[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 314 Engrossed in Senate (ES)]
106th CONGRESS
1st Session
S. 314
_______________________________________________________________________
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.
Passed the Senate March 2, 1999.
Attest:
Secretary.
106th CONGRESS
1st Session
S. 314
_______________________________________________________________________
AN ACT
To provide for a loan guarantee program to address the Year 2000
computer problems of small business concerns, and for other purposes.