Small Business Year 2000 Readiness Act
PL 106-8 (S.314), enacted 04/02/1999

PUBLIC LAW 106-8—APR. 2, 1999 
113 STAT. 13 
Public Law 106-^ 
106th Congress 
An Act 
To provide for a loan guarantee program to address the Year 2000 computer problems 
Apr. 2, 1999 
of smaU business concerns, and for other purposes. 
[g 314] 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
Small Business 
Year 2000 
SECTION 1. SHORT TITLE. 
Readiness Act. 
This Act may be cited as the "Small Business Year 2000 Readi-
ness Act". 
SEC. 2. FINDINGS. 
15 USC 636 note. 
Congress finds that— 
(1) the failure of many computer pro-ams to recognize 
the Year 2000 may have extreme negative financial con-
sequences 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 det-
rimental effect on the economy in the Year 2000 and in subse-
quent 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 follow-
ing: 
"(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 partici-
pate in the general business loan program under this 
subsection; and 
"(ii) the term Tear 2000 computer problem' means, 
with respect to information technology, and embedded 
systems, any problem that adversely effects 
the 
processing (including calculating, comparing, sequenc-
ing, displaying, or storing), transmitting, or receiving 
of date-dependent data— 
"(I) from, into, or between— 
"(aa) the 20th or 21st centuries; or 
113 STAT. 14 
PUBLIC LAW 106-8—APR. 2, 1999 
"(bb) the years 1999 and 2000; or 
"(11) with regard to leap year calculations. 
"(B) ESTABLISHMENT OF PROGRAM.—^The Administra-
tion 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 
Notification. 
"(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 OP 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 pur-
chase 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 con-
cern), if such economic injury has not been com-
pensated 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 para-
graph even if the total amount outstanding and 
committed (by participation or otherwise) to the bor-
rower 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 other-
wise) 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.—Notwithstand-
ing paragraph (2)(A), in an agreement to participate in 
a loan under this paragraph, participation by the Adminis-
tration 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 
PUBLIC LAW 106-8—APR. 2, 1999 
113 STAT. 15 
"(iii) notwithstanding clauses (i) and (ii), in any 
case in which the subject loan is processed in accord-
ance 
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 miti-
gate 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 para-
graph 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 auto-
mated systems or to remedy an economic injury; 
and 
"(iii) the total number of eligible lenders participat-
ing in the program.". 
(b) GUIDELINES.— 
is use 636 note. 
(1) IN GENERAL.—Not later than 30 days after the date 
of enactment of this Act, the Administrator of the Small Busi-
ness 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 loain pro-
gram for up to 1 year beginning on the date of the origina-
tion 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 accord-
ance with the requirements applicable to loans originated 
113 STAT. 16 
PUBLIC LAW 106-8—APR. 2, 1999 
under another loan program established pursuant to sec-
tion 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 require-
ments applicable to loans originated under such other 
loan program. 
15 use 636 and 
(c) REPEAL.—Effective on December 31, 2000, this section and 
note. 
the amendments made by this section are repealed. 
Approved April 2, 1999. 
LEGISLATIVE fflSTORY—S. 314: 
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.