[Congressional Record (Bound Edition), Volume 145 (1999), Part 9]
[Senate]
[Pages 12362-12367]
[From the U.S. Government Publishing Office, www.gpo.gov]



                                Y2K ACT

  The Senate continued with the consideration of the bill.


                 Amendment No. 621, As Further Modified

  Mr. GORTON. What is the business before the Senate?
  The PRESIDING OFFICER. The pending business is the question on the 
amendment by the Senator from California, as further modified.
  Mr. GORTON. I move to table the Boxer amendment and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table amendment No. 621, as further modified. The yeas and nays have 
been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) 
and the Senator from Wyoming (Mr. Thomas) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 66, nays 32, as follows:

                      [Rollcall Vote No. 163 Leg.]

                                YEAS--66

     Abraham
     Allard
     Ashcroft
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Dodd
     Domenici
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kerry
     Kohl
     Kyl
     Landrieu
     Lieberman
     Lincoln
     Lott
     Lugar
     Mack
     McConnell
     Moynihan
     Murkowski
     Nickles
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thompson
     Thurmond
     Voinovich
     Warner
     Wyden

                                NAYS--32

     Akaka
     Biden
     Boxer
     Breaux
     Bryan
     Byrd
     Cleland
     Conrad
     Daschle
     Dorgan
     Durbin
     Edwards
     Feingold
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Lautenberg
     Leahy
     Levin
     Mikulski
     Murray
     Reed
     Reid
     Sarbanes
     Schumer
     Torricelli
     Wellstone

                             NOT VOTING--2

     McCain
     Thomas
       
  The motion was agreed to.
  Mr. GORTON. I move to reconsider the vote.
  Mr. HOLLINGS. I move to table the motion.
  The motion to lay on the table was agreed to.


                      Unanimous Consent Agreement

  Mr. GORTON. Mr. President, I ask unanimous consent that the only 
remaining amendments in order to S. 96 be those by Senators Sessions, 
Gregg, and Inhofe, and that following those amendments the bill be 
advanced to third reading.
  I further ask consent that all debate must be concluded today on the 
Sessions, Gregg, and Inhofe amendments, and if any votes are ordered, 
they occur in stacked sequence just prior to the passage vote on 
Tuesday, with 2 minutes for explanation prior to the votes if stacked 
votes occur.
  I further ask that following the reading of the bill for the third 
time, the Senate then proceed to the House companion bill, H.R. 775, 
and all after the enacting clause be stricken, the text of S. 96 be 
inserted, H.R. 775 be read for a third time, and final passage occur at 
2:15 p.m. on Tuesday, June 15, or immediately after votes on any of the 
above amendments if such votes are ordered, with paragraph 4 of rule 
XII being waived.
  I further ask that following the third reading of S. 96, the bill be 
placed back on the calendar.
  Finally, I ask consent that at 11 a.m. on Tuesday, June 15, there be 
2 hours equally divided for closing arguments,

[[Page 12363]]

and following those remarks the Senate stand in recess until 2:15 p.m. 
for the weekly party conferences to meet.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GORTON. I want to make a further announcement by direction of the 
majority leader. There will be no further votes today, and there will 
be no votes tomorrow. The next vote will take place not earlier than 
5:30 p.m. on Monday, and there may, if appropriate at that time, be a 
vote on final passage of the energy and water appropriations bill.


                 Amendment No. 622 to Amendment No. 608

   (Purpose: To provide regulatory amnesty for defendants, including 
    States and local governments, that are unable to comply with a 
 federally enforceable measurement or reporting requirement because of 
                factors related to a Y2K system failure)

  Mr. GORTON. I send an amendment to the desk on behalf of Senator 
Inhofe and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Washington [Mr. Gorton], for Mr. Inhofe, 
     proposes an amendment numbered 622.

  Mr. GORTON. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 11, between lines 22 and 23, insert the following:
       (6) Application to Actions Brought by a Governmental 
     Entity.--
       (1) In general.--To the extent provided in this subsection, 
     this Act shall apply to an action brought by a governmental 
     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 
     subclause (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 
     measurement or reporting 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 
     measurement or reporting 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 measurement or reporting 
     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 subsection, the Y2K upset defense shall be 
     a complete defense to any action brought as a result of 
     noncompliance with federally enforceable measurement or 
     reporting 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 15 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.
       At the appropriate place, insert the following:

     SEC.   . CREDIT PROTECTION FROM YEAR 2000 FAILURES.

