Page:United States Statutes at Large Volume 102 Part 3.djvu/1056

 102 STAT. 3008

PUBLIC LAW 100-590—NOV. 3, 1988 "(A) the person who would be principal under the bond is a small business concern; "(B) the bond is required in order for such person to bid on a contract, or to serve as a prime contractor or subcontractor thereon; "(Q such person is not able to obtain such bond on reasonable terms and conditions without a guarantee under this section; and "(D) there is a reasonable expectation that such principal will perform the covenants and conditions of the contract with respect to which such bond is required, and the terms and conditions of such bond are reasonal>le in the light of the risks involved and the extent of the surety's participation.".

SEC. 203. INDEMNIFICATION.

Disadvantaged persons.

(a) IN GENERAL.—Section 4110i>) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(b)) is amended— (1) by striking paragraph (3), (2) by striking "; and and inserting a period at the end of paragraph (2), (3) by redesignating paragraph (2) as paragraph (3), (4) by inserting after paragraph (1) the following new paragraph: "(2) a surety must obtain approval from the Administration prior to making any payments pursuant to this subsection unless the surety is participating under the authority of sul^ection (a)(3); and", and (5) by inserting at the end the following new sentence: "In no event shall the Administration pay a surety pursuant to this subsection an amount exceeding the guaranteed share of the bond available to such surety pursuant to subsection (a).". (b) AMOUNT OF INDEMNIFICATION.—Section 411(c) of the Small Business Investment Act of 1958 (15 U.S.C. 694b(c)) is amended to read as follows: "(c) Any guarantee or agreement to indemnify under this section shall obligate the Administration to pay to the surety a sum— "(1) not to exceed 70 per centum of the loss incurred and paid by a surety authorized to issue bonds subject to the Administration's guarantee under subsection (a)(3); "(2) not to exceed 90 per centum of the loss incurred and paid in the case of a surety requiring the Administration's specific approval for the issuance of such bond, but in no event may the Administration make any duplicate payment pursuant to subsection (b) or any other subsection; "(3) equal to 90 per centum of the loss incurred and paid in the case of a surety requiring the administration's specific approval for the issuance of a bond, if— "(A) the total amount of the contract at the time of execution of the bond or bonds is $100,000 or less, or "(B) the bond was issued to a small business concern owned and controlled by socially and economically disadvantaged individuals as defined by section 8(d) of the Small Business Act; or "(4) determined pursuant to subsection (b), if applicable.", (c) LIMITATION OF ADMINISTRATION'S LIABILITY.—Section 411(e) of

the Small Business Investment Act of 1958 (15 U.S.C. 694b(e)) is amended—

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