[Congressional Record (Bound Edition), Volume 145 (1999), Part 6]
[Senate]
[Pages 7685-7708]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______
                                 

                                Y2K ACT

                                 ______
                                 

                        LEAHY AMENDMENT NO. 273

  Mr. LEAHY submitted an amendment intended to be proposed by him to 
the bill (S.96) to regulate commerce between and among the several 
States by providing for the orderly resolution of disputes arising out 
of computer-based problems related to processing data that includes a 
2-digit expression of that year's date; as follows:

       At the appropriate place, insert the following:

     SEC.   . EXCLUSION FOR CONSUMERS.

       (a) Consumer Actions.--This does not apply to any Y2K 
     action brought by a consumer.
       (b) Definitions.--In this section:
       (1) Consumer.--The term ``consumer'' means an individual 
     who acquires a consumer product for purposes other than 
     resale.
       (2) Consumer product.--The ``consumer product'' means any 
     personal property or service which is normally used for 
     personal, family, or household purposes.
                                 ______
                                 

                        INHOFE AMENDMENT NO. 274

  (Ordered to lie on the table.)
  Mr. INHOFE submitted an amendment intended to be proposed by him to 
the bill, S. 96, supra; as follows:

       On page 11, between lines 10 and 11, insert the following:
       (f) Application to Actions Described in Section 3(1)(C).--
       (1) In general.--This Act applies, as provided in this 
     subsection to actions by a government entity described in 
     section 3(1)(C).
       (2) Definitions.--In this subsection:
       (A) Defendant.--
       (i) In general.--The term ``defendant'' includes a State or 
     local government.
       (ii) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, and the Commonwealth of the Northern Mariana 
     Islands.
       (iii) Local government.--The term ``local government'' 
     means--
       (I) any county, city, town, township, parish, village, or 
     other general purpose political subdivision of a State; and
       (II) any combination of political subdivisions described in 
     clause (i) recognized by the Secretary of Housing and Urban 
     Development.
       (B) Y2K upset.--The term ``Y2K upset''--
       (i) means an exceptional incident involving temporary 
     noncompliance with applicable federally enforceable 
     requirements because of factors related to a Y2K failure that 
     are beyond the reasonable control of the defendant charged 
     with compliance; and
       (ii) does not include--
       (I) noncompliance with applicable federally enforceable 
     requirements that constitutes or would create an imminent 
     threat to public health, safety, or the environment;
       (II) noncompliance with applicable federally enforceable 
     requirements that provide for the safety and soundness of the 
     banking or monetary system, including the protection of 
     depositors;
       (III) noncompliance to the extent caused by operational 
     error or negligence;
       (IV) lack of reasonable preventative maintenance; or
       (V) lack of preparedness for Y2K.
       (3) Conditions necessary for a demonstration of a y2k 
     upset.--A defendant who wishes to establish the affirmative 
     defense of Y2K upset shall demonstrate, through properly 
     signed, contemporaneous operating logs, or other relevant 
     evidence that--
       (A) the defendant previously made a good faith effort to 
     effectively remediate Y2K problems;
       (B) a Y2K upset occurred as a result of a Y2K system 
     failure or other Y2K emergency;
       (C) noncompliance with the applicable federally enforceable 
     requirement was unavoidable in the face of a Y2K emergency or 
     was intended to prevent the disruption of critical functions 
     or services that could result in the harm of life or 
     property;
       (D) upon identification of noncompliance the defendant 
     invoking the defense began immediate actions to remediate any 
     violation of federally enforceable requirements; and
       (E) the defendant submitted notice to the appropriate 
     Federal regulatory authority of a Y2K upset within 72 hours 
     from the time that it became aware of the upset.
       (4) Grant of a y2k upset defense.--Subject to the other 
     provisions of this section, the Y2K upset defense shall be a 
     complete defense to any action brought as a result of 
     noncompliance with federally enforceable requirements for any 
     defendant who establishes by a preponderance of the evidence 
     that the conditions set forth in paragraph (3) are met.
       (5) Length of y2k upset.--The maximum allowable length of 
     the Y2K upset shall be not more than 30 days beginning on the 
     date of the upset unless granted specific relief by the 
     appropriate regulatory authority.
       (6) Violation of a y2k upset.--Fraudulent use of the Y2K 
     upset defense provided for in this subsection shall be 
     subject to penalties provided in section 1001 of title 18, 
     United States Code.
       (7) Expiration of defense.--The Y2K upset defense may not 
     be asserted for a Y2K upset occurring after June 30, 2000.
                                 ______
                                 

                    HOLLINGS AMENDMENTS NOS. 275-281

  (Ordered to lie on the table.)
  Mr. HOLLINGS submitted seven amendments intended to be proposed by 
him to the bill, S. 96, supra; as follows:

                           Amendment No. 275

       Strike section 16.
                                  ____


                           Amendment No. 276

       Strike section 15.
                                  ____


                           Amendment No. 277

       Strike section 14.
                                  ____


                           Amendment No. 278

       Strike section 13.
                                  ____


                           Amendment No. 279

       Strike section 6.
                                  ____


                           Amendment No. 280

       Strike section 5.
                                  ____


                           Amendment No. 281

       On page six, strike line 19 through Page 10, line 7 and 
     insert the following:

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action''--
       (A) means a civil action alleging commercial loss commenced 
     in any Federal or State court, or an agency board of contract 
     appeal proceeding, in which the plaintiff's alleged harm or 
     injury resulted directly or indirectly from an actual or 
     potential Y2K failure, or a claim or defense is related 
     directly or indirectly to an actual or potential Y2K failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a governmental entity when acting in a 
     commercial or contracting capacity; but
       (C) does not include an action brought by a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive year-2000 date-related data, 
     including failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately to process any specific date 
     in 1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.

[[Page 7686]]

       (3) Government entity.--The term ``government entity'' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).
       (4) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     according to its specifications. The term ``material defect'' 
     does not include a defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only a component of an item or program that, as 
     a whole, substantially operates or functions as designed; or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (5) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including--
       (A) death as a result of a physical injury; and
       (B) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (7) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (8) Alternative dispute resolution.--The term ``alternative 
     dispute resolution'' means any process or proceeding, other 
     than adjudication by a court or in an administrative 
     proceeding, to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.
       (9) Commercial loss.--The term ``commercial loss'' means 
     any loss incurred by a plaintiff in the course of operating a 
     business enterprise that provides goods or services for 
     compensation.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a state of Federal court after February 22, 1999, 
     in which the plaintiff alleges harm from commercial loss 
     arising from a Y2K failure occurring before January 1, 2003, 
     including any appeal, reward, stay, or other judicial, 
     administrative, or alternative dispute resolution preceding 
     in such an action.
                                 ______
                                 

                      TORRICELLI AMENDMENT NO. 282

  (Ordered to lie on the table.)
  Mr. TORRICELLI submitted an amendment intended to be proposed by him 
to the bill, S. 96, supra; as follows:

       Strike section 9.
       At the appropriate place, insert the following:

     SEC. __. ANTIPROFITEERING.

       (a) Definitions.--In this section:
       (1) Product seller.--The term ``product seller'' means a 
     person who in the course of a business conducted for that 
     purpose, sells an information technology product.
       (2) Year 2000 compliant.--The term ``year 2000 compliant'' 
     means, with respect to information technology, that the 
     information technology accurately processes (including 
     calculating, comparing, and sequencing) date and time data 
     from, into, and between the 20th and 21st centuries and the 
     years 1999 and 2000, and leap year calculations, to the 
     extent that other information technology properly exchanges 
     date and time data with it.
       (b) Correction.--Notwithstanding any other provision of 
     law, during the 60-day period beginning on the date on which 
     a plaintiff or prospective plaintiff provides notice under 
     section 7, if--
       (1) the plaintiff or prospective plaintiff is a business 
     and alleges harm caused by an information technology product 
     that is not year 2000 compliant; and
       (2) a product seller that is a defendant or prospective 
     defendant sold the plaintiff that information technology 
     product;

     that product seller shall be required to render that 
     information technology product year 2000 compliant (if a 
     practicable method of doing so is available) and provide the 
     applicable certification under subsection (c).
       (c) Certification.--A product seller that is required under 
     subsection (b) to provide certification under this subsection 
     shall certify, as applicable, that--
       (1) the product seller is not obligated, under a contract, 
     written agreement, or applicable State law, to render the 
     information technology product described in subsection (b) 
     year 2000 compliant;
       (2) a practicable method of rendering the information 
     technology product described in subsection (b) year 2000 
     compliant is not available; or
       (3)(A) the correction to render the information technology 
     product described in subsection (b) year 2000 compliant is 
     provided at actual cost to the seller; and
       (B) the correction is being provided at the least costly 
     and most practicable manner available.
       (d) Penalties.--Notwithstanding any other provision of this 
     Act, if a product seller provides false information in a 
     certification under subsection (c), in a year 2000 civil 
     action for harm caused by the information technology 
     product--
       (1) the plaintiff shall have the burden of proof in 
     demonstrating, by a preponderance of the evidence, that the 
     product seller made a false certification under subsection 
     (c); and
       (2) if the plaintiff proves under paragraph (1) that such a 
     false certification was made, the product seller shall be 
     liable for 3 times the amount of actual and consequential 
     damages suffered by the business as a result of the year 2000 
     failure involved.
       (e) Effect on Written Agreements and Contract 
     Obligations.--Nothing in this section may supersede, alter, 
     or abrogate a written agreement or contractual obligation 
     entered into by a product seller and a party harmed by an 
     information technology product that is not year 2000 
     compliant.
                                 ______
                                 

                    FEINGOLD AMENDMENTS NOS. 283-286

  (Ordered to lie on the table.)
       Mr. FEINGOLD submitted four amendments intended to be 
     proposed by him to the bill, S. 96, supra; as follows:

                           Amendment No. 283

       In section 14, strike subsection (c).
                                  ____


                           Amendment No. 284

       In section 5(a), strike ``In any Y2K action in which 
     punitive damages are permitted by applicable State law,'' and 
     inserting ``Punitive damages may be awarded in a Y2K action 
     and''.
                                  ____


                           Amendment No. 285

       In section 6, strike subsection (g).
                                  ____


                           Amendment No. 286

       Strike sections 5 through 14 and insert in lieu thereof the 
     following:

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--Punitive damages may be awarded in a Y2K 
     action and the defendant shall not be liable for punitive 
     damages unless the plaintiff proves by clear and convincing 
     evidence that the applicable standard for awarding damages 
     has been met.
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant in such a Y2K action 
     may not exceed the larger of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees.

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (3) No cap if injury specifically intended.--Neither 
     paragraph (1) nor paragraph (2) applies if the plaintiff 
     establishes by clear and convincing evidence that the 
     defendant acted with specific intent to injure the plaintiff.
       (c) Government Entities.--Punitive damages in a Y2K action 
     may not be awarded against a government entity.

     SEC. 6. PROPORTIONATE LIABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person against whom a final judgment is entered in a 
     Y2K action shall be liable solely for the portion of the 
     judgment that corresponds to the relative and proportional 
     responsibility of that person. In determining the percentage 
     of responsibility of any defendant, the trier of fact shall 
     determine that percentage as a percentage of the total fault 
     of all persons, including the plaintiff, who caused or 
     contributed to the total loss incurred by the plaintiff.
       (b) Proportionate Liability.--
       (1) Determination of responsibility.--In any Y2K action, 
     the court shall instruct the jury to answer special 
     interrogatories, or, if there is no jury, the court shall 
     make findings with respect to each defendant, including 
     defendants who have entered into settlements with the 
     plaintiff or plaintiffs, concerning--
       (A) the percentage of responsibility, if any, of each 
     defendant, measured as a percentage of the total fault of all 
     persons who caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) if alleged by the plaintiff, whether the defendant--
       (i) acted with specific intent to injure the plaintiff; or
       (ii) knowingly committed fraud.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories or findings under paragraph (1) 
     shall specify the total amount of damages that the plaintiff 
     is entitled to recover and the percentage of responsibility 
     of each defendant

[[Page 7687]]

     found to have caused or contributed to the loss incurred by 
     the plaintiff.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person found to have 
     caused or contributed to the loss incurred by the plaintiff; 
     and
       (B) the nature and extent of the causal relationship 
     between the conduct of each such person and the damages 
     incurred by the plaintiff.
       (c) Joint Liability for Specific Intent or Fraud.--
       (1) In general.--Notwithstanding subsection (a), the 
     liability of a defendant in a Y2K action is joint and several 
     if the trier of fact specifically determines that the 
     defendant--
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Fraud; recklessness.--
       (A) Knowing commission of fraud described.--For purposes of 
     subsection (b)(1)(B)(ii) and paragraph (1)(B) of this 
     subsection, a defendant knowingly committed fraud if the 
     defendant--
       (i) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (ii) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (iii) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (B) Recklessness.--For purposes of subsection (b)(1)(B) and 
     paragraph (1) of this subsection, reckless conduct by the 
     defendant does not constitute either a specific intent to 
     injure, or the knowing commission of fraud, by the defendant.
       (3) Right to contribution not affected.--Nothing in this 
     section affects the right, under any other law, of a 
     defendant to contribution with respect to another defendant 
     found under subsection (b)(1)(B), or determined under 
     paragraph (1)(B) of this subsection, to have acted with 
     specific intent to injure the plaintiff or to have knowingly 
     committed fraud.
       (d) Special Rules.--
       (1) Uncollectible share.--
       (A) In general.--Notwithstanding subsection (a), if, upon 
     motion made not later than 6 months after a final judgment is 
     entered in any Y2K action, the court determines that all or 
     part of the share of the judgment against a defendant for 
     compensatory damages is not collectible against that 
     defendant, then each other defendant in the action is liable 
     for the uncollectible share as follows:
       (i) Percentage of new worth.--The other defendants are 
     jointly and severally liable for the uncollectible share if 
     the plaintiff establishes that--
       (I) the plaintiff is an individual whose recoverable 
     damages under the final judgment are equal to more than 10 
     percent of the net worth of the plaintiff; and
       (II) the net worth of the plaintiff is less than $200,000.
       (ii) Other plaintiffs.--For a plaintiff not described in 
     clause (i), each of the other defendants is liable for the 
     uncollectible share in proportion to the percentage of 
     responsibility of that defendant, except that the total 
     liability of a defendant under this clause may not exceed 50 
     percent of the proportionate share of that defendant, as 
     determined under subsection (b)(2).
       (B) Overall limit.--The total payments required under 
     subparagraph (A) from all defendants may not exceed the 
     amount of the uncollectible share.
       (C) Subject to contribution.--A defendant against whom 
     judgment is not collectible is subject to contribution and to 
     any continuing liability to the plaintiff on the judgment.
       (2) Special right of contribution.--To the extent that a 
     defendant is required to make an additional payment under 
     paragraph (1), that defendant may recover contribution--
       (A) from the defendant originally liable to make the 
     payment;
       (B) from any other defendant that is jointly and severally 
     liable;
       (C) from any other defendant held proportionately liable 
     who is liable to make the same payment and has paid less than 
     that other defendant's proportionate share of that payment; 
     or
       (D) from any other person responsible for the conduct 
     giving rise to the payment that would have been liable to 
     make the same payment.
       (3) Nondisclosure to jury.--The standard for allocation of 
     damages under subsection (a) and subsection (b)(1), and the 
     procedure for reallocation of uncollectible shares under 
     paragraph (1) of this subsection, shall not be disclosed to 
     members of the jury.
       (e) Settlemnt Discharge.--
       (1) In general.--A defendant who settles a Y2K action at 
     any time before final verdict or judgment shall be discharged 
     from all claims for contribution brought by other persons. 
     Upon entry of the settlement by the court, the court shall 
     enter a bar order constituting the final discharge of all 
     obligations to the plaintiff of the settling defendant 
     arising out of the action. The order shall bar future claims 
     for contribution arising out of the action--
       (A) by any person against the settling defendant; and
       (B) by the settling defendant against any person other than 
     a person whose liability has been extinguished by the 
     settlement of the settling defendant.
       (2) Reduction.--If a defendant enters into a settlement 
     with the plaintiff before the final verdict or judgment, the 
     verdict or judgment shall be reduced by the greater of--
       (A) an amount that corresponds to the percentage of 
     responsibility of that defendant; or
       (B) the amount paid to the plaintiff by that defendant.
       (f) General Right of Contribution.--
       (1) In general.--A defendant who is jointly and severally 
     liable for damages in any Y2K action may recover contribution 
     from any other person who, if joined in the original action, 
     would have been liable for the same damages. A claim for 
     contribution shall be determined based on the percentage of 
     responsibility of the claimant and of each person against 
     whom a claim for contribution is made.
       (2) Statute of limitations for contribuiton.--An action for 
     contribution in connection with a Y2K action shall be brought 
     not later than 6 months after the entry of a final, 
     nonappealable judgment in the Y2K action, except that an 
     action for contribution brought by a defendant who was 
     required to make an additional payment under subsection 
     (d)(1) may be brought not alter than 6 months after the date 
     on which such payment was made.

     SEC. 7. PRE-LITIGATION NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall send a written notice by 
     certified mail to each prospective defendant in that action. 
     The notice shall provide specific and detailed information 
     about--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or less allegedly suffered by the prospective 
     plaintiff;
       (3) how the prospective plaintiff would like the 
     prospective defendant to remedy the problem;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Person to Whom Notice To Be Sent.--The notice required 
     by subsection (a) shall be sent--
       (1) to the registered agent of the prospective defendant of 
     service of legal process;
       (2) if the prospective defendant does not have a registered 
     agent, then to the chief executive officer of a corporation, 
     the managing partner of a partnership, the proprietor of a 
     sole proprietorship, or to a similarly-situated person for 
     any other enterprise; or
       (3) if the prospective defendant has designated a person to 
     receive pre-litigation notices on a Year 2000 Internet 
     Website (as defined in section 3(7) of the Year 2000 
     Information and Readiness Disclosure Act), to the designated 
     person, if the prospective plaintiff has reasonable access to 
     the Internet.
       (c) Response to Notice.--
       (1) In general.--Within 30 days after receipt of the notice 
     specified in subsection (a), each prospective defendant shall 
     send by certified mail with return receipt requested to each 
     prospective plaintiff a written statement acknowledging 
     receipt of the notice, and describing the actions it has 
     taken or will take to address the problem identified by the 
     prospective plaintiff.
       (2) Willingness to engage in ADR.--The written statement 
     shall state whether the prospective defendant is willing to 
     engage in alternative dispute resolution.
       (3) Inadmissability.--A written statement required by this 
     paragraph is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.
       (4) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (d) Failure To Respond.--If a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c)(1); or
       (2) does not describe the action, if any, the prospective 
     defendant has taken, or will take, to address the problem 
     identified by the prospective plaintiff,

     the prospective plaintiff may immediately commence a legal 
     action against that prospective defendant.
       (e) Remediation Period.--
       (1) In general.--If the prospective defendant responds and 
     proposes remedial action it will take, or offers to engage in 
     alternative dispute resolution, then the prospective 
     plaintiff shall allow the prospective defendant an additional 
     60 days from the end of the 30-day notice period to complete 
     the proposed remedial action before commencing a

[[Page 7688]]

     legal action against that prospective defendant.
       (2) Extension by agreement.--The prospective plaintiff and 
     prospective defendant may change the length of the 60-day 
     remediation period by written agreement.
       (3) Multiple extensions not allowed.--Except as provided in 
     paragraph (2), a defendant in a Y2K action is entitled to no 
     more than one 30-day period and one 60-day remediation period 
     under paragraph (1).
       (4) Statutes of limitation, etc., tolled.--Any applicable 
     statute of limitations or doctrine of laches in a Y2K action 
     to which paragraph (1) applies shall be tolled during the 
     notice and remediation period under that paragraph.
       (f) Failure To Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice specified in subsection (a) or without awaiting the 
     expiration of the appropriate waiting period specified in 
     subsection (c), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff. If any defendant elects to treat the complaint as 
     such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for the appropriate period after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during the appropriate period.
       (g) Effect of Contractual or Statutory Waiting Periods.--In 
     cases in which a contact, or a statute enacted before January 
     1, 1999, requires notice of nonperformance and provides for a 
     period of delay prior to the initiation of suit for breach or 
     repudiation of contract, the period of delay provided by 
     contract or the statute is controlling over the waiting 
     period specified in subsections (c) and (d).
       (h) State Law Controls Alternative Methods.--Nothing in 
     this section supersedes or otherwise preempts any State law 
     or rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.
       (i) Provisional Remedies Unaffected.--Nothing in this 
     section interferes with the right of a litigant to 
     provisional remedies otherwise available under Rule 65 of the 
     Federal Rules of Civil Procedure or any State rule of civil 
     procedure providing extraordinary or provisional remedies in 
     any civil action in which the underlying complaint seeks both 
     injunctive and monetary relief.
       (j) Special Rule for Class Actions.--For the purpose of 
     applying this section to a Y2K action that is maintained as a 
     class action in Federal or State court, the requirements of 
     the preceding subsections of this section apply only to named 
     plaintiffs in the class action.

