Surety Bond Guarantee Program-Quick Bond Guarantee Application and Agreement, 5721-5724 [2012-2519]
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Federal Register / Vol. 77, No. 24 / Monday, February 6, 2012 / Proposed Rules
agricultural producers are defined as
those having annual receipts of less than
$750,000.
Based on USDA data from the
Economic Research Service (ERS), the
U.S. organic sector included nearly
13,000 certified organic crop and
livestock operations at the end of 2008.
These operations contained more than
4.8 million certified acres consisting of
2,665,382 acres of cropland and
2,160,577 acres of pasture and
rangeland. The total acreage under
organic management represents a twelve
percent increase from 2007. Organic
poultry production has steadily
contributed to the overall growth in the
organic food market. ERS estimated that
there were 5,538,011 laying chickens
and 9,015,984 broiler chickens raised
under organic management in 2008. ERS
estimated the number of certified
organic turkeys raised in the United
States in 2008 at 398,531.2 Based on the
USDA data reported by the National
Agricultural Statistical Service (NASS),
the US market value for organic eggs,
and laying and broiler chickens was
calculated at $352,831,850 in 2008.3 In
addition to being sold as whole
products, organic eggs and poultry byproducts are used in the production of
organic processed products including
soups, broths, prepared meals, ice
cream, and egg nog. U.S. sales of organic
food and beverages have grown from $1
billion in 1990 to $26.7 billion in 2010.
Sales in 2010 represented 7.7 percent
growth over 2009 sales.4
The USDA accredits 93 certifying
agents who provide certification
services to producers and handlers. A
complete list of names and addresses of
accredited certifying agents may be
found on the AMS NOP Web site, at
https://www.ams.usda.gov/nop. AMS
believes that most of these entities
would be considered small entities
under the criteria established by the
SBA.
tkelley on DSK3SPTVN1PROD with PROPOSALS
E. Paperwork Reduction Act
No additional collection or
recordkeeping requirements are
imposed on the public by this proposed
rule. Accordingly, OMB clearance is not
2 U.S. Department of Agriculture, Economic
Research Service. 2009. Data Sets: U.S. Certified
Organic Farmland Acreage, Livestock Numbers and
Farm Operations, 1992–2008. https://
www.ers.usda.gov/Data/Organic/.
3 U.S. Department of Agriculture, National
Agricultural Statistics Service. 2010. The 2007
Census of Agriculture, Organic Production Survey
(2008): Volume 3, Special Studies, Part 2, AC–07–
SS–2, Tables 10 & 11, pp 69–91. https://
www.agcensus.usda.gov/Publications/2007/
Online_Highlights/Organics/ORGANICS.pdf.
4 Organic Trade Association. 2011. Organic
Industry Survey. www.ota.com.
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required by the Paperwork Reduction
Act of 1995, 44 U.S.C. 3501, Chapter 35.
F. General Notice of Public Rulemaking
This proposed rule reflects a
recommendation submitted to the
Secretary by the National Organic
Standards Board (NOSB) in April 2010
to modify the annotation for extending
the use of synthetic methionine in
organic poultry production beyond
October 1, 2012. This proposed rule
would also correct the CAS numbers for
synthetic methionine. A 60-day period
for interested persons to comment on
this rule is provided and deemed
appropriate.
List of Subjects in 7 CFR Part 205
Administrative practice and
procedure, Agriculture, Animals,
Archives and records, Imports, Labeling,
Organically produced products, Plants,
Reporting and recordkeeping
requirements, Seals and insignia, Soil
conservation.
For the reasons set forth in the
preamble, 7 CFR part 205, subpart G is
amended as follows:
PART 205—NATIONAL ORGANIC
PROGRAM
1. The authority citation for 7 CFR
part 205 continues to read as follows:
Authority: 7 U.S.C. 6501–6522.
2. Section § 205.603(d)(1) is amended
by revising paragraph (d)(1) to read as
follows:
§ 205.603 Synthetic substances allowed
for use in organic livestock production.
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(d) * * *
(1) DL—Methionine, DL—
Methionine—hydroxy analog, and DL—
Methionine—hydroxy analog calcium
(CAS #’s 59–51–8, 583–91–5, 4857–44–
7, and 922–50–9)—for use only in
organic poultry production after October
2, 1012, at the following maximum
levels of synthetic methionine per ton of
feed: laying and broiler chickens—2
pounds; turkeys and all other poultry—
3 pounds.
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Dated: January 31, 2012.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2012–2628 Filed 2–3–12; 8:45 am]
BILLING CODE 3410–02–P
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 115
RIN 3245–AG39
Surety Bond Guarantee Program—
Quick Bond Guarantee Application and
Agreement
Small Business Administration.
Proposed rule.
AGENCY:
ACTION:
This proposed rule would
implement a streamlined application
process in the Prior Approval Program
of the Surety Bond Guarantee (SBG)
Program for contract amounts not
exceeding $250,000 and would make
other minor administrative changes to
the SBG Program regulations to, among
other things, clarify the procedures for
submitting the application forms and
paying of fees, and delete an obsolete
reference to a form.