       (a) In General.--No person who transacts business on 
     matters directly or indirectly affecting mortgage, credit 
     accounts, banking, or other financial transactions shall 
     cause or permit a foreclosure, default, or other adverse 
     action against any other person as a result of the improper 
     or incorrect transmission or inability to cause transaction 
     to occur, which is caused directly or indirectly by an actual 
     or potential Y2K failure that results in an inability to 
     accurately or timely process any information or data, 
     including data regarding payments and transfers.
       (b) Scope.--The prohibition of such adverse action to 
     enforce obligations referred to in subsection (a) includes 
     but is not limited to mortgages, contracts, landlord-tenant 
     agreements, consumer credit obligations, utilities, and 
     banking transactions.
       (c) Adverse Credit Information.--The prohibition on adverse 
     action in subsection (a) includes the entry of any negative 
     credit information to any credit reporting agency, if the 
     negative credit information is due directly or indirectly by 
     an actual or potential disruption of the proper processing of 
     financial responsibilities and information, or the inability 
     of the consumer to cause payments to be made to creditors 
     where such inability is due directly or indirectly to an 
     actual or potential Y2K failure.
       (d) Actions May Resume After Problem Is Fixed.--No 
     enforcement or other adverse action prohibited by subsection 
     (a) shall resume until the obligor has a reasonable time 
     after the full restoration of the ability to regularly 
     receive and dispense data necessary to perform the financial 
     transaction required to fulfill the obligation.
       (e) Section Does Not Apply to Non-Y2K-Related Problems.--
     This section shall not affect transactions upon which a 
     default has occurred prior to a Y2K failure that disrupts 
     financial or data transfer operations of either party.
       (f) Enforcement of Obligations Merely Tolled.--This section 
     delays but does not prevent the enforcement of financial 
     obligations.
  Mr. GORTON. This is the Inhofe amendment referred to in my unanimous 
consent request. It has to do with amnesty for certain regulatory 
activities in its first part. The second part was suggested by the 
distinguished Senator from South Carolina and is designed to assure 
that no one lose a home through a mortgage or any other similar kind of 
loss as a result of a Y2K failure or glitch.
  The amendment has been cleared on both sides.
  Mr. HOLLINGS. I thank the Senator from Washington.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 622) was agreed to.


                 Amendment No. 623 to Amendment No. 608

 (Purpose: To permit evidence of communications with state and federal 
         regulators to be admissible in class action lawsuits)

  Mr. SESSIONS. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative assistant read as follows:

       The Senator from Alabama [Mr. Sessions] proposes an 
     amendment numbered 623.

  Mr. SESSIONS. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At an appropriate place, add the following section:

     SEC.   . ADMISSIBLE EVIDENCE ULTIMATE ISSUE IN STATE COURTS.

       Any party to a Y2K action in a State court in a State that 
     has not adopted a rule of evidence substantially similar to 
     Rule 704 of the Federal Rules of Evidence may introduce in 
     such action evidence that would be admissible if Rule 704 
     applied in that jurisdiction.

  Mr. SESSIONS. Mr. President, this amendment simply provides that rule

[[Page 12364]]