     SEC. 8. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to Y2K actions and, except to the 
     extent that this section requires additional information to 
     be contained in or attached to pleadings, nothing in this 
     section is intended to amend or otherwise supersede 
     applicable rules of Federal or State civil procedure.
       (b) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, there shall be filed with the 
     complaint a statement of specific information as to the 
     nature and amount of each element of damages and the factual 
     basis for the damages calculation.
       (c) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that there is a material defect in a 
     product or service, there shall be filed with the complaint a 
     statement of specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (d) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, there shall be filed with the complaint, with respect 
     to each element of that claim, a statement of the facts 
     giving rise to a strong inference that the defendant acted 
     with the required state of mind.

     SEC. 9. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably should have been, 
     aware, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the Y2K failure.

     SEC. 10. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       In any Y2K action for breach or repudiation of contract, 
     the applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by the law in 
     existence on January 1, 1999. Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon such doctrines.

     SEC. 11. DAMAGES LIMITATION BY CONTRACT.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, any category of damages 
     unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was effective or by 
     operation of Federal law.

     SEC. 12. DAMAGES IN TORT CLAIMS.

       (a) In General.--A party to a Y2K action making a tort 
     claim may not recover damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party; or
       (2) such losses result directly from damage to tangible 
     personal or real property caused by the Y2K failure (other 
     than damage to property that is the subject of the contract 
     between the parties to the Y2K action or, in the event there 
     is no contract between the parties, other than damage caused 
     only to the property that experienced the Y2K failure),

     and such damages are permitted under applicable Federal or 
     State law.
       (b) Economic Loss.--For purposes of this section only, and 
     except as otherwise specifically provided in a valid and 
     enforceable written contract between the plaintiff and the 
     defendant in a Y2K action, the term ``economic loss''--
       (1) means amounts awarded to compensate an injured party 
     for any loss other than losses described in subsection 
     (a)(2); and
       (2) includes amounts awarded for damages such as--
       (A) lost profits or sales;
       (B) business interruption;
       (C) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (D) losses that arise because of the claims of third 
     parties;
       (E) losses that must be plead as special damages; and
       (F) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (c) Certain Actions Excluded.--This section does not 
     affect, abrogate, amended, or alter any patent, copyright, 
     trade-secret, trademark, or service-mark action, or any claim 
     for defamation or invasion of privacy under Federal or State 
     law.
       (d) Certain Other Actions.--A person liable for damages, 
     whether by settlement or judgment, in a civil action to which 
     this Act does not apply because of section 4(c) whose 
     liability, in whole or in part, is the result of a Y2K 
     failure may, notwithstanding any other provision of this Act, 
     pursue any remedy otherwise available under Federal or State 
     law against the person responsible for that Y2K failure to 
     the extent of recovering the amount of those damages.

     SEC. 13. STATE OF MIND; BYSTANDER LIABILITY; CONTROL.

       (a) Defendant's State of Mind.--In a Y2K action other than 
     a claim for breach or repudiation of contract, and in which 
     the defendant's actual or constructive awareness of an actual 
     or potential Y2K failure is an element of the claim, the 
     defendant is not liable unless the plaintiff establishes that 
     element of the claim by clear and convincing evidence.
       (b) Limitation of Bystander Liability for Y2K Failures.--
     (1) In general.--With respect to any Y2K action for money 
     damages in which--
       (A) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the Y2K failure at issue;
       (B) the plaintiff is not in substantial privity with the 
     defendant; and
       (C) the defendant's actual or constructive awareness of an 
     actual or potential Y2K failure is an element of the claim 
     under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves, by clear and convincing evidence, that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (2) Substantial privity.--For purposes of paragraph (1)(B), 
     a plaintiff and a defendant are in substantial privity when, 
     in a Y2K action arising out of the performance of 
     professional services, the plaintiff and the defendant either 
     have contractual relations with one another or the plaintiff 
     is a person who, prior to the defendant's performance of such 
     services, was specifically identified to and acknowledged by 
     the defendant as a person for who special benefit the 
     services were being performed.
       (3) Certain claims excluded.--For purposes of paragraph 
     (1)(C), claims in which the defendant's actual or 
     constructive awareness of an actual or potential Y2K failure 
     is an element of the claim under applicable law do not 
     include claims for negligence but do include claims such as 
     fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.
       (c) Control Not Determination of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, systems, 
     product, or component that was sold, leased, rented, or 
     otherwise within the control of the party against whom a 
     claim is asserted in a Y2K action shall not constitute the 
     sole basis for recovery of damages in that action. A claim in 
     a Y2K action for breach or repudiation of contract for such a 
     failure is governed by the terms of the contract.

[[Page 7689]]



     SEC. 14. LIABILITY OF OFFICERS, DIRECTORS, AND EMPLOYEES.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership or non-profit 
     organization) is not personally liable in any Y2K action in 
     that person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee or employee from the business or 
     organization during that 12 months immediatley preceding the 
     act or omission for which liability is inmposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found by clear and convincing evidence 
     that the director, officer, trustee, or employee--
       (1) made statements intended to be misleading regarding any 
     actual or potential year 2000 problem; or
       (2) withheld from the public significant information there 
     was a legal duty to disclose regarding any actual or 
     potential year 2000 problem of that business or organization 
     which would likely result in actionable Y2K failure.
                                 ______
                                 

                         DODD AMENDMENT NO. 287

  (Ordered to lie on the table.)
  Mr. DODD submitted an amendment intended to be proposed by him to the 
bill, S. 96, supra; as follows:

       In section 5, strike subsection (b) and insert the 
     following:
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant described in 
     paragraph (2) in a Y2K action may not exceed the lesser of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Defendant described.--A defendant described in this 
     paragraph is a defendant--
       (A) who--
       (i) is sued in his or her capacity as a individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, or organization with fewer than 25 
     full-time employees.
       (3) No Cap If Injury Specifically Intended.--Paragraph (1) 
     does not apply if the plaintiff establishes by clear and 
     convincing evidence that the defendant acted with specific 
     intent to injure the plaintiff.
       In section 13--
       (1) in subsection (a), strike ``by clear and convincing 
     evidence'' and inserting ``by the standard of evidence under 
     applicable State law in effect before January 1, 1999'';
       (2) in subsection (b)(1), strike ``by clear and convincing 
     evidence'' and inserting ``by the standard of evidence under 
     applicable State law in effect before January 1, 1999''; and
       (3) at the end add the following:
       (d) Protections of the Year 2000 Information and Readiness 
     Disclosure Act Apply.--The protections for the exchange of 
     information provided by section 4 of the Year 2000 
     Information and Readiness Disclosure Act (Public Law 105-271) 
     shall apply to this Act.
       Strike section 14.
                                 ______
                                 

                      FEINSTEIN AMENDMENT NO. 288

  (Ordered to lie on the table.)
  Mrs. FEINSTEIN submitted an amendment intended to be proposed by her 
to the bill, S. 96, supra; as follows:

       Strike Section 5.
       Strike Section 13.
       Strike Section 14.
                                 ______
                                 

                   MURKOWSKI AMENDMENTS NOS. 289-290

  (Ordered to lie on the table.)
  Mr. MURKOWSKI submitted two amendments intended to be proposed by him 
to the bill, S. 96, supra; as follows:

                           Amendment No. 289

       At the end of section 5(b)(3), strike ``plaintiff.'' and 
     insert the following:

     ``plaintiff or that the defendant sold the product or service 
     that is the subject of the Y2K action after the date of 
     enactment of this Act knowing that the product or service 
     will have a Y2K failure, without a signed waiver from the 
     plaintiff.''
                                  ____


                           Amendment No. 290

       Section 7(c) of the bill is amended by adding at the end 
     the following:
       (5) Priority.--A prospective defendant receiving more than 
     1 notice under this section shall give priority to notices 
     with respect to a product or service that involves a health 
     or safety related Y2K failure.
                                 ______
                                 

                       KENNEDY AMENDMENT NO. 291

  Mr. KENNEDY proposed an amendment to the motion to recommit proposed 
by him to the bill, S. 96, supra; as follows:

       At the appropriate place, insert the following:

     SEC.   . FAIR MINIMUM WAGE.

       (a) Short Title.--This section may be cited as the ``Fair 
     Minimum Wage Act of 1999''.
       (b) Minimum Wage Increase.--
       (1) Wage.--Paragraph (1) of section 6(a) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to 
     read as follows:
       ``(1) except as otherwise provided in this section, not 
     less than--
       ``(A) $5.65 an hour during the year beginning on September 
     1, 1999; and
       ``(B) $6.15 an hour beginning on September 1, 2000;''.
       (2) Effective date.--The amendment made by paragraph (1) 
     takes effect on September 1, 1999.
       (c) Applicability of Minimum Wage to the Commonwealth of 
     the Northern Mariana Islands.--The provisions of section 6 of 
     the Fair Labor Standards Act of 1938 (29 U.S.C. 206) shall 
     apply to the Commonwealth of the Northern Mariana Islands.
                                 ______
                                 

                        McCAIN AMENDMENT NO. 292

  Mr. McCAIN proposed an amendment to the bill, S. 96, supra; as 
follows:

       In lieu of the instructions insert the following: ``with 
     instructions to report forthwith with the following 
     amendment:

     SECTION 1. SHORT TITLE; TABLE OF SECTIONS.

       (a) Short Title.--This Act may be cited as the ``Y2K Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.
Sec. 6. Proportionate liability.
Sec. 7. Pre-litigation notice.
Sec. 8. Pleading requirements.
Sec. 9. Duty to mitigate.
Sec. 10. Application of existing impossibility or commercial 
              impracticability doctrines.
Sec. 11. Damages limitation by contract.
Sec. 12. Damages in tort claims.
Sec. 13. State of mind; bystander liability; control.
Sec. 14. Liability of officers, directors, and employees.
Sec. 15. Appointment of special masters or magistrates for Y2K actions.
Sec. 16. Y2K actions as class actions.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that:
       (1)(A) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process dates after December 
     31, 1999.
       (B) If not corrected, the problem described in subparagraph 
     (A) and resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (2) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date-
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (3)(A) Because year 2000 computer date-change problems may 
     affect virtually all businesses and other users of technology 
     products to some degree, there is a substantial likelihood 
     that actual or potential year 2000 failures will prompt a 
     significant volume of litigation, much of it insubstantial.
       (B) The litigation described in subparagraph (A) would have 
     a range of undesirable effects, including the following:
       (i) It would threaten to waste technical and financial 
     resources that are better devoted to curing year 2000 
     computer date-change problems and ensuring that systems 
     remain or become operational.
       (ii) It could threaten the network of valued and trusted 
     business and customer relationships that are important to the 
     effective functioning of the national economy.
       (iii) It would strain the Nation's legal system, causing 
     particular problems for the small businesses and individuals 
     who already find that system inaccessible because of its 
     complexity and expense.
       (iv) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes could exacerbate the 
     difficulties associated with the date change and work against 
     the successful resolution of those difficulties.
       (4) It is appropriate for the Congress to enact legislation 
     to assure that Y2K problems do not unnecessarily disrupt 
     interstate commerce or create unnecessary caseloads in 
     Federal courts and to provide initiatives to help businesses 
     prepare and be in a position to withstand the potentially 
     devastating economic impact of Y2K.

[[Page 7690]]

       (5) Resorting to the legal system for resolution of Y2K 
     problems is not feasible for many businesses and individuals 
     who already find the legal system inaccessible, particularly 
     small businesses and individuals who already find the legal 
     system inaccessible, because of its complexity and expense.
       (6) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with Y2K date change, and work 
     against the successful resolution of those difficulties.
       (7) Concern about the potential for liability--in 
     particular, concern about the substantial litigation expense 
     associated with defending against even the most insubstantial 
     lawsuits--is prompting many persons and businesses with 
     technical expertise to avoid projects aimed at curing year 
     2000 computer date-change problems.
       (8) A proliferation of frivolous Y2K lawsuits by 
     opportunistic parties may further limit access to courts by 
     straining the resources of the legal system and depriving 
     deserving parties of their legitimate rights to relief.
       (9) Congress encourages businesses to approach their Y2K 
     disputes responsibly, and to avoid unnecessary, time-
     consuming and costly litigation about Y2K failures, 
     particularly those that are not material. Congress supports 
     good faith negotiations between parties when there is a 
     dispute over a Y2K problem, and, if necessary, urges the 
     parties to enter into voluntary, non-binding mediation rather 
     than litigation.
       (b) Purposes.--Based upon the power of the Congress under 
     Article I, Section 8, Clause 3 of the Constitution of the 
     United States, the purpose of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to solve Y2K computer date-change problems before 
     they develop;
       (2) to encourage continued Y2K remediation and testing 
     efforts by providers, suppliers, customers, and other 
     contracting partners;
       (3) to encourage private and public parties alike to 
     resolve Y2K disputes by alternative dispute mechanisms in 
     order to avoid costly and time-consuming litigation, to 
     initiate those mechanisms as early as possible, and to 
     encourage the prompt identification and correction of Y2K 
     problems; and
       (4) to lessen the burdens on interstate commerce by 
     discouraging insubstantial lawsuits while preserving the 
     ability of individuals and businesses that have suffered real 
     injury to obtain complete relief.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action''--
       (A) means a civil action commenced in any Federal or State 
     court, or an agency board of contract appeal proceeding, in 
     which the plaintiff's alleged harm or injury resulted 
     directly or indirectly from an actual or potential Y2K 
     failure, or a claim or defense is related directly or 
     indirectly to an actual or potential Y2K failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a governmental entity when acting in a 
     commercial or contracting capacity; but
       (C) does not include an action brought by a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive year-2000 date-related data, 
     including failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately to process any specific date 
     in 1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (3) Government entity.--The term ``government entity'' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).
       (4) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     according to its specifications. The term ``material defect'' 
     does not include a defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only a component of an item or program that, as 
     a whole, substantially operates or functions as designed; or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (5) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including--
       (A) death as a result of a physical injury; and
       (B) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (7) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (8) Alternative dispute resolution.--The term ``alternative 
     dispute resolution'' means any process or proceeding, other 
     than adjudication by a court or in an administrative 
     proceeding, to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a State or Federal court after February 22, 1999, 
     for a Y2K failure occurring before January 1, 2003, including 
     any appeal, remand, stay, or other judicial, administrative, 
     or alternative dispute resolution proceeding in such an 
     action.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action, and, except as otherwise 
     explicitly provided in this Act, nothing in this Act expands 
     any liability otherwise imposed or limits any defense 
     otherwise available under Federal or State law.
       (c) Claims for Personal Injury or Wrongful Death 
     Excluded.--This Act does not apply to a claim for personal 
     injury or for wrongful death.
       (d) Contract Preservation.--
       (1) In general.--Subject to paragraph (2), in any Y2K 
     action any written contractual term, including a limitation 
     or an exclusion of liability, or a disclaimer of warranty, 
     shall be strictly enforced unless the enforcement of that 
     term would manifestly and directly contravene applicable 
     State law embodied in any statute in effect on January 1, 
     1999, specifically addressing that term.
       (2) Interpretation of contract.--In any Y2K action in which 
     a contract to which paragraph (1) applies is silent as to a 
     particular issue, the interpretation of the contract as to 
     that issue shall be determined by applicable law in effect at 
     the time the contract was executed.
       (e) Preemption of State Law.--This Act supersedes State law 
     to the extent that it establishes a rule of law applicable to 
     a Y2K action that is inconsistent with State law, but nothing 
     in this Act implicates, alters, or diminishes the ability of 
     a State to defend itself against any claim on the basis of 
     sovereign immunity.

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--In any Y2K action in which punitive 
     damages are permitted by applicable law, the defendant shall 
     not be liable for punitive damages unless the plaintiff 
     proves by clear and convincing evidence that the applicable 
     standard for awarding damages has been met.
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant in such a Y2K action 
     may not exceed the larger of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees,

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (3) No cap if injury specifically intended.--Neither 
     paragraph (1) nor paragraph (2) applies if the plaintiff 
     establishes by clear and convincing evidence that the 
     defendant acted with specific intent to injure the plaintiff.
       (c) Government Entities.--Punitive damages in a Y2K action 
     may not be awarded against a government entity.

     SEC. 6. PROPORTIONATE LIABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person against whom a final judgment is entered in a 
     Y2K action shall be liable solely for the portion of the 
     judgment that corresponds to the relative and proportional 
     responsibility of that person. In determining the percentage 
     of responsibility of any defendant, the trier of fact shall 
     determine that percentage as a percentage of the total fault 
     of all persons, including the plaintiff, who caused or 
     contributed to the total loss incurred by the plaintiff.
       (b) Proportionate Liability.--
       (1) Determination of responsibility.--In any Y2K action, 
     the court shall instruct the jury to answer special 
     interrogatories, or, if there is no jury, the court shall 
     make findings with respect to each defendant, including 
     defendants who have entered into settlements with the 
     plaintiff or plaintiffs, concerning--

[[Page 7691]]

       (A) the percentage of responsibility, if any, of each 
     defendant, measured as a percentage of the total fault of all 
     persons who caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) if alleged by the plaintiff, whether the defendant--
       (i) acted with specific intent to injure the plaintiff; or
       (ii) knowingly committed fraud.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories or findings under paragraph (1) 
     shall specify the total amount of damages that the plaintiff 
     is entitled to recover and the percentage of responsibility 
     of each defendant found to have caused or contributed to the 
     loss incurred by the plaintiff.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person found to have 
     caused or contributed to the loss incurred by the plaintiff; 
     and
       (B) the nature and extent of the causal relationship 
     between the conduct of each defendant and the damages 
     incurred by the plaintiff.
       (c) Joint Liability for Specific Intent or Fraud.--
       (1) In general.--Notwithstanding subsection (a), the 
     liability of a defendant in a Y2K action is joint and several 
     if the trier of fact specifically determines that the 
     defendant--
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Fraud; Recklessness.--
       (A) Knowing commission of fraud described.--For purposes of 
     subsection (b)(1)(B)(ii) and paragraph (1)(B) of this 
     subsection, a defendant knowingly committed fraud if the 
     defendant--
       (i) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (ii) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (iii) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (B) Recklessness.--For purposes of subsection (b)(1)(B) and 
     paragraph (1) of this subsection, reckless conduct by the 
     defendant does not constitute either a specific intent to 
     injure, or the knowing commission of fraud, by the defendant.
       (3) Right to contribution not affected.--Nothing in this 
     section affects the right, under any other law, of a 
     defendant to contribution with respect to another defendant 
     found under subsection (b)(1)(B), or determined under 
     paragraph (1)(B) of this subsection, to have acted with 
     specific intent to injure the plaintiff or to have knowingly 
     committed fraud.
       (d) Special Rules.--
       (1) Uncollectible share.--
       (A) In general.--Notwithstanding subsection (a), if, upon 
     motion not later than 6 months after a final judgment is 
     entered in any Y2K action, the court determines that all or 
     part of the share of the judgment against a defendant for 
     compensatory damages is not collectible against that 
     defendant, then each other defendant in the action is liable 
     for the uncollectible share as follows:
       (i) Percentage of net worth.--The other defendants are 
     jointly and severally liable for the uncollectible share if 
     the plaintiff establishes that--
       (I) the plaintiff is an individual whose recoverable 
     damages under the final judgment are equal to more than 10 
     percent of the net worth of the plaintiff; and
       (II) the net worth of the plaintiff is less than $200,000.
       (ii) Other plaintiffs.--For a plaintiff not described in 
     clause (i), each of the other defendants is liable for the 
     uncollectible share in proportion to the percentage of 
     responsibility of that defendant, except that the total 
     liability of a defendant under this clause may not exceed 50 
     percent of the proportionate share of that defendant, as 
     determined under subsection (b)(2).
       (B) Overall limit.--The total payments required under 
     subparagraph (A) from all defendants may not exceed the 
     amount of the uncollectible share.
       (C) Subject to contribution.--A defendant against whom 
     judgment is not collectible is subject to contribution and to 
     any continuing liability to the plaintiff on the judgment.
       (2) Special right of contribution.--To the extent that a 
     defendant is required to make an additional payment under 
     paragraph (1), that defendant may recover contribution--
       (A) from the defendant originally liable to make the 
     payment;
       (B) from any other defendant that is jointly and severally 
     liable;
       (C) from any other defendant held proportionately liable 
     who is liable to make the same payment and has paid less than 
     that other defendant's proportionate share of that payment; 
     or
       (D) from any other person responsible for the conduct 
     giving rise to the payment that would have been liable to 
     make the same payment.
       (3) Nondisclosure to jury.--The standard for allocation of 
     damages under subsection (a) and subsection (b)(1), and the 
     procedure for reallocation of uncollectible shares under 
     paragraph (1) of this subsection, shall not be disclosed to 
     members of the jury.
       (e) Settlement Discharge.--
       (1) In general.--A defendant who settles a Y2K action at 
     any time before final verdict or judgment shall be discharged 
     from all claims for contribution brought by other persons. 
     Upon entry of the settlement by the court, the court shall 
     enter a bar order constituting the final discharge of all 
     obligations to the plaintiff of the settling defendant 
     arising out of the action. The order shall bar all future 
     claims for contribution arising out of the action--
       (A) by any person against the settling defendant; and
       (B) by the settling defendant against any person other than 
     a person whose liability has been extinguished by the 
     settlement of the settling defendant.
       (2) Reduction.--If a defendant enters into a settlement 
     with the plaintiff before the final verdict or judgment, the 
     verdict or judgment shall be reduced by the greater of--
       (A) an amount that corresponds to the percentage of 
     responsibility of that defendant; or
       (B) the amount paid to the plaintiff by that defendant.
       (f) General Right of Contribution.--
       (1) In general.--A defendant who is jointly and severally 
     liable for damages in any Y2K action may recover contribution 
     from any other person who, if joined in the original action, 
     would have been liable for the same damages. A claim for 
     contribution shall be determined based on the percentage of 
     responsibility of the claimant and of each person against 
     whom a claim for contribution is made.
       (2) Statute of limitations for contribution.--An action for 
     contribution in connection with a Y2K action shall be brought 
     not later than 6 months after the entry of a final, 
     nonappealable judgment in the Y2K action, except than an 
     action for contribution brought by a defendant who was 
     required to make an additional payment under subsection 
     (d)(1) may be brought not later than 6 months after the date 
     on which such payment was made.
       (g) More Protective State Law Not Preempted.--Nothing in 
     this section pre-empts or supersedes any provision of State 
     statutory law that--
       (1) limits the liability of a defendant in a Y2K action to 
     a lesser amount than the amount determined under this 
     section; or
       (2) otherwise affords a greater degree of protection from 
     joint or several liability than is afforded by this section.

