I
106TH CONGRESS
1ST SESSION
H. R. 1056
To provide for a loan guarantee program to address the Year 2000 computer
problems of small business concerns, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 10, 1999
Mr. KUCINICH introduced the following bill; which was referred to the
Committee on Small Business
A BILL
To provide for a loan guarantee program to address the
Year 2000 computer problems of small business con-
cerns, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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
business loan program under this sub-
section; and
‘‘(ii) the term ‘Year 2000 computer
problem’ means, with respect to informa-
tion technology, and embedded systems,
any problem that adversely affects the
processing (including calculating, compar-
ing, sequencing, displaying, or storing),
transmitting, or receiving of date-depend-
ent data—
‘‘(I) from, into, or between—
‘‘(aa) the 20th or 21st cen-
turies; 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 pro-
gram, 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 in-
formation technology systems, the pur-
chase and repair of software, the purchase
of consulting and other third party serv-
ices, and related expenses; and
‘‘(ii) provide relief for a substantial
economic injury incurred by the small busi-
ness concern as a direct result of the Year
2000 computer problems of the small busi-
ness concern or of any other entity (includ-
ing any service provider or supplier of the
small business concern), if such economic
injury has not been compensated for by in-
surance 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 commit-
ted (by participation or otherwise) to the
borrower from the business loan and in-
vestment fund, the business guaranty loan
financing account, and the business direct
loan financing account would thereby ex-
ceed $750,000.
‘‘(ii) EXCEPTION.—A loan may not be
made to a borrower under this paragraph
if the total amount outstanding and com-
mitted (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 there-
by exceed $1,000,000.
‘‘(E) ADMINISTRATION
PARTICIPATION.—
Notwithstanding paragraph (2)(A), in an agree-
ment to participate in a loan under this para-
graph, participation by the Administration shall
not exceed—
‘‘(i) 85 percent of the balance of the
financing outstanding at the time of dis-
bursement of the loan, if the balance ex-
ceeds $100,000;
‘‘(ii) 90 percent of the balance of the
financing outstanding at the time of dis-
bursement 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 re-
quirements 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 guaran-
teed under this paragraph to mitigate the risk
of fraud and ensure the safety and soundness
of the loan program.
‘‘(G) ANNUAL REPORT.—The Administra-
tion 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 dur-
ing the preceding 12-month period, which shall
include information relating to—
‘‘(i) the total number of loans guaran-
teed under this paragraph;
‘‘(ii) with respect to each loan guaran-
teed 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 tech-
nology and other automated systems
or to remedy an economic injury; and
‘‘(iii) the total number of eligible lend-
ers 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 es-
tablishment of terms and conditions of loans
originated under the loan program so that such
loans may be structured in a manner that en-
hances 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 begin-
ning on the date of the origination of the loan;
(C) provide that any reasonable doubts re-
garding 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 pursu-
ant 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 par-
ticipate in such other loan program; and
(ii) the terms of the loan, including
the principal amount of the loan, are con-
sistent with the requirements applicable to
loans originated under such other loan pro-
gram.
(c) REPEAL.—Effective on December 31, 2000, this
section and the amendments made by this section are re-
pealed.
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