Legislature(1999 - 2000)

03/03/1999 03:20 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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HB 82 - IMMUNITY:CLAIMS ARISING FROM Y2K PROBLEMS                                                                               
                                                                                                                                
Number 1752                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the next order of business would be HB
82, "An Act relating to immunity for certain claims arising out of                                                              
or in connection with the year 2000 date change; and providing for                                                              
an effective date."  He pointed out that the new proposed committee                                                             
substitute (CS), Version I [1-LS0398\I, Ford, 3/2/99], reflects the                                                             
conceptual amendments adopted by the committee the previous week.                                                               
He indicated the committee packets additionally contained an                                                                    
executive summary of the Senate Year 2000 Problem report,                                                                       
"Investigating the Impact of the Year 2000 Problem," issued by the                                                              
United States Senate Special Committee on the Year 2000                                                                         
Technological Problem; chairman, Senator Bob Bennet; vice-chairman,                                                             
Senator Chris Dodd.  The chairman noted the material provided to                                                                
the committee contained a web page address for anyone interested in                                                             
reviewing the entire report [homepage address for the United States                                                             
Senate special committee, with links to the report:                                                                             
http://www.senate.gov/~y2k/home.html].  The chairman indicated the                                                              
report was issued on February 24, 1999, and became available March                                                              
2 on the Internet.  Chairman Rokeberg commented the committee had                                                               
also received additional information from Scott Thorson who                                                                     
testified on HB 82 on February 26, 1999.  He invited Ms. Seitz                                                                  
forward to briefly explain the changes in the proposed Version I                                                                
CS.                                                                                                                             
                                                                                                                                
Number 1802                                                                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant to Representative Norman                                                                     
Rokeberg, Alaska State Legislature, came forward.  She told members                                                             
that Version I incorporates the three conceptual amendments adopted                                                             
by the committee on February 26.  Amendment 1 added language                                                                    
similar to that contained in S.96, the federal legislation; these                                                               
changes appear page 1, lines 12 and 13, and page 2, lines 14                                                                    
through 18.  Amendment 2 added "curing" language to give the                                                                    
business an opportunity to cure its problems before any legal                                                                   
action was instituted; this language appears on page 3, lines 7                                                                 
through 14.  Amendment 3 added some language covering people who                                                                
developed software, firmware, et cetera, and [those] who only sell,                                                             
rent or lease those items; that language is on page 2, line 20,                                                                 
with the addition of the word "develops", and on line 25, with the                                                              
addition of the word "sells".                                                                                                   
                                                                                                                                
Number 1863                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to adopt the proposed committee                                                             
substitute, 1-LS0398\I, Ford, 3/2/99, as a work draft.  There being                                                             
no objection, Version I was before the committee.                                                                               
                                                                                                                                
Number 1881                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG confirmed no one wished to testify on HB 82.  He                                                              
thanked members for their work on the bill at the previous hearing.                                                             
The chairman commented on two areas that had been discussed at that                                                             
hearing.  He indicated Representative Murkowski had expressed some                                                              
concerns, and that he was also concerned, about "those provisions                                                               
of a plan of due diligence," page 1, line 14, through page 2, line                                                              
13.  This language specifies specific steps, making good faith                                                                  
efforts, and demonstrating to the courts what due diligence is.                                                                 
The chairman expressed concern about these provisions; however, he                                                              
indicated he would like to leave the current language for the House                                                             
Judiciary Standing Committee, where the provisions as specific                                                                  
steps would probably be removed or possibly modified depending on                                                               
legal input.  Chairman Rokeberg commented he did not think this                                                                 
would hurt the intention of the legislation.  He noted he would                                                                 
like to have further discussion of these issues by the public for                                                               
education purposes.                                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG referred to page 2, line 27, subsection (b)(2)                                                                
["(b) The defense in (a) of this section may not be asserted ...                                                                
(2) in an action based on a contract."].  The chairman indicated he                                                             
believes this section should probably be removed but wishes to                                                                  
allow the House Judiciary Committee to debate the issue regarding                                                               
the legal aspect of the legislation.  He based his reason for                                                                   
removal on allowing the defense contained in the bill to come into                                                              
action, noting most causes of action brought under this "theory"                                                                
will be "actions in contract."  The chairman expressed his belief                                                               
in the privy of contract and allowing the agreed performance to                                                                 
take place, but said, conversely, if the action is not allowed the                                                              
defense the bill's purpose is defeated.  Chairman Rokeberg stated                                                               
he would like to move the current version of the legislation out of                                                             
committee, asking for recommendations and discussion from the                                                                   
committee.                                                                                                                      
                                                                                                                                