     SEC. 7. PRE-LITIGATION NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall send a written notice by 
     certified mail to each prospective defendant in that action. 
     The notice shall provide specific and detailed information 
     about--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) how the prospective plaintiff would like the 
     prospective defendant to remedy the problem;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Person to Whom Notice To Be Sent.--The notice required 
     by subsection (a) shall be sent--
       (1) to the registered agent of the prospective defendant 
     for service of legal process;
       (2) if the prospective defendant does not have a registered 
     agent, then to the chief executive officer of a corporation, 
     the managing partner of a partnership, the proprietor of a 
     sole proprietorship, or to a similarly-situated person for 
     any other enterprise; or
       (3) if the prospective defendant has designated a person to 
     receive pre-litigation notices on a Year 2000 Internet 
     Website (as defined in section 3(7) of the Year 2000 
     Information and Readiness Disclosure Act), to the designated 
     person, if the prospective plaintiff has reasonable access to 
     the Internet.
       (c) Response to Notice.--
       (1) In general.--Within 30 days after receipt of the notice 
     specified in subsection (a), each prospective defendant shall 
     send by certified mail with return receipt requested to each 
     prospective plaintiff a written statement acknowledging 
     receipt of the notice, and describing the actions it has 
     taken or will take to address the problem identified by the 
     prospective plaintiff.
       (2) Willingness to engage in adr.--The Written statement 
     shall state whether the prospective defendant is willing to 
     engage in alternative dispute resolution.
       (3) Inadmissibility.--A written statement required by this 
     paragraph is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.

[[Page 7692]]

       (4) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (d) Failure to Respond.--If a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c)(1); or
       (2) does not describe the action, if any, the prospective 
     defendant has taken, or will take, to address the problem 
     identified by the prospective plaintiff,

     the prospective plaintiff may immediately commence at legal 
     action against that prospective defendant.
       (e) Remediation Period.--
       (1) In general.--If the prospective defendant responds and 
     proposes remedial action it will take, of offers to engage in 
     alternative dispute resolution, then the prospective 
     plaintiff shall allow the prospective defendant an additional 
     60 days from the end of the 30-day notice period to complete 
     the proposed remedial action before commencing a legal action 
     against that prospective defendant.
       (2) Extension by agreement.--The prospective plaintiff and 
     prospective defendant may change the length of the 60-day 
     remediation period by written agreement.
       (3) Multiple extensions not allowed.--Except as provided in 
     paragraph (2), a defendant in a Y2K action is entitled to no 
     more than one 30-day period and one 60-day remediation period 
     under paragraph (1).
       (4) Statutes of limitation, etc., tolled.--Any applicable 
     statute of limitations or doctrine of laches in a Y2K action 
     to which paragraph (1) applies shall be tolled during the 
     notice and remediation period under that paragraph.
       (f) Failure To Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice specified in subsection (a) or without awaiting the 
     expiration of the appropriate waiting period specified in 
     subsection (c), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff. If any defendant elects to treat the complaint as 
     such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for the appropriate period after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during the appropriate period.
       (g) Effect of Contractual or Statutory Waiting Periods.--In 
     cases in which a contract, or a statute enacted before 
     January 1, 1999, requires notice of non-performance and 
     provides for a period of delay prior to the initiation of 
     suit for breach or repudiation of contract, the period of 
     delay provided by contract or the statute is controlling over 
     the waiting period specified in subsections (c) and (d).
       (h) State Law Controls Alternative Methods.--Nothing in 
     this section supersedes or otherwise preempts any State law 
     or rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.
       (i) Provisional Remedies Unaffected.--Nothing in this 
     section interferes with the right of a litigant to 
     provisional remedies otherwise available under Rule 65 of the 
     Federal Rules of Civil Procedure or any State rule of civil 
     procedure providing extraordinary or provisional remedies in 
     any civil action in which the underlying complaint seeks both 
     injunctive and monetary relief.
       (j) Special Rule for Class Actions.--For the purpose of 
     applying this section to a Y2K action that is maintained as a 
     class action in Federal or State court, the requirements of 
     the preceding subsections of this section apply only to named 
     plaintiffs in the class action.

     SEC. 8. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to Y2K actions and, except to the 
     extent that this section requires additional information to 
     be contained in or attached to pleadings, nothing in this 
     section is intended to amend or otherwise supersede 
     applicable rules of Federal or State civil procedure.
       (b) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, there shall be filed with the 
     complaint a statement of specific information as to the 
     nature and amount of each element of damages and the factual 
     basis for the damages calculation.
       (c) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that there is a material defect in a 
     product or service, there shall be filed with the complaint a 
     statement of specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (d) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, there shall be filed with the complaint, with respect 
     to each element of that claim, a statement of the facts 
     giving rise to a strong inference that the defendant acted 
     with the required state of mind.

     SEC. 9. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably should have been, 
     aware, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the Y2K failure.

     SEC. 10. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       In any Y2K action for breach or repudiation of contract, 
     the applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by the law in 
     existence on January 1, 1999. Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon such doctrines.

     SEC. 11. DAMAGES LIMITATION BY CONTRACT.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, any category of damages 
     unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was effective or by 
     operation of Federal law.

     SEC. 12. DAMAGES IN TORT CLAIMS.

       (a) In General.--A party to a Y2K action making a tort 
     claim may not recover damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party; or
       (2) such losses result directly from damage to tangible 
     personal or real property caused by the Y2K failure (other 
     than damage to property that is the subject of the contract 
     between the parties to the Y2K action or, in the event there 
     is no contract between the parties, other than damage caused 
     only to the property that experienced the Y2K failure),

     and such damages are permitted under applicable State law.
       (b) Economic Loss.--For purposes of this section only, and 
     except as otherwise specifically provided in a valid and 
     enforceable written contract between the plaintiff and the 
     defendant in a Y2K action, the term ``economic loss''--
       (1) means amounts awarded to compensate an injured party 
     for any loss other than losses described in subsection 
     (a)(2); and
       (2) includes amounts awarded for damages such as--
       (A) lost profits or sales;
       (B) business interruption;
       (C) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (D) losses that arise because of the claims of third 
     parties;
       (E) losses that must be plead as special damages; and
       (F) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (c) Certain Actions Excluded.--This section does not 
     affect, abrogate, amend, or alter any patent, copyright, 
     trade-secret, trademark, or service-mark action, or any claim 
     for defamation or invasion of privacy under Federal or State 
     law.
       (d) Certain Other Actions.--A person liable for damages, 
     whether by settlement or judgment, in a civil action to which 
     this Act does not apply because of section 4(c), whose 
     liability, in whole or in part, is the result of a Y2K 
     failure may, notwithstanding any other provision of this Act, 
     pursue any remedy otherwise available under Federal or State 
     law against the person responsible for that Y2K failure to 
     the extent of recovering the amount of those damages.

     SEC. 13. STATE OF MIND; BYSTANDER LIABILITY; CONTROL.

       (a) Defendant's State of Mind.--In a Y2K action other than 
     a claim for breach of repudiation of contract, and in which 
     the defendant's actual or constructive awareness of an actual 
     or potential Y2K failure is an element of the claim, the 
     defendant is not liable unless the plaintiff establishes that 
     elements of the claim by clear and convincing evidence.
       (b) Limitation on Bystander Liability for Y2K Failures.--
       (1) In general.--With respect to any Y2K action for money 
     damages in which--
       (A) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the Y2K failure at issue;
       (B) the plaintiff is not in substantial privity with the 
     defendant; and
       (C) the defendant's actual or constructive awareness of an 
     actual or potential Y2K failure is an element of the claim 
     under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves by clear and convincing evidence that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (2) Substantial privity.--For purposes of paragraph (1)(B), 
     a plaintiff and a defendant are in substantial privity when, 
     in a Y2K action arising out of the performance of 
     professional services, the plaintiff and the defendant either 
     have contractual relations with one another or the plaintiff 
     is a person who,

[[Page 7693]]

     prior to the defendant's performance of such services, was 
     specifically identified to and acknowledged by the defendant 
     as a person for whose special benefit the services were being 
     performed.
       (3) Certain claims excluded.--For purposes of paragraph 
     (1)(C), claims in which the defendant's actual or 
     constructive awareness of an actual or potential Y2K failure 
     is an element of the claim under applicable law do not 
     include claims for negligence but do include claims such as 
     fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.
       (c) Control Not Determinative of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, system, 
     product, or component that was sold, leased, rented, or 
     otherwise within the control of the party against whom a 
     claim is asserted in a Y2K action shall not constitute the 
     sole basis for recovery of damages in that action. A claim in 
     a Y2K action for breach or repudiation of contract for such a 
     failure is governed by the terms of the contract.

     SEC. 14. LIABILITY OF OFFICERS, DIRECTORS, AND EMPLOYEES.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) is not personally liable in any Y2K action in 
     that person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee, or employee from the business or 
     organization during the 12 months immediately preceding the 
     act or omission for which liability is imposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found by clear and convincing evidence 
     that the director, officer, trustee, or employee--
       (1) made statements intended to be misleading regarding any 
     actual or potential year 2000 problem; or
       (2) withheld from the public significant information there 
     was a legal duty to disclose regarding any actual or 
     potential year 2000 problem of that business or organization 
     which would likely result in actionable Y2K failure.
       (c) State Law, Charter, or Bylaws.--Nothing in this section 
     supersedes any provision of State law, charter, or a bylaw 
     authorized by State law in existence on January 1, 1999, that 
     establishes lower financial limits on the liability of a 
     director, officer, trustee, or employee of such a business or 
     organization.

     SEC. 15. APPOINTMENT OF SPECIAL MASTERS OR MAGISTRATES FOR 
                   Y2K ACTIONS.

       Any District Court of the United States in which a Y2K 
     action is pending may appoint a special master or a 
     magistrate to hear the matter and to make findings of fact 
     and conclusions of law in accordance with Rule 53 of the 
     Federal Rules of Civil Procedure.

     SEC. 16. Y2K ACTIONS AS CLASS ACTIONS.

       (a) Minimum Injury Requirement.--A Y2K action involving a 
     claim that a product or service is defective may be 
     maintained as a class action in Federal or State court as to 
     that claim only if--
       (1) it satisfies all other prerequisites established by 
     applicable Federal or State law, including applicable rules 
     of civil procedure; and
       (2) the court finds that the defect in a product or service 
     as alleged would be a material defect for the majority of the 
     members of the class.
       (b) Notification.--In any Y2K action that is maintained as 
     a class action, the court, in addition to any other notice 
     required by applicable Federal or State law, shall direct 
     notice of the action to each member of the class, which shall 
     include--
       (1) a concise and clear description of the nature of the 
     action;
       (2) the jurisdiction where the case is pending; and
       (3) the fee arrangements with class counsel, including the 
     hourly fee being charged, or, if it is a contingency fee, the 
     percentage of the final award which will be paid, including 
     as estimate of the total amount that would be paid if the 
     requested damages were to be granted.
       (c) Forum for Y2K Class Actions.--
       (1) Jurisdiction.--Except as provided in paragraph (2), a 
     Y2K action may be brought as a class action in a United 
     States District Court or removed to a United States District 
     Court if the amount in controversy is greater than the sum or 
     value of $1,000,000 (exclusive of interest and costs), 
     computed on the basis of all claims to be determined in the 
     action.
       (2) Exception.--A Y2K action may not be brought or removed 
     as a class action under this section if--
       (A) a substantial majority of the members of the proposed 
     plaintiff class are citizens of a single State;
       (B) the primary defendants are citizens of that State; and
       (C) the claims asserted will be governed primarily by the 
     law of that State, or

     the primary defendants are States, State officials, or other 
     governmental entities against whom the United States District 
     Court may be foreclosed from ordering relief.
                                 ______
                                 

                         LOTT AMENDMENT NO. 293

  Mr. McCAIN (for Mr. Lott) proposed an amendment to amendment No. 292 
proposed by Mr. Lott to the bill, S. 96, supra; as follows:

       Strike all after the word ``with'' and insert 
     ``Instructions to report forthwith with the following 
     amendment:

     SECTION 1. SHORT TITLE; TABLE OF SECTIONS.

       (a) Short Title.--This Act may be cited as the ``Y2K Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.
Sec. 6. Proportionate liability.
Sec. 7. Pre-litigation notice.
Sec. 8. Pleading requirements.
Sec. 9. Duty to mitigate.
Sec. 10. Application of existing impossibility or commercial 
              impracticability doctrines.
Sec. 11. Damages limitation by contract.
Sec. 12. Damages in tort claims.
Sec. 13. State of mind; bystander liability; control.
Sec. 14. Liability of officers, directors, and employees.
Sec. 15. Appointment of special masters or magistrates for Y2K actions.
Sec. 16. Y2K actions as class actions.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that:
       (1)(A) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process dates after December 
     31, 1999.
       (B) If not corrected, the problem described in subparagraph 
     (A) and resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (2) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date-
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (3)(A) Because year 2000 computer date-change problems may 
     affect virtually all businesses and other users of technology 
     products to some degree, there is a substantial likelihood 
     that actual or potential year 2000 failures will prompt a 
     significant volume of litigation, much of it insubstantial.
       (B) The litigation described in subparagraph (A) would have 
     a range of undesirable effects, including the following:
       (i) It would threaten to waste technical and financial 
     resources that are better devoted to curing year 2000 
     computer date-change problems and ensuring that systems 
     remain or become operational.
       (ii) It could threaten the network of valued and trusted 
     business and customer relationships that are important to the 
     effective functioning of the national economy.
       (iii) It would strain the Nation's legal system, causing 
     particular problems for the small businesses and individuals 
     who already find that system inaccessible because of its 
     complexity and expense.
       (iv) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes could exacerbate the 
     difficulties associated with the date change and work against 
     the successful resolution of those difficulties.
       (4) It is appropriate for the Congress to enact legislation 
     to assure that Y2K problems do not unnecessarily disrupt 
     interstate commerce or create unnecessary caseloads in 
     Federal courts and to provide initiatives to help businesses 
     prepare and be in a position to withstand the potentially 
     devastating economic impact of Y2K.
       (5) Resorting to the legal system for resolution of Y2K 
     problems is not feasible for many businesses and individuals 
     who already find the legal system inaccessible, particularly 
     small businesses and individuals who already find the legal 
     system inaccessible, because of its complexity and expense.
       (6) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with Y2K date change, and work 
     against the successful resolution of those difficulties.
       (7) Concern about the potential for liability--in 
     particular, concern about the substantial litigation expense 
     associated with defending against even the most insubstantial 
     lawsuits--is prompting many persons and businesses with 
     technical expertise to avoid projects aimed at curing year 
     2000 computer date-change problems.
       (8) A proliferation of frivolous Y2K lawsuits by 
     opportunistic parties may further

[[Page 7694]]

     limit access to courts by straining the resources of the 
     legal system and depriving deserving parties of their 
     legitimate rights to relief.
       (9) Congress encourages businesses to approach their Y2K 
     disputes responsibly, and to avoid unnecessary, time-
     consuming and costly litigation about Y2K failures, 
     particularly those that are not material. Congress supports 
     good faith negotiations between parties when there is a 
     dispute over a Y2K problem, and, if necessary, urges the 
     parties to enter into voluntary, non-binding mediation rather 
     than litigation.
       (b) Purposes.--Based upon the power of the Congress under 
     Article I, Section 8, Clause 3 of the Constitution of the 
     United States, the purpose of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to solve Y2K computer date-change problems before 
     they develop;
       (2) to encourage continued Y2K remediation and testing 
     efforts by providers, suppliers, customers, and other 
     contracting partners;
       (3) to encourage private and public parties alike to 
     resolve Y2K disputes by alternative dispute mechanisms in 
     order to avoid costly and time-consuming litigation, to 
     initiate those mechanisms as early as possible, and to 
     encourage the prompt identification and correction of Y2K 
     problems; and
       (4) to lessen the burdens on interstate commerce by 
     discouraging insubstantial lawsuits while preserving the 
     ability of individuals and businesses that have suffered real 
     injury to obtain complete relief.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action''--
       (A) means a civil action commenced in any Federal or State 
     court, or an agency board of contract appeal proceeding, in 
     which the plaintiff's alleged harm or injury resulted 
     directly or indirectly from an actual or potential Y2K 
     failure, or a claim or defense is related directly or 
     indirectly to an actual or potential Y2K failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a governmental entity when acting in a 
     commercial or contracting capacity; but
       (C) does not include an action brought by a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive year-2000 date-related data, 
     including failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately to process any specific date 
     in 1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (3) Government entity.--The term ``government entity'' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).
       (4) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     according to its specifications. The term ``material defect'' 
     does not include a defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only a component of an item or program that, as 
     a whole, substantially operates or functions as designed; or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (5) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including--
       (A) death as a result of a physical injury; and
       (B) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (7) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (8) Alternative dispute resolution.--The term ``alternative 
     dispute resolution'' means any process or proceeding, other 
     than adjudication by a court or in an administrative 
     proceeding, to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a State or Federal court after February 22, 1999, 
     for a Y2K failure occurring before January 1, 2003, including 
     any appeal, remand, stay, or other judicial, administrative, 
     or alternative dispute resolution proceeding in such an 
     action.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action, and, except as otherwise 
     explicitly provided in this Act, nothing in this Act expands 
     any liability otherwise imposed or limits any defense 
     otherwise available under Federal or State law.
       (c) Claims for Personal Injury or Wrongful Death 
     Excluded.--This Act does not apply to a claim for personal 
     injury or for wrongful death.
       (d) Contract Preservation.--
       (1) In general.--Subject to paragraph (2), in any Y2K 
     action any written contractual term, including a limitation 
     or an exclusion of liability, or a disclaimer of warranty, 
     shall be strictly enforced unless the enforcement of that 
     term would manifestly and directly contravene applicable 
     State law embodied in any statute in effect on January 1, 
     1999, specifically addressing that term.
       (2) Interpretation of contract.--In any Y2K action in which 
     a contract to which paragraph (1) applies is silent as to a 
     particular issue, the interpretation of the contract as to 
     that issue shall be determined by applicable law in effect at 
     the time the contract was executed.
       (e) Preemption of State Law.--This Act supersedes State law 
     to the extent that it establishes a rule of law applicable to 
     a Y2K action that is inconsistent with State law, but nothing 
     in this Act implicates, alters, or diminishes the ability of 
     a State to defend itself against any claim on the basis of 
     sovereign immunity.

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--In any Y2K action in which punitive 
     damages are permitted by applicable law, the defendant shall 
     not be liable for punitive damages unless the plaintiff 
     proves by clear and convincing evidence that the applicable 
     standard for awarding damages has been met.
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant in such a Y2K action 
     may not exceed the larger of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees,

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (3) No cap if injury specifically intended.--Neither 
     paragraph (1) nor paragraph (2) applies if the plaintiff 
     establishes by clear and convincing evidence that the 
     defendant acted with specific intent to injure the plaintiff.
       (c) Government Entities.--Punitive damages in a Y2K action 
     may not be awarded against a government entity.