DATES: Comments must be received on
or before April 6, 2012.
ADDRESSES: You may submit comments,
identified by RIN: 3245–AG39 by any of
the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Office of Surety Guarantees,
Suite 8600, 409 Third Street SW.,
Washington, DC 20416.
• Hand Delivery/Courier: Office of
Surety Guarantees, 409 Third Street
SW., Washington, DC 20416.
SBA will post all comments on https://
www.regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.regulations.gov, please
submit the information to Ms. Barbara
Brannan, Management Analyst, Office of
Surety Guarantees, 409 Third Street
SW., Washington, DC 20416 or send an
email to Barbara.brannan@sba.gov.
Highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review the information and make the
final determination whether it will
publish the information.
FOR FURTHER INFORMATION CONTACT: Ms.
Barbara Brannan, Office of Surety
Guarantees, (202) 205–6545, email:
Barbara.brannan@sba.gov.
SUMMARY:
SUPPLEMENTARY INFORMATION:
I. Background Information
Through the Surety Bond Guarantee
(SBG) Program, SBA guarantees bid,
payment, and performance bonds for
contracts up to $2 million for small and
emerging contractors who cannot obtain
bonds through regular commercial
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Federal Register / Vol. 77, No. 24 / Monday, February 6, 2012 / Proposed Rules
surety channels. SBA’s guarantee
provides the incentive needed for
sureties to bond these contractors,
giving them greater access to contracting
opportunities. The SBG Program
consists of the Prior Approval Program
and the Preferred Surety Bond (PSB)
Program. In the Prior Approval Program,
sureties must apply to SBA for each
bond guarantee and must receive SBA
approval before issuing bonds. Sureties
in the PSB Program can issue SBA
guaranteed bonds without SBA’s prior
approval.
This rule proposes to implement a
streamlined application process for use
in the Prior Approval Program for
contract amounts not exceeding
$250,000. For these smaller contracts,
SBA proposes to create a new form, the
Quick Bond Guarantee Application and
Agreement, SBA Form 990A, which will
consolidate two of the forms currently
used in the SBG Program—SBA Form
990, Surety Bond Agreement and the
SBA Form 994, Application for Surety
Bond Guarantee Assistance. The
proposed SBA Form 990A complements
the existing industry practice of offering
a streamlined bond application for
smaller contract amounts. In addition,
SBA will not require the Principal to
complete and submit two other forms
for these smaller contract amounts,
including SBA Form 994F, Schedule of
Work in Process, and SBA Form 413,
Personal Financial Statement. Instead,
to mitigate any risk associated with
these smaller contract amounts, the new
SBA Form 990A will require the
Principal to provide a list of the largest
three contracts completed in the last
5 years.
The streamlined application process
will also help to address sureties’
concerns about the amount of
paperwork necessary to obtain bond
guarantees in the SBG Program. In FY
2010, SBA guaranteed 2,206 Bid Bonds
and 729 Final Bonds in the Prior
Approval Program for contracts of
$250,000 or less. The proposed changes
would reduce the paperwork burden in
applying for surety bond guarantee
assistance for contracts of this size. By
offering this streamlined application
process for lower contract amounts,
SBA also hopes to increase activity by
participating sureties and to encourage
more sureties to begin using the
program. As a result, bonding
opportunities would be available to
more small businesses. This streamlined
process will be monitored closely to
mitigate any increased risk exposure,
including through the use of periodic
on-site audits of participating surety
companies. SBA will pay particular
attention to guaranteed bonds for
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contracts that are within the dollar
limits at the time of application, but that
increase to over $250,000 after the
guaranteed bond is issued. The
proposed rule also sets forth the
circumstances under which the new
SBA Form 990A may not be utilized.
In addition, the proposed rule would
make other minor changes to the
existing SBG Program rules, including
clarifying that SBA Form 990 or SBA
Form 990A must be submitted to and
approved by SBA prior to the Surety’s
execution of the bond (except for surety
bonding lines) and, with respect to the
rules regarding surety bonding lines,
removing the reference to SBA Form
994C as this form is no longer used.
II. Section-by-Section Analysis
Section 115.10. SBA is proposing to
amend the definition of the term, ‘‘Prior
Approval Agreement’’, to add the
‘‘Quick Bond Guarantee Application
and Agreement (SBA Form 990A)’’ to
the agreements into which a Prior
Approval Surety can enter with SBA.
Section 115.30(d)(1). SBA is
proposing to clarify in paragraph (d)(1)
that, where the Surety Bond Guarantee
Agreement (SBA Form 990) is used, it
must be approved before the Prior
Approval Surety executes a Bid or a
Final Bond, except in the case of a
bonding line under § 115.33(d). Until
SBA has an opportunity to review and
approve or decline an application, the
Surety may not execute the bond. SBA
is also proposing to amend this
paragraph to clarify that the applicable
guarantee fees must be paid in
accordance with 13 CFR 115.32, and not
as set forth in the current section
115.30(d), which gives the Principal up
to 45 days (15 days in the case of a
bonding line) after bond execution to
pay its fee. Under section 115.32(b), the
Principal’s fee must be remitted by the
Surety with the Prior Approval
Agreement.
