Surety Bond Guarantee Program Fees, 62362-62363 [2020-21876]

Download as PDF 62362 Federal Register / Vol. 85, No. 192 / Friday, October 2, 2020 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–90023; File No. SR–NYSE– 2020–67] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 J. Matthew DeLesDernier, Assistant Secretary. Self-Regulatory Organizations; New York Stock Exchange LLC, Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change to Amend Article IV, Section 4.05 of the Thirteenth Amended and Restated Operating Agreement of the Exchange [FR Doc. 2020–21764 Filed 10–1–20; 8:45 am] BILLING CODE 8011–01–P September 28, 2020. jbell on DSKJLSW7X2PROD with NOTICES On August 7, 2020, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b-4 thereunder,2 a proposed rule change to amend Article IV, Section 4.05 of the Thirteenth Amended and Restated Operating Agreement of the Exchange to allow the use of regulatory fines for charitable donations. The proposed rule change was published for comment in the Federal Register on August 25, 2020.3 The Commission has received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a propose rule change, or within such longer period up to 90 days as the Commission may designate if it find such longer period to be appropriate and published its reasons for so finding or as to which the selfregulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the Notice for the proposed rule change is October 9, 2020. The Commission is extending this 45-day period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, pursuant to Section 19(b)(2) of the Act,5 the Commission designates November 23, 2020, as the date by which the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 89615 (August 19, 2020), 85 FR 52392 (August 25, 2020) (SR–NYSE–2020–67). 4 15 U.S.C. 78s(b)(2). 5 15 U.S.C. 78s(b)(2). 2 17 VerDate Sep<11>2014 19:38 Oct 01, 2020 Jkt 253001 Commission shall either approve or disapprove, or institute proceedings to determine whether to approve or disapprove, the proposed rule change (File No. SR–NYSE–2020–67). SMALL BUSINESS ADMINISTRATION Surety Bond Guarantee Program Fees U.S. Small Business Administration. ACTION: Notification of Surety Bond Guarantee Program Fees. AGENCY: This document announces that the U.S. Small Business Administration (SBA) is adopting the guarantee fees in the amounts that SBA has been charging during the temporary fee reduction initiative that began October 1, 2018 and continues through September 30, 2020. These guarantee fees are charged to all Surety companies and Principals on each guaranteed bond (other than a bid bond) issued in SBA’s Surety Bond Guarantee (SBG) Program. DATES: The fees described in this document will be adopted as of October 1, 2020 and will apply to all SBA surety bond guarantees approved on or after October 1, 2020. FOR FURTHER INFORMATION CONTACT: Jermaine Perry, Management Analyst, Office of Surety Guarantees; (202) 401– 8275 or jermaine.perry@sba.gov. SUPPLEMENTARY INFORMATION: Under its SBG Program, the SBA guarantees a certain percentage of bid, payment, and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels. The SBA guarantee incentivizes Sureties to provide bonding for small businesses and thereby assists small businesses in obtaining greater access to contracting opportunities. Pursuant to its statutory authority to ‘‘establish such fee or fees for small business concerns and premium or premiums for sureties as it deems reasonable and necessary,’’ and to administer the SBG Program ‘‘on a prudent and economically justifiable basis,’’ 15 U.S.C. 694b(h), SBA assesses a guarantee fee against both the small business concern (the Principal) and the Surety and deposits these fees into a SUMMARY: 6 17 PO 00000 CFR 200.30–3(a)(31). Frm 00089 Fmt 4703 Sfmt 4703 revolving fund to cover the program’s liabilities and certain program expenses. SBA’s rules provide that the amount of the fees to be paid by the Surety and the Principal will be determined by SBA and published in Notices in the Federal Register from time to time. See 13 CFR 115.32(b) and (c) and 115.66. On July 30, 2018, SBA published a notification in the Federal Register (83 FR 36658) that announced that, for all guaranteed bonds approved during the one year period beginning October 1, 2018 through September 30, 2019, the Surety fee would decrease from 26% of the bond premium to 20% of the bond