704 of the Federal Rules of Evidence, which most States have adopted--
as a matter of fact, I think no more than a handful have not adopted 
Federal Rules of Evidence, and most of those have adopted 704; it 
happens that the State of Alabama did not adopt rule 704. Particularly 
with regard to these Y2K cases, I think rule 704 would be an 
appropriate rule of evidence.
  It allows the introductions of analyses and reports by parties to the 
litigation that would indicate whether or not the entity that is 
involved had or had not taken adequate steps toward curing the Y2K 
problem, whether or not they actually have moved in that direction in a 
sufficient way. It could be the defense or, on the other side, assist 
the plaintiff.
  I think this would be a good amendment and bring Alabama's law and 
perhaps a handful of other State laws into compliance, into uniformity 
in this Y2K bill.
  We worked hard to have support across the aisle. I thank my 
colleagues, both Democrats and Republicans, for their courtesy and 
interest in dealing with this problem. I think we have developed 
language, after a number of changes, that will leave most people happy. 
I hope this amendment will be accepted.
  I know some Members will want to review this amendment before next 
week when we have a final vote.
  Mr. GORTON. The amendment proposed by the Senator from Alabama 
certainly seems highly reasonable to me.
  He is, however, correct; a number of proponents and opponents have 
asked for an opportunity to examine the amendment in a little more 
detail. That is why the unanimous consent agreement deferred final 
consideration until Monday.
  I am reasonably confident it will be accepted by voice vote, and I 
certainly hope it will.
  Mr. SESSIONS. I thank the Senator from Washington, and I thank him 
for his leadership on this important issue dealing with an economic 
problem that could place one of America's greatest industries in 
jeopardy. I believe this is an important piece of legislation.
  I thank Senator Gorton for his leadership.
  Mr. GREGG. I ask unanimous consent the pending amendment be set 
aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                 Amendment No. 624 to Amendment No. 608

 (Purpose: To provide for the suspension of penalties for certain year 
               2000 failures by small business concerns)

  Mr. GREGG. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative assistant read as follows:

       The Senator from New Hampshire [Mr. Gregg], for himself and 
     Mr. Bond, proposes an amendment numbered 624.

  Mr. GREGG. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place, insert the following:

     SEC. __. SUSPENSION OF PENALTIES FOR CERTAIN YEAR 2000 
                   FAILURES BY SMALL BUSINESS CONCERNS.

       (a) Definitions.--In this section--
       (1) the term ``agency'' means any executive agency, as 
     defined in section 105 of title 5, United States Code, that 
     has the authority to impose civil penalties on small business 
     concerns;
       (2) the term ``first-time violation'' means a violation by 
     a small business concern of a Federal rule or regulation 
     resulting from a Y2K failure if that Federal rule or 
     regulation had not been violated by that small business 
     concern within the preceding 3 years; and
       (3) the term ``small business concern'' has the meaning 
     given such term in section 3 of the Small Business Act (25 
     U.S.C. 632).
       (b) Establishment of Liaisons.--Not later than 30 days 
     after the date of enactment of this section each agency 
     shall--
       (1) establish a point of contact within the agency to act 
     as a liaison between the agency and small business concerns 
     with respect to problems arising out of Y2K failures and 
     compliance with Federal rules or regulations; and
       (2) publish the name and phone number of the point of 
     contact for the agency in the Federal Register.
       (c) General Rule.--Subject to subsections (d) and (e), no 
     agency shall impose any civil money penalty on a small 
     business concern for a first-time violation.
       (d) Standards for Waiver.--In order to receive a waiver of 
     civil money penalties from an agency for a first-time 
     violation, a small business concern shall demonstrate that--
       (1) the small business concern previously made a good faith 
     effort to effectively remediate Y2K problems;
       (2) a first-time violation occurred as a result of the Y2K 
     system failure of the small business concern or other entity, 
     which affected the small business concern's ability to comply 
     with a federal rule or regulation;
       (3) the first-time violation was unavoidable in the face of 
     a Y2K system failure or occurred as a result of efforts to 
     prevent the disruption of critical functions or services that 
     could result in harm to life or property;
       (4) upon identification of a first-time violation, the 
     small business concern initiated reasonable and timely 
     measures to remediate the violation; and
       (5) the small business concern submitted notice to the 
     appropriate agency of the first-time violation within a 
     reasonable time not to exceed 7 business days from the time 
     that the small business concern became aware that a first-
     time violation had occurred.
       (e) Exceptions.--An agency may impose civil money penalties 
     authorized under Federal law on a small business concern for 
     a first-time violation if the small business concern fails to 
     correct the violation not later than 6 months after initial 
     notification to the agency.

