Session of 1999
         
HOUSE BILL No. 2185
         
By Committee on Judiciary
         
1-28
         

  9             AN  ACT enacting the Kansas Y2K protection act.
10      
11       Be it enacted by the Legislature of the State of Kansas:
12             Section  1. This act shall be known and may be cited as the Kansas
13       Y2K protection act.
14             Sec.  2. As used in this act:
15             (a) "Defendant" means any individual, proprietor, firm, partnership,
16       joint venturer, syndicate, business trust, company, corporation, limited
17       liability company, association, committee and any other group of persons
18       acting in concert who provides services to a customer or client through
19       the use, in part, of a computer system, program, or software which may
20       be affected by a computer date failure, but does not include any of the
21       above entities who sell, manufacture, distribute or lease computer sys-
22       tems, programs, or software.
23             (b) "Action" means any action to recover damages resulting directly
24       or indirectly from a computer date failure, including an action based on
25       a breach of contract for a computer date failure, a shareholder or deriv-
26       ative action based on a computer date failure, or an action based on an
27       alleged failure to properly detect, disclose, prevent, report on, or reme-
28       diate a computer date failure.
29             (c) "Computer date failure" means either of the following:
30             (1) The present or future inability of the computer system or com-
31       puter program or software to accurately store, process, provide or receive
32       data from, into and between the years 1999 and 2000 and beyond, in-
33       cluding leap year calculations, if all other technology used in combination
34       with such system, program or software properly exchanges data therewith;
35       or
36             (2) The possibility of the existence of any such inability or
37       incompatibility.
38             (d) "Computer program or software" means a set of statements or
39       instructions to be used directly or indirectly in a computer system in order
40       to bring about a certain result.
41             (e) "Computer system" means any electronic device or collection of
42       devices, including support devices, networks and embedded chips, and
43       excluding calculators that are not programmable, that contain computer
44       programs or electronic instructions and that perform functions including
45       logic, arithmetic, data processing, data storage and retrieval, communi-
46       cation or control.
47             (f) "Actual damages" means damages which are immediately attrib-
48       utable to a computer date failure as the natural result of a computer date
49       failure, and shall not include damages which are immediately attributable
50       to an intervening act, nor include damages which flow immediately from
51       the consequences or results of a computer date failure.
52             (g) "Consequential and remote damages" means damages which are
53       immediately attributable to an intervening event, and shall not include
54       damages which are immediately attributable to a computer date failure.
55       Such intervening event may form a link in an unbroken chain of causation,
56       so that the consequential and remote damages would not have occurred
57       if they had not been set in motion by the computer date failure. Conse-
58       quential and remote damages flow immediately from the consequences
59       or results of a computer date failure, and shall not include damages which
60       flow immediately from the computer date failure itself.
61             Sec.  3. (a) If the conditions set out in subsection (b) are met, then
62       any action which is brought against a defendant because of a computer
63       date failure shall:
64             (1) Be brought only as an individual action and not as a class action;
65             (2) be deemed to be based solely and exclusively in contract to the
66       exclusion of all other causes of action; and
67             (3) if brought, shall only allow recovery for the actual damages re-
68       sulting from a computer date failure and not for consequential and remote
69       damages resulting from a computer date failure.
70             (b) The conditions referred to in subsection (a) are as follows:
71             (1) the plaintiff in the action has not suffered any personal injury,
72       other than emotional harm, as a result of the computer date failure;
73             (2) the defendant in the action has made reasonable efforts to protect
74       its computer systems, programs or software, which it uses to provide
75       services to its clients or customers, from a computer date failure;
76             (3) the defendant, not later than September 1, 1999, has tested its
77       computer systems, programs or software, which it uses to provide services
78       to its customers and clients, by actually simulating the transition from
79       December 31, 1999, to January 1, 2000, and made any other tests that a
80       reasonable person would believe necessary to prevent a computer date
81       failure. The defendant is not required to test the computer system, pro-
82       gram or software of any individual client or customer;
83             (4) the defendant, not later than October 1, 1999, has prepared a
84       contingency plan, that will provide for alternative methods of carrying out
