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Date: Wed, 24 Mar 1999
To: year2000@efn.org
From: Bill Dale
Subject: Small Business Y2K Readiness Act - Press release
[The House Small Business Committee] http://www.house.gov/smbiz/press/106th/1999/990323.htm
( http://www.senate.gov - search on S. 314 )
March 23, 1999
CONGRESS PASSES FINAL HURDLE TO MAKE Y2K BILL LAW
Hearing to Review Y2K Relief Bill for Small Business
WASHINGTON, DC - Today, the House completed the final hurdle to make S. 314 the "Small Business Year 2000 Readiness Act," (S.314) law. The bill, which was introduced by Senator Kit Bond (R-Mo.) and passed unanimously by the Senate on March 2, establishes a short-term loan program to help small businesses cover the cost of Y2K problems. The bill now goes to the President, where it is expected to be signed into law.
"American businesses are likely to spend at least $50 billion fixing Y2K computer glitches," said House Small Business Committee Chairman Jim Talent (R-Mo.). "With only 41% of the small businesses surveyed by the National Federation of Independent Business taking action or planning to take action to address their potential Y2K problems, something must be done to make becoming Y2K compliant more affordable. The Small Business Y2K Readiness Act does just that; it will make a difference," added Talent.
The Small Business Y2K Readiness Act amends the Small Business Act to authorize the Small Business Administration (SBA) to establish a limited-term loan program for small businesses to correct Y2K computer problems. The loans will be provided by more than 6,000 private financial institutions and guaranteed by the SBA. A small business may use the loans to correct its own Y2K problems (e.g., purchase or repair software and hardware or hire a consultant), and recover from economic injuries resulting from its own Y2K computer problems or those of another entity.
The bill allows the SBA to guarantee loans of up to $1 million under the Y2K program. In addition, the measure allows borrowers who have outstanding SBA loans to participate in the Y2K program, even if the new loan will exceed the SBA's guarantee limit.
The measure requires the SBA to establish guidelines for the Y2K loan program no later than 30 days after enactment. The guidelines must permit lenders to process Y2K loans according to the requirements of any existing SBA loan programs in which they are participating, as well as provide maximum flexibility when structuring loans in order to enhance the borrowers' ability to repay the debt. Because the precise costs of making Y2K corrections are largely unknown, the bill requires the SBA to structure the loans in a manner that gives small businesses access to loans that meet their current and projected cash flows.
CBO estimates that enactment will result in additional discretionary outlays of $20 million over FYs 2000-2001; however, the actual cost to the government may be substantially higher or lower depending on the severity of economic injury associated with Y2K computer problems. The bill was introduced by Senator Kit Bond (R-Mo.) and passed the Senate by a vote of 99-0 on March 2, 1999.