Small Business Year 2000 Readiness Act

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 affects 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.

Summary: Small Business Year 2000 Readiness Act - Amends the Small Business Act to authorize the Small Business Administration (SBA), during the period ending on December 31, 2000, to: (1) guarantee loans made by eligible lenders to small businesses to address Year 2000 computer problems , including repair and acquisition, consulting, and related expenses. And (2) provide relief for a substantial economic injury incurred by a small business as a direct result of Y2K problems. Provides loan amounts and administration participation limits. Requires an annual report from the SBA to the congressional small business committees on the loan guarantee program.