     SEC. 6. PROPORTIONATE LIABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person against whom a final judgment is entered in a 
     Y2K action shall be liable solely for the portion of the 
     judgment that corresponds to the relative and proportional 
     responsibility of that person. In determining the percentage 
     of responsibility of any defendant, the trier of fact shall 
     determine that percentage as a percentage of the total fault 
     of all persons, including the plaintiff, who caused or 
     contributed to the total loss incurred by the plaintiff.
       (b) Proportionate Liability.--
       (1) Determination of responsibility.--In any Y2K action, 
     the court shall instruct the jury to answer special 
     interrogatories, or, if there is no jury, the court shall 
     make findings with respect to each defendant, including 
     defendants who have entered into settlements with the 
     plaintiff or plaintiffs, concerning--
       (A) the percentage of responsibility, if any, of each 
     defendant, measured as a percentage of the total fault of all 
     persons who caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) if alleged by the plaintiff, whether the defendant--
       (i) acted with specific intent to injure the plaintiff; or
       (ii) knowingly committed fraud.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories or findings under paragraph (1) 
     shall specify the total amount of damages that the plaintiff 
     is entitled to recover and the percentage of responsibility 
     of each defendant found to have caused or contributed to the 
     loss incurred by the plaintiff.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--

[[Page 7695]]

       (A) the nature of the conduct of each person found to have 
     caused or contributed to the loss incurred by the plaintiff; 
     and
       (B) the nature and extent of the causal relationship 
     between the conduct of each defendant and the damages 
     incurred by the plaintiff.
       (c) Joint Liability for Specific Intent or Fraud.--
       (1) In general.--Notwithstanding subsection (a), the 
     liability of a defendant in a Y2K action is joint and several 
     if the trier of fact specifically determines that the 
     defendant--
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Fraud; Recklessness.--
       (A) Knowing commission of fraud described.--For purposes of 
     subsection (b)(1)(B)(ii) and paragraph (1)(B) of this 
     subsection, a defendant knowingly committed fraud if the 
     defendant--
       (i) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (ii) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (iii) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (B) Recklessness.--For purposes of subsection (b)(1)(B) and 
     paragraph (1) of this subsection, reckless conduct by the 
     defendant does not constitute either a specific intent to 
     injure, or the knowing commission of fraud, by the defendant.
       (3) Right to contribution not affected.--Nothing in this 
     section affects the right, under any other law, of a 
     defendant to contribution with respect to another defendant 
     found under subsection (b)(1)(B), or determined under 
     paragraph (1)(B) of this subsection, to have acted with 
     specific intent to injure the plaintiff or to have knowingly 
     committed fraud.
       (d) Special Rules.--
       (1) Uncollectible share.--
       (A) In general.--Notwithstanding subsection (a), if, upon 
     motion not later than 6 months after a final judgment is 
     entered in any Y2K action, the court determines that all or 
     part of the share of the judgment against a defendant for 
     compensatory damages is not collectible against that 
     defendant, then each other defendant in the action is liable 
     for the uncollectible share as follows:
       (i) Percentage of net worth.--The other defendants are 
     jointly and severally liable for the uncollectible share if 
     the plaintiff establishes that--
       (I) the plaintiff is an individual whose recoverable 
     damages under the final judgment are equal to more than 10 
     percent of the net worth of the plaintiff; and
       (II) the net worth of the plaintiff is less than $200,000.
       (ii) Other plaintiffs.--For a plaintiff not described in 
     clause (i), each of the other defendants is liable for the 
     uncollectible share in proportion to the percentage of 
     responsibility of that defendant, except that the total 
     liability of a defendant under this clause may not exceed 50 
     percent of the proportionate share of that defendant, as 
     determined under subsection (b)(2).
       (B) Overall limit.--The total payments required under 
     subparagraph (A) from all defendants may not exceed the 
     amount of the uncollectible share.
       (C) Subject to contribution.--A defendant against whom 
     judgment is not collectible is subject to contribution and to 
     any continuing liability to the plaintiff on the judgment.
       (2) Special right of contribution.--To the extent that a 
     defendant is required to make an additional payment under 
     paragraph (1), that defendant may recover contribution--
       (A) from the defendant originally liable to make the 
     payment;
       (B) from any other defendant that is jointly and severally 
     liable;
       (C) from any other defendant held proportionately liable 
     who is liable to make the same payment and has paid less than 
     that other defendant's proportionate share of that payment; 
     or
       (D) from any other person responsible for the conduct 
     giving rise to the payment that would have been liable to 
     make the same payment.
       (3) Nondisclosure to jury.--The standard for allocation of 
     damages under subsection (a) and subsection (b)(1), and the 
     procedure for reallocation of uncollectible shares under 
     paragraph (1) of this subsection, shall not be disclosed to 
     members of the jury.
       (e) Settlement Discharge.--
       (1) In general.--A defendant who settles a Y2K action at 
     any time before final verdict or judgment shall be discharged 
     from all claims for contribution brought by other persons. 
     Upon entry of the settlement by the court, the court shall 
     enter a bar order constituting the final discharge of all 
     obligations to the plaintiff of the settling defendant 
     arising out of the action. The order shall bar all future 
     claims for contribution arising out of the action--
       (A) by any person against the settling defendant; and
       (B) by the settling defendant against any person other than 
     a person whose liability has been extinguished by the 
     settlement of the settling defendant.
       (2) Reduction.--If a defendant enters into a settlement 
     with the plaintiff before the final verdict or judgment, the 
     verdict or judgment shall be reduced by the greater of--
       (A) an amount that corresponds to the percentage of 
     responsibility of that defendant; or
       (B) the amount paid to the plaintiff by that defendant.
       (f) General Right of Contribution.--
       (1) In general.--A defendant who is jointly and severally 
     liable for damages in any Y2K action may recover contribution 
     from any other person who, if joined in the original action, 
     would have been liable for the same damages. A claim for 
     contribution shall be determined based on the percentage of 
     responsibility of the claimant and of each person against 
     whom a claim for contribution is made.
       (2) Statute of limitations for contribution.--An action for 
     contribution in connection with a Y2K action shall be brought 
     not later than 6 months after the entry of a final, 
     nonappealable judgment in the Y2K action, except than an 
     action for contribution brought by a defendant who was 
     required to make an additional payment under subsection 
     (d)(1) may be brought not later than 6 months after the date 
     on which such payment was made.
       (g) More Protective State Law Not Preempted.--Nothing in 
     this section pre-empts or supersedes any provision of State 
     statutory law that--
       (1) limits the liability of a defendant in a Y2K action to 
     a lesser amount than the amount determined under this 
     section; or
       (2) otherwise affords a greater degree of protection from 
     joint or several liability than is afforded by this section.

     SEC. 7. PRE-LITIGATION NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall send a written notice by 
     certified mail to each prospective defendant in that action. 
     The notice shall provide specific and detailed information 
     about--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) how the prospective plaintiff would like the 
     prospective defendant to remedy the problem;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Person to Whom Notice To Be Sent.--The notice required 
     by subsection (a) shall be sent--
       (1) to the registered agent of the prospective defendant 
     for service of legal process;
       (2) if the prospective defendant does not have a registered 
     agent, then to the chief executive officer of a corporation, 
     the managing partner of a partnership, the proprietor of a 
     sole proprietorship, or to a similarly-situated person for 
     any other enterprise; or
       (3) if the prospective defendant has designated a person to 
     receive pre-litigation notices on a Year 2000 Internet 
     Website (as defined in section 3(7) of the Year 2000 
     Information and Readiness Disclosure Act), to the designated 
     person, if the prospective plaintiff has reasonable access to 
     the Internet.
       (c) Response to Notice.--
       (1) In general.--Within 30 days after receipt of the notice 
     specified in subsection (a), each prospective defendant shall 
     send by certified mail with return receipt requested to each 
     prospective plaintiff a written statement acknowledging 
     receipt of the notice, and describing the actions it has 
     taken or will take to address the problem identified by the 
     prospective plaintiff.
       (2) Willingness to engage in adr.--The Written statement 
     shall state whether the prospective defendant is willing to 
     engage in alternative dispute resolution.
       (3) Inadmissibility.--A written statement required by this 
     paragraph is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.
       (4) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (d) Failure To Respond.--If a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c)(1); or
       (2) does not describe the action, if any, the prospective 
     defendant has taken, or will take, to address the problem 
     identified by the prospective plaintiff,

     the prospective plaintiff may immediately commence at legal 
     action against that prospective defendant.
       (e) Remediation Period.--
       (1) In general.--If the prospective defendant responds and 
     proposes remedial action it will take, of offers to engage in 
     alternative dispute resolution, then the prospective

[[Page 7696]]

     plaintiff shall allow the prospective defendant an additional 
     60 days from the end of the 30-day notice period to complete 
     the proposed remedial action before commencing a legal action 
     against that prospective defendant.
       (2) Extension by agreement.--The prospective plaintiff and 
     prospective defendant may change the length of the 60-day 
     remediation period by written agreement.
       (3) Multiple extensions not allowed.--Except as provided in 
     paragraph (2), a defendant in a Y2K action is entitled to no 
     more than one 30-day period and one 60-day remediation period 
     under paragraph (1).
       (4) Statutes of limitation, etc., tolled.--Any applicable 
     statute of limitations or doctrine of laches in a Y2K action 
     to which paragraph (1) applies shall be tolled during the 
     notice and remediation period under that paragraph.
       (f) Failure To Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice specified in subsection (a) or without awaiting the 
     expiration of the appropriate waiting period specified in 
     subsection (c), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff. If any defendant elects to treat the complaint as 
     such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for the appropriate period after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during the appropriate period.
       (g) Effect of Contractual or Statutory Waiting Periods.--In 
     cases in which a contract, or a statute enacted before 
     January 1, 1999, requires notice of non-performance and 
     provides for a period of delay prior to the initiation of 
     suit for breach or repudiation of contract, the period of 
     delay provided by contract or the statute is controlling over 
     the waiting period specified in subsections (c) and (d).
       (h) State Law Controls Alternative Methods.--Nothing in 
     this section supersedes or otherwise preempts any State law 
     or rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.
       (i) Provisional Remedies Unaffected.--Nothing in this 
     section interferes with the right of a litigant to 
     provisional remedies otherwise available under Rule 65 of the 
     Federal Rules of Civil Procedure or any State rule of civil 
     procedure providing extraordinary or provisional remedies in 
     any civil action in which the underlying complaint seeks both 
     injunctive and monetary relief.
       (j) Special Rule for Class Actions.--For the purpose of 
     applying this section to a Y2K action that is maintained as a 
     class action in Federal or State court, the requirements of 
     the preceding subsections of this section apply only to named 
     plaintiffs in the class action.

     SEC. 8. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to Y2K actions and, except to the 
     extent that this section requires additional information to 
     be contained in or attached to pleadings, nothing in this 
     section is intended to amend or otherwise supersede 
     applicable rules of Federal or State civil procedure.
       (b) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, there shall be filed with the 
     complaint a statement of specific information as to the 
     nature and amount of each element of damages and the factual 
     basis for the damages calculation.
       (c) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that there is a material defect in a 
     product or service, there shall be filed with the complaint a 
     statement of specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (d) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, there shall be filed with the complaint, with respect 
     to each element of that claim, a statement of the facts 
     giving rise to a strong inference that the defendant acted 
     with the required state of mind.

     SEC. 9. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably should have been, 
     aware, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the Y2K failure.

     SEC. 10. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       In any Y2K action for breach or repudiation of contract, 
     the applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by the law in 
     existence on January 1, 1999. Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon such doctrines.

     SEC. 11. DAMAGES LIMITATION BY CONTRACT.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, any category of damages 
     unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was effective or by 
     operation of Federal law.

     SEC. 12. DAMAGES IN TORT CLAIMS.

       (a) In General.--A party to a Y2K action making a tort 
     claim may not recover damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party; or
       (2) such losses result directly from damage to tangible 
     personal or real property caused by the Y2K failure (other 
     than damage to property that is the subject of the contract 
     between the parties to the Y2K action or, in the event there 
     is no contract between the parties, other than damage caused 
     only to the property that experienced the Y2K failure),

     and such damages are permitted under applicable State law.
       (b) Economic Loss.--For purposes of this section only, and 
     except as otherwise specifically provided in a valid and 
     enforceable written contract between the plaintiff and the 
     defendant in a Y2K action, the term ``economic loss''--
       (1) means amounts awarded to compensate an injured party 
     for any loss other than losses described in subsection 
     (a)(2); and
       (2) includes amounts awarded for damages such as--
       (A) lost profits or sales;
       (B) business interruption;
       (C) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (D) losses that arise because of the claims of third 
     parties;
       (E) losses that must be plead as special damages; and
       (F) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (c) Certain Actions Excluded.--This section does not 
     affect, abrogate, amend, or alter any patent, copyright, 
     trade-secret, trademark, or service-mark action, or any claim 
     for defamation or invasion of privacy under Federal or State 
     law.
       (d) Certain Other Actions.--A person liable for damages, 
     whether by settlement or judgment, in a civil action to which 
     this Act does not apply because of section 4(c), whose 
     liability, in whole or in part, is the result of a Y2K 
     failure may, notwithstanding any other provision of this Act, 
     pursue any remedy otherwise available under Federal or State 
     law against the person responsible for that Y2K failure to 
     the extent of recovering the amount of those damages.

     SEC. 13. STATE OF MIND; BYSTANDER LIABILITY; CONTROL.

       (a) Defendant's State of Mind.--In a Y2K action other than 
     a claim for breach of repudiation of contract, and in which 
     the defendant's actual or constructive awareness of an actual 
     or potential Y2K failure is an element of the claim, the 
     defendant is not liable unless the plaintiff establishes that 
     elements of the claim by clear and convincing evidence.
       (b) Limitation on Bystander Liability for Y2K Failures.--
       (1) In general.--With respect to any Y2K action for money 
     damages in which--
       (A) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the Y2K failure at issue;
       (B) the plaintiff is not in substantial privity with the 
     defendant; and
       (C) the defendant's actual or constructive awareness of an 
     actual or potential Y2K failure is an element of the claim 
     under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves by clear and convincing evidence that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (2) Substantial privity.--For purposes of paragraph (1)(B), 
     a plaintiff and a defendant are in substantial privity when, 
     in a Y2K action arising out of the performance of 
     professional services, the plaintiff and the defendant either 
     have contractual relations with one another or the plaintiff 
     is a person who, prior to the defendant's performance of such 
     services, was specifically identified to and acknowledged by 
     the defendant as a person for whose special benefit the 
     services were being performed.
       (3) Certain claims excluded.--For purposes of paragraph 
     (1)(C), claims in which the defendant's actual or 
     constructive awareness of an actual or potential Y2K failure 
     is an element of the claim under applicable law do not 
     include claims for negligence but do include claims such as 
     fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.
       (c) Control Not Determinative of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, system, 
     product, or component that was sold, leased, rented, or 
     otherwise within the control of the party against whom a 
     claim is asserted in a Y2K action shall not constitute the 
     sole basis for

[[Page 7697]]

     recovery of damages in that action. A claim in a Y2K action 
     for breach or repudiation of contract for such a failure is 
     governed by the terms of the contract.

     SEC. 14. LIABILITY OF OFFICERS, DIRECTORS, AND EMPLOYEES.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) is not personally liable in any Y2K action in 
     that person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee, or employee from the business or 
     organization during the 12 months immediately preceding the 
     act or omission for which liability is imposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found by clear and convincing evidence 
     that the director, officer, trustee, or employee--
       (1) made statements intended to be misleading regarding any 
     actual or potential year 2000 problem; or
       (2) withheld from the public significant information there 
     was a legal duty to disclose regarding any actual or 
     potential year 2000 problem of that business or organization 
     which would likely result in actionable Y2K failure.
       (c) State Law, Charter, or Bylaws.--Nothing in this section 
     supersedes any provision of State law, charter, or a bylaw 
     authorized by State law in existence on January 1, 1999, that 
     establishes lower financial limits on the liability of a 
     director, officer, trustee, or employee of such a business or 
     organization.

     SEC. 15. APPOINTMENT OF SPECIAL MASTERS OR MAGISTRATES FOR 
                   Y2K ACTIONS.

       Any District Court of the United States in which a Y2K 
     action is pending may appoint a special master or a 
     magistrate to hear the matter and to make findings of fact 
     and conclusions of law in accordance with Rule 53 of the 
     Federal Rules of Civil Procedure.

     SEC. 16. Y2K ACTIONS AS CLASS ACTIONS.

       (a) Minimum Injury Requirement.--A Y2K action involving a 
     claim that a product or service is defective may be 
     maintained as a class action in Federal or State court as to 
     that claim only if--
       (1) it satisfies all other prerequisites established by 
     applicable Federal or State law, including applicable rules 
     of civil procedure; and
       (2) the court finds that the defect in a product or service 
     as alleged would be a material defect for the majority of the 
     members of the class.
       (b) Notification.--In any Y2K action that is maintained as 
     a class action, the court, in addition to any other notice 
     required by applicable Federal or State law, shall direct 
     notice of the action to each member of the class, which shall 
     include--
       (1) a concise and clear description of the nature of the 
     action;
       (2) the jurisdiction where the case is pending; and
       (3) the fee arrangements with class counsel, including the 
     hourly fee being charged, or, if it is a contingency fee, the 
     percentage of the final award which will be paid, including 
     as estimate of the total amount that would be paid if the 
     requested damages were to be granted.
       (c) Forum for Y2K Class Actions.--
       (1) Jurisdiction.--Except as provided in paragraph (2), a 
     Y2K action may be brought as a class action in a United 
     States District Court or removed to a United States District 
     Court if the amount in controversy is greater than the sum or 
     value of $1,000,000 (exclusive of interest and costs), 
     computed on the basis of all claims to be determined in the 
     action.
       (2) Exception.--A Y2K action may not be brought or removed 
     as a class action under this section if--
       (A) a substantial majority of the members of the proposed 
     plaintiff class are citizens of a single State;
       (B) the primary defendants are citizens of that State; and
       (C) the claims asserted will be governed primarily by the 
     law of that State, or
     the primary defendants are States, State officials, or other 
     governmental entities against whom the United States District 
     Court may be foreclosed from ordering relief.
       (D) This section shall become effective five days after the 
     date of enactment.
                                 ______
                                 

                         LOTT AMENDMENT NO. 294

  Mr. LOTT proposed an amendment to the motion to recommit proposed by 
him to the bill, S. 96, supra; as follows:

       At the end of the instructions add the following:

     with an amendment as follows:
       Strike all after the word ``SECTION'' and add the 
     following:

     1. SHORT TITLE; TABLE OF SECTIONS.

       (a) Short Title.--This Act may be cited as the ``Y2K Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.
Sec. 6. Proportionate liability.
Sec. 7. Pre-litigation notice.
Sec. 8. Pleading requirements.
Sec. 9. Duty to mitigate.
Sec. 10. Application of existing impossibility or commercial 
              impracticability doctrines.
Sec. 11. Damages limitation by contract.
Sec. 12. Damages in tort claims.
Sec. 13. State of mind; bystander liability; control.
Sec. 14. Liability of officers, directors, and employees.
Sec. 15. Appointment of special masters or magistrates for Y2K actions.
Sec. 16. Y2K actions as class actions.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that:
       (1)(A) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process dates after December 
     31, 1999.
       (B) If not corrected, the problem described in subparagraph 
     (A) and resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (2) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date-
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (3)(A) Because year 2000 computer date-change problems may 
     affect virtually all businesses and other users of technology 
     products to some degree, there is a substantial likelihood 
     that actual or potential year 2000 failures will prompt a 
     significant volume of litigation, much of it insubstantial.
       (B) The litigation described in subparagraph (A) would have 
     a range of undesirable effects, including the following:
       (i) It would threaten to waste technical and financial 
     resources that are better devoted to curing year 2000 
     computer date-change problems and ensuring that systems 
     remain or become operational.
       (ii) It could threaten the network of valued and trusted 
     business and customer relationships that are important to the 
     effective functioning of the national economy.
       (iii) It would strain the Nation's legal system, causing 
     particular problems for the small businesses and individuals 
     who already find that system inaccessible because of its 
     complexity and expense.
       (iv) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes could exacerbate the 
     difficulties associated with the date change and work against 
     the successful resolution of those difficulties.
       (4) It is appropriate for the Congress to enact legislation 
     to assure that Y2K problems do not unnecessarily disrupt 
     interstate commerce or create unnecessary caseloads in 
     Federal courts and to provide initiatives to help businesses 
     prepare and be in a position to withstand the potentially 
     devastating economic impact of Y2K.
       (5) Resorting to the legal system for resolution of Y2K 
     problems is not feasible for many businesses and individuals 
     who already find the legal system inaccessible, particularly 
     small businesses and individuals who already find the legal 
     system inaccessible, because of its complexity and expense.
       (6) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with Y2K date change, and work 
     against the successful resolution of those difficulties.
       (7) Concern about the potential for liability--in 
     particular, concern about the substantial litigation expense 
     associated with defending against even the most insubstantial 
     lawsuits--is prompting many persons and businesses with 
     technical expertise to avoid projects aimed at curing year 
     2000 computer date-change problems.
       (8) A proliferation of frivolous Y2K lawsuits by 
     opportunistic parties may further limit access to courts by 
     straining the resources of the legal system and depriving 
     deserving parties of their legitimate rights to relief.
       (9) Congress encourages businesses to approach their Y2K 
     disputes responsibly, and to avoid unnecessary, time-
     consuming and costly litigation about Y2K failures, 
     particularly those that are not material. Congress supports 
     good faith negotiations between parties when there is a 
     dispute over a Y2K problem, and, if necessary, urges the 
     parties to enter into voluntary, non-binding mediation rather 
     than litigation.
       (b) Purposes.--Based upon the power of the Congress under 
     Article I, Section 8, Clause 3 of the Constitution of the 
     United States, the purpose of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to

[[Page 7698]]

     solve Y2K computer date-change problems before they develop;
       (2) to encourage continued Y2K remediation and testing 
     efforts by providers, suppliers, customers, and other 
     contracting partners;
       (3) to encourage private and public parties alike to 
     resolve Y2K disputes by alternative dispute mechanisms in 
     order to avoid costly and time-consuming litigation, to 
     initiate those mechanisms as early as possible, and to 
     encourage the prompt identification and correction of Y2K 
     problems; and
       (4) to lessen the burdens on interstate commerce by 
     discouraging insubstantial lawsuits while preserving the 
     ability of individuals and businesses that have suffered real 
     injury to obtain complete relief.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action''--
       (A) means a civil action commenced in any Federal or State 
     court, or an agency board of contract appeal proceeding, in 
     which the plaintiff's alleged harm or injury resulted 
     directly or indirectly from an actual or potential Y2K 
     failure, or a claim or defense is related directly or 
     indirectly to an actual or potential Y2K failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a governmental entity when acting in a 
     commercial or contracting capacity; but
       (C) does not include an action brought by a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive year-2000 date-related data, 
     including failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately to process any specific date 
     in 1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (3) Government entity.--The term ``government entity'' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).
       (4) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     according to its specifications. The term ``material defect'' 
     does not include a defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only a component of an item or program that, as 
     a whole, substantially operates or functions as designed; or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (5) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including--
       (A) death as a result of a physical injury; and
       (B) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (7) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (8) Alternative dispute resolution.--The term ``alternative 
     dispute resolution'' means any process or proceeding, other 
     than adjudication by a court or in an administrative 
     proceeding, to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a State or Federal court after February 22, 1999, 
     for a Y2K failure occurring before January 1, 2003, including 
     any appeal, remand, stay, or other judicial, administrative, 
     or alternative dispute resolution proceeding in such an 
     action.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action, and, except as otherwise 
     explicitly provided in this Act, nothing in this Act expands 
     any liability otherwise imposed or limits any defense 
     otherwise available under Federal or State law.
       (c) Claims for Personal Injury or Wrongful Death 
     Excluded.--This Act does not apply to a claim for personal 
     injury or for wrongful death.
       (d) Contract Preservation.--
       (1) In general.--Subject to paragraph (2), in any Y2K 
     action any written contractual term, including a limitation 
     or an exclusion of liability, or a disclaimer of warranty, 
     shall be strictly enforced unless the enforcement of that 
     term would manifestly and directly contravene applicable 
     State law embodied in any statute in effect on January 1, 
     1999, specifically addressing that term.
       (2) Interpretation of contract.--In any Y2K action in which 
     a contract to which paragraph (1) applies is silent as to a 
     particular issue, the interpretation of the contract as to 
     that issue shall be determined by applicable law in effect at 
     the time the contract was executed.
       (e) Preemption of State Law.--This Act supersedes State law 
     to the extent that it establishes a rule of law applicable to 
     a Y2K action that is inconsistent with State law, but nothing 
     in this Act implicates, alters, or diminishes the ability of 
     a State to defend itself against any claim on the basis of 
     sovereign immunity.

