[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 314 Enrolled Bill (ENR)]

        S.314

                       One Hundred Sixth Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

         Begun and held at the City of Washington on Wednesday,
   the sixth day of January, one thousand nine hundred and ninety-nine


                                 An Act


 
    To provide for a loan guarantee program to address the Year 2000 
  computer problems of small business concerns, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Year 2000 Readiness 
Act''.

SEC. 2. FINDINGS.

    Congress finds that--
        (1) the failure of many computer programs to recognize the Year 
    2000 may have extreme negative financial consequences in the Year 
    2000, and in subsequent years for both large and small businesses;
        (2) small businesses are well behind larger businesses in 
    implementing corrective changes to their automated systems;
        (3) many small businesses do not have access to capital to fix 
    mission critical automated systems, which could result in severe 
    financial distress or failure for small businesses; and
        (4) the failure of a large number of small businesses due to 
    the Year 2000 computer problem would have a highly detrimental 
    effect on the economy in the Year 2000 and in subsequent years.

SEC. 3. YEAR 2000 COMPUTER PROBLEM LOAN GUARANTEE PROGRAM.

    (a) Program Established.--Section 7(a) of the Small Business Act 
(15 U.S.C. 636(a)) is amended by adding at the end the following:
        ``(27) Year 2000 computer problem program.--
            ``(A) Definitions.--In this paragraph--
                ``(i) the term `eligible lender' means any lender 
            designated by the Administration as eligible to participate 
            in the general business loan program under this subsection; 
            and
                ``(ii) the term `Year 2000 computer problem' means, 
            with respect to information technology, and embedded 
            systems, any problem that adversely effects the processing 
            (including calculating, comparing, sequencing, displaying, 
            or storing), transmitting, or receiving of date-dependent 
            data--

                    ``(I) from, into, or between--

                        ``(aa) the 20th or 21st centuries; or
                        ``(bb) the years 1999 and 2000; or

                    ``(II) with regard to leap year calculations.

            ``(B) Establishment of program.--The Administration shall--
                ``(i) establish a loan guarantee program, under which 
            the Administration may, during the period beginning on the 
            date of enactment of this paragraph and ending on December 
            31, 2000, guarantee loans made by eligible lenders to small 
            business concerns in accordance with this paragraph; and
                ``(ii) notify each eligible lender of the establishment 
            of the program under this paragraph, and otherwise take 
            such actions as may be necessary to aggressively market the 
            program under this paragraph.
            ``(C) Use of funds.--A small business concern that receives 
        a loan guaranteed under this paragraph shall only use the 
        proceeds of the loan to--
                ``(i) address the Year 2000 computer problems of that 
            small business concern, including the repair and 
            acquisition of information technology systems, the purchase 
            and repair of software, the purchase of consulting and 
            other third party services, and related expenses; and
                ``(ii) provide relief for a substantial economic injury 
            incurred by the small business concern as a direct result 
            of the Year 2000 computer problems of the small business 
            concern or of any other entity (including any service 
            provider or supplier of the small business concern), if 
            such economic injury has not been compensated for by 
            insurance or otherwise.
            ``(D) Loan amounts.--
                ``(i) In general.--Notwithstanding paragraph (3)(A) and 
            subject to clause (ii) of this subparagraph, a loan may be 
            made to a borrower under this paragraph even if the total 
            amount outstanding and committed (by participation or 
            otherwise) to the borrower from the business loan and 
            investment fund, the business guaranty loan financing 
            account, and the business direct loan financing account 
            would thereby exceed $750,000.
                ``(ii) Exception.--A loan may not be made to a borrower 
            under this paragraph if the total amount outstanding and 
            committed (by participation or otherwise) to the borrower 
            from the business loan and investment fund, the business 
            guaranty loan financing account, and the business direct 
            loan financing account would thereby exceed $1,000,000.
            ``(E) Administration participation.--Notwithstanding 
        paragraph (2)(A), in an agreement to participate in a loan 
        under this paragraph, participation by the Administration shall 
        not exceed--
                ``(i) 85 percent of the balance of the financing 
            outstanding at the time of disbursement of the loan, if the 
            balance exceeds $100,000;
                ``(ii) 90 percent of the balance of the financing 
            outstanding at the time of disbursement of the loan, if the 
            balance is less than or equal to $100,000; and
                ``(iii) notwithstanding clauses (i) and (ii), in any 
            case in which the subject loan is processed in accordance 
            with the requirements applicable to the SBAExpress Pilot 
            Program, 50 percent of the balance outstanding at the time 
            of disbursement of the loan.
            ``(F) Periodic reviews.--The Inspector General of the 
        Administration shall periodically review a representative 
        sample of loans guaranteed under this paragraph to mitigate the 
        risk of fraud and ensure the safety and soundness of the loan 
        program.
            ``(G) Annual report.--The Administration shall annually 
        submit to the Committees on Small Business of the House of 
        Representatives and the Senate a report on the results of the 
        program carried out under this paragraph during the preceding 
        12-month period, which shall include information relating to--
                ``(i) the total number of loans guaranteed under this 
            paragraph;
                ``(ii) with respect to each loan guaranteed under this 
            paragraph--

                    ``(I) the amount of the loan;
                    ``(II) the geographic location of the borrower; and
                    ``(III) whether the loan was made to repair or 
                replace information technology and other automated 
                systems or to remedy an economic injury; and

                ``(iii) the total number of eligible lenders 
            participating in the program.''.
    (b) Guidelines.--
        (1) In general.--Not later than 30 days after the date of 
    enactment of this Act, the Administrator of the Small Business 
    Administration shall issue guidelines to carry out the program 
    under section 7(a)(27) of the Small Business Act, as added by this 
    section.
        (2) Requirements.--Except to the extent that it would be 
    inconsistent with this section or section 7(a)(27) of the Small 
    Business Act, as added by this section, the guidelines issued under 
    this subsection shall, with respect to the loan program established 
    under section 7(a)(27) of the Small Business Act, as added by this 
    section--
            (A) provide maximum flexibility in the establishment of 
        terms and conditions of loans originated under the loan program 
        so that such loans may be structured in a manner that enhances 
        the ability of the applicant to repay the debt;
            (B) if appropriate to facilitate repayment, establish a 
        moratorium on principal payments under the loan program for up 
        to 1 year beginning on the date of the origination of the loan;
            (C) provide that any reasonable doubts regarding a loan 
        applicant's ability to service the debt be resolved in favor of 
        the loan applicant; and
            (D) authorize an eligible lender (as defined in section 
        7(a)(27)(A) of the Small Business Act, as added by this 
        section) to process a loan under the loan program in accordance 
        with the requirements applicable to loans originated under 
        another loan program established pursuant to section 7(a) of 
        the Small Business Act (including the general business loan 
        program, the Preferred Lender Program, the Certified Lender 
        Program, the Low Documentation Loan Program, and the SBAExpress 
        Pilot Program), if--
                (i) the eligible lender is eligible to participate in 
            such other loan program; and
                (ii) the terms of the loan, including the principal 
            amount of the loan, are consistent with the requirements 
            applicable to loans originated under such other loan 
            program.
    (c) Repeal.--Effective on December 31, 2000, this section and the 
amendments made by this section are repealed.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.