85       the services which it provides to its clients and customers, in order to
86       remedy any problem with the services it provides to its clients and cus-
87       tomers that may arise from a computer date failure. Such contingency
88       plan must be able to be implemented within 60 days after receiving writ-
89       ten notice from a customer or client of an actual problem regarding the
90       defendant's services that has been caused by a computer date failure;
91             (5) the defendant, not later than October 1, 1999, has provided notice
92       by mail to its current, known customers or clients of its efforts to avoid a
93       computer date failure, and has posted such notice prominently in its place
94       of business for public review. For all new customers or clients, who be-
95       come known to the defendant after October 1, 1999, the defendant pro-
96       vides notice of its efforts to avoid a computer date failure to these new
97       customers or clients within 60 days after these customers or clients be-
98       come known to the defendant. Such continuing notification, for all new
99       clients who become known to the defendant after October 1, 1999, may
100       be discontinued on July 1, 2000. The notice required herein shall include
101       a summary of the following: (A) A general description of the defendant's
102       year 2000 compliance efforts; (B) the likelihood that it will make a tran-
103       sition to the year 2000 without a computer date failure; (C) the problems
104       that could or will arise in the services which the defendant provides to its
105       client or customers should a computer date failure occur; (D) an expla-
106       nation to the defendant's customers or clients that all problems discov-
107       ered in the defendant's services which are possibly caused by a computer
108       date failure should be reported to the defendant in writing; (E) an expla-
109       nation to the defendant's customers or clients of the contingency plan,
110       which the defendant has prepared, that will provide alternative methods
111       for carrying out the services which the defendant provides to its clients
112       and customers, in order to remedy any problem in the defendant's serv-
113       ices that may arise from a computer date failure; (F) an explanation to
114       the defendant's customers or clients that it should expect any problem
115       with the defendant's services, that is caused by a computer date failure,
116       to be remedied within 60 days after the client or customer has notified
117       the defendant in writing of a problem with the defendant's services that
118       may be caused by a computer date failure; and
119             (6) the defendant has or will implement the applicable portions of
120       the contingency plan, or otherwise remedy the problem created by the
121       computer date failure, within 60 days after receiving written notice, from
122       a client or customer, of a problem with its services that may be caused
123       by a computer date failure.
124             Sec.  4. (a) The notice required under subsection (b)(5)(E) of section
125       3, and amendments thereto, in whole or in part, shall not be admissible
126       against the defendant in any action covered by this act to prove the ac-
127       curacy or truth of any information set forth in the notice, except that:
128             (1) The notice may be admissible to serve as the basis for a claim
129       brought by an individual, not as a class action, of anticipatory breach or
130       repudiation of a contract, to the extent provided under subsection (a)(2)
131       of section 3, and amendments thereto; and
132             (2) The court in any covered action shall have discretion to limit ap-
133       plication of this section in any case in which the court determines that
134       the defendant's use of the disclosures in the notice amounted to bad faith
135       or fraud.
136             Sec.  5. Notwithstanding section 3, neither the state of Kansas, nor
137       any political subdivision thereof, shall have liability for any individual or
138       class action which is brought against it by any person for damages result-
139       ing directly or indirectly from a computer date failure, or an action based
140       on a breach of contract for a computer date failure, or an action based
141       on an alleged failure to properly detect, disclose, prevent, report on, or
142       remediate a computer date failure.
143             (b) As used in this section the term "political subdivision" means any
144       office, agency, department, commission, board, division, and institution
145       of any county or municipality of the state of Kansas.
146             Sec.  6. (a) Nothing in this act shall be construed to:
147             (1) Limit the ability of contracting parties to enter into agreements
148       as they deem appropriate on the issue of liability and damages resulting
149       from computer date failure;
150             (2) affect the validity of existing contracts created on or before en-
151       actment of this act regarding issues of liability and damages resulting from
152       a computer date failure;
153             (3) recognize, endorse or suggest the existence or validity of any pur-
154       ported cause of action; or
155             (4) create a cause of action where none existed otherwise.
156        Sec.  7. This act shall take effect and be in force from and after its
157       publication in the Kansas register.