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--In any Y2K action in which punitive 
     damages are permitted by applicable law, the defendant shall 
     not be liable for punitive damages unless the plaintiff 
     proves by clear and convincing evidence that the applicable 
     standard for awarding damages has been met.
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant in such a Y2K action 
     may not exceed the larger of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees,

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (3) No cap if injury specifically intended.--Neither 
     paragraph (1) nor paragraph (2) applies if the plaintiff 
     establishes by clear and convincing evidence that the 
     defendant acted with specific intent to injure the plaintiff.
       (c) Government Entities.--Punitive damages in a Y2K action 
     may not be awarded against a government entity.

     SEC. 6. PROPORTIONATE LIABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person against whom a final judgment is entered in a 
     Y2K action shall be liable solely for the portion of the 
     judgment that corresponds to the relative and proportional 
     responsibility of that person. In determining the percentage 
     of responsibility of any defendant, the trier of fact shall 
     determine that percentage as a percentage of the total fault 
     of all persons, including the plaintiff, who caused or 
     contributed to the total loss incurred by the plaintiff.
       (b) Proportionate Liability.--
       (1) Determination of responsibility.--In any Y2K action, 
     the court shall instruct the jury to answer special 
     interrogatories, or, if there is no jury, the court shall 
     make findings with respect to each defendant, including 
     defendants who have entered into settlements with the 
     plaintiff or plaintiffs, concerning--
       (A) the percentage of responsibility, if any, of each 
     defendant, measured as a percentage of the total fault of all 
     persons who caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) if alleged by the plaintiff, whether the defendant--
       (i) acted with specific intent to injure the plaintiff; or
       (ii) knowingly committed fraud.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories or findings under paragraph (1) 
     shall specify the total amount of damages that the plaintiff 
     is entitled to recover and the percentage of responsibility 
     of each defendant found to have caused or contributed to the 
     loss incurred by the plaintiff.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person found to have 
     caused or contributed to the loss incurred by the plaintiff; 
     and
       (B) the nature and extent of the causal relationship 
     between the conduct of each defendant and the damages 
     incurred by the plaintiff.
       (c) Joint Liability for Specific Intent or Fraud.--
       (1) In general.--Notwithstanding subsection (a), the 
     liability of a defendant in a Y2K action is joint and several 
     if the trier of fact specifically determines that the 
     defendant--
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Fraud; Recklessness.--
       (A) Knowing commission of fraud described.--For purposes of 
     subsection (b)(1)(B)(ii) and paragraph (1)(B) of this 
     subsection, a defendant knowingly committed fraud if the 
     defendant--

[[Page 7699]]

       (i) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (ii) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (iii) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (B) Recklessness.--For purposes of subsection (b)(1)(B) and 
     paragraph (1) of this subsection, reckless conduct by the 
     defendant does not constitute either a specific intent to 
     injure, or the knowing commission of fraud, by the defendant.
       (3) Right to contribution not affected.--Nothing in this 
     section affects the right, under any other law, of a 
     defendant to contribution with respect to another defendant 
     found under subsection (b)(1)(B), or determined under 
     paragraph (1)(B) of this subsection, to have acted with 
     specific intent to injure the plaintiff or to have knowingly 
     committed fraud.
       (d) Special Rules.--
       (1) Uncollectible share.--
       (A) In general.--Notwithstanding subsection (a), if, upon 
     motion not later than 6 months after a final judgment is 
     entered in any Y2K action, the court determines that all or 
     part of the share of the judgment against a defendant for 
     compensatory damages is not collectible against that 
     defendant, then each other defendant in the action is liable 
     for the uncollectible share as follows:
       (i) Percentage of net worth.--The other defendants are 
     jointly and severally liable for the uncollectible share if 
     the plaintiff establishes that--
       (I) the plaintiff is an individual whose recoverable 
     damages under the final judgment are equal to more than 10 
     percent of the net worth of the plaintiff; and
       (II) the net worth of the plaintiff is less than $200,000.
       (ii) Other plaintiffs.--For a plaintiff not described in 
     clause (i), each of the other defendants is liable for the 
     uncollectible share in proportion to the percentage of 
     responsibility of that defendant, except that the total 
     liability of a defendant under this clause may not exceed 50 
     percent of the proportionate share of that defendant, as 
     determined under subsection (b)(2).
       (B) Overall limit.--The total payments required under 
     subparagraph (A) from all defendants may not exceed the 
     amount of the uncollectible share.
       (C) Subject to contribution.--A defendant against whom 
     judgment is not collectible is subject to contribution and to 
     any continuing liability to the plaintiff on the judgment.
       (2) Special right of contribution.--To the extent that a 
     defendant is required to make an additional payment under 
     paragraph (1), that defendant may recover contribution--
       (A) from the defendant originally liable to make the 
     payment;
       (B) from any other defendant that is jointly and severally 
     liable;
       (C) from any other defendant held proportionately liable 
     who is liable to make the same payment and has paid less than 
     that other defendant's proportionate share of that payment; 
     or
       (D) from any other person responsible for the conduct 
     giving rise to the payment that would have been liable to 
     make the same payment.
       (3) Nondisclosure to jury.--The standard for allocation of 
     damages under subsection (a) and subsection (b)(1), and the 
     procedure for reallocation of uncollectible shares under 
     paragraph (1) of this subsection, shall not be disclosed to 
     members of the jury.
       (e) Settlement Discharge.--
       (1) In general.--A defendant who settles a Y2K action at 
     any time before final verdict or judgment shall be discharged 
     from all claims for contribution brought by other persons. 
     Upon entry of the settlement by the court, the court shall 
     enter a bar order constituting the final discharge of all 
     obligations to the plaintiff of the settling defendant 
     arising out of the action. The order shall bar all future 
     claims for contribution arising out of the action--
       (A) by any person against the settling defendant; and
       (B) by the settling defendant against any person other than 
     a person whose liability has been extinguished by the 
     settlement of the settling defendant.
       (2) Reduction.--If a defendant enters into a settlement 
     with the plaintiff before the final verdict or judgment, the 
     verdict or judgment shall be reduced by the greater of--
       (A) an amount that corresponds to the percentage of 
     responsibility of that defendant; or
       (B) the amount paid to the plaintiff by that defendant.
       (f) General Right of Contribution.--
       (1) In general.--A defendant who is jointly and severally 
     liable for damages in any Y2K action may recover contribution 
     from any other person who, if joined in the original action, 
     would have been liable for the same damages. A claim for 
     contribution shall be determined based on the percentage of 
     responsibility of the claimant and of each person against 
     whom a claim for contribution is made.
       (2) Statute of limitations for contribution.--An action for 
     contribution in connection with a Y2K action shall be brought 
     not later than 6 months after the entry of a final, 
     nonappealable judgment in the Y2K action, except than an 
     action for contribution brought by a defendant who was 
     required to make an additional payment under subsection 
     (d)(1) may be brought not later than 6 months after the date 
     on which such payment was made.
       (g) More Protective State Law Not Preempted.--Nothing in 
     this section pre-empts or supersedes any provision of State 
     statutory law that--
       (1) limits the liability of a defendant in a Y2K action to 
     a lesser amount than the amount determined under this 
     section; or
       (2) otherwise affords a greater degree of protection from 
     joint or several liability than is afforded by this section.

     SEC. 7. PRE-LITIGATION NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall send a written notice by 
     certified mail to each prospective defendant in that action. 
     The notice shall provide specific and detailed information 
     about--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) how the prospective plaintiff would like the 
     prospective defendant to remedy the problem;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Person to Whom Notice To Be Sent.--The notice required 
     by subsection (a) shall be sent--
       (1) to the registered agent of the prospective defendant 
     for service of legal process;
       (2) if the prospective defendant does not have a registered 
     agent, then to the chief executive officer of a corporation, 
     the managing partner of a partnership, the proprietor of a 
     sole proprietorship, or to a similarly-situated person for 
     any other enterprise; or
       (3) if the prospective defendant has designated a person to 
     receive pre-litigation notices on a Year 2000 Internet 
     Website (as defined in section 3(7) of the Year 2000 
     Information and Readiness Disclosure Act), to the designated 
     person, if the prospective plaintiff has reasonable access to 
     the Internet.
       (c) Response to Notice.--
       (1) In general.--Within 30 days after receipt of the notice 
     specified in subsection (a), each prospective defendant shall 
     send by certified mail with return receipt requested to each 
     prospective plaintiff a written statement acknowledging 
     receipt of the notice, and describing the actions it has 
     taken or will take to address the problem identified by the 
     prospective plaintiff.
       (2) Willingness to engage in adr.--The Written statement 
     shall state whether the prospective defendant is willing to 
     engage in alternative dispute resolution.
       (3) Inadmissibility.--A written statement required by this 
     paragraph is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.
       (4) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (d) Failure To Respond.--If a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c)(1); or
       (2) does not describe the action, if any, the prospective 
     defendant has taken, or will take, to address the problem 
     identified by the prospective plaintiff,

     the prospective plaintiff may immediately commence at legal 
     action against that prospective defendant.
       (e) Remediation Period.--
       (1) In general.--If the prospective defendant responds and 
     proposes remedial action it will take, of offers to engage in 
     alternative dispute resolution, then the prospective 
     plaintiff shall allow the prospective defendant an additional 
     60 days from the end of the 30-day notice period to complete 
     the proposed remedial action before commencing a legal action 
     against that prospective defendant.
       (2) Extension by agreement.--The prospective plaintiff and 
     prospective defendant may change the length of the 60-day 
     remediation period by written agreement.
       (3) Multiple extensions not allowed.--Except as provided in 
     paragraph (2), a defendant in a Y2K action is entitled to no 
     more than one 30-day period and one 60-day remediation period 
     under paragraph (1).
       (4) Statutes of limitation, etc., tolled.--Any applicable 
     statute of limitations or doctrine of laches in a Y2K action 
     to which paragraph (1) applies shall be tolled during the 
     notice and remediation period under that paragraph.
       (f) Failure To Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice

[[Page 7700]]

     specified in subsection (a) or without awaiting the 
     expiration of the appropriate waiting period specified in 
     subsection (c), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff. If any defendant elects to treat the complaint as 
     such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for the appropriate period after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during the appropriate period.
       (g) Effect of Contractual or Statutory Waiting Periods.--In 
     cases in which a contract, or a statute enacted before 
     January 1, 1999, requires notice of non-performance and 
     provides for a period of delay prior to the initiation of 
     suit for breach or repudiation of contract, the period of 
     delay provided by contract or the statute is controlling over 
     the waiting period specified in subsections (c) and (d).
       (h) State Law Controls Alternative Methods.--Nothing in 
     this section supersedes or otherwise preempts any State law 
     or rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.
       (i) Provisional Remedies Unaffected.--Nothing in this 
     section interferes with the right of a litigant to 
     provisional remedies otherwise available under Rule 65 of the 
     Federal Rules of Civil Procedure or any State rule of civil 
     procedure providing extraordinary or provisional remedies in 
     any civil action in which the underlying complaint seeks both 
     injunctive and monetary relief.
       (j) Special Rule for Class Actions.--For the purpose of 
     applying this section to a Y2K action that is maintained as a 
     class action in Federal or State court, the requirements of 
     the preceding subsections of this section apply only to named 
     plaintiffs in the class action.

     SEC. 8. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to Y2K actions and, except to the 
     extent that this section requires additional information to 
     be contained in or attached to pleadings, nothing in this 
     section is intended to amend or otherwise supersede 
     applicable rules of Federal or State civil procedure.
       (b) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, there shall be filed with the 
     complaint a statement of specific information as to the 
     nature and amount of each element of damages and the factual 
     basis for the damages calculation.
       (c) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that there is a material defect in a 
     product or service, there shall be filed with the complaint a 
     statement of specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (d) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, there shall be filed with the complaint, with respect 
     to each element of that claim, a statement of the facts 
     giving rise to a strong inference that the defendant acted 
     with the required state of mind.

     SEC. 9. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably should have been, 
     aware, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the Y2K failure.

     SEC. 10. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       In any Y2K action for breach or repudiation of contract, 
     the applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by the law in 
     existence on January 1, 1999. Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon such doctrines.

     SEC. 11. DAMAGES LIMITATION BY CONTRACT.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, any category of damages 
     unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was effective or by 
     operation of Federal law.

     SEC. 12. DAMAGES IN TORT CLAIMS.

       (a) In General.--A party to a Y2K action making a tort 
     claim may not recover damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party; or
       (2) such losses result directly from damage to tangible 
     personal or real property caused by the Y2K failure (other 
     than damage to property that is the subject of the contract 
     between the parties to the Y2K action or, in the event there 
     is no contract between the parties, other than damage caused 
     only to the property that experienced the Y2K failure),

     and such damages are permitted under applicable State law.
       (b) Economic Loss.--For purposes of this section only, and 
     except as otherwise specifically provided in a valid and 
     enforceable written contract between the plaintiff and the 
     defendant in a Y2K action, the term ``economic loss''--
       (1) means amounts awarded to compensate an injured party 
     for any loss other than losses described in subsection 
     (a)(2); and
       (2) includes amounts awarded for damages such as--
       (A) lost profits or sales;
       (B) business interruption;
       (C) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (D) losses that arise because of the claims of third 
     parties;
       (E) losses that must be plead as special damages; and
       (F) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (c) Certain Actions Excluded.--This section does not 
     affect, abrogate, amend, or alter any patent, copyright, 
     trade-secret, trademark, or service-mark action, or any claim 
     for defamation or invasion of privacy under Federal or State 
     law.
       (d) Certain Other Actions.--A person liable for damages, 
     whether by settlement or judgment, in a civil action to which 
     this Act does not apply because of section 4(c), whose 
     liability, in whole or in part, is the result of a Y2K 
     failure may, notwithstanding any other provision of this Act, 
     pursue any remedy otherwise available under Federal or State 
     law against the person responsible for that Y2K failure to 
     the extent of recovering the amount of those damages.

     SEC. 13. STATE OF MIND; BYSTANDER LIABILITY; CONTROL.

       (a) Defendant's State of Mind.--In a Y2K action other than 
     a claim for breach of repudiation of contract, and in which 
     the defendant's actual or constructive awareness of an actual 
     or potential Y2K failure is an element of the claim, the 
     defendant is not liable unless the plaintiff establishes that 
     elements of the claim by clear and convincing evidence.
       (b) Limitation on Bystander Liability for Y2K Failures.--
       (1) In general.--With respect to any Y2K action for money 
     damages in which--
       (A) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the Y2K failure at
       (B) the plaintiff is not in substantial privity with the 
     defendant; and
       (C) the defendant's actual or constructive awareness of an 
     actual or potential Y2K failure is an element of the claim 
     under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves by clear and convincing evidence that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (2) Substantial privity.--For purposes of paragraph (1)(B), 
     a plaintiff and a defendant are in substantial privity when, 
     in a Y2K action arising out of the performance of 
     professional services, the plaintiff and the defendant either 
     have contractual relations with one another or the plaintiff 
     is a person who, prior to the defendant's performance of such 
     services, was specifically identified to and acknowledged by 
     the defendant as a person for whose special benefit the 
     services were being performed.
       (3) Certain claims excluded.--For purposes of paragraph 
     (1)(C), claims in which the defendant's actual or 
     constructive awareness of an actual or potential Y2K failure 
     is an element of the claim under applicable law do not 
     include claims for negligence but do include claims such as 
     fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.
       (c) Control Not Determinative of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, system, 
     product, or component that was sold, leased, rented, or 
     otherwise within the control of the party against whom a 
     claim is asserted in a Y2K action shall not constitute the 
     sole basis for recovery of damages in that action. A claim in 
     a Y2K action for breach or repudiation of contract for such a 
     failure is governed by the terms of the contract.

     SEC. 14. LIABILITY OF OFFICERS, DIRECTORS, AND EMPLOYEES.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) is not personally liable in any Y2K action in 
     that person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee, or employee from the business or 
     organization during the 12 months immediately preceding the 
     act or omission for which liability is imposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found

[[Page 7701]]

     by clear and convincing evidence that the director, officer, 
     trustee, or employee--
       (1) made statements intended to be misleading regarding any 
     actual or potential year 2000 problem; or
       (2) withheld from the public significant information there 
     was a legal duty to disclose regarding any actual or 
     potential year 2000 problem of that business or organization 
     which would likely result in actionable Y2K failure.
       (c) State Law, Charter, or Bylaws.--Nothing in this section 
     supersedes any provision of State law, charter, or a bylaw 
     authorized by State law in existence on January 1, 1999, that 
     establishes lower financial limits on the liability of a 
     director, officer, trustee, or employee of such a business or 
     organization.

     SEC. 15. APPOINTMENT OF SPECIAL MASTERS OR MAGISTRATES FOR 
                   Y2K ACTIONS.

       Any District Court of the United States in which a Y2K 
     action is pending may appoint a special master or a 
     magistrate to hear the matter and to make findings of fact 
     and conclusions of law in accordance with Rule 53 of the 
     Federal Rules of Civil Procedure.

     SEC. 16. Y2K ACTIONS AS CLASS ACTIONS.

       (a) Minimum Injury Requirement.--A Y2K action involving a 
     claim that a product or service is defective may be 
     maintained as a class action in Federal or State court as to 
     that claim only if--
       (1) it satisfies all other prerequisites established by 
     applicable Federal or State law, including applicable rules 
     of civil procedure; and
       (2) the court finds that the defect in a product or service 
     as alleged would be a material defect for the majority of the 
     members of the class.
       (b) Notification.--In any Y2K action that is maintained as 
     a class action, the court, in addition to any other notice 
     required by applicable Federal or State law, shall direct 
     notice of the action to each member of the class, which shall 
     include--
       (1) a concise and clear description of the nature of the 
     action;
       (2) the jurisdiction where the case is pending; and
       (3) the fee arrangements with class counsel, including the 
     hourly fee being charged, or, if it is a contingency fee, the 
     percentage of the final award which will be paid, including 
     as estimate of the total amount that would be paid if the 
     requested damages were to be granted.
       (c) Forum for Y2K Class Actions.--
       (1) Jurisdiction.--Except as provided in paragraph (2), a 
     Y2K action may be brought as a class action in a United 
     States District Court or removed to a United States District 
     Court if the amount in controversy is greater than the sum or 
     value of $1,000,000 (exclusive of interest and costs), 
     computed on the basis of all claims to be determined in the 
     action.
       (2) Exception.--A Y2K action may not be brought or removed 
     as a class action under this section if--
       (A) a substantial majority of the members of the proposed 
     plaintiff class are citizens of a single State;
       (B) the primary defendants are citizens of that State; and
       (C) the claims asserted will be governed primarily by the 
     law of that State, or

     the primary defendants are States, State officials, or other 
     governmental entities against whom the United States District 
     Court may be foreclosed from ordering relief.
       (D) This section shall become effective four days after the 
     date of enactment.
                                 ______
                                 

                         LOTT AMENDMENT NO. 295

  Mr. LOTT proposed an amendment to amendment No. 294 proposed by Mr. 
Lott to the bill, S. 96, supra; as follows:

       Strike all after the word ``1'' and add the following:

     SHORT TITLE; TABLE OF SECTIONS.