Section 115.30(d)(2). SBA is
proposing to add this new provision to
implement a streamlined application
process for bond guarantees for
contracts that do not exceed $250,000.
SBA is proposing that applicants use a
new form, the ‘‘Quick Bond Guarantee
Application and Agreement (SBA Form
990A)’’ in place of SBA Form 990 and
SBA Form 994. This new provision
would also require that the Quick Bond
Guarantee Application and Agreement
(SBA Form 990A) be submitted to and
approved by SBA before the Surety
executes the Bid or Final Bond. Until
SBA has an opportunity to review and
approve or decline an application, the
Surety may not execute the bond. The
new provision also would require that
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the guarantee fees be paid in accordance
with 13 CFR 115.32. This provision also
sets forth the circumstances under
which this streamlined application
process may not be used.
Section 115.32(b). SBA is proposing
to amend this provision to add the
requirement that the Principal’s fee be
remitted to SBA with the new SBA
Form 990A, just as it is required to be
submitted with SBA Form 990.
Section 115.32(c). SBA is proposing to
amend this paragraph to clarify that the
requirements regarding the guarantee
fee paid by the Surety applies to the
new SBA Form 990A, just as it applies
to the SBA Form 990.
Section 115.32(d)(1). SBA is
proposing to delete the words
‘‘Supplemental Form 990’’ from this
paragraph to make it clear that this
provision applies to bond guarantees
approved under the new SBA Form
990A in addition to SBA Form 990. SBA
is also proposing to add a sentence to
provide that, in notifying SBA of any
increase or decrease in the Contract or
bond amount, the Surety must use the
same form that it used in applying for
the original bond guarantee.
Section 115.33(d). SBA is proposing
to eliminate references to the Surety
Bond Guarantee Review Update (SBA
Form 994C) throughout this provision
because the form is no longer used.
Compliance With Executive Orders
12866, 12988, 13132, and 13563, 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
(OMB) has determined that this
proposed rule does not constitute a
significant regulatory action under the
meaning of Executive Order 12866. This
proposed rule is also not a major rule
under the Congressional Review Act.
Executive Order 12988
This action 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. The action does not have
retroactive or preemptive effect.
Executive Order 13132
SBA has determined that the rule 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. Therefore, for the
purpose of Executive Order 13132,
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Federalism, SBA has determined that
this proposed rule has no federalism
implications warranting preparation of a
federalism assessment.
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Executive Order 13563
In accordance with Executive Order
13563, SBA discussed implementing a
streamlined application process with
several surety industry associations and
surety company representatives and
they responded very favorably.
Paperwork Reduction Act, 44 U.S.C.,
Ch. 35
SBA has determined that this
proposed rule imposes additional
reporting and recordkeeping
requirements under the Paperwork
Reduction Act, 44 U.S.C., Chapter 35.
As described above, SBA proposes to
implement a new application process
for surety bonds for contracts that are
equal to or less than $250,000. The
public is invited to comment on the
proposed new form that will be used to
collect application information and to
submit any comments by the deadline
stated in the DATES section of this rule
to: SBA Desk Officer, Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10202, 725 17th Street NW.,
Washington, DC 20503.
SBA invites comments on: (1)
Whether the proposed collection of
information is necessary for the proper
performance of SBA’s functions,
including whether the information will
have a practical utility; (2) the accuracy
of SBA’s estimate of the burden of the
proposed collections of information,
including the validity of the
methodology and assumptions used; (3)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (4) ways to minimize the
burden of the collection of information
on respondents, including through the
use of automated collection techniques,
when appropriate, and other forms of
information technology. SBA will
submit the proposed form and other
documents required under the
Paperwork Reduction Act to OMB for
review and approval.
A description of this information
collection, the respondents, and the
estimate of the annual hour burden
resulting from this new process is
provided below. Included in the
estimate is the time for reviewing
instructions, searching existing data
sources, gathering the data needed, and
completing and reviewing the
responses.
Title: Quick Bond Surety Guarantee
Application and Agreement (SBA Form
990A).
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Description: The Quick Bond Surety
Guarantee Application and Agreement
is a combination application and bond
guarantee agreement that would be used
in the Prior Approval Program for
contract amounts that do not exceed
$250,000. It is a streamlined alternative
to the existing surety bond application
and agreement, the SBA Forms 990 and
994 (OMB Control Number 3245–0007).
The information would be used to
evaluate whether the applicant small
business meets the program eligibility
criteria and the likelihood that it will
successfully complete performance on
the contract.
OMB Control Number: New
Collection.