  Mr. GREGG. I offer an amendment that ensures that small businesses 
which are hit with Y2K problems will not be penalized by the Federal 
Government for activities they are unable to deal with as a result of 
the Y2K problem.
  An overzealous Federal Government bearing down on a small business 
can be a very serious problem. I know all Members have constituents who 
have had small businesses that have found the Federal Government to be 
overbearing.
  It would therefore be uniquely ironic and inappropriate if the 
overzealousness of the Federal Government were to be thrown on top of a 
situation which a small business had no control over, which would be 
the failure of their computer system as a result of a Y2K problem. This 
does not get into the issue of liability, which may be the underlying 
question in this bill. It doesn't raise the question of whether or not 
the computer company should be exempt from liability, which I know has 
been a genuine concern of the Senator from South Carolina. Rather, it 
simply addresses the need for equity and fairness when we are dealing 
with small businesses which, through no fault of their own, have 
suddenly been hit with a Y2K problem and therefore fail to comply with 
a Federal requirement or Federal regulation and end up getting hit with 
a huge fine, all of which they had no control over.
  This amendment is tightly drafted so a small business cannot use it 
as an excuse not to meet a Federal obligation or Federal regulation. It 
does not allow a small business to take the Y2K issue and use it to 
bootstrap into avoiding an obligation which it has in the area of some 
Federal regulatory regime. Rather, it is very specific. It says, first 
off, this must be an incident of a first-time regulatory violation, so 
no small business which has any sort of track record of violating that 
Federal regulation could qualify for this exemption. So it has to be a 
first-time event.
  Second, the small business has to prove it made a good-faith effort 
to remedy the Y2K problem before it got hit with it. So it cannot be a 
situation where the small business said: I have this Y2K problem coming 
at me, I have this Federal regulation problem coming at me, I am going 
to let the Y2K problem occur and then I will say that is my reason for 
not complying. Small business must have made a good-faith attempt to 
remedy the Y2K problem.
  Third, the Y2K problem cannot be used if the violation was to avoid 
or resulted from efforts to prevent disruption of a critical function 
or service.
  Fourth, the small business has to demonstrate the actions to 
remediate the violation were begun when the violation was discovered. 
So the small business has to show it attempted to address the problem 
as soon as it realized it had a Y2K problem, and it cannot allow the 
fact it has a Y2K problem, again, to go unabated and use that

[[Page 12365]]