       (a) Short Title.--This Act may be cited as the ``Y2K Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Application of Act.
Sec. 5. Punitive damages limitations.
Sec. 6. Proportionate liability.
Sec. 7. Pre-litigation notice.
Sec. 8. Pleading requirements.
Sec. 9. Duty to mitigate.
Sec. 10. Application of existing impossibility or commercial 
              impracticability doctrines.
Sec. 11. Damages limitation by contract.
Sec. 12. Damages in tort claims.
Sec. 13. State of mind; bystander liability; control.
Sec. 14. Liability of officers, directors, and employees.
Sec. 15. Appointment of special masters or magistrates for Y2K actions.
Sec. 16. Y2K actions as class actions.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that:
       (1)(A) Many information technology systems, devices, and 
     programs are not capable of recognizing certain dates in 1999 
     and after December 31, 1999, and will read dates in the year 
     2000 and thereafter as if those dates represent the year 1900 
     or thereafter or will fail to process dates after December 
     31, 1999.
       (B) If not corrected, the problem described in subparagraph 
     (A) and resulting failures could incapacitate systems that 
     are essential to the functioning of markets, commerce, 
     consumer products, utilities, Government, and safety and 
     defense systems, in the United States and throughout the 
     world.
       (2) It is in the national interest that producers and users 
     of technology products concentrate their attention and 
     resources in the time remaining before January 1, 2000, on 
     assessing, fixing, testing, and developing contingency plans 
     to address any and all outstanding year 2000 computer date-
     change problems, so as to minimize possible disruptions 
     associated with computer failures.
       (3)(A) Because year 2000 computer date-change problems may 
     affect virtually all businesses and other users of technology 
     products to some degree, there is a substantial likelihood 
     that actual or potential year 2000 failures will prompt a 
     significant volume of litigation, much of it insubstantial.
       (B) The litigation described in subparagraph (A) would have 
     a range of undesirable effects, including the following:
       (i) It would threaten to waste technical and financial 
     resources that are better devoted to curing year 2000 
     computer date-change problems and ensuring that systems 
     remain or become operational.
       (ii) It could threaten the network of valued and trusted 
     business and customer relationships that are important to the 
     effective functioning of the national economy.
       (iii) It would strain the Nation's legal system, causing 
     particular problems for the small businesses and individuals 
     who already find that system inaccessible because of its 
     complexity and expense.
       (iv) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes could exacerbate the 
     difficulties associated with the date change and work against 
     the successful resolution of those difficulties.
       (4) It is appropriate for the Congress to enact legislation 
     to assure that Y2K problems do not unnecessarily disrupt 
     interstate commerce or create unnecessary caseloads in 
     Federal courts and to provide initiatives to help businesses 
     prepare and be in a position to withstand the potentially 
     devastating economic impact of Y2K.
       (5) Resorting to the legal system for resolution of Y2K 
     problems is not feasible for many businesses and individuals 
     who already find the legal system inaccessible, particularly 
     small businesses and individuals who already find the legal 
     system inaccessible, because of its complexity and expense.
       (6) The delays, expense, uncertainties, loss of control, 
     adverse publicity, and animosities that frequently accompany 
     litigation of business disputes can only exacerbate the 
     difficulties associated with Y2K date change, and work 
     against the successful resolution of those difficulties.
       (7) Concern about the potential for liability--in 
     particular, concern about the substantial litigation expense 
     associated with defending against even the most insubstantial 
     lawsuits--is prompting many persons and businesses with 
     technical expertise to avoid projects aimed at curing year 
     2000 computer date-change problems.
       (8) A proliferation of frivolous Y2K lawsuits by 
     opportunistic parties may further limit access to courts by 
     straining the resources of the legal system and depriving 
     deserving parties of their legitimate rights to relief.
       (9) Congress encourages businesses to approach their Y2K 
     disputes responsibly, and to avoid unnecessary, time-
     consuming and costly litigation about Y2K failures, 
     particularly those that are not material. Congress supports 
     good faith negotiations between parties when there is a 
     dispute over a Y2K problem, and, if necessary, urges the 
     parties to enter into voluntary, non-binding mediation rather 
     than litigation.
       (b) Purposes.--Based upon the power of the Congress under 
     Article I, Section 8, Clause 3 of the Constitution of the 
     United States, the purpose of this Act are--
       (1) to establish uniform legal standards that give all 
     businesses and users of technology products reasonable 
     incentives to solve Y2K computer date-change problems before 
     they develop;
       (2) to encourage continued Y2K remediation and testing 
     efforts by providers, suppliers, customers, and other 
     contracting partners;
       (3) to encourage private and public parties alike to 
     resolve Y2K disputes by alternative dispute mechanisms in 
     order to avoid costly and time-consuming litigation, to 
     initiate those mechanisms as early as possible, and to 
     encourage the prompt identification and correction of Y2K 
     problems; and
       (4) to lessen the burdens on interstate commerce by 
     discouraging insubstantial lawsuits while preserving the 
     ability of individuals and businesses that have suffered real 
     injury to obtain complete relief.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Y2K action.--The term ``Y2K action''--
       (A) means a civil action commenced in any Federal or State 
     court, or an agency board of contract appeal proceeding, in 
     which the

[[Page 7702]]

     plaintiff's alleged harm or injury resulted directly or 
     indirectly from an actual or potential Y2K failure, or a 
     claim or defense is related directly or indirectly to an 
     actual or potential Y2K failure;
       (B) includes a civil action commenced in any Federal or 
     State court by a governmental entity when acting in a 
     commercial or contracting capacity; but
       (C) does not include an action brought by a governmental 
     entity acting in a regulatory, supervisory, or enforcement 
     capacity.
       (2) Y2K failure.--The term ``Y2K failure'' means failure by 
     any device or system (including any computer system and any 
     microchip or integrated circuit embedded in another device or 
     product), or any software, firmware, or other set or 
     collection of processing instructions to process, to 
     calculate, to compare, to sequence, to display, to store, to 
     transmit, or to receive year-2000 date-related data, 
     including failures--
       (A) to deal with or account for transitions or comparisons 
     from, into, and between the years 1999 and 2000 accurately;
       (B) to recognize or accurately to process any specific date 
     in 1999, 2000, or 2001; or
       (C) accurately to account for the year 2000's status as a 
     leap year, including recognition and processing of the 
     correct date on February 29, 2000.
       (3) Government entity.--The term ``government entity'' 
     means an agency, instrumentality, or other entity of Federal, 
     State, or local government (including multijurisdictional 
     agencies, instrumentalities, and entities).
       (4) Material defect.--The term ``material defect'' means a 
     defect in any item, whether tangible or intangible, or in the 
     provision of a service, that substantially prevents the item 
     or service from operating or functioning as designed or 
     according to its specifications. The term ``material defect'' 
     does not include a defect that--
       (A) has an insignificant or de minimis effect on the 
     operation or functioning of an item or computer program;
       (B) affects only a component of an item or program that, as 
     a whole, substantially operates or functions as designed; or
       (C) has an insignificant or de minimis effect on the 
     efficacy of the service provided.
       (5) Personal injury.--The term ``personal injury'' means 
     physical injury to a natural person, including--
       (A) death as a result of a physical injury; and
       (B) mental suffering, emotional distress, or similar 
     injuries suffered by that person in connection with a 
     physical injury.
       (6) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, Commonwealth of 
     Puerto Rico, the Northern Mariana Islands, the United States 
     Virgin Islands, Guam, American Samoa, and any other territory 
     or possession of the United States, and any political 
     subdivision thereof.
       (7) Contract.--The term ``contract'' means a contract, 
     tariff, license, or warranty.
       (8) Alternative dispute resolution.--The term ``alternative 
     dispute resolution'' means any process or proceeding, other 
     than adjudication by a court or in an administrative 
     proceeding, to assist in the resolution of issues in 
     controversy, through processes such as early neutral 
     evaluation, mediation, minitrial, and arbitration.

     SEC. 4. APPLICATION OF ACT.

       (a) General Rule.--This Act applies to any Y2K action 
     brought in a State or Federal court after February 22, 1999, 
     for a Y2K failure occurring before January 1, 2003, including 
     any appeal, remand, stay, or other judicial, administrative, 
     or alternative dispute resolution proceeding in such an 
     action.
       (b) No New Cause of Action Created.--Nothing in this Act 
     creates a new cause of action, and, except as otherwise 
     explicitly provided in this Act, nothing in this Act expands 
     any liability otherwise imposed or limits any defense 
     otherwise available under Federal or State law.
       (c) Claims for Personal Injury or Wrongful Death 
     Excluded.--This Act does not apply to a claim for personal 
     injury or for wrongful death.
       (d) Contract Preservation.--
       (1) In general.--Subject to paragraph (2), in any Y2K 
     action any written contractual term, including a limitation 
     or an exclusion of liability, or a disclaimer of warranty, 
     shall be strictly enforced unless the enforcement of that 
     term would manifestly and directly contravene applicable 
     State law embodied in any statute in effect on January 1, 
     1999, specifically addressing that term.
       (2) Interpretation of contract.--In any Y2K action in which 
     a contract to which paragraph (1) applies is silent as to a 
     particular issue, the interpretation of the contract as to 
     that issue shall be determined by applicable law in effect at 
     the time the contract was executed.
       (e) Preemption of State Law.--This Act supersedes State law 
     to the extent that it establishes a rule of law applicable to 
     a Y2K action that is inconsistent with State law, but nothing 
     in this Act implicates, alters, or diminishes the ability of 
     a State to defend itself against any claim on the basis of 
     sovereign immunity.

     SEC. 5. PUNITIVE DAMAGES LIMITATIONS.

       (a) In General.--In any Y2K action in which punitive 
     damages are permitted by applicable law, the defendant shall 
     not be liable for punitive damages unless the plaintiff 
     proves by clear and convincing evidence that the applicable 
     standard for awarding damages has been met.
       (b) Caps on Punitive Damages.--
       (1) In general.--Subject to the evidentiary standard 
     established by subsection (a), punitive damages permitted 
     under applicable law against a defendant in such a Y2K action 
     may not exceed the larger of--
       (A) 3 times the amount awarded for compensatory damages; or
       (B) $250,000.
       (2) Special rule.--In the case of a defendant--
       (A) who--
       (i) is sued in his or her capacity as an individual; and
       (ii) whose net worth does not exceed $500,000; or
       (B) that is an unincorporated business, a partnership, 
     corporation, association, unit of local government, or 
     organization with fewer than 25 full-time employees,

     paragraph (1) shall be applied by substituting ``smaller'' 
     for ``larger''.
       (3) No cap if injury specifically intended.--Neither 
     paragraph (1) nor paragraph (2) applies if the plaintiff 
     establishes by clear and convincing evidence that the 
     defendant acted with specific intent to injure the plaintiff.
       (c) Government Entities.--Punitive damages in a Y2K action 
     may not be awarded against a government entity.

     SEC. 6. PROPORTIONATE LIABILITY.

       (a) In General.--Except as provided in subsections (b) and 
     (c), a person against whom a final judgment is entered in a 
     Y2K action shall be liable solely for the portion of the 
     judgment that corresponds to the relative and proportional 
     responsibility of that person. In determining the percentage 
     of responsibility of any defendant, the trier of fact shall 
     determine that percentage as a percentage of the total fault 
     of all persons, including the plaintiff, who caused or 
     contributed to the total loss incurred by the plaintiff.
       (b) Proportionate Liability.--
       (1) Determination of responsibility.--In any Y2K action, 
     the court shall instruct the jury to answer special 
     interrogatories, or, if there is no jury, the court shall 
     make findings with respect to each defendant, including 
     defendants who have entered into settlements with the 
     plaintiff or plaintiffs, concerning--
       (A) the percentage of responsibility, if any, of each 
     defendant, measured as a percentage of the total fault of all 
     persons who caused or contributed to the loss incurred by the 
     plaintiff; and
       (B) if alleged by the plaintiff, whether the defendant--
       (i) acted with specific intent to injure the plaintiff; or
       (ii) knowingly committed fraud.
       (2) Contents of special interrogatories or findings.--The 
     responses to interrogatories or findings under paragraph (1) 
     shall specify the total amount of damages that the plaintiff 
     is entitled to recover and the percentage of responsibility 
     of each defendant found to have caused or contributed to the 
     loss incurred by the plaintiff.
       (3) Factors for consideration.--In determining the 
     percentage of responsibility under this subsection, the trier 
     of fact shall consider--
       (A) the nature of the conduct of each person found to have 
     caused or contributed to the loss incurred by the plaintiff; 
     and
       (B) the nature and extent of the causal relationship 
     between the conduct of each defendant and the damages 
     incurred by the plaintiff.
       (c) Joint Liability for Specific Intent or Fraud.--
       (1) In general.--Notwithstanding subsection (a), the 
     liability of a defendant in a Y2K action is joint and several 
     if the trier of fact specifically determines that the 
     defendant--
       (A) acted with specific intent to injure the plaintiff; or
       (B) knowingly committed fraud.
       (2) Fraud; Recklessness.--
       (A) Knowing commission of fraud described.--For purposes of 
     subsection (b)(1)(B)(ii) and paragraph (1)(B) of this 
     subsection, a defendant knowingly committed fraud if the 
     defendant--
       (i) made an untrue statement of a material fact, with 
     actual knowledge that the statement was false;
       (ii) omitted a fact necessary to make the statement not be 
     misleading, with actual knowledge that, as a result of the 
     omission, the statement was false; and
       (iii) knew that the plaintiff was reasonably likely to rely 
     on the false statement.
       (B) Recklessness.--For purposes of subsection (b)(1)(B) and 
     paragraph (1) of this subsection, reckless conduct by the 
     defendant does not constitute either a specific intent to 
     injure, or the knowing commission of fraud, by the defendant.
       (3) Right to contribution not affected.--Nothing in this 
     section affects the right, under any other law, of a 
     defendant to contribution with respect to another defendant 
     found under subsection (b)(1)(B), or determined under 
     paragraph (1)(B) of this subsection, to have acted with 
     specific intent to

[[Page 7703]]

     injure the plaintiff or to have knowingly committed fraud.
       (d) Special Rules.--
       (1) Uncollectible share.--
       (A) In general.--Notwithstanding subsection (a), if, upon 
     motion not later than 6 months after a final judgment is 
     entered in any Y2K action, the court determines that all or 
     part of the share of the judgment against a defendant for 
     compensatory damages is not collectible against that 
     defendant, then each other defendant in the action is liable 
     for the uncollectible share as follows:
       (i) Percentage of net worth.--The other defendants are 
     jointly and severally liable for the uncollectible share if 
     the plaintiff establishes that--
       (I) the plaintiff is an individual whose recoverable 
     damages under the final judgment are equal to more than 10 
     percent of the net worth of the plaintiff; and
       (II) the net worth of the plaintiff is less than $200,000.
       (ii) Other plaintiffs.--For a plaintiff not described in 
     clause (i), each of the other defendants is liable for the 
     uncollectible share in proportion to the percentage of 
     responsibility of that defendant, except that the total 
     liability of a defendant under this clause may not exceed 50 
     percent of the proportionate share of that defendant, as 
     determined under subsection (b)(2).
       (B) Overall limit.--The total payments required under 
     subparagraph (A) from all defendants may not exceed the 
     amount of the uncollectible share.
       (C) Subject to contribution.--A defendant against whom 
     judgment is not collectible is subject to contribution and to 
     any continuing liability to the plaintiff on the judgment.
       (2) Special right of contribution.--To the extent that a 
     defendant is required to make an additional payment under 
     paragraph (1), that defendant may recover contribution--
       (A) from the defendant originally liable to make the 
     payment;
       (B) from any other defendant that is jointly and severally 
     liable;
       (C) from any other defendant held proportionately liable 
     who is liable to make the same payment and has paid less than 
     that other defendant's proportionate share of that payment; 
     or
       (D) from any other person responsible for the conduct 
     giving rise to the payment that would have been liable to 
     make the same payment.
       (3) Nondisclosure to jury.--The standard for allocation of 
     damages under subsection (a) and subsection (b)(1), and the 
     procedure for reallocation of uncollectible shares under 
     paragraph (1) of this subsection, shall not be disclosed to 
     members of the jury.
       (e) Settlement Discharge.--
       (1) In general.--A defendant who settles a Y2K action at 
     any time before final verdict or judgment shall be discharged 
     from all claims for contribution brought by other persons. 
     Upon entry of the settlement by the court, the court shall 
     enter a bar order constituting the final discharge of all 
     obligations to the plaintiff of the settling defendant 
     arising out of the action. The order shall bar all future 
     claims for contribution arising out of the action--
       (A) by any person against the settling defendant; and
       (B) by the settling defendant against any person other than 
     a person whose liability has been extinguished by the 
     settlement of the settling defendant.
       (2) Reduction.--If a defendant enters into a settlement 
     with the plaintiff before the final verdict or judgment, the 
     verdict or judgment shall be reduced by the greater of--
       (A) an amount that corresponds to the percentage of 
     responsibility of that defendant; or
       (B) the amount paid to the plaintiff by that defendant.
       (f) General Right of Contribution.--
       (1) In general.--A defendant who is jointly and severally 
     liable for damages in any Y2K action may recover contribution 
     from any other person who, if joined in the original action, 
     would have been liable for the same damages. A claim for 
     contribution shall be determined based on the percentage of 
     responsibility of the claimant and of each person against 
     whom a claim for contribution is made.
       (2) Statute of limitations for contribution.--An action for 
     contribution in connection with a Y2K action shall be brought 
     not later than 6 months after the entry of a final, 
     nonappealable judgment in the Y2K action, except than an 
     action for contribution brought by a defendant who was 
     required to make an additional payment under subsection 
     (d)(1) may be brought not later than 6 months after the date 
     on which such payment was made.
       (g) More Protective State Law Not Preempted.--Nothing in 
     this section pre-empts or supersedes any provision of State 
     statutory law that--
       (1) limits the liability of a defendant in a Y2K action to 
     a lesser amount than the amount determined under this 
     section; or
       (2) otherwise affords a greater degree of protection from 
     joint or several liability than is afforded by this section.

     SEC. 7. PRE-LITIGATION NOTICE.

       (a) In General.--Before commencing a Y2K action, except an 
     action that seeks only injunctive relief, a prospective 
     plaintiff with a Y2K claim shall send a written notice by 
     certified mail to each prospective defendant in that action. 
     The notice shall provide specific and detailed information 
     about--
       (1) the manifestations of any material defect alleged to 
     have caused harm or loss;
       (2) the harm or loss allegedly suffered by the prospective 
     plaintiff;
       (3) how the prospective plaintiff would like the 
     prospective defendant to remedy the problem;
       (4) the basis upon which the prospective plaintiff seeks 
     that remedy; and
       (5) the name, title, address, and telephone number of any 
     individual who has authority to negotiate a resolution of the 
     dispute on behalf of the prospective plaintiff.
       (b) Person to Whom Notice To Be Sent.--The notice required 
     by subsection (a) shall be sent--
       (1) to the registered agent of the prospective defendant 
     for service of legal process;
       (2) if the prospective defendant does not have a registered 
     agent, then to the chief executive officer of a corporation, 
     the managing partner of a partnership, the proprietor of a 
     sole proprietorship, or to a similarly-situated person for 
     any other enterprise; or
       (3) if the prospective defendant has designated a person to 
     receive pre-litigation notices on a Year 2000 Internet 
     Website (as defined in section 3(7) of the Year 2000 
     Information and Readiness Disclosure Act), to the designated 
     person, if the prospective plaintiff has reasonable access to 
     the Internet.
       (c) Response to Notice.--
       (1) In general.--Within 30 days after receipt of the notice 
     specified in subsection (a), each prospective defendant shall 
     send by certified mail with return receipt requested to each 
     prospective plaintiff a written statement acknowledging 
     receipt of the notice, and describing the actions it has 
     taken or will take to address the problem identified by the 
     prospective plaintiff.
       (2) Willingness to engage in adr.--The Written statement 
     shall state whether the prospective defendant is willing to 
     engage in alternative dispute resolution.
       (3) Inadmissibility.--A written statement required by this 
     paragraph is not admissible in evidence, under Rule 408 of 
     the Federal Rules of Evidence or any analogous rule of 
     evidence in any State, in any proceeding to prove liability 
     for, or the invalidity of, a claim or its amount, or 
     otherwise as evidence of conduct or statements made in 
     compromise negotiations.
       (4) Presumptive time of receipt.--For purposes of paragraph 
     (1), a notice under subsection (a) is presumed to be received 
     7 days after it was sent.
       (d) Failure to Respond.--If a prospective defendant--
       (1) fails to respond to a notice provided pursuant to 
     subsection (a) within the 30 days specified in subsection 
     (c)(1); or
       (2) does not describe the action, if any, the prospective 
     defendant has taken, or will take, to address the problem 
     identified by the prospective plaintiff,

     the prospective plaintiff may immediately commence at legal 
     action against that prospective defendant.
       (e) Remediation Period.--
       (1) In general.--If the prospective defendant responds and 
     proposes remedial action it will take, of offers to engage in 
     alternative dispute resolution, then the prospective 
     plaintiff shall allow the prospective defendant an additional 
     60 days from the end of the 30-day notice period to complete 
     the proposed remedial action before commencing a legal action 
     against that prospective defendant.
       (2) Extension by agreement.--The prospective plaintiff and 
     prospective defendant may change the length of the 60-day 
     remediation period by written agreement.
       (3) Multiple extensions not allowed.--Except as provided in 
     paragraph (2), a defendant in a Y2K action is entitled to no 
     more than one 30-day period and one 60-day remediation period 
     under paragraph (1).
       (4) Statutes of limitation, etc., tolled.--Any applicable 
     statute of limitations or doctrine of laches in a Y2K action 
     to which paragraph (1) applies shall be tolled during the 
     notice and remediation period under that paragraph.
       (f) Failure to Provide Notice.--If a defendant determines 
     that a plaintiff has filed a Y2K action without providing the 
     notice specified in subsection (a) or without awaiting the 
     expiration of the appropriate waiting period specified in 
     subsection (c), the defendant may treat the plaintiff's 
     complaint as such a notice by so informing the court and the 
     plaintiff. If any defendant elects to treat the complaint as 
     such a notice--
       (1) the court shall stay all discovery and all other 
     proceedings in the action for the appropriate period after 
     filing of the complaint; and
       (2) the time for filing answers and all other pleadings 
     shall be tolled during the appropriate period.
       (g) Effect of Contractual or Statutory Waiting Periods.--In 
     cases in which a contract, or a statute enacted before 
     January 1, 1999, requires notice of non-performance and 
     provides for a period of delay prior to the initiation of 
     suit for breach or repudiation of contract, the period of 
     delay provided by

[[Page 7704]]

     contract or the statute is controlling over the waiting 
     period specified in subsections (c) and (d).
       (h) State Law Controls Alternative Methods.--Nothing in 
     this section supersedes or otherwise preempts any State law 
     or rule of civil procedure with respect to the use of 
     alternative dispute resolution for Y2K actions.
       (i) Provisional Remedies Unaffected.--Nothing in this 
     section interferes with the right of a litigant to 
     provisional remedies otherwise available under Rule 65 of the 
     Federal Rules of Civil Procedure or any State rule of civil 
     procedure providing extraordinary or provisional remedies in 
     any civil action in which the underlying complaint seeks both 
     injunctive and monetary relief.
       (j) Special Rule for Class Actions.--For the purpose of 
     applying this section to a Y2K action that is maintained as a 
     class action in Federal or State court, the requirements of 
     the preceding subsections of this section apply only to named 
     plaintiffs in the class action.