Description of and Estimated Number
of Respondents. This proposed new
collection would be submitted by small
businesses seeking to obtain a bond in
order to bid or perform on a contract,
and by surety companies and their
agents or representatives. Based on the
current volume of bonds for contracts
up to $250,000, SBA estimates that
approximately 500 small businesses and
13 Prior Approval Sureties would
submit this streamlined application and
agreement form.
Estimated Response Time: It is
estimated that each applicant would
require approximately 5 minutes to
complete the proposed new form.
Estimated Number of Responses:
4,450. This number is based on SBA’s
projection of program activity during
Fiscal Year 2012.
Total Estimated Annual Hour Burden:
369 hours.
Estimated Annual Cost Burden:
$18,941.
Regulatory Flexibility Act, 5 U.S.C. 601–
612
The Regulatory Flexibility Act (RFA),
5 U.S.C. 601, requires administrative
agencies to consider the effect of their
actions on small entities, small nonprofit enterprises, and small local
governments. Pursuant to RFA, when an
agency issues a rulemaking, the agency
must prepare a regulatory flexibility
analysis which describes the impact of
the rule on small entities. However,
section 605 of the RFA allows an agency
to certify a rule, in lieu of preparing an
analysis, if the rulemaking is not
expected to have a significant economic
impact on a substantial number of small
entities. Within the meaning of RFA,
SBA certifies that this rule will not have
a significant economic impact on a
substantial number of small entities.
There are 13 Sureties that currently
participate in the SBA Prior Approval
program, and no part of this proposed
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5723
rule would impose any significant
additional cost or burden on them.
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 proposes to amend 13
CFR Part 115 as follows:
PART 115—SURETY BOND
GUARANTEE
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, Pub. L. 106–554; Pub.
L. 108–447, Div K, Sec. 203; Pub. L. 110–246,
Sec. 12079, 122 Stat. 1651; and Pub. L. 111–
5, 123 Stat. 115.
§ 115.10
[Amended]
2. In § 115.10 amend the definition of
‘‘Prior Approval Agreement’’ by adding
‘‘or Quick Bond Guarantee Application
and Agreement (SBA Form 990A)’’ after
‘‘(SBA Form 990)’’.
3. Amend § 115.30 as follows:
a. Revise paragraph (d) to read as set
forth below; and
b. Add a new paragraph (e) to read as
set forth below.
§ 115.30 Submission of Surety’s guarantee
application.
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(d) Prior Approval Agreement. To
apply for a bond guarantee, a Prior
Approval Surety must submit one of the
following forms:
(1) Surety Bond Guarantee Agreement
(SBA Form 990). A Prior Approval
Surety may complete and submit a
Surety Bond Guarantee Agreement (SBA
Form 990) to SBA for each Bid Bond or
Final Bond, and this Form must be
approved by SBA prior to the Surety’s
Execution of the bond, except in the
case of a surety bonding line approved
by SBA under § 115.33(d). The
guarantee fees owed in connection with
Final Bonds must be paid in accordance
with § 115.32.
(2) Quick Bond Guarantee
Application and Agreement (SBA Form
990A).
(i) General procedures. Except as
provided in (d)(2)(ii) of this section, a
Prior Approval Surety may complete
and submit the Quick Bond Guarantee
Application and Agreement (SBA Form
990A) to SBA for each Bid Bond or
Final Bond, and this Form must be
approved by SBA prior to the Surety’s
Execution of the bond. SBA Form 990A
is a streamlined application form that
may be used only for contract amounts
that do not exceed $250,000 at the time
of application. The guarantee fees owed
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in connection with Final Bonds must be
paid in accordance with § 115.32.
(ii) Exclusions. SBA Form 990A 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 is Executed;
(C) The time for completion of the
Contract or the warranty/maintenance
period exceeds 12 months;
(D) The Contract includes a provision
for liquidated damages that exceed $250
per day;
(E) The Contract involves asbestos
abatement, hazardous waste removal,
demolition, or timber sales; or
(F) The bond would be issued under
a surety bonding line approved under
§ 115.33.
4. Amend § 115.32 as follows:
a. Revise the fourth sentence of
paragraph (b) to read as set forth below;
b. Revise the second sentence of
paragraph (c) to read as set forth below;
and
c. In the second sentence of paragraph
(d)(1), remove the words
‘‘(Supplemental Form 990)’’, and add
the following sentence at the end: ‘‘In
notifying SBA of any increase or
decrease in the Contract or bond
amount, the Surety must use the same
form (SBA Form 990 or SBA Form
990A) that it used in applying for the
original bond guarantee.’’
§ 115.32
Fees and Premiums.
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(b) * * * The Principal’s fee is
rounded to the nearest dollar and is to
be remitted to SBA by the Surety
together with the form submitted under
either § 115.30(d)(1) or (2). * * *
(c) * * * Subject to § 115.18(a)(4), the
Surety must pay SBA a guarantee fee on
each guaranteed bond (other than a Bid
Bond) within 60 calendar days after
SBA’s approval of the Prior Approval
Agreement. * * *
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5. Amend § 115.33 by revising
paragraphs (d)(1) and (d)(2) to read as
follows:
§ 115.33
Surety bonding line.