premium, and the Principal fee would decrease from $7.29 per thousand dollars of the contract amount to $6 per thousand dollars of the contract amount (the decrease in the Surety and Principal fees referred to, collectively, as ‘‘lower fees’’). The announcement stated that SBA will evaluate whether the lower fees will result in an increase in the bond activity level of the SBG Program and, if so, whether any such increased level of activity will generate sufficient revenues to offset the reduced fee amounts. SBA invited comments on this temporary initiative and received a total of eleven comments, with nine comments from surety companies and agents and two comments from trade associations, all of which expressed support for the lower fees. SBA subsequently published a notification in the Federal Register (84 FR 40466) extending the lower fees through September 30, 2020 to provide additional time for SBA to evaluate the fee reduction due to the Government lapse of appropriation, which spanned from December 22, 2018 through January 25, 2019. During the extension, SBA continued its evaluation into how lower fees affect the SBG Program, including program utilization by surety companies, surety agents and small businesses; the size and characteristics of the portfolio; and the risk level of the program, including cash flow and defaults. A final report of the evaluation study conducted by SBA (which covered the period between October 1, 2018 and December 31, 2019) will be published on www.sba.gov/evaluation. In addition to the report and the public comments in support of the lower fees, SBA has considered the effect of the lower fees on the annual cashflow (fees collected minus claims paid) and the reserves in the SBG Program’s revolving fund. The annual cashflow during the period of the temporary fee reductions, between October 1, 2018 and September 21, 2020, maintained a surplus, resulting in an increase in the reserves in the E:\FR\FM\02OCN1.SGM 02OCN1 Federal Register / Vol. 85, No. 192 / Friday, October 2, 2020 / Notices revolving fund. SBA has determined that the lower fees are reasonable to maintain sufficient funds in the revolving fund to cover the cost of anticipated losses in the SBG program. Although the report on the evaluation study found that the lower fees did not increase the number or values of bonds during the fee evaluation period, the lower fees charged to the Principal and Surety will reduce the cost of bonding to small businesses, and result in a projected average annual cost savings of $3.5 million for Principals and Sureties. In addition, the evaluation report indicated that ‘‘higher volume surety producers were more likely to respond more positively or optimistically to the potential benefits of continuing or increasing the [fee] reductions.’’ In light of the above, SBA has decided to adopt the lower fees of 20% of the bond premium for the Surety fee and $6 per thousand dollars of the contract amount for the Principal fee, and will continue to apply these lower fees to all SBA surety bond guarantees approved on or after October 1, 2020. SBA will actively monitor the performance of the SBG program to ensure that the fees are reasonable and necessary and allow SBA to administer the SBG program on a prudent and economically justifiable basis. Authority: 15 U.S.C. 694b(h); 13 CFR 115.32(b) and (c) and 115.66. Dated: September 29, 2020. William Manger, Associate Administrator/Chief of Staff, Office of Capital Access. [FR Doc. 2020–21876 Filed 9–29–20; 4:15 pm] BILLING CODE 8026–03–P SMALL BUSINESS ADMINISTRATION Change to SBA Secondary Market Program Small Business Administration. Notice of change to secondary market program. AGENCY: ACTION: The purpose of this Notice is to inform the public that the Small Business Administration (SBA) is making a change to its Secondary Market Loan Pooling Program. SBA is decreasing the minimum maturity ratio for both SBA Standard Pools and Weighted-Average Coupon (WAC) Pools by 500 basis points, to 89.0%. The change described in this Notice is being made to cover the estimated cost of the timely payment guaranty for newly formed SBA 7(a) loan pools. This change will be incorporated, as needed, into the SBA Secondary Market Program jbell on DSKJLSW7X2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:38 Oct 01, 2020 Jkt 253001 Guide and all other appropriate SBA Secondary Market documents. DATES: