Small Business Year 2000 Readiness Act

Summary: Small Business Year 2000 Readiness Act - Amends the Small Business Act to direct the Small Business Administration (SBA) to establish a pilot loan guarantee program under which the SBA shall guarantee loans made by eligible lenders to small businesses to address Year 2000 computer problems (Y2K problem), including the repair or acquisition of information technology systems and other automated systems. Limits:  (1) the loan amount for each participating small business to $50,000; and (2) the amount which is guaranteed by the SBA to 50 percent of the total loan received from a lender. 
Requires the SBA to notify the small business committees at least 30 days in advance of the initiation of any pilot program under such Act or a pilot program which may affect the subsidy rate estimates for a loan program.  Requires an annual report to such committees on each pilot program under which loans are guaranteed by the SBA.

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 will 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--85 
        percent of businesses with 200 employees or less have not 
        commenced inventorying the changes they must make to their 
        automated systems to avoid Year 2000 problems;
            (3) many small businesses do not have access to capital to 
        fix mission critical automated systems; and
            (4) the failure of a large number of small businesses will 
        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 pilot program.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `eligible lender' means any 
                        lender designated by the Administration as 
                        eligible to participate in--
                                    ``(I) the Preferred Lenders Program 
                                authorized by the proviso in section 
                                5(b)(7); or
                                    ``(II) the Certified Lenders 
                                Program authorized in paragraph (19); 
                                and
                            ``(ii) the term `Year 2000 computer 
                        problem' means, with respect to information 
                        technology, any problem that prevents the 
                        information technology from accurately 
                        processing, calculating, comparing, or 
                        sequencing date or time 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 pilot loan guarantee 
                        program, under which the Administration shall 
                        guarantee loans made by eligible lenders to 
small business concerns in accordance with this subsection; and
                            ``(ii) notify each eligible lender of the 
                        establishment of the program under this 
                        paragraph.
                    ``(C) Use of funds.--A small business concern that 
                receives a loan guaranteed under this paragraph shall 
                use the proceeds of the loan solely to address the Year 
                2000 computer problems of that small business concern, 
                including the repair or acquisition of information 
                technology systems and other automated systems.
                    ``(D) Maximum amount.--The total amount of a loan 
                made to a small business concern and guaranteed under 
                this paragraph shall not exceed $50,000.
                    ``(E) Guarantee limit.--The guarantee percentage of 
                a loan guaranteed under this paragraph shall not exceed 
                50 percent of the balance of the financing outstanding 
                at the time of disbursement of the loan.
                    ``(F) Report.--The Administration shall annually 
                submit to the Committees on Small Business of the House 
                of Representatives and the Senate a report on the 
                results of the program under this paragraph, which 
                shall include information relating to--
                            ``(i) the number and amount of loans 
                        guaranteed under this paragraph;
                            ``(ii) whether the loans guaranteed were 
                        made to repair or replace information 
                        technology and other automated systems; and
                            ``(iii) the number of eligible lenders 
                        participating in the program.''.
    (b) Regulations.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Administrator of the Small Business 
        Administration shall issue final regulations to carry out the 
        program under section 7(a)(27) of the Small Business Act, as 
        added by this section.
            (2) Requirements.--Except to the extent inconsistent this 
        section or section 7(a)(27) of the Small Business Act, as added 
        by this section, the regulations issued under this subsection 
        shall be substantially similar to the requirements governing 
        the FA$TRACK pilot program of the Small Business 
        Administration, or any successor pilot program to that pilot 
        program.
    (c) Repeal.--Effective on October 1, 2001, this section and the 
amendment made by this section are repealed.

SEC. 4. PILOT PROGRAM REQUIREMENTS.

    Section 7(a)(25) of the Small Business Act (15 U.S.C. 636(a)(25)) 
is amended by adding at the end the following:
                    ``(D) Notification of change.--Not later than 30 
                days prior to initiating any pilot program or making 
                any change in a pilot program under this subsection 
                that may affect the subsidy rate estimates for the loan 
                program under this subsection, the Administration shall 
                notify the Committees on Small Business of the House of 
                Representatives and the Senate, which notification 
                shall include--
                            ``(i) a description of the proposed change; 
                        and
                            ``(ii) an explanation, which shall be 
                        developed by the Administration in consultation 
                        with the Director of the Office of Management 
                        and Budget, of the estimated effect that the 
                        change will have on the subsidy rate.
                    ``(E) Report on pilot programs.--The Administration 
                shall annually submit to the Committees on Small 
                Business of the House of Representatives and the Senate 
                a report on each pilot program under this subsection, 
                which report shall include information relating to--
                            ``(i) the number and amount of loans made 
                        under the pilot program;
                            ``(ii) the number of lenders participating 
                        in the pilot program; and
                            ``(iii) the default rate, delinquency rate, 
                        and recovery rate for loans under each pilot 
                        program, as compared to those rates for other 
                        loan programs under this subsection.''.