[Congressional Record Volume 145, Number 28 (Tuesday, February 23, 1999)]
[Extensions of Remarks]
[Page E243]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E243]]



     INTRODUCTION OF THE YEAR 2000 READINESS AND RESPONSIBILITY ACT

                                 ______
                                 

                          HON. THOMAS M. DAVIS

                              of virginia

                    in the house of representatives

                       Tuesday, February 23, 1999

  Mr. DAVIS of Virginia. Mr. Speaker, I rise today to announce the 
introduction of the Year 2000 Readiness and Responsibility Act, 
bipartisan legislation that is critical to our Nation's readiness for 
the Year 2000 Millennium Bug and critical to the competitiveness of the 
U.S. economy.
  I, along with my distinguished colleagues, Congressman Moran from 
Virginia, Congressmen Dreier, Cox, and Dooley from California, and 
Congressman Cramer from Alabama, have crafted a bipartisan bill 
critical to ensuring that precious resources are used to fix the Year 
2000 (Y2K) problem and thus will protect Americans and our economy for 
the new millennium. As all of us have learned in the past few years, 
the Year 2000 computer problem is a result of a decision made in the 
1960s by computer programmers to design software that recognized only 
the last two digits rather than the full four digits of dates in order 
to conserve precious computer memory. When the clock turns from 
December 31, 1999 to January 1, 2000, some computers will interpret 
``00'' to mean that the date is 1900 rather than 2000. With dates being 
critical to almost every layer of our economy and across vast numbers 
of industries, systems that are noncompliant will disrupt the free flow 
of information that forms the underpinnings of our Nation's economy.
  These are indeed unique circumstances that require Congress to tackle 
the obstacles that are currently discouraging businesses from 
addressing the Y2K problem and ultimately harming consumers. At the 
outset, the Year 2000 Readiness and Responsibility Act will continue 
the efforts which we initiated with the Administration in the 105th 
Congress through the passage of the Year 2000 Information and Readiness 
Disclosure Act that furnished the first steps toward facilitating Year 
2K remediation and testing.
  The Year 2000 Readiness and Responsibility Act has 2 main objectives. 
The first is to implement a reform framework designed to encourage a 
fair, fast and predictable mechanism for both plaintiffs and defendants 
for resolving Y2K disputes, such that litigation will become the avenue 
of last resort rather than the first option for settling disputes. 
While it is estimated that American businesses have poured hundreds of 
billions of dollars into making the transition to the Year 2000, the 
simple reality is that some problems will go unresolved because of a 
fear of litigation. A basic premise of the bill is that contracts 
between suppliers and users will be fully enforceable in a court of 
law. All economic losses suffered by an individual or business as a 
result of a Year 2000 failure, provided that their duty to mitigate 
damages was fulfilled, will be compensable. Claims brought by 
individuals or businesses based on personal injury are outside the 
scope of this legislation.
  Further, the Act creates a prefiling notification period intended to 
encourage potential plaintiffs and defendants to work together to reach 
a solution before they reach the courtroom. The prefiling notification 
period requires potential plaintiffs to give written notice identifying 
their Y2K concerns and provide potential defendants with an opportunity 
to fix the Y2K problem outside of the courtroom. After receipt of this 
notice, the potential defendant would have 30 days to respond to the 
plaintiff, stating what actions will be taken to fix the problem. At 
that point, the potential defendant has 60 days to remedy the problem. 
If the defendant fails to take responsibility for the failure at the 
end of the 30-day period, the potential plaintiff can file a Year 2000 
action immediately. If the injured party is not satisfied once the 60 
days have passed, he or she still retains the right to file a lawsuit. 
There are also provisions encouraging alternative dispute resolution. 
As a result, we expect that there will be more attention given to Y2K 
remediation and an elimination of many Y2K lawsuits.

  Also included are provisions that apply a proportionate liability 
standard to damages caused by multiple actors, some of whom may not 
necessarily be parties to a Year 2000 action. A defendant found to be 
only 5 percent liable in causing a Year 2000 problem would only be 
responsible for 5 percent of the damages, not 100 percent liable.
  We also fulfill our first objective by minimizing the opportunities 
for those who would exploit the unknown value of potential Y2K failures 
and pursue litigation as a first resort rather than permit the parties 
to resolve problems. This bill contains provisions that will make sure 
that businesses are confident that they can spend their dollars fixing 
the Y2K problem rather than reserving those dollars for costly lawsuits 
that will increase costs for consumers, push small innovative 
businesses into extinction, and endanger and in some instances 
eliminate many American jobs. The bill grants original jurisdiction to 
Federal district courts for any Year 2000 class action where certain 
diversity requirements are met. Punitive damages in a Year 2000 action 
are capped at $250,000 or 3 times the amount of actual damages, 
whichever is greater. For businesses with fewer than 25 employees, 
including state and local government units, or individuals whose net 
worth is no greater than $500,000, punitive damages are capped at the 
lesser of $250,000 or 3 times the amount of actual damages. Attorney's 
fees are also capped at $1,000 per hour and detailed attorney 
disclosure requirements are included to ensure that clients are kept 
informed of the progress and expense of their cases.
  Our second principle objective is to provide assistance to small 
businesses and their employees by allowing them to access up to $50,000 
under the Small Business Administration 7(A) Loan Guaranty Program for 
Y2K repair and testing expenses. For the many small companies that want 
to ensure their Y2K readiness but simply lack the financial resources 
to undertake remediation, the Year 2000 Readiness and Responsibility 
Act will give them access to necessary funding. It will also give small 
businesses limited regulatory relief if they fail to comply with 
federal regulations as a result of a Y2K, so long as the businesses 
noncompliance was not done in bad faith.
  Since 1996, there have been over 50 bipartisan hearings in the 
Congress examining a wide-ranging array of issues that are directly 
related to the Y2K challenge that is facing our global economy. We have 
listened to consumers and to industry. And what we have consistently 
heard is that small and large businesses are eager to solve the Y2K 
problem. Yet many are not doing so, primarily because of the fear of 
liability and lawsuits. The potential for excessive litigation and the 
negative impact on targeted industries are already diverting precious 
resources that could otherwise be used to help fix the Y2K problem. The 
Year 2000 Readiness and Responsibility Act aims to eliminate those 
fears and hasten the repair of Y2K problems while we still have time to 
resolve them.
  For this reason, I look forward to working with my colleagues on both 
sides of the aisle as well as with the Administration to achieve 
passage of this legislation. I hope that all of my colleagues will join 
us in cosponsoring this critical measure.

                          ____________________