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(d)(1) Submission of forms to SBA—
Bid Bonds. Within 15 business days
after the Execution of any Bid Bonds
under a bonding line, the Surety must
submit a ‘‘Surety Bond Guarantee
Underwriting Review’’ (SBA Form
994B) to SBA for approval. If the Surety
fails to submit the form within this time
period, SBA’s guarantee of the bond will
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be void from its inception unless SBA
determines otherwise upon a showing
that a valid reason exists why the timely
submission was not made.
(2) Submission of forms to SBA—
Final Bonds. Within 15 business days
after the Execution of any Final Bonds
under a bonding line, the Surety must
submit a Surety Bond Guarantee
Underwriting Review (SBA Form 994B)
and a Surety Bond Guarantee
Agreement (SBA Form 990) to SBA for
approval. If the Surety fails to submit
these forms within the time period or
the guarantee fees are not paid in
accordance with § 115.32, SBA’s
guarantee of the bond will be void from
its inception unless SBA determines
otherwise upon a showing that the
Contract is not in default and a valid
reason exists why the timely submission
was not made.
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Dated: January 30, 2012.
Karen G. Mills,
Administrator.
[FR Doc. 2012–2519 Filed 2–3–12; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
We must receive comments on
this proposed AD by March 22, 2012.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue SE., Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue SE., Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
For service information identified in
this proposed AD, contact Fokker
Services B.V., Technical Services Dept.,
P.O. Box 231, 2150 AE Nieuw-Vennep,
the Netherlands; telephone +31 (0)252–
627–350; fax +31 (0)252–627–211; email
technicalservices.fokkerservices@
stork.com; Internet https://www.my
fokkerfleet.com. You may review copies
of the referenced service information at
the FAA, Transport Airplane
Directorate, 1601 Lind Avenue SW.,
Renton, Washington. For information on
the availability of this material at the
FAA, call 425–227–1221.
DATES:
14 CFR Part 39
Examining the AD Docket
[Docket No. FAA–2012–0039; Directorate
Identifier 2011–NM–144–AD]
You may examine the AD docket on
the Internet at https://
www.regulations.gov; or in person at the
Docket Operations office between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket
contains this proposed AD, the
regulatory evaluation, any comments
received, and other information. The
street address for the Docket Operations
office (telephone (800) 647–5527) is in
the ADDRESSES section. Comments will
be available in the AD docket shortly
after receipt.
FOR FURTHER INFORMATION CONTACT: Tom
Rodriguez, Aerospace Engineer,
International Branch, ANM–116,
Transport Airplane Directorate, FAA
1601 Lind Avenue SW., Renton,
Washington 98057–3356; telephone
(425) 227–1137; fax (425) 227–1149.
SUPPLEMENTARY INFORMATION:
RIN 2120–AA64
Airworthiness Directives; Fokker
Services B.V. Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for certain
Fokker Services B.V. Model F.28 Mark
0070 and 0100 airplanes. This proposed
AD was prompted by reports of cracks
underneath the passenger door in a buttjoint on the forward fuselage of an F.28
Mark 0100 airplane. This proposed AD
would require repetitive low frequency
eddy current inspections of the forward
fuselage butt-joints for cracks, and if
necessary, a temporary repair followed
by a permanent repair. We are
proposing this AD to detect and correct
cracks on the butt-joint on the forward
fuselage, which could result in
explosive decompression and
consequent loss of control of the
airplane.
SUMMARY:
PO 00000
Frm 00008
Fmt 4702
Sfmt 4702
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposed AD. Send your comments
to an address listed under the
ADDRESSES section. Include ‘‘Docket No.
FAA–2012–0039; Directorate Identifier
2011–NM–144–AD’’ at the beginning of
E:\FR\FM\06FEP1.SGM
06FEP1
Agencies
[Federal Register Volume 77, Number 24 (Monday, February 6, 2012)]
[Proposed Rules]
[Pages 5721-5724]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2519]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 115
RIN 3245-AG39
Surety Bond Guarantee Program--Quick Bond Guarantee Application
and Agreement
AGENCY: Small Business Administration.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement a streamlined application
process in the Prior Approval Program of the Surety Bond Guarantee
(SBG) Program for contract amounts not exceeding $250,000 and would
make other minor administrative changes to the SBG Program regulations
to, among other things, clarify the procedures for submitting the
application forms and paying of fees, and delete an obsolete reference
to a form.
DATES: Comments must be received on or before April 6, 2012.
ADDRESSES: You may submit comments, identified by RIN: 3245-AG39 by any
of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Office of Surety Guarantees, Suite 8600, 409 Third
Street SW., Washington, DC 20416.
Hand Delivery/Courier: Office of Surety Guarantees, 409
Third Street SW., Washington, DC 20416.