lack of correction of a problem as an excuse for not meeting the 
obligations of the Federal regulation.
  Fifth, that notice was submitted to the appropriate agency when the 
small business became aware of the violation and therefore knew it had 
a Y2K problem.
  The practical effect of this will be small businesses throughout this 
country, which are inadvertently and beyond their own capacity to 
control a hit with a Y2K problem, will not be doubled up with a penalty 
for not meeting a Federal regulatory requirement that they could not 
meet as a result of the Y2K problem kicking in.
  It is a simple amendment. It is a reasonable amendment. It really 
does not get into the overall contest that has been generated around 
this bill which is: Should there be an exemption of liability for 
manufacturers of the product which creates the Y2K problem? Rather, it 
is trying to address the innocent bystander who gets hit, that small 
businessperson who suddenly wakes up, realizes he has a Y2K problem, 
tries to correct the Y2K problem, can't correct the Y2K problem, and as 
a result fails to comply with a Federal regulation, and then the 
Federal Government comes down and hits him with a big fine and there 
was nothing the small business could do. It gets hit with a double 
whammy: Its systems go down and they get hit with a fine.
  This just goes to civil remedy, to remedies which involve monetary 
activity, so it does not address issues where a business would be 
required to remedy through action. An example here might be OSHA. If 
they had to correct a workplace problem, they would still have to 
correct the workplace problem whether or not they had the Y2K failure. 
If they had an environmental problem which required remedial action, 
such as a change in their water discharge activities, again they would 
have to meet the remedial action.
  All this amendment does, it is very limited in scope, it just goes to 
the financial liability the company might incur as a result of failing 
to meet a regulation. It is a proposal which is strongly supported by 
the small business community. The NFIB is a supporter of this proposal 
and will be scoring this vote as one of its primary votes as it puts 
together its assessment of Members of Congress, and their support for 
small business.
  It is a reasonable proposal. I certainly hope it will end up being 
accepted. In any event, I understand under the unanimous consent 
agreement which has been generated there will be a vote on it Tuesday.
  I yield the floor.
  Mr. BOND. Mr. President, I rise today to address the amendment to the 
Y2K Act sponsored by Senator Gregg and which cosponsored. This is an 
important amendment that will waive Federal civil money penalties for 
blameless small businesses that have in good faith attempted to correct 
their Y2K problems, but find themselves inadvertently in violation of a 
Federal regulation or rule despite such efforts. Most experts that have 
studied the Y2K problem agree that regardless of how diligent a 
business is at fixing its Y2K problems, unknowable difficulties are 
still likely to arise that may place the operations of such businesses 
at risk. This amendment will ensure that the government does not 
further punish small businesses that have attempted to fix their Y2K 
problems, but are nevertheless placed in financial peril because of 
these problems.
  As chairman of the Senate Committee on small Business, I have paid 
particular attention to the problems that small businesses are facing 
regarding the Y2K problem. Small businesses are trying to become Y2K 
complaint, but face many obstacles in doing so. One of the major 
obstacles is capital. Small businesses are the most vulnerable sector 
of our business community, as many of them do not have a significant 
amount of excess cash flow. Yet, a great number of small businesses are 
already incurring significant costs to become Y2K compliant. Earlier 
this year, Congress passed Y2K legislation that I authored to provide 
small businesses with the means to fix their own computer systems. Even 
small businesses that take advantage of that program, however, will see 
decreased cash flow from their efforts to correct Y2K problems.
  The last thing, therefore, this government should do is levy civil 
money penalties on small businesses that find themselves inadvertently 
confronted with Y2K problems. Many of these businesses will already 
have had their operations disrupted and may be in danger of going out 
of business entirely. The Federal Government should not push them over 
the edge.
  This amendment has been carefully crafted so that only those small 
businesses that are subject to civil money penalties through no fault 
of their own are granted a waiver. Under this amendment, a small 
business would only be eligible for a waiver of civil money penalties 
if it had not violated the applicable rule or regulation in the last 3 
years. This provision will help to ensure that businesses that have 
continuing violations or that have a history of violating Federal rules 
and regulations will not be let off the hook.
  Small businesses must also demonstrate to the government agency 
levying the penalties that the business had previously made a good 
faith effort to correct its Y2K problems. We must not provide 
disincentives to businesses so that they do not fix their Y2K problems 
now. This amendment does not provide such a disincentive. In addition, 
to receive relief, a small business must show that the violation of the 
Federal rule or regulation was unavoidable or occurred as a result of 
efforts to prevent the disruption of critical functions or services 
that could result in harm to life or property. The amendment also 
provides that, upon identification of a violation, the small business 
concern must have initiated reasonable and timely efforts to correct 
it. Finally, in order to receive the relief provided by this amendment, 
a small business must have submitted notice, within seven business 
days, to the appropriate Federal agency.
  What is clear from these requirements is that the amendment will only 
apply to conscientious small businesses that have tried in good faith 
to prepare for the Y2K problem and that promptly correct inadvertent 
violations of a Federal rule or regulation that nevertheless occur as a 
result of such problem. It is critically important that these innocent 
victims not be punished by the Federal Government for a problem that 
confronts us all.
  The PRESIDING OFFICER. The Senator from Washington.
  Mr. GORTON. Mr. President, the Senator from New Hampshire is correct. 
He has explained his amendment with great clarity. It may or may not be 
seriously contested. We simply are not going to know that until early 
next week, so I thank him for his graciousness in waiting for a final 
decision until then.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GORTON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MURKOWSKI. Mr. President, today there are 204 days left before 
the Y2K problem becomes a concrete reality for any entity throughout 
the world that has a computer system.
  The Y2K issue has been publicized across this nation; sometimes to a 
greater degree than necessary. Some Americans have even resorted to 
hoarding food and planning for the end of the world. While no one has a 
magic answer as to what will happen on the first of the year, enough 
effort has been made by the public and private sector to ensure that 
Americans are aware of this issue.
  However, I am concerned that under the current version of S. 96, 
companies may continue sales of non-Y2K compliant products even after 
enactment of this act without disclosing non-Y2K compliance to 
consumers. While I strongly support this important piece of 
legislation, I am concerned that unscrupulous marketers may attempt to 
deceive consumers by continuing to

