order or contract amount at the time of bond execution that does not exceed $6.5 million, as adjusted for inflation. </p> <p>Requires the Comptroller General (GAO) to study:</p> <ul> <li>all instances during the 10-year period before enactment of the Act in which a surety bond proposed or issued by a surety in connection with a federal project was: (1) rejected by a federal contracting officer; or (2) accepted by one, but was later found to have been backed by insufficient collateral or to be otherwise deficient or with respect to which the surety did not perform;</li> <li>the consequences to the federal government, subcontractors, and suppliers of the instances; and</li> <li>the percentages of all federal contracts that were awarded to new startup businesses (including new startups that are small disadvantaged businesses or disadvantaged business enterprises), small disadvantaged businesses, and disadvantaged business enterprises as prime contractors in the two-year period before and the two-year period after enactment of this Act, together with an assessment of the impact of this Act and its amendments upon such percentages.</li> </ul>

tv_txt: I 114th CONGRESS 1st Session H. R. 838 IN THE HOUSE OF REPRESENTATIVES February 10, 2015 Mr. Hanna (for himself, Ms. Meng , and Mr. Chabot ) introduced the following bill; which was referred to the Committee on the Judiciary , and in addition to the Committee on Small Business , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend title 31, United States Code, to revise requirements related to assets pledged by a surety, and for other purposes.

1. Short title This Act may be cited as the Security in Bonding Act of 2015 . 2. Surety bond requirements Chapter 93 of subtitle VI of title 31, United States Code, is amended— (1) by adding at the end the following: 9310. Individual sureties If another applicable law or regulation permits the acceptance of a bond from a surety that is not subject to sections 9305 and 9306 and is based on a pledge of assets by the surety, the assets pledged by such surety shall— (1) consist of eligible obligations described under section 9303(a); and (2) be submitted to the official of the Government required to approve or accept the bond, who shall deposit the assets with a depository described under section 9303(b). ; and (2) in the table of contents for such chapter, by adding at the end the following: 9310. Individual sureties. . 3. SBA surety bond guarantee 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 . 4. GAO Study (a) Study The Comptroller General of the United States shall carry out a study on the following: (1) All instances during the 10-year period prior to the date of enactment of the Act in which a surety bond proposed or issued by a surety in connection with a Federal project was— (A) rejected by a Federal contracting officer; or (B) accepted by a Federal contracting officer, but was later found to have been backed by insufficient collateral or to be otherwise deficient or with respect to which the surety did not perform. (2) The consequences to the Federal Government, subcontractors, and suppliers of the instances described under paragraph (1). (3) The percentages of all Federal contracts that were awarded to new startup businesses (including new startup businesses that are small disadvantaged businesses or disadvantaged business enterprises), small disadvantaged businesses, and disadvantaged business enterprises as prime contractors in the 2-year period prior to and the 2-year period following the date of enactment of this Act, and an assessment of the impact of this Act and the amendments made by this Act upon such percentages. (b) Report Not later than the end of the 3-year period beginning on the date of the enactment of this Act, the Comptroller General shall issue a report to the Committee on the Judiciary of the House of Representatives and the Committee on Homeland Security and Government Affairs of the Senate containing all findings and determinations made in carrying out the study required under subsection (a). (c) Definitions For purposes of this section: (1) Disadvantaged business enterprise The term disadvantaged business enterprise has the meaning given that term under section 26.5 of title 49, Code of Federal Regulations. (2) New startup business The term new startup business means a business that was formed in the 2-year period ending on the date on which the business bids on a Federal contract that requires giving a surety bond. (3) Small disadvantaged business The term small disadvantaged business has the meaning given that term under section 124.1002(b) of title 13, Code of Federal Regulations.