SBA will post all comments on https://www.regulations.gov. If you wish
to submit confidential business information (CBI) as defined in the
User Notice at www.regulations.gov, please submit the information to
Ms. Barbara Brannan, Management Analyst, Office of Surety Guarantees,
409 Third Street SW., Washington, DC 20416 or send an email to
Barbara.brannan@sba.gov. Highlight the information that you consider to
be CBI and explain why you believe SBA should hold this information as
confidential. SBA will review the information and make the final
determination whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Ms. Barbara Brannan, Office of Surety
Guarantees, (202) 205-6545, email: Barbara.brannan@sba.gov.
SUPPLEMENTARY INFORMATION:
I. Background Information
Through the Surety Bond Guarantee (SBG) Program, SBA guarantees
bid, payment, and performance bonds for contracts up to $2 million for
small and emerging contractors who cannot obtain bonds through regular
commercial
[[Page 5722]]
surety channels. SBA's guarantee provides the incentive needed for
sureties to bond these contractors, giving them greater access to
contracting opportunities. The SBG Program consists of the Prior
Approval Program and the Preferred Surety Bond (PSB) Program. In the
Prior Approval Program, sureties must apply to SBA for each bond
guarantee and must receive SBA approval before issuing bonds. Sureties
in the PSB Program can issue SBA guaranteed bonds without SBA's prior
approval.
This rule proposes to implement a streamlined application process
for use in the Prior Approval Program for contract amounts not
exceeding $250,000. For these smaller contracts, SBA proposes to create
a new form, the Quick Bond Guarantee Application and Agreement, SBA
Form 990A, which will consolidate two of the forms currently used in
the SBG Program--SBA Form 990, Surety Bond Agreement and the SBA Form
994, Application for Surety Bond Guarantee Assistance. The proposed SBA
Form 990A complements the existing industry practice of offering a
streamlined bond application for smaller contract amounts. In addition,
SBA will not require the Principal to complete and submit two other
forms for these smaller contract amounts, including SBA Form 994F,
Schedule of Work in Process, and SBA Form 413, Personal Financial
Statement. Instead, to mitigate any risk associated with these smaller
contract amounts, the new SBA Form 990A will require the Principal to
provide a list of the largest three contracts completed in the last 5
years.
The streamlined application process will also help to address
sureties' concerns about the amount of paperwork necessary to obtain
bond guarantees in the SBG Program. In FY 2010, SBA guaranteed 2,206
Bid Bonds and 729 Final Bonds in the Prior Approval Program for
contracts of $250,000 or less. The proposed changes would reduce the
paperwork burden in applying for surety bond guarantee assistance for
contracts of this size. By offering this streamlined application
process for lower contract amounts, SBA also hopes to increase activity
by participating sureties and to encourage more sureties to begin using
the program. As a result, bonding opportunities would be available to
more small businesses. This streamlined process will be monitored
closely to mitigate any increased risk exposure, including through the
use of periodic on-site audits of participating surety companies. SBA
will pay particular attention to guaranteed bonds for contracts that
are within the dollar limits at the time of application, but that
increase to over $250,000 after the guaranteed bond is issued. The
proposed rule also sets forth the circumstances under which the new SBA
Form 990A may not be utilized.
In addition, the proposed rule would make other minor changes to
the existing SBG Program rules, including clarifying that SBA Form 990
or SBA Form 990A must be submitted to and approved by SBA prior to the
Surety's execution of the bond (except for surety bonding lines) and,
with respect to the rules regarding surety bonding lines, removing the
reference to SBA Form 994C as this form is no longer used.
II. Section-by-Section Analysis
Section 115.10. SBA is proposing to amend the definition of the
term, ``Prior Approval Agreement'', to add the ``Quick Bond Guarantee
Application and Agreement (SBA Form 990A)'' to the agreements into
which a Prior Approval Surety can enter with SBA.
Section 115.30(d)(1). SBA is proposing to clarify in paragraph
(d)(1) that, where the Surety Bond Guarantee Agreement (SBA Form 990)
is used, it must be approved before the Prior Approval Surety executes
a Bid or a Final Bond, except in the case of a bonding line under Sec.
115.33(d). Until SBA has an opportunity to review and approve or
decline an application, the Surety may not execute the bond. SBA is
also proposing to amend this paragraph to clarify that the applicable
guarantee fees must be paid in accordance with 13 CFR 115.32, and not
as set forth in the current section 115.30(d), which gives the
Principal up to 45 days (15 days in the case of a bonding line) after
bond execution to pay its fee. Under section 115.32(b), the Principal's
fee must be remitted by the Surety with the Prior Approval Agreement.
Section 115.30(d)(2). SBA is proposing to add this new provision to
implement a streamlined application process for bond guarantees for
contracts that do not exceed $250,000. SBA is proposing that applicants
use a new form, the ``Quick Bond Guarantee Application and Agreement
(SBA Form 990A)'' in place of SBA Form 990 and SBA Form 994. This new
provision would also require that the Quick Bond Guarantee Application
and Agreement (SBA Form 990A) be submitted to and approved by SBA
before the Surety executes the Bid or Final Bond. Until SBA has an
opportunity to review and approve or decline an application, the Surety
may not execute the bond. The new provision also would require that the
guarantee fees be paid in accordance with 13 CFR 115.32. This provision
also sets forth the circumstances under which this streamlined
application process may not be used.
