How A Bill Becomes Law Essay Research

Paper

HOW A BILL BECOMES LAW

THE CALIFORNIA STATE LEGISLATIVE PROCESS

This paper deals with how bills in the state of California become laws, otherwise known as the Legislative Process. It will trace the process of a bill from the inception of an idea, to the outcome on a particular bill. Since I am majoring in Electronics Technology, Computer Repair here at American River College, I have chosen a bill related to that field. This bill is Assembly Bill 1710, Liability, and computer failures. The failure being referred to deals with year 2000 date change problem, or Y2K as it has been come to known.

The Y2K problem is that of information processing using the incorrect date as a parameter. In order to save on hard disk space and the size (number of bytes or kilobytes) of software, it was decided to only refer to the YEAR part of the date without the ‘19′. Therefore, the date would read as follows: dd/mm/yy (e.g. 02/12/98).

On the turn of the century the date parameter will read as follows: 03/01/00 and the software will misinterpret it as the 3rd of January 1900 and not 2000. This style of programming was adapted and has been used for the past 30 years and up until now. Most financial software purchased by financial institutions was developed using the Cobol (Common Business Oriented Language) with the date parameter used incorrectly or only applicable in the 20th century (using the last two digits of the year). This makes most of the world s financial software inadequate and incorrect for the new millenium.

How is that? The date parameter is used (in the incorrect format) in various crucial calculations such as calculating interest on bonds and pension funds. Hence, 30 years of programming needs to be corrected in a 6th of the time! This is a global task of greater magnitude than ever imagined. Basically all the programming of the last 30 years needs to be corrected in time for the turn of the century. It becomes even more interesting as it is not easy to find the date parameters in the millions of lines of code. According to a March, 1998 survey by Rubin Systems, Inc. of 128 Information Technology (IT) directors and managers in major companies (the majority of which expect to spend more than $100 million on their Y2K projects), about 78% of the 128 companies surveyed reported that their rate of missing milestones in implementing their Y2K remediation plans is increasing and 37% of the companies surveyed have already encountered a Y2K-related systems failure. Gartner Group, Inc. has estimated (with a probability of 0.7) that approximately 50% of the companies with this software problem may not become Year 2000 compliant in time and will have all or part of their computer systems shut down (or start producing incorrect data) on or after January 1, 2000. The Gartner Group estimate appears to conform with a survey conducted by Arthur Andersen in July of 1997, which predicts, based on an extrapolation of current data, that only 50% of companies will be fully compliant by the year 2000.

As a result, any programming that is not corrected properly by the year 2000 will stop functioning. This will have far reaching consequences as vital state and local services are interrupted, and individuals will be hurt either physically or financially. A major concern at the state government level is that government agencies will be hit by lawsuits from citizens seeking damages.

California Assemblymember Brooks Firestone (R-Los Olivos) introduced legislation to curtail the damages available in lawsuits against businesses. The measure, AB 1710, limits the damages available in Y2K litigation to the costs resulting from bodily injury, if any, and to the amount necessary to repair or replace the failed computer system or program. In other words, the measure would prohibit punitive damage awards or awards based on emotional distress.

This legislation is necessary to focus our efforts on solving the Y2K problem, while preventing trial lawyers from devastating our high-tech industry with frivolous litigation, said Firestone. The new millenium bug should not be a full-employment act for our state s trial lawyers

Indeed, a recent study completed by Capers Jones found that the country faces some $277 billion in overall Y2K costs. Of that amount, the single largest component will be litigation accounting for an estimated $100 billion of the total. The cost of repairing Y2K in California alone may exceed $9.5 billion. Additionally, a recent survey by the National Association of State Information Resource Executives (NASIRE) of California s remediation results showed that of 640 critical government systems, only 50% had been converted to be Y2K compliant.

Senator Bruce McPherson (R-Santa Cruz) and Assemblymember Jim Cunneen (R-San Jose) co-authored the measure with Firestone. (Senator McPherson introduced a similar measure in the Senate, S.B. 2000, Information systems: public entity liability).

We need this legislation, said Assemblymember Jim Cunneen, to bring some sanity to our tort system. By capping damage awards, the incentive will be to settle these cases without going to trial reducing the burden on our already crowded courts. It serves no purpose to put a California company out of business because of a computer glitch that is out of their control, said Senator Bruce McPherson. This legislation is the common sense solution to a very real problem that every business in California must face.

Brooks Firestone is a member of the Banking and Finance Consumer Protection legislative committee and as such is concerned with consumer litigation. Assemblymember Jim Cunneen s district is in the heart of Silicon Valley and is therefore concerned with possible litigation that could affect the computer manufacturer industry. Senator Bruce McPherson is a member of the Senate select committee on Technological Crime and the Consumer and as such is concerned with consumer litigation.

The idea for this measure was sent to the Legislative counsel where it was drafted into the actual bill, and was then returned to Brooks Firestone for introduction to the Assembly. The bill was first read on January 28, 1998 on the assembly floor identifying the bill number, author and the descriptive title.