Number 2020                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO thanked the chairman for his work on the                                                                  
legislation.  He commented on large articles in both the February                                                               
27 and 28 Seattle Times on year 2000 (Y2K) problems.                                                                            
Representative Halcro noted this is one issue garnering bipartisan                                                              
support:  Dianne Feinstein [Senator, California, Democrat] is                                                                   
working with Orrin Hatch [Senator, Utah, Republican] in addressing                                                              
this.  According to Representative Halcro, both have indicated that                                                             
if some form of immunity is not granted to businesses "there's just                                                             
gonna be a flood of litigation that this country has never seen                                                                 
before."  Representative Halcro stated he thinks the chairman is                                                                
"ahead of the curve on this," and he agrees the legislation needs                                                               
to get moving.                                                                                                                  
                                                                                                                                
REPRESENTATIVE HARRIS said he echoed Representative Halcro's                                                                    
comments.  He added that the federal legislation, S.96, is being                                                                
taken up by the United States Senate, possibly this day on the                                                                  
floor.                                                                                                                          
                                                                                                                                
Number 2076                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI commended the chairman for getting this                                                                
moving; however, she noted the somewhat "loose language" in the                                                                 
cure provision, page 3, line 12, gives her some concern although                                                                
she notes she thinks the provision is absolutely critical                                                                       
[subsection (d)(2)(B), "(B) gives the business the opportunity to                                                               
fix the problem, including reasonable access to electronic                                                                      
computing devices or software affected by the failure described                                                                 
under (A) of this paragraph;"].  She felt that language should be                                                               
"tightened up," indicating a business could say it would fix the                                                                
problem, but never do so.  Representative Murkowski further                                                                     
expressed some concern with the itemization in Section 1, the                                                                   
drafter's either/or language:  business either does the following                                                               
six steps or it follows the generally accepted standards of care.                                                               
Commenting she was somewhat thinking out loud, she questioned                                                                   
whether the specific steps would be construed to be a business's                                                                
standard of care, indicating the possibility that something                                                                     
critical might be overlooked because it was not included in those                                                               
six steps, and that the standard of care might be vary by industry.                                                             
In response to the chairman's comment, she agreed the disjunctive                                                               
disconnecting subsections (1) and (2) solves a lot of the concerns.                                                             
She reiterated her own concern, however, that the standard of care                                                              
within the industry not automatically revert back to the specific                                                               
steps.  Representative Murkowski indicated she is much more                                                                     
comfortable with the flexibility of the "or" language.                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG said he tended to agree regarding the tightness                                                               
of the language.  He inferred that Representative Murkowski, as a                                                               
member of the House Judiciary Committee along with the chairman,                                                                
could provide some possible wording.                                                                                            
                                                                                                                                
Number 2237                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA indicated she had missed the majority of the                                                              
previous hearing, but had listened to a taped copy.  She confirmed                                                              
she was correct in her hearing that the chairman would like to see                                                              
the contract language deleted.  She further confirmed the chairman                                                              
did not wish to amend the bill in this committee.                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG said he thought the issue needed further                                                                      
discussion and the House Judiciary Committee is the proper place                                                                
for that discussion.  This issue is one of whether or not the                                                                   
defense raised in the bill is defeated, he said, "By having the ...                                                             
exception of the contract, action (indisc.) contract left in."                                                                  
Noting he is unsure of that dynamic, he believes it is best served                                                              
by removal, and, as the bill sponsor, he will make sure it is fixed                                                             
properly before it reaches the House floor.                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned whether the legislation had                                                                 
other committees of referral besides Judiciary.                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG answered in the negative, noting there was a zero                                                             
fiscal note.                                                                                                                    
                                                                                                                                
Number 2354                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move the proposed CS for HB
82, Version I, out of committee with the attached two zero fiscal                                                               
notes and individual recommendations.  There being no objections,                                                               
CSHB 82(L&C) moved out of the House Labor and Commerce Standing                                                                 
Committee.                                                                                                                      

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