[[Page 12366]]

sell non-Y2K compliant products. A computer given for a Christmas gift 
isn't much of a gift when it stops working 7 days later.
  Thus I planned to offer an amendment to section 5(b)(3) that would 
lift the cap on punitive damages for products sold after the date of 
enactment of this act if the plaintiff could have established by clear 
and convincing evidence that the defendant knowingly sold non-Y2K 
compliant products absent a signed waiver from the plaintiff. However, 
I have agreed to defer to the chairman so that this issue can be best 
addressed in conference.
  Mr. McCAIN. If I could inquire of my colleague from Alaska how his 
original amendment would have applied if, for example, a company bought 
a Y2K-compliant computer server in November 1999, and that server has 
to interact with other software and networked hardware manufactured by 
other companies that may or may not be Y2K compliant.
  Mr. MURKOWSKI. I thank my friend for his question. My amendment would 
have imposed liability only if the manufacturer sold a server that was 
non-Y2K compliant by itself after the date of enactment of this act. My 
amendment would not apply to a Y2K compliant server that failed due to 
the non-Y2K compliance of installed software or attached hardware 
manufactured by other companies.
  Mr. McCAIN. I thank my colleague for his clarification and will be 
pleased to address his concerns in conference.
  Mr. MURKOWSKI. I thank my friend from Arizona for his attention to 
this issue.
  Mr. FEINGOLD. Mr. President, I appreciate all the hard work that has 
been done on this legislation by my colleagues. I know they are sincere 
in their concern about the effect of Y2K computer failures and in their 
desire to do something to encourage solutions to those problems in 
advance of the end of the year. But this bill is ill-considered and 
ill-advised. As the Justice Department has noted with respect to 
original version of this bill, and I think the judgment remains 
accurate: this bill would be ``by far the most sweeping litigation 
reform measure ever enacted if it were approved in its current form. 
The bill makes extraordinarily dramatic changes in both federal 
procedural and substantive law and in state procedural and substantive 
law.''
  For all the heated rhetoric we have heard on this floor over the past 
few days, I have not seen evidence that legislation is needed to create 
incentives for businesses to correct Y2K problems. More importantly, I 
do not agree that this bill actually creates those incentives. Indeed, 
I think that in many ways it does just the opposite. It rewards the 
worst actors with its damages caps and its prohibition of recovery for 
economic loss, and it may even give incentives to delay corrective 
action with the cooling off period and the changes in class action 
rules.
  A major concern that I have about this bill is the breathtakingly 
broad and unprecedented preemption of state law that it contains. I 
simply do not agree that we should overrule the judgment of state 
legislatures and judges who have defined the law in their states for 
traditional contract and tort cases. This bill benefits one class of 
businesses, those who sell products that may cause Y2K problems, over 
another class of business, those who buy such products, and individual 
consumers. It completely disregards whether state lawmakers and judges 
would reach the same conclusions. I see no reason why Congress should 
dictate tort and contract law to the states. Protections for injured 
parties that have been developed through decades of experience are 
being summarily wiped out by the Congress, on the basis of a very thin 
record. Mr. President, that is not right.
  Another serious problem with this bill has to do with the elimination 
of joint and several liability in the vast majority of Y2K cases. Mr. 
Chairman, we all have heard many times the horror story of a poor deep 
pocket defendant found to be only 1% liable who ends up on the hook for 
the entire judgment in a tort case. Frankly, I am aware of few actual 
examples of this phenomenon, but I know it is theoretically possible. A 
far more frequent occurrence, however, is a case where two or three 
defendants are found equally liable, but one or more of them is 
financially insolvent. The real question raised by joint and several 
versus proportionate liability is who should bear the risk that the 
full share of damages cannot be collected from one defendant. Who 
should have the responsibility to identify all potentially liable 
parties and bring them into the suit? Who should bear the risk that one 
of the defendants has gone bankrupt? Should it be the innocent 
plaintiff who the law is supposed to make whole, or a culpable 
defendant? Mr. President, to me that question is easy to answer. 
Someone who has done wrong should bear that risk. But states have 
reached different balances on this question, based on their own 
experience of decades and decades of tort cases. How is it that we in 
the Congress all of the sudden became experts on this issue? Where do 
we get off overriding the judgment of state legislatures on this 
crucial question of public policy?
  Now I recognize that changes to the bill obtained by Senator Dodd 
would limit the effect of the abrogation of joint and several liability 
in a narrow set of cases involving egregious conduct by defendants or 
particularly poor plaintiffs. But I don't think this change goes far 
enough in protecting innocent victims from the harsh reality that 
sometimes the worst offenders have the least money. Section 6 of this 
bill eliminates joint and several liability in virtually every Y2K 
case, and that is wrong.
  Let me quote one of the bill's stated purposes from Section 2(b) of 
the bill--``to establish uniform legal standards that give all 
businesses and users of technology reasonable incentives to solve Y2K 
computer date-change problems before they develop.'' But Mr. President, 
this bill doesn't establish uniform standards. It preempts state law 
only in one direction--always in favor of defendants and against the 
interests of the injured party.
  As I stated before, I don't agree that uniform standards are needed. 
I think our state legislatures and judges are due more respect than 
this bill gives them. But if there is truly a compelling interest in 
uniformity, then I do not understand why this bill preempts state laws 
that offer more protection to injured plaintiffs but not those state 
laws that are less generous to the injured party. Yesterday, we even 
adopted, without debate, an amendment offered by Senator Allard that 
says specifically that any state law that provides more protection for 
defendants in Y2K cases than this bill does is not preempted. So 
preemption is a one-way street here. If you're in a state where the law 
is moving in the same direction as this bill and cutting back on the 
damages that can be recovered in a Y2K suit, you're fine, but if your 
state is going in the wrong direction, you get run over.
  Mr. President, that is not fair. And it certainly is not consistent 
with the bill's stated purpose of providing uniform national standards.
  Let me give you one example. About 30 states have no caps on punitive 
damages. Three other states have caps that are more generous than the 
caps in this bill. In Y2K cases involving defendants who are small 
businesses as defined in this bill, those state laws would be 
preempted. About a dozen states have higher caps on some kind of cases 
and lower caps on others. This bill would partially preempt those state 
laws, overriding the balance that the duly elected state legislatures 
in question decided was fair and just.
  Six states do not allow punitive damages in tort cases, and one has 
caps that are lower than those permitted under this bill. Those states 
would be allowed to continue to apply the judgments of their 
legislatures and courts in Y2K cases.
  My state of Wisconsin has generally rejected imposing arbitrary caps 
on punitive damages, instead trusting judges and juries to determine an 
appropriate punishment for defendants who act in a particularly harmful 
and intentional or malicious way. The state of Washington, to take an 
example, has eliminated punitive damages. Why should

