[106th Congress Public Law 8]
[From the U.S. Government Printing Office]
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[DOCID: f:publ008.106]
[[Page 113 STAT. 13]]
Public Law 106-8
106th Congress
An Act
To provide for a loan guarantee program to address the Year 2000
computer problems of small business concerns, and for other
purposes. <<NOTE: Apr. 2, 1999 - [S. 314]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Small Business
Year 2000 Readiness Act.>>
SECTION 1. SHORT TITLE. <<NOTE: 15 USC 631 note.>>
This Act may be cited as the ``Small Business Year 2000 Readiness
Act''.
SEC. 2. FINDINGS. <<NOTE: 15 USC 636 note.>>
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
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``(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) <<NOTE: Notification.>> 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
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``(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.-- <<NOTE: 15 USC 636 note.>>
(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
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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) <<NOTE: 15 USC 636 and note.>> Repeal.--Effective on December
31, 2000, this section and the amendments made by this section are
repealed.
Approved April 2, 1999.
LEGISLATIVE HISTORY--S. 314:
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SENATE REPORTS: No. 106-5 (Comm. on Small Business).
CONGRESSIONAL RECORD, Vol. 145 (1999):
Mar. 2, considered and passed Senate.
Mar. 23, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 35 (1999):
Apr. 2, Presidential statement.
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