Speech by Rep. David Dreier in House of Representatives.
Re: HR 4240, Y2K Liability and Anti-Trust Reform Act.
Date: July 17, 1998.
Source: Congressional Record.

[Page: H5848]

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. Dreier) is recognized for 5 minutes.

[Page: H5849]

Mr. DREIER. Mr. Speaker, some computers and electronic systems will have difficulty adjusting to the dates beginning in the year 2000. This is the oft-mentioned `Y2K' bug. This problem is caused by a long-time custom in electronic industries to use 2-digit dates. Thus, 1980 was simply `80', 1990 was `90', and 1998 is `98.' However, that system does not work when we get to January 1, 2000. At that time, many machines will think it is January 1, 1900.

There are enormous national interests at stake as we prepare to deal with the technical challenge of the year 2000. Critical national infrastructures may be threatened, including many government services, banking and financial services, energy and power, telecommunications, transportation, and vital human services such as hospitals.

It is not surprising that Federal Government agencies include millions of computer and electronic systems. Led by the gentleman from California (Mr. Horn), the chairman of the House Committee on Government Reform's Subcommittee on Government Management, Information, and Technology, the Republican Congress has pushed long and hard to whip Federal agencies into action to address Y2K problems.

Although the Federal Government faces a major Y2K challenge, the private sector challenge from the year 2000 transition is far greater. Recent congressional testimony from the Board of Governors of the Federal Reserve System estimated costs at roughly $50 billion, and many estimates go far beyond that staggering figure. And those are U.S. costs alone. Actually, this is an international problem, and we must recognize that.

Mr. Speaker, while I am not an alarmist, I believe it is prudent for Congress to immediately consider legislation to help the private sector deal with Y2K problems. It is clear that two legislative reforms would effectively encourage computer-related companies and the private sector clients that they serve to avoid Y2K problems and reduce the impact on the public by, first, a limited modification of Federal liability law and, second, a targeted anti-trust exemption for firms working together to deal with Y2K problems. These reforms make up H.R. 4240, legislation that I introduced just yesterday called the Y2K Liability and Anti-Trust Reform Act.

The press is already reporting that some unscrupulous lawyers are planning and filing multi-billion-dollar Y2K lawsuits to reap monetary rewards from America's pain. It is clearly in the national interest to have companies focused on fixing Y2K problems rather than being frozen by the fear of lawsuits.

Earlier this week, the Clinton administration proposed a pop-gun response to this potentially immense problem. The President proposed to provide a small degree of liability protection to encourage companies to share information on how to solve Y2K problems. Mr. Speaker, far more than that is needed.

With just 17 months remaining before January 1, 2000, one of our core principles on Y2K policy must be to focus all relevant talent and energies on avoiding the problems. While the President's proposal falls short, the liability provisions in H.R. 4240 are the best way to achieve that goal.

While talk is nice, the Y2K Liability and Anti-Trust Reform Act provides a real incentive for companies to solve Y2K problems before computer systems fail and the American people suffer.

My legislation requires computer-related companies to take responsibility for products they have developed and sold. They must make fixes available to customers for their non-Y2K compatible hardware and software, and those fixes must be available cost-free for products sold after December 31, 1994. I am confident that freed from the fear of multi-billion-dollar lawsuits that the enormously creative and successful American high-technology industries can respond to this challenge.

Companies that use computer and electronic systems must also take responsibility for fixing Y2K problems before things go wrong. Remember, Mr. Speaker, it is the American people that lose when a company adopts a strategy based on the plan to simply sue someone when things go wrong.

Companies that use computer and electronic systems gain a similar degree of liability protection if they make all reasonable efforts to fix the Y2K problems in their systems, run a test by July 1, 1999, and notify all customers and the President's Y2K Commission of the prospects for their own Y2K failures by August 1, 1999.

Right now, as the clock ticks towards the year 2000, too much private-sector energy is being wasted on legal liability strategies rather than finding and fixing potential failures. The liability provisions in H.R. 4240 will create a real incentive for companies to focus on finding and fixing problems, because there will be a tangible reward, some freedom from aggressive Y2K lawsuits.