Section 115.32(b). SBA is proposing to amend this provision to add
the requirement that the Principal's fee be remitted to SBA with the
new SBA Form 990A, just as it is required to be submitted with SBA Form
990.
Section 115.32(c). SBA is proposing to amend this paragraph to
clarify that the requirements regarding the guarantee fee paid by the
Surety applies to the new SBA Form 990A, just as it applies to the SBA
Form 990.
Section 115.32(d)(1). SBA is proposing to delete the words
``Supplemental Form 990'' from this paragraph to make it clear that
this provision applies to bond guarantees approved under the new SBA
Form 990A in addition to SBA Form 990. SBA is also proposing to add a
sentence to provide that, in notifying SBA of any increase or decrease
in the Contract or bond amount, the Surety must use the same form that
it used in applying for the original bond guarantee.
Section 115.33(d). SBA is proposing to eliminate references to the
Surety Bond Guarantee Review Update (SBA Form 994C) throughout this
provision because the form is no longer used.
Compliance With Executive Orders 12866, 12988, 13132, and 13563, 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 (OMB) has determined that this
proposed rule does not constitute a significant regulatory action under
the meaning of Executive Order 12866. This proposed rule is also not a
major rule under the Congressional Review Act.
Executive Order 12988
This action 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. The action does not
have retroactive or preemptive effect.
Executive Order 13132
SBA has determined that the rule 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. Therefore, for
the purpose of Executive Order 13132,
[[Page 5723]]
Federalism, SBA has determined that this proposed rule has no
federalism implications warranting preparation of a federalism
assessment.
Executive Order 13563
In accordance with Executive Order 13563, SBA discussed
implementing a streamlined application process with several surety
industry associations and surety company representatives and they
responded very favorably.
Paperwork Reduction Act, 44 U.S.C., Ch. 35
SBA has determined that this proposed rule imposes additional
reporting and recordkeeping requirements under the Paperwork Reduction
Act, 44 U.S.C., Chapter 35. As described above, SBA proposes to
implement a new application process for surety bonds for contracts that
are equal to or less than $250,000. The public is invited to comment on
the proposed new form that will be used to collect application
information and to submit any comments by the deadline stated in the
DATES section of this rule to: SBA Desk Officer, Office of Information
and Regulatory Affairs, Office of Management and Budget, Room 10202,
725 17th Street NW., Washington, DC 20503.
SBA invites comments on: (1) Whether the proposed collection of
information is necessary for the proper performance of SBA's functions,
including whether the information will have a practical utility; (2)
the accuracy of SBA's estimate of the burden of the proposed
collections of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of the collection of information on respondents, including
through the use of automated collection techniques, when appropriate,
and other forms of information technology. SBA will submit the proposed
form and other documents required under the Paperwork Reduction Act to
OMB for review and approval.
A description of this information collection, the respondents, and
the estimate of the annual hour burden resulting from this new process
is provided below. Included in the estimate is the time for reviewing
instructions, searching existing data sources, gathering the data
needed, and completing and reviewing the responses.
Title: Quick Bond Surety Guarantee Application and Agreement (SBA
Form 990A).
Description: The Quick Bond Surety Guarantee Application and
Agreement is a combination application and bond guarantee agreement
that would be used in the Prior Approval Program for contract amounts
that do not exceed $250,000. It is a streamlined alternative to the
existing surety bond application and agreement, the SBA Forms 990 and
994 (OMB Control Number 3245-0007). The information would be used to
evaluate whether the applicant small business meets the program
eligibility criteria and the likelihood that it will successfully
complete performance on the contract.
OMB Control Number: New Collection.
Description of and Estimated Number of Respondents. This proposed
new collection would be submitted by small businesses seeking to obtain
a bond in order to bid or perform on a contract, and by surety
companies and their agents or representatives. Based on the current
volume of bonds for contracts up to $250,000, SBA estimates that
approximately 500 small businesses and 13 Prior Approval Sureties would
submit this streamlined application and agreement form.
Estimated Response Time: It is estimated that each applicant would
require approximately 5 minutes to complete the proposed new form.
Estimated Number of Responses: 4,450. This number is based on SBA's
projection of program activity during Fiscal Year 2012.
Total Estimated Annual Hour Burden: 369 hours.
Estimated Annual Cost Burden: $18,941.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, small non-profit enterprises, and small local
governments. Pursuant to RFA, when an agency issues a rulemaking, the
agency must prepare a regulatory flexibility analysis which describes
the impact of the rule on small entities. However, section 605 of the
RFA allows an agency to certify a rule, in lieu of preparing an
analysis, if the rulemaking is not expected to have a significant
economic impact on a substantial number of small entities. Within the
meaning of RFA, SBA certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
There are 13 Sureties that currently participate in the SBA Prior
Approval program, and no part of this proposed rule would impose any
significant additional cost or burden on them.