This change will apply to SBA 7(a) loan pools with an issue date on or after October 1, 2020. ADDRESSES: Address comments concerning this Notice to John M. Wade, Chief Secondary Market Division, U.S. Small Business Administration, 409 3rd Street SW, Washington, DC 20416; or, john.wade@sba.gov. FOR FURTHER INFORMATION CONTACT: John M. Wade, Chief, Secondary Market Division at 202–205–3647 or john.wade@sba.gov. SUPPLEMENTARY INFORMATION: The Secondary Market Improvements Act of 1984, 15 U.S.C. 634(f) through (h), authorized SBA to guarantee the timely payment of principal and interest on Pool Certificates. A Pool Certificate represents a fractional undivided interest in a ‘‘Pool,’’ which is an aggregation of SBA guaranteed portions of loans made by SBA Lenders under section 7(a) of the Small Business Act, 15 U.S.C. 636(a). In order to support the timely payment guaranty requirement, SBA established the Master Reserve Fund (MRF), which serves as a mechanism to cover the cost of SBA’s timely payment guaranty. Borrower payments on the guaranteed portions of pooled loans, as well as SBA guaranty payments on defaulted pooled loans, are deposited into the MRF. Funds are held in the MRF until distributions are made to investors (Registered Holders) of Pool Certificates. The interest earned on the borrower payments and the SBA guaranty payments deposited into the MRF supports the timely payments made to Registered Holders. From time to time, SBA provides guidance to SBA Pool Assemblers on the required loan and pool characteristics necessary to form a Pool. These characteristics include, among other things, the minimum number of guaranteed portions of loans required to form a Pool, the allowable difference between the highest and lowest gross and net note rates of the guaranteed portions of loans in a Pool, and the minimum maturity ratio of the guaranteed portions of loans in a Pool. The minimum maturity ratio is equal to the ratio of the shortest and the longest remaining term to maturity of the guaranteed portions of loans in a Pool. Based on SBA’s expectations as to the performance of future Pools, SBA has determined that for pools formed on or after October 1, 2020, SBA Pool Assemblers may increase the difference between the shortest and the longest remaining term of the guaranteed portions of loans in a Pool by 5 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 62363 percentage points (i.e., decreasing the minimum maturity ratio by 500 basis points). SBA does not expect a 5 percentage point reduction in the minimum maturity ratio to have an adverse impact on either the program or the participants in the program. Therefore, effective October 1, 2020, all guaranteed portions of loans in Standard Pools and WAC Pools presented for settlement with SBA’s Fiscal Transfer Agent will be required to have a minimum maturity ratio of at least 89.0%. SBA is making this change pursuant to Section 5(g)(2) of the Small Business Act, 15 U.S.C. 634(g)(2). SBA will continue to monitor loan and pool characteristics and will provide notification of additional changes as necessary. It is important to note that there is no change to SBA’s obligation to honor its guaranty of the amounts owed to Registered Holders of Pool Certificates and that such guaranty continues to be backed by the full faith and credit of the United States. This program change will be incorporated as necessary into SBA’s Secondary Market Guide and all other appropriate SBA Secondary Market documents. As indicated above, this change will be effective for Standard Pools and WAC Pools with an issue date on or after October 1, 2020. Dated: September 29, 2020. William M. Manger, Associate Administrator, Office of Capital Access. [FR Doc. 2020–21832 Filed 10–1–20; 8:45 am] BILLING CODE P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Public Notice for Waiver of Aeronautical Land Use Assurance; Nampa Municipal Airport, Nampa, Idaho Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice. AGENCY: Notice is being given that the FAA is considering a request from the Nampa Municipal Airport, Airport Superintendent to change certain portions of the airport from aeronautical use to non-aeronautical use at the Nampa Municipal Airport, Nampa, ID. The request consists of 6 parcels, or portions thereof that are depicted on the Airport’s current Exhibit A—Airport Property Map. SUMMARY: E:\FR\FM\02OCN1.SGM 02OCN1