     SEC. 8. PLEADING REQUIREMENTS.

       (a) Application With Rules of Civil Procedure.--This 
     section applies exclusively to Y2K actions and, except to the 
     extent that this section requires additional information to 
     be contained in or attached to pleadings, nothing in this 
     section is intended to amend or otherwise supersede 
     applicable rules of Federal or State civil procedure.
       (b) Nature and Amount of Damages.--In all Y2K actions in 
     which damages are requested, there shall be filed with the 
     complaint a statement of specific information as to the 
     nature and amount of each element of damages and the factual 
     basis for the damages calculation.
       (c) Material Defects.--In any Y2K action in which the 
     plaintiff alleges that there is a material defect in a 
     product or service, there shall be filed with the complaint a 
     statement of specific information regarding the 
     manifestations of the material defects and the facts 
     supporting a conclusion that the defects are material.
       (d) Required State of Mind.--In any Y2K action in which a 
     claim is asserted on which the plaintiff may prevail only on 
     proof that the defendant acted with a particular state of 
     mind, there shall be filed with the complaint, with respect 
     to each element of that claim, a statement of the facts 
     giving rise to a strong inference that the defendant acted 
     with the required state of mind.

     SEC. 9. DUTY TO MITIGATE.

       Damages awarded in any Y2K action shall exclude 
     compensation for damages the plaintiff could reasonably have 
     avoided in light of any disclosure or other information of 
     which the plaintiff was, or reasonably should have been, 
     aware, including information made available by the defendant 
     to purchasers or users of the defendant's product or services 
     concerning means of remedying or avoiding the Y2K failure.

     SEC. 10. APPLICATION OF EXISTING IMPOSSIBILITY OR COMMERCIAL 
                   IMPRACTICABILITY DOCTRINES.

       In any Y2K action for breach or repudiation of contract, 
     the applicability of the doctrines of impossibility and 
     commercial impracticability shall be determined by the law in 
     existence on January 1, 1999. Nothing in this Act shall be 
     construed as limiting or impairing a party's right to assert 
     defenses based upon such doctrines.

     SEC. 11. DAMAGES LIMITATION BY CONTRACT.

       In any Y2K action for breach or repudiation of contract, no 
     party may claim, nor be awarded, any category of damages 
     unless such damages are allowed--
       (1) by the express terms of the contract; or
       (2) if the contract is silent on such damages, by operation 
     of State law at the time the contract was effective or by 
     operation of Federal law.

     SEC. 12. DAMAGES IN TORT CLAIMS.

       (a) In General.--A party to a Y2K action making a tort 
     claim may not recover damages for economic loss unless--
       (1) the recovery of such losses is provided for in a 
     contract to which the party seeking to recover such losses is 
     a party; or
       (2) such losses result directly from damage to tangible 
     personal or real property caused by the Y2K failure (other 
     than damage to property that is the subject of the contract 
     between the parties to the Y2K action or, in the event there 
     is no contract between the parties, other than damage caused 
     only to the property that experienced the Y2K failure),

     and such damages are permitted under applicable State law.
       (b) Economic Loss.--For purposes of this section only, and 
     except as otherwise specifically provided in a valid and 
     enforceable written contract between the plaintiff and the 
     defendant in a Y2K action, the term ``economic loss''--
       (1) means amounts awarded to compensate an injured party 
     for any loss other than losses described in subsection 
     (a)(2); and
       (2) includes amounts awarded for damages such as--
       (A) lost profits or sales;
       (B) business interruption;
       (C) losses indirectly suffered as a result of the 
     defendant's wrongful act or omission;
       (D) losses that arise because of the claims of third 
     parties;
       (E) losses that must be plead as special damages; and
       (F) consequential damages (as defined in the Uniform 
     Commercial Code or analogous State commercial law).
       (c) Certain Actions Excluded.--This section does not 
     affect, abrogate, amend, or alter any patent, copyright, 
     trade-secret, trademark, or service-mark action, or any claim 
     for defamation or invasion of privacy under Federal or State 
     law.
       (d) Certain Other Actions.--A person liable for damages, 
     whether by settlement or judgment, in a civil action to which 
     this Act does not apply because of section 4(c), whose 
     liability, in whole or in part, is the result of a Y2K 
     failure may, notwithstanding any other provision of this Act, 
     pursue any remedy otherwise available under Federal or State 
     law against the person responsible for that Y2K failure to 
     the extent of recovering the amount of those damages.

     SEC. 13. STATE OF MIND; BYSTANDER LIABILITY; CONTROL.

       (a) Defendant's State of Mind.--In a Y2K action other than 
     a claim for breach of repudiation of contract, and in which 
     the defendant's actual or constructive awareness of an actual 
     or potential Y2K failure is an element of the claim, the 
     defendant is not liable unless the plaintiff establishes that 
     elements of the claim by clear and convincing evidence.
       (b) Limitation on Bystander Liability for Y2K Failures.--
       (1) In general.--With respect to any Y2K action for money 
     damages in which--
       (A) the defendant is not the manufacturer, seller, or 
     distributor of a product, or the provider of a service, that 
     suffers or causes the Y2K failure at
       (B) the plaintiff is not in substantial privity with the 
     defendant; and
       (C) the defendant's actual or constructive awareness of an 
     actual or potential Y2K failure is an element of the claim 
     under applicable law,

     the defendant shall not be liable unless the plaintiff, in 
     addition to establishing all other requisite elements of the 
     claim, proves by clear and convincing evidence that the 
     defendant actually knew, or recklessly disregarded a known 
     and substantial risk, that such failure would occur.
       (2) Substantial privity.--For purposes of paragraph (1)(B), 
     a plaintiff and a defendant are in substantial privity when, 
     in a Y2K action arising out of the performance of 
     professional services, the plaintiff and the defendant either 
     have contractual relations with one another or the plaintiff 
     is a person who, prior to the defendant's performance of such 
     services, was specifically identified to and acknowledged by 
     the defendant as a person for whose special benefit the 
     services were being performed.
       (3) Certain claims excluded.--For purposes of paragraph 
     (1)(C), claims in which the defendant's actual or 
     constructive awareness of an actual or potential Y2K failure 
     is an element of the claim under applicable law do not 
     include claims for negligence but do include claims such as 
     fraud, constructive fraud, breach of fiduciary duty, 
     negligent misrepresentation, and interference with contract 
     or economic advantage.
       (c) Control Not Determinative of Liability.--The fact that 
     a Y2K failure occurred in an entity, facility, system, 
     product, or component that was sold, leased, rented, or 
     otherwise within the control of the party against whom a 
     claim is asserted in a Y2K action shall not constitute the 
     sole basis for recovery of damages in that action. A claim in 
     a Y2K action for breach or repudiation of contract for such a 
     failure is governed by the terms of the contract.

     SEC. 14. LIABILITY OF OFFICERS, DIRECTORS, AND EMPLOYEES.

       (a) In General.--A director, officer, trustee, or employee 
     of a business or other organization (including a corporation, 
     unincorporated association, partnership, or non-profit 
     organization) is not personally liable in any Y2K action in 
     that person's capacity as a director, officer, trustee, or 
     employee of the business or organization for more than the 
     greater of--
       (1) $100,000; or
       (2) the amount of pre-tax compensation received by the 
     director, officer, trustee, or employee from the business or 
     organization during the 12 months immediately preceding the 
     act or omission for which liability is imposed.
       (b) Exception.--Subsection (a) does not apply in any Y2K 
     action in which it is found by clear and convincing evidence 
     that the director, officer, trustee, or employee--
       (1) made statements intended to be misleading regarding any 
     actual or potential year 2000 problem; or
       (2) withheld from the public significant information there 
     was a legal duty to disclose regarding any actual or 
     potential year 2000 problem of that business or organization 
     which would likely result in actionable Y2K failure.
       (c) State Law, Charter, or Bylaws.--Nothing in this section 
     supersedes any provision of State law, charter, or a bylaw 
     authorized by State law in existence on January 1, 1999, that 
     establishes lower financial limits on the liability of a 
     director, officer, trustee, or employee of such a business or 
     organization.

     SEC. 15. APPOINTMENT OF SPECIAL MASTERS OR MAGISTRATES FOR 
                   Y2K ACTIONS.

       Any District Court of the United States in which a Y2K 
     action is pending may appoint

[[Page 7705]]

     a special master or a magistrate to hear the matter and to 
     make findings of fact and conclusions of law in accordance 
     with Rule 53 of the Federal Rules of Civil Procedure.

     SEC. 16. Y2K ACTIONS AS CLASS ACTIONS.

       (a) Minimum Injury Requirement.--A Y2K action involving a 
     claim that a product or service is defective may be 
     maintained as a class action in Federal or State court as to 
     that claim only if--
       (1) it satisfies all other prerequisites established by 
     applicable Federal or State law, including applicable rules 
     of civil procedure; and
       (2) the court finds that the defect in a product or service 
     as alleged would be a material defect for the majority of the 
     members of the class.
       (b) Notification.--In any Y2K action that is maintained as 
     a class action, the court, in addition to any other notice 
     required by applicable Federal or State law, shall direct 
     notice of the action to each member of the class, which shall 
     include--
       (1) a concise and clear description of the nature of the 
     action;
       (2) the jurisdiction where the case is pending; and
       (3) the fee arrangements with class counsel, including the 
     hourly fee being charged, or, if it is a contingency fee, the 
     percentage of the final award which will be paid, including 
     as estimate of the total amount that would be paid if the 
     requested damages were to be granted.
       (c) Forum for Y2K Class Actions.--
       (1) Jurisdiction.--Except as provided in paragraph (2), a 
     Y2K action may be brought as a class action in a United 
     States District Court or removed to a United States District 
     Court if the amount in controversy is greater than the sum or 
     value of $1,000,000 (exclusive of interest and costs), 
     computed on the basis of all claims to be determined in the 
     action.
       (2) Exception.--A Y2K action may not be brought or removed 
     as a class action under this section if--
       (A) a substantial majority of the members of the proposed 
     plaintiff class are citizens of a single State;
       (B) the primary defendants are citizens of that State; and
       (C) the claims asserted will be governed primarily by the 
     law of that State, or

     the primary defendants are States, State officials, or other 
     governmental entities against whom the United States District 
     Court may be foreclosed from ordering relief.
       (D) This section shall become effective seven days after 
     the date of enactment.
                                 ______
                                 

                         LOTT AMENDMENT NO. 296

  Mr. LOTT proposed an amendment to the motion to recommit proposed by 
him to the bill, S. 557, supra; as follows:

       At the end of the instructions, add the following:

     with an amendment as follows:
       Strike all after the word ``TITLE'' and add the following:

    II--SOCIAL SECURITY SURPLUS PRESERVATION AND DEBT REDUCTION ACT

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Social Security Surplus 
     Preservation and Debt Reduction Act''.

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) the $69,246,000,000 unified budget surplus achieved in 
     fiscal year 1998 was entirely due to surpluses generated by 
     the social security trust funds and the cumulative unified 
     budget surpluses projected for subsequent fiscal years are 
     primarily due to surpluses generated by the social security 
     trust funds;
       (2) Congress and the President should balance the budget 
     excluding the surpluses generated by the social security 
     trust funds;
       (3) according to the Congressional Budget Office, balancing 
     the budget excluding the surpluses generated by the social 
     security trust funds will reduce the debt held by the public 
     by a total of $1,723,000,000,000 by the end of fiscal year 
     2009; and
       (4) social security surpluses should be used for social 
     security reform or to reduce the debt held by the public and 
     should not be spent on other programs.

     SEC. 203. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS.

       (a) Protection by Congress.--
       (1) Reaffirmation of support.--Congress reaffirms its 
     support for the provisions of section 13301 of the Budget 
     Enforcement Act of 1990 that provides that the receipts and 
     disbursements of the social security trust funds shall not be 
     counted for the purposes of the budget submitted by the 
     President, the congressional budget, or the Balanced Budget 
     and Emergency Deficit Control Act of 1985.
       (2) Protection of social security benefits.--If there are 
     sufficient balances in the Federal Old-Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund, the Secretary of Treasury shall give priority to 
     the payment of social security benefits required to be paid 
     by law.
       (b) Points of Order.--Section 301 of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following:
       ``(j) Social Security Point of Order.--It shall not be in 
     order in the Senate to consider a concurrent resolution on 
     the budget, an amendment thereto, or a conference report 
     thereon that violates section 13301 of the Budget Enforcement 
     Act of 1990.
       ``(k) Debt Held by the Public Point of Order.--It shall not 
     be in order in the Senate to consider any bill, joint 
     resolution, amendment, motion, or conference report that 
     would--
       ``(1) increase the limit on the debt held by the public in 
     section 253A(a) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985; or
       ``(2) provide additional borrowing authority that would 
     result in the limit on the debt held by the public in section 
     253A(a) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985 being exceeded.
       ``(l) Social Security Surplus Protection Point of Order.--
       ``(1) In general.--It shall not be in order in the Senate 
     to consider a concurrent resolution on the budget, an 
     amendment thereto, or a conference report thereon that sets 
     forth a deficit in any fiscal year.
       ``(2) Exception.--Paragraph (1) shall not apply if--
       ``(A) the limit on the debt held by the public in section 
     253A(a) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985 is suspended; or
       ``(B) the deficit for a fiscal year results solely from the 
     enactment of--
       ``(i) social security reform legislation, as defined in 
     section 253A(e)(2) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985; or
       ``(ii) provisions of legislation that are designated as an 
     emergency requirement pursuant to section 251(b)(2)(A) or 
     252(e) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985.''.
       (c) Supermajority Waiver and Appeal.--Subsections (c)(1) 
     and (d)(2) of section 904 of the Congressional Budget Act of 
     1974 are amended by striking ``305(b)(2),'' and inserting 
     ``301(k), 301(l), 305(b)(2), 318,''.
       (d) Conforming Amendment.--Section 318 of the Congressional 
     Budget Act of 1974, as added by this Act, is amended by 
     adding at the end the following:
       ``(c) Exception for Defense Spending.--Subsection (b) shall 
     not apply against an emergency designation for a provision 
     making discretionary appropriations in the defense 
     category.''.

     SEC. 204. DEDICATION OF SOCIAL SECURITY SURPLUSES TO 
                   REDUCTION IN THE DEBT HELD BY THE PUBLIC.

       (a) Amendments to the Congressional Budget Act of 1974.--
     The Congressional Budget Act of 1974 is amended--
       (1) in section 3, by adding at the end the following:
       ``(11)(A) The term `debt held by the public' means the 
     outstanding face amount of all debt obligations issued by the 
     United States Government that are held by outside investors, 
     including individuals, corporations, State or local 
     governments, foreign governments, and the Federal Reserve 
     System.
       ``(B) For the purpose of this paragraph, the term `face 
     amount', for any month, of any debt obligation issued on a 
     discount basis that is not redeemable before maturity at the 
     option of the holder of the obligation is an amount equal to 
     the sum of--
       ``(i) the original issue price of the obligation; plus
       ``(ii) the portion of the discount on the obligation 
     attributable to periods before the beginning of such month.
       ``(12) The term `social security surplus' means the amount 
     for a fiscal year that receipts exceed outlays of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund.'';
       (2) in section 301(a) by--
       (A) redesignating paragraphs (6) and (7) as paragraphs (7) 
     and (8), respectfully; and
       (B) inserting after paragraph (5) the following:
       ``(6) the debt held by the public; and''; and
       (3) in section 310(a) by--
       (A) striking ``or'' at the end of paragraph (3);
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) inserting the following new paragraph;
       ``(4) specify the amounts by which the statutory limit on 
     the debt held by the public is to be changed and direct the 
     committee having jurisdiction to recommend such change; or''.
       (b) Amendments to the Balanced Budget and Emergency Deficit 
     Control Act of 1985.--The Balanced Budget and Emergency 
     Deficit Control Act of 1985 is amended--
       (1) in section 250, by striking subsection (b) and 
     inserting the following:
       ``(b) General Statement of Purpose.--This part provides for 
     the enforcement of--
       ``(1) a balanced budget excluding the receipts and 
     disbursements of the social security trust funds; and
       ``(2) a limit on the debt held by the public to ensure that 
     social security surpluses are used for social security reform 
     or to reduce debt held by the public and are not spent on 
     other programs.'';
       (2) in section 250(c)(1), by inserting `` ` debt held by 
     the public', `social security surplus' '' after ``outlays', 
     ''; and
       (3) by inserting after section 253 the following:

[[Page 7706]]



     ``SEC. 253A. DEBT HELD BY THE PUBLIC LIMIT.

       ``(a) Limit.--The debt held by the public shall not 
     exceed--
       ``(1) for the period beginning May 1, 2000 through April 
     30, 2001, $3,628,000,000,000;
       ``(2) for the period beginning May 1, 2001 through April 
     30, 2002, $3,512,000,000,000;
       ``(3) for the period beginning May 1, 2002 through April 
     30, 2004, $3,383,000,000,000;
       ``(4) for the period beginning May 1, 2004 through April 
     30, 2006, $3,100,000,000,000;
       ``(5) for the period beginning May 1, 2006 through April 
     30, 2008, $2,775,000,000,000; and,
       ``(6) for the period beginning May 1, 2008 through April 
     30, 2010, $2,404,000,000,000.
       ``(b) Adjustments for Actual Social Security Surplus 
     Levels.--
       ``(1) Estimated levels.--The estimated level of social 
     security surpluses for the purposes of this section is--
       ``(A) for fiscal year 1999, $127,000,000,000;
       ``(B) for fiscal year 2000, $137,000,000,000;
       ``(C) for fiscal year 2001, $145,000,000,000;
       ``(D) for fiscal year 2002, $153,000,000,000;
       ``(E) for fiscal year 2003, $162,000,000,000;
       ``(F) for fiscal year 2004, $171,000,000,000;
       ``(G) for fiscal year 2005, $184,000,000,000;
       ``(H) for fiscal year 2006, $193,000,000,000;
       ``(I) for fiscal year 2007, $204,000,000,000;
       ``(J) for fiscal year 2008, $212,000,000,000; and
       ``(K) for fiscal year 2009, $218,000,000,000.
       ``(2) Adjustment to the limit for actual social security 
     surpluses.--After October 1 and no later than December 31 of 
     each year, the Secretary shall make the following 
     calculations and adjustments:
       ``(A) Calculation.--After the Secretary determines the 
     actual level for the social security surplus for the current 
     year, the Secretary shall take the estimated level of the 
     social security surplus for that year specified in paragraph 
     (1) and subtract that actual level.
       ``(B) Adjustment.--
       ``(i) 2000 through 2004.--With respect to the periods 
     described in subsections (a)(1), (a)(2), and (a)(3), the 
     Secretary shall add the amount calculated under subparagraph 
     (A) to--

       ``(I) the limit set forth in subsection (a) for the period 
     of years that begins on May 1st of the following calendar 
     year; and
       ``(II) each subsequent limit.