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 proposes to amend 13
CFR Part 115 as follows:
PART 115--SURETY BOND GUARANTEE
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, Pub. L. 106-554; Pub. L. 108-447, Div K, Sec. 203; Pub. L.
110-246, Sec. 12079, 122 Stat. 1651; and Pub. L. 111-5, 123 Stat.
115.
Sec. 115.10 [Amended]
2. In Sec. 115.10 amend the definition of ``Prior Approval
Agreement'' by adding ``or Quick Bond Guarantee Application and
Agreement (SBA Form 990A)'' after ``(SBA Form 990)''.
3. Amend Sec. 115.30 as follows:
a. Revise paragraph (d) to read as set forth below; and
b. Add a new paragraph (e) to read as set forth below.
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 one of the following forms:
(1) Surety Bond Guarantee Agreement (SBA Form 990). A Prior
Approval Surety may complete and submit a Surety Bond Guarantee
Agreement (SBA Form 990) to SBA for each Bid Bond or Final Bond, and
this Form must be approved by SBA prior to the Surety's Execution of
the bond, except in the case of a surety bonding line approved by SBA
under Sec. 115.33(d). The guarantee fees owed in connection with Final
Bonds must be paid in accordance with Sec. 115.32.
(2) Quick Bond Guarantee Application and Agreement (SBA Form 990A).
(i) General procedures. Except as provided in (d)(2)(ii) of this
section, a Prior Approval Surety may complete and submit the Quick Bond
Guarantee Application and Agreement (SBA Form 990A) to SBA for each Bid
Bond or Final Bond, and this Form must be approved by SBA prior to the
Surety's Execution of the bond. SBA Form 990A is a streamlined
application form that may be used only for contract amounts that do not
exceed $250,000 at the time of application. The guarantee fees owed
[[Page 5724]]
in connection with Final Bonds must be paid in accordance with Sec.
115.32.
(ii) Exclusions. SBA Form 990A 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 is Executed;
(C) The time for completion of the Contract or the warranty/
maintenance period exceeds 12 months;
(D) The Contract includes a provision for liquidated damages that
exceed $250 per day;
(E) The Contract involves asbestos abatement, hazardous waste
removal, demolition, or timber sales; or
(F) The bond would be issued under a surety bonding line approved
under Sec. 115.33.
4. Amend Sec. 115.32 as follows:
a. Revise the fourth sentence of paragraph (b) to read as set forth
below;
b. Revise the second sentence of paragraph (c) to read as set forth
below; and
c. In the second sentence of paragraph (d)(1), remove the words
``(Supplemental Form 990)'', and add the following sentence at the end:
``In notifying SBA of any increase or decrease in the Contract or bond
amount, the Surety must use the same form (SBA Form 990 or SBA Form
990A) that it used in applying for the original bond guarantee.''
Sec. 115.32 Fees and Premiums.
* * * * *
(b) * * * The Principal's fee is rounded to the nearest dollar and
is to be remitted to SBA by the Surety together with the form submitted
under either Sec. 115.30(d)(1) or (2). * * *
(c) * * * Subject to Sec. 115.18(a)(4), the Surety must pay SBA a
guarantee fee on each guaranteed bond (other than a Bid Bond) within 60
calendar days after SBA's approval of the Prior Approval Agreement. * *
*
* * * * *
5. Amend Sec. 115.33 by revising paragraphs (d)(1) and (d)(2) to
read as follows:
Sec. 115.33 Surety bonding line.
* * * * *
(d)(1) Submission of forms to SBA--Bid Bonds. Within 15 business
days after the Execution of any Bid Bonds under a bonding line, the
Surety must submit a ``Surety Bond Guarantee Underwriting Review'' (SBA
Form 994B) to SBA for approval. If the Surety fails to submit the form
within this time period, SBA's guarantee of the bond will be void from
its inception unless SBA determines otherwise upon a showing that a
valid reason exists why the timely submission was not made.
(2) Submission of forms to SBA--Final Bonds. Within 15 business
days after the Execution of any Final Bonds under a bonding line, the
Surety must submit a Surety Bond Guarantee Underwriting Review (SBA
Form 994B) and a Surety Bond Guarantee Agreement (SBA Form 990) to SBA
for approval. If the Surety fails to submit these forms within the time
period or the guarantee fees are not paid in accordance with Sec.
115.32, SBA's guarantee of the bond will be void from its inception
unless SBA determines otherwise upon a showing that the Contract is not
in default and a valid reason exists why the timely submission was not
made.
* * * * *
Dated: January 30, 2012.
Karen G. Mills,
Administrator.
[FR Doc. 2012-2519 Filed 2-3-12; 8:45 am]
BILLING CODE 8025-01-P