Agencies

[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Notices]
[Pages 62362-62363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21876]


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SMALL BUSINESS ADMINISTRATION


Surety Bond Guarantee Program Fees

AGENCY: U.S. Small Business Administration.

ACTION: Notification of Surety Bond Guarantee Program Fees.

-----------------------------------------------------------------------

SUMMARY: This document announces that the U.S. Small Business 
Administration (SBA) is adopting the guarantee fees in the amounts that 
SBA has been charging during the temporary fee reduction initiative 
that began October 1, 2018 and continues through September 30, 2020. 
These guarantee fees are charged to all Surety companies and Principals 
on each guaranteed bond (other than a bid bond) issued in SBA's Surety 
Bond Guarantee (SBG) Program.

DATES: The fees described in this document will be adopted as of 
October 1, 2020 and will apply to all SBA surety bond guarantees 
approved on or after October 1, 2020.

FOR FURTHER INFORMATION CONTACT: Jermaine Perry, Management Analyst, 
Office of Surety Guarantees; (202) 401-8275 or [email protected].

SUPPLEMENTARY INFORMATION: Under its SBG Program, the SBA guarantees a 
certain percentage of bid, payment, and performance bonds for small and 
emerging contractors who cannot obtain surety bonds through regular 
commercial channels. The SBA guarantee incentivizes Sureties to provide 
bonding for small businesses and thereby assists small businesses in 
obtaining greater access to contracting opportunities. Pursuant to its 
statutory authority to ``establish such fee or fees for small business 
concerns and premium or premiums for sureties as it deems reasonable 
and necessary,'' and to administer the SBG Program ``on a prudent and 
economically justifiable basis,'' 15 U.S.C. 694b(h), SBA assesses a 
guarantee fee against both the small business concern (the Principal) 
and the Surety and deposits these fees into a revolving fund to cover 
the program's liabilities and certain program expenses.
    SBA's rules provide that the amount of the fees to be paid by the 
Surety and the Principal will be determined by SBA and published in 
Notices in the Federal Register from time to time. See 13 CFR 115.32(b) 
and (c) and 115.66. On July 30, 2018, SBA published a notification in 
the Federal Register (83 FR 36658) that announced that, for all 
guaranteed bonds approved during the one year period beginning October 
1, 2018 through September 30, 2019, the Surety fee would decrease from 
26% of the bond premium to 20% of the bond premium, and the Principal 
fee would decrease from $7.29 per thousand dollars of the contract 
amount to $6 per thousand dollars of the contract amount (the decrease 
in the Surety and Principal fees referred to, collectively, as ``lower 
fees''). The announcement stated that SBA will evaluate whether the 
lower fees will result in an increase in the bond activity level of the 
SBG Program and, if so, whether any such increased level of activity 
will generate sufficient revenues to offset the reduced fee amounts. 
SBA invited comments on this temporary initiative and received a total 
of eleven comments, with nine comments from surety companies and agents 
and two comments from trade associations, all of which expressed 
support for the lower fees.
    SBA subsequently published a notification in the Federal Register 
(84 FR 40466) extending the lower fees through September 30, 2020 to 
provide additional time for SBA to evaluate the fee reduction due to 
the Government lapse of appropriation, which spanned from December 22, 
2018 through January 25, 2019. During the extension, SBA continued its 
evaluation into how lower fees affect the SBG Program, including 
program utilization by surety companies, surety agents and small 
businesses; the size and characteristics of the portfolio; and the risk 
level of the program, including cash flow and defaults. A final report 
of the evaluation study conducted by SBA (which covered the period 
between October 1, 2018 and December 31, 2019) will be published on 
www.sba.gov/evaluation.
    In addition to the report and the public comments in support of the 
lower fees, SBA has considered the effect of the lower fees on the 
annual cashflow (fees collected minus claims paid) and the reserves in 
the SBG Program's revolving fund. The annual cashflow during the period 
of the temporary fee reductions, between October 1, 2018 and September 
21, 2020, maintained a surplus, resulting in an increase in the 
reserves in the

[[Page 62363]]

revolving fund. SBA has determined that the lower fees are reasonable 
to maintain sufficient funds in the revolving fund to cover the cost of 
anticipated losses in the SBG program. Although the report on the 
evaluation study found that the lower fees did not increase the number 
or values of bonds during the fee evaluation period, the lower fees 
charged to the Principal and Surety will reduce the cost of bonding to 
small businesses, and result in a projected average annual cost savings 
of $3.5 million for Principals and Sureties. In addition, the 
evaluation report indicated that ``higher volume surety producers were 
more likely to respond more positively or optimistically to the 
potential benefits of continuing or increasing the [fee] reductions.''
    In light of the above, SBA has decided to adopt the lower fees of 
20% of the bond premium for the Surety fee and $6 per thousand dollars 
of the contract amount for the Principal fee, and will continue to 
apply these lower fees to all SBA surety bond guarantees approved on or 
after October 1, 2020. SBA will actively monitor the performance of the 
SBG program to ensure that the fees are reasonable and necessary and 
allow SBA to administer the SBG program on a prudent and economically 
justifiable basis.

    Authority: 15 U.S.C. 694b(h); 13 CFR 115.32(b) and (c) and 
115.66.

    Dated: September 29, 2020.
William Manger,
Associate Administrator/Chief of Staff, Office of Capital Access.
[FR Doc. 2020-21876 Filed 9-29-20; 4:15 pm]
BILLING CODE 8026-03-P
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