       ``(ii) 2004 through 2010.--With respect to the periods 
     described in subsections (a)(4), (a)(5), and (a)(6), the 
     Secretary shall add the amount calculated under subparagraph 
     (A) to--

       ``(I) the limit set forth in subsection (a) for the period 
     of years that includes May 1st of the following calendar 
     year; and
       ``(II) each subsequent limit.

       ``(c) Adjustment to the Limit for Emergencies.--
       ``(1) Estimate of legislation.--
       ``(A) Calculation.--If legislation is enacted into law that 
     contains a provision that is designated as an emergency 
     requirement pursuant to section 251(b)(2)(A) or 252(e), OMB 
     shall estimate the amount the debt held by the public will 
     change as a result of the provision's effect on the level of 
     total outlays and receipts excluding the impact on outlays 
     and receipts of the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund.
       ``(B) Baseline levels.--OMB shall calculate the changes in 
     subparagraph (A) relative to baseline levels for each fiscal 
     year through fiscal year 2010 using current estimates.
       ``(C) Estimate.--OMB shall include the estimate required by 
     this paragraph in the report required under section 251(a)(7) 
     or section 252(d), as the case may be.
       ``(2) Adjustment.--After January 1 and no later than May 1 
     of each calendar year beginning with calendar year 2000--
       ``(A) with respect to the periods described in subsections 
     (a)(1), (a)(2), and (a)(3), the Secretary shall add the 
     amounts calculated under paragraph (1)(A) for the current 
     year included in the report referenced in paragraph (1)(C) 
     to--
       ``(i) the limit set forth in subsection (a) for the period 
     of years that begins on May 1 of that calendar year; and
       ``(ii) each subsequent limit; and
       ``(B) with respect to the periods described in subsections 
     (a)(4), (a)(5), and (a)(6), the Secretary shall add the 
     amounts calculated under paragraph (1)(A) for the current 
     year included in the report referenced in paragraph (1)(C) 
     to--
       ``(i) the limit set forth in subsection (a) for the period 
     of years that includes May 1 of that calendar year; and
       ``(ii) each subsequent limit.
       ``(3) Exception.--The Secretary shall not make the 
     adjustments pursuant to this section if the adjustments for 
     the current year are less than the on-budget surplus for the 
     year before the current year.
       ``(d) Adjustment to the Limit for Low Economic Growth and 
     War.--
       ``(1) Suspension of statutory limit on debt held by the 
     public.--
       ``(A) Low economic growth.--If the most recent of the 
     Department of Commerce's advance, preliminary, or final 
     reports of actual real economic growth indicate that the rate 
     of real economic growth for each of the most recently 
     reported quarter and the immediately preceding quarter is 
     less than 1 percent, the limit on the debt held by the public 
     established in this section is suspended.
       ``(B) War.--If a declaration of war is in effect, the limit 
     on the debt held by the public established in this section is 
     suspended.
       ``(2) Restoration of statutory limit on debt held by the 
     public.--
       ``(A) Restoration of limit.--The statutory limit on debt 
     held by the public shall be restored on May 1 following the 
     quarter in which the level of real Gross Domestic Product in 
     the final report from the Department of Commerce is equal to 
     or is higher than the level of real Gross Domestic Product in 
     the quarter preceding the first two quarters that caused the 
     suspension of the pursuant to paragraph (1).
       ``(B) Adjustment.--
       ``(i) Calculation.--The Secretary shall take level of the 
     debt held by the public on October 1 of the year preceding 
     the date referenced in subparagraph (A) and subtract the 
     limit in subsection (a) for the period of years that includes 
     the date referenced in subparagraph (A).
       ``(ii) Adjustment.--The Secretary shall add the amount 
     calculated under clause (i) to--

       ``(I) the limit in subsection (a) for the period of fiscal 
     years that includes the date referenced in subparagraph (A); 
     and
       ``(II) each subsequent limit.

       ``(e) Adjustment to the Limit for Social Security Reform 
     Provisions That Affect On-Budget Levels.--
       ``(1) Estimate of legislation.--
       ``(A) Calculation.--If social security reform legislation 
     is enacted, OMB shall estimate the amount the debt held by 
     the public will change as a result of the legislation's 
     effect on the level of total outlays and receipts excluding 
     the impact on outlays and receipts of the Federal Old-Age and 
     Survivors Insurance Trust Fund and the Federal Disability 
     Insurance Trust Fund.
       ``(B) Baseline levels.--OMB shall calculate the changes in 
     subparagraph (A) relative to baseline levels for each fiscal 
     year through fiscal year 2010 using current estimates.
       ``(C) Estimate.--OMB shall include the estimate required by 
     this paragraph in the report required under section 252(d) 
     for social security reform legislation.
       ``(2) Adjustment to limit on the debt held by the public.--
     If social security reform legislation is enacted, the 
     Secretary shall adjust the limit on the debt held by the 
     public for each period of fiscal years by the amounts 
     determined under paragraph (1)(A) for the relevant fiscal 
     years included in the report referenced in paragraph (1)(C).
       ``(e) Definitions.--In this section:
       ``(1) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(2) Social security reform legislation.--The term `social 
     security reform legislation' means a bill or joint resolution 
     that is enacted into law and includes a provision stating the 
     following:
       `` `(  ) Social security reform legislation.--For the 
     purposes of the Social Security Surplus Preservation and Debt 
     Reduction Act, this Act constitutes social security reform 
     legislation.'

     This paragraph shall apply only to the first bill or joint 
     resolution enacted into law as described in this paragraph.
       ``(3) Social security reform provisions.--The term `social 
     security reform provisions' means a provision or provisions 
     identified in social security reform legislation stating the 
     following:
       `` `(  ) Social security reform provisions.--For the 
     purposes of the Social Security Surplus Preservation and Debt 
     Reduction Act, ____ of this Act constitutes or constitute 
     social security reform provisions.', with a list of specific 
     provisions in that bill or joint resolution specified in the 
     blank space.''.

     SEC. 205. PRESIDENT'S BUDGET.

       Section 1105(f) of title 31, United States Code, is amended 
     by striking ``in a manner consistent'' and inserting ``in 
     compliance''.

     SEC. 206. SUNSET.

       This title and the amendments made by this title shall 
     expire on May 3, 2010.
                                 ______
                                 

                         LOTT AMENDMENT NO. 297

  Mr. LOTT proposed an amendment to amendment No. 296 proposed by Mr. 
Lott to the bill, S. 96, supra; as follows:

       In the amendment strike all after the word ``II'' and add 
     the following:

      SOCIAL SECURITY SURPLUS PRESERVATION AND DEBT REDUCTION ACT

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Social Security Surplus 
     Preservation and Debt Reduction Act''.

     SEC. 202. FINDINGS.

       Congress finds that--
       (1) the $69,246,000,000 unified budget surplus achieved in 
     fiscal year 1998 was entirely due to surpluses generated by 
     the social security trust funds and the cumulative unified 
     budget surpluses projected for subsequent fiscal years are 
     primarily due to surpluses generated by the social security 
     trust funds;
       (2) Congress and the President should balance the budget 
     excluding the surpluses generated by the social security 
     trust funds;
       (3) according to the Congressional Budget Office, balancing 
     the budget excluding the

[[Page 7707]]

     surpluses generated by the social security trust funds will 
     reduce the debt held by the public by a total of 
     $1,723,000,000,000 by the end of fiscal year 2009; and
       (4) social security surpluses should be used for social 
     security reform or to reduce the debt held by the public and 
     should not be spent on other programs.

     SEC. 203. PROTECTION OF THE SOCIAL SECURITY TRUST FUNDS.

       (a) Protection by Congress.--
       (1) Reaffirmation of support.--Congress reaffirms its 
     support for the provisions of section 13301 of the Budget 
     Enforcement Act of 1990 that provides that the receipts and 
     disbursements of the social security trust funds shall not be 
     counted for the purposes of the budget submitted by the 
     President, the congressional budget, or the Balanced Budget 
     and Emergency Deficit Control Act of 1985.
       (2) Protection of social security benefits.--If there are 
     sufficient balances in the Federal Old-Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund, the Secretary of Treasury shall give priority to 
     the payment of social security benefits required to be paid 
     by law.
       (b) Points of Order.--Section 301 of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following:
       ``(j) Social Security Point of Order.--It shall not be in 
     order in the Senate to consider a concurrent resolution on 
     the budget, an amendment thereto, or a conference report 
     thereon that violates section 13301 of the Budget Enforcement 
     Act of 1990.
       ``(k) Debt Held by the Public Point of Order.--It shall not 
     be in order in the Senate to consider any bill, joint 
     resolution, amendment, motion, or conference report that 
     would--
       ``(1) increase the limit on the debt held by the public in 
     section 253A(a) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985; or
       ``(2) provide additional borrowing authority that would 
     result in the limit on the debt held by the public in section 
     253A(a) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985 being exceeded.
       ``(l) Social Security Surplus Protection Point of Order.--
       ``(1) In general.--It shall not be in order in the Senate 
     to consider a concurrent resolution on the budget, an 
     amendment thereto, or a conference report thereon that sets 
     forth a deficit in any fiscal year.
       ``(2) Exception.--Paragraph (1) shall not apply if--
       ``(A) the limit on the debt held by the public in section 
     253A(a) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985 is suspended; or
       ``(B) the deficit for a fiscal year results solely from the 
     enactment of--
       ``(i) social security reform legislation, as defined in 
     section 253A(e)(2) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985; or
       ``(ii) provisions of legislation that are designated as an 
     emergency requirement pursuant to section 251(b)(2)(A) or 
     252(e) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985.''.
       (c) Supermajority Waiver and Appeal.--Subsections (c)(1) 
     and (d)(2) of section 904 of the Congressional Budget Act of 
     1974 are amended by striking ``305(b)(2),'' and inserting 
     ``301(k), 301(l), 305(b)(2), 318,''.
       (d) Conforming Amendment.--Section 318 of the Congressional 
     Budget Act of 1974, as added by this Act, is amended by 
     adding at the end the following:
       ``(c) Exception for Defense Spending.--Subsection (b) shall 
     not apply against an emergency designation for a provision 
     making discretionary appropriations in the defense 
     category.''.

     SEC. 204. DEDICATION OF SOCIAL SECURITY SURPLUSES TO 
                   REDUCTION IN THE DEBT HELD BY THE PUBLIC.

       (a) Amendments to the Congressional Budget Act of 1974.--
     The Congressional Budget Act of 1974 is amended--
       (1) in section 3, by adding at the end the following:
       ``(11)(A) The term `debt held by the public' means the 
     outstanding face amount of all debt obligations issued by the 
     United States Government that are held by outside investors, 
     including individuals, corporations, State or local 
     governments, foreign governments, and the Federal Reserve 
     System.
       ``(B) For the purpose of this paragraph, the term `face 
     amount', for any month, of any debt obligation issued on a 
     discount basis that is not redeemable before maturity at the 
     option of the holder of the obligation is an amount equal to 
     the sum of--
       ``(i) the original issue price of the obligation; plus
       ``(ii) the portion of the discount on the obligation 
     attributable to periods before the beginning of such month.
       ``(12) The term `social security surplus' means the amount 
     for a fiscal year that receipts exceed outlays of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund.'';
       (2) in section 301(a) by--
       (A) redesignating paragraphs (6) and (7) as paragraphs (7) 
     and (8), respectfully; and
       (B) inserting after paragraph (5) the following:
       ``(6) the debt held by the public; and''; and
       (3) in section 310(a) by--
       (A) striking ``or'' at the end of paragraph (3);
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) inserting the following new paragraph;
       ``(4) specify the amounts by which the statutory limit on 
     the debt held by the public is to be changed and direct the 
     committee having jurisdiction to recommend such change; or''.
       (b) Amendments to the Balanced Budget and Emergency Deficit 
     Control Act of 1985.--The Balanced Budget and Emergency 
     Deficit Control Act of 1985 is amended--
       (1) in section 250, by striking subsection (b) and 
     inserting the following:
       ``(b) General Statement of Purpose.--This part provides for 
     the enforcement of--
       ``(1) a balanced budget excluding the receipts and 
     disbursements of the social security trust funds; and
       ``(2) a limit on the debt held by the public to ensure that 
     social security surpluses are used for social security reform 
     or to reduce debt held by the public and are not spent on 
     other programs.'';
       (2) in section 250(c)(1), by inserting `` ` debt held by 
     the public', `social security surplus' '' after ``outlays', 
     ''; and
       (3) by inserting after section 253 the following:

     ``SEC. 253A. DEBT HELD BY THE PUBLIC LIMIT.

       ``(a) Limit.--The debt held by the public shall not 
     exceed--
       ``(1) for the period beginning May 1, 2000 through April 
     30, 2001, $3,628,000,000,000;
       ``(2) for the period beginning May 1, 2001 through April 
     30, 2002, $3,512,000,000,000;
       ``(3) for the period beginning May 1, 2002 through April 
     30, 2004, $3,383,000,000,000;
       ``(4) for the period beginning May 1, 2004 through April 
     30, 2006, $3,100,000,000,000;
       ``(5) for the period beginning May 1, 2006 through April 
     30, 2008, $2,775,000,000,000; and,
       ``(6) for the period beginning May 1, 2008 through April 
     30, 2010, $2,404,000,000,000.
       ``(b) Adjustments for Actual Social Security Surplus 
     Levels.--
       ``(1) Estimated levels.--The estimated level of social 
     security surpluses for the purposes of this section is--
       ``(A) for fiscal year 1999, $127,000,000,000;
       ``(B) for fiscal year 2000, $137,000,000,000;
       ``(C) for fiscal year 2001, $145,000,000,000;
       ``(D) for fiscal year 2002, $153,000,000,000;
       ``(E) for fiscal year 2003, $162,000,000,000;
       ``(F) for fiscal year 2004, $171,000,000,000;
       ``(G) for fiscal year 2005, $184,000,000,000;
       ``(H) for fiscal year 2006, $193,000,000,000;
       ``(I) for fiscal year 2007, $204,000,000,000;
       ``(J) for fiscal year 2008, $212,000,000,000; and
       ``(K) for fiscal year 2009, $218,000,000,000.
       ``(2) Adjustment to the limit for actual social security 
     surpluses.--After October 1 and no later than December 31 of 
     each year, the Secretary shall make the following 
     calculations and adjustments:
       ``(A) Calculation.--After the Secretary determines the 
     actual level for the social security surplus for the current 
     year, the Secretary shall take the estimated level of the 
     social security surplus for that year specified in paragraph 
     (1) and subtract that actual level.
       ``(B) Adjustment.--
       ``(i) 2000 through 2004.--With respect to the periods 
     described in subsections (a)(1), (a)(2), and (a)(3), the 
     Secretary shall add the amount calculated under subparagraph 
     (A) to--

       ``(I) the limit set forth in subsection (a) for the period 
     of years that begins on May 1st of the following calendar 
     year; and
       ``(II) each subsequent limit.

       ``(ii) 2004 through 2010.--With respect to the periods 
     described in subsections (a)(4), (a)(5), and (a)(6), the 
     Secretary shall add the amount calculated under subparagraph 
     (A) to--

       ``(I) the limit set forth in subsection (a) for the period 
     of years that includes May 1st of the following calendar 
     year; and
       ``(II) each subsequent limit.

       ``(c) Adjustment to the Limit for Emergencies.--
       ``(1) Estimate of legislation.--
       ``(A) Calculation.--If legislation is enacted into law that 
     contains a provision that is designated as an emergency 
     requirement pursuant to section 251(b)(2)(A) or 252(e), OMB 
     shall estimate the amount the debt held by the public will 
     change as a result of the provision's effect on the level of 
     total outlays and receipts excluding the impact on outlays 
     and receipts of the Federal Old-Age and Survivors Insurance 
     Trust Fund and the Federal Disability Insurance Trust Fund.
       ``(B) Baseline levels.--OMB shall calculate the changes in 
     subparagraph (A) relative to baseline levels for each fiscal 
     year through fiscal year 2010 using current estimates.
       ``(C) Estimate.--OMB shall include the estimate required by 
     this paragraph in the report required under section 251(a)(7) 
     or section 252(d), as the case may be.
       ``(2) Adjustment.--After January 1 and no later than May 1 
     of each calendar year beginning with calendar year 2000--
       ``(A) with respect to the periods described in subsections 
     (a)(1), (a)(2), and (a)(3), the Secretary shall add the 
     amounts calculated under paragraph (1)(A) for the current 
     year included in the report referenced in paragraph (1)(C) 
     to--

[[Page 7708]]

       ``(i) the limit set forth in subsection (a) for the period 
     of years that begins on May 1 of that calendar year; and
       ``(ii) each subsequent limit; and
       ``(B) with respect to the periods described in subsections 
     (a)(4), (a)(5), and (a)(6), the Secretary shall add the 
     amounts calculated under paragraph (1)(A) for the current 
     year included in the report referenced in paragraph (1)(C) 
     to--
       ``(i) the limit set forth in subsection (a) for the period 
     of years that includes May 1 of that calendar year; and
       ``(ii) each subsequent limit.
       ``(3) Exception.--The Secretary shall not make the 
     adjustments pursuant to this section if the adjustments for 
     the current year are less than the on-budget surplus for the 
     year before the current year.
       ``(d) Adjustment to the Limit for Low Economic Growth and 
     War.--
       ``(1) Suspension of statutory limit on debt held by the 
     public.--
       ``(A) Low economic growth.--If the most recent of the 
     Department of Commerce's advance, preliminary, or final 
     reports of actual real economic growth indicate that the rate 
     of real economic growth for each of the most recently 
     reported quarter and the immediately preceding quarter is 
     less than 1 percent, the limit on the debt held by the public 
     established in this section is suspended.
       ``(B) War.--If a declaration of war is in effect, the limit 
     on the debt held by the public established in this section is 
     suspended.
       ``(2) Restoration of statutory limit on debt held by the 
     public.--
       ``(A) Restoration of limit.--The statutory limit on debt 
     held by the public shall be restored on May 1 following the 
     quarter in which the level of real Gross Domestic Product in 
     the final report from the Department of Commerce is equal to 
     or is higher than the level of real Gross Domestic Product in 
     the quarter preceding the first two quarters that caused the 
     suspension of the pursuant to paragraph (1).
       ``(B) Adjustment.--
       ``(i) Calculation.--The Secretary shall take level of the 
     debt held by the public on October 1 of the year preceding 
     the date referenced in subparagraph (A) and subtract the 
     limit in subsection (a) for the period of years that includes 
     the date referenced in subparagraph (A).
       ``(ii) Adjustment.--The Secretary shall add the amount 
     calculated under clause (i) to--

       ``(I) the limit in subsection (a) for the period of fiscal 
     years that includes the date referenced in subparagraph (A); 
     and
       ``(II) each subsequent limit.

       ``(e) Adjustment to the Limit for Social Security Reform 
     Provisions that Affect On-Budget Levels.--
       ``(1) Estimate of legislation.--
       ``(A) Calculation.--If social security reform legislation 
     is enacted, OMB shall estimate the amount the debt held by 
     the public will change as a result of the legislation's 
     effect on the level of total outlays and receipts excluding 
     the impact on outlays and receipts of the Federal Old-Age and 
     Survivors Insurance Trust Fund and the Federal Disability 
     Insurance Trust Fund.
       ``(B) Baseline levels.--OMB shall calculate the changes in 
     subparagraph (A) relative to baseline levels for each fiscal 
     year through fiscal year 2010 using current estimates.
       ``(C) Estimate.--OMB shall include the estimate required by 
     this paragraph in the report required under section 252(d) 
     for social security reform legislation.
       ``(2) Adjustment to limit on the debt held by the public.--
     If social security reform legislation is enacted, the 
     Secretary shall adjust the limit on the debt held by the 
     public for each period of fiscal years by the amounts 
     determined under paragraph (1)(A) for the relevant fiscal 
     years included in the report referenced in paragraph (1)(C).
       ``(e) Definitions.--In this section:
       ``(1) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(2) Social security reform legislation.--The term `social 
     security reform legislation' means a bill or joint resolution 
     that is enacted into law and includes a provision stating the 
     following:
       `` `(  ) Social security reform legislation.--For the 
     purposes of the Social Security Surplus Preservation and Debt 
     Reduction Act, this Act constitutes social security reform 
     legislation.'

     This paragraph shall apply only to the first bill or joint 
     resolution enacted into law as described in this paragraph.
       ``(3) Social security reform provisions.--The term `social 
     security reform provisions' means a provision or provisions 
     identified in social security reform legislation stating the 
     following:
       `` `(  ) Social security reform provisions.--For the 
     purposes of the Social Security Surplus Preservation and Debt 
     Reduction Act, ____ of this Act constitutes or constitute 
     social security reform provisions.', with a list of specific 
     provisions in that bill or joint resolution specified in the 
     blank space.''.

     SEC. 205. PRESIDENT'S BUDGET.

       Section 1105(f) of title 31, United States Code, is amended 
     by striking ``in a manner consistent'' and inserting ``in 
     compliance''.

     SEC. 206. SUNSET.

       This title and the amendments made by this title shall 
     expire on April 30, 2010.
       This section shall become effective 1 day after enactment.

                          ____________________