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the policy decisions of the state of Washington be respected by this 
Congress more than the policy decisions of Wisconsin--or Pennsylvania, 
or Arizona, or New York, or the majority of states.
  The one-sided tilt of this bill is very troubling. Punitive damages 
caps of any kind are bad ideas I believe. Remember that in every state 
punitive damages can be awarded only in cases of intentional or 
outrageous misconduct. So the protection offered by these caps goes to 
the very worst Y2K offenders--those who have acted intentionally or 
maliciously to avoid fixing their Y2K problems. Where is the justice 
and balance in that?
  Mr. President, because I think it's important for the Senate to take 
every aspect of legislation into account in our debate here on the 
floor, I have a few more facts I'd like to add--facts about how much 
money has been donated to the political parties and to candidates by a 
couple of powerful groups that have a huge stake in this bill.
  Now the dollar figures I'm about to cite, keep in mind, are only for 
the last election cycle, 1997 to 1998. First there's the computer and 
electronics industry, which gave close to $6 million in PAC and soft 
money during the last election cycle--$5,772,146 to be exact. And 
there's also the Association of Trial Lawyers of America, which gave 
$2,836,350 in PAC and soft money contributions to parties and 
candidates in 1997 and 1998.
  As I said, I cite these figures so that as my colleagues weigh the 
pros and cons of this bill, they, and the public, are aware of the 
financial interests that have been brought to bear on the legislation. 
The lobbying efforts, as we know, have been significant, and so have 
the campaign contributions. And the public can be excused if it wonders 
if those contributions have distorted the process by which this bill 
was crafted.
  Mr. President, I am pleased that the Administration has indicated it 
will veto this bill in its current form. I will support that veto as 
well as voting against the bill. We need to encourage problem solving 
and remediation to avoid a disaster on January 1 in the Year 2000. But 
we don't need to enact this bill. Indeed, while trying to address a 
supposed litigation explosion, we may well have created an explosion of 
unfairness to people and businesses who are injured by the negligent or 
reckless behavior of those who sell non-Y2K compliant products.

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