The next step was to send the bill to the Office of State Printing, which was done that day. It was returned from the printer the next day. Additionally, the bill was sent to the Assembly Rules Committee, whose primary jurisdictions are proposed amendments to the rules, and other matters relating to the business of the Legislature, to determine which policy committees would have hearings to review the bill. On February 6, the bill was assigned to the Committee on the Judiciary, whose primary jurisdictions are family law, product liability, tort liability, Civil Code, and Evidence Code (excluding criminal procedure), and the Committee on Televising the Assembly and Information Technology, whose primary jurisdiction is information technology.

The bill can not be heard in policy committee until 30 days after they have been printed. This allows sufficient time for anyone to review the bill and determine if they support or oppose it.

Registered supporters of this bill and their position were as follows (as excerpted from the legislative analysis by Al Hernandez Santana):

1. The Silicon Valley Software Industry–There are three specific reasons for supporting this bill: The Year 2000 problem is a result of a programming imperative and is not a matter of individual fault; the best solution is for those who developed the software to provide the fix; and massive litigation which attempts to recover punitive damages and other large settlements . . . does not serve the public interest and [will] have no deterrent value . . . because of the one-time nature of the problem.

2. The State Farm Insurance Companies–AB 1710 will help the computer and software industries address the Y2K issue by deterring frivolous claims. The California Business Roundtable recently cited the high costs of litigation, particularly the dramatic growth in damages available under tort law, as being one of the greatest barriers to doing business in California. The Y2K issue presents fertile ground for the exploitation of this trend. Already at least two class action [type] lawsuits have been filed in California based on Y2K issues. Many predict a virtual explosion of such claims as the millenium approaches. Finally, it leaves undisturbed legitimate contract claims that may exist based on the failure of a particular computer or software.

3. Intel Corporation–The Year 2000 problem requires a broad based solution and this bill will encourage that approach. Intel mentions the notice provisions for repair or replacement, and the free upgrade for the “off the shelf” software versions put on the market after December 31, 1997, as especially noteworthy.

4. The California Manufacturers Association–supports the bill for the same reasons.

5. The Semiconductor Equipment & Materials International (SEMI)–The upcoming millennium should not serve as a basis for unwarranted litigation. AB 1710 represents an effort to encourage companies to address the issue immediately, remove any incentives for lawyers to exploit the Year 2000 issue, and ensure that disputes can be settled fairly and quickly. The bill would protect companies caught in the middle of the issue who might be exposed unfairly to damage claims due to a computer date failure.

6. The American Electronics Association (AEA)–This area is ripe for litigation at almost every level of the high-tech industry. Potential liability exists for directors and officers for failure to take timely or appropriate steps to cure the problems both as manufacturers and sellers of technology and as directors and officers responsible shareholders. There is no silver bullet solution. Each company is faced with a line-by-line review of all code for all programs they use. Further, the problem may be embedded in the firmware of a device or burned into the computer chip itself.

7. The American Insurance Association (AIA)–AB 1710 is a balanced, fair solution to the legal issues raised by the Year 2000 problem. AIA expresses concern that Year 2000 lawsuits that are aimed at exploiting the problem rather than providing the solution. In contrast, AIA argues, AB 1710 seeks a solution by requiring software makers of newly sold products to provide a free upgrade to solve the problem. For older programs, it requires the software maker to provide notice that the system may experience a computer date failure and explain the manner by which the individual may obtain repair or replacement of the system or software.

8. The Personal Insurance Federation of California (PIF)–This measure addresses the inability of computer systems to manage the transition and date change from 1999 to 2000 and related issues arising from the anticipated failure of computer hardware and software. AB 1710 addresses such failures by fashioning exclusive remedies for the anticipated and unavoidable computer failures. This measure will assist both the public and private sector in confronting issues which will arise relating to computer failures and at the same time will allow individuals redress through contract remedies.

9. The California Chamber of Commerce–California’s computer industry is critically important to our state’s economy. This problem, commonly known as Y2K, must be addressed through informing users of their options with regard to computer failures. This bill will give California high-tech business, and those that use these systems for their own businesses, some predictability as to their liability regarding Y2K.

Registered opposers of this bill and their position were as follows (as excerpted from the legislative analysis by Al Hernandez Santana):

1. The Consumer Attorneys of California This bill goes against the long-standing goal of the tort system, namely, to deter wrongful conduct and encourage responsible behavior. AB 1710 is intended to protect high tech companies from frivolous lawsuits, however, immunizing the computer industry for a crisis of its own making is bad public policy. The primary goal must be to achieve compliance, rather than creating immunity from full responsibility, which will provide an incentive to procrastinate.

2. The Motion Picture Association of America The member companies invested millions of dollars in their computer systems with the reasonable expectation that the system would work regardless of the year in which it was operated. This bill is an unfair attempt to take away substantial legal rights that consumers have under current law. We should not be penalized for the lack of foresight and reasonable care demonstrated by certain segments of the software industry.

3. David Edward Ross (a software engineer for over 35 years) As long ago as 1969 he was working with software that would correctly handle dates beyond December 31, 1999. The only reason that more modern software cannot handle the year 2000 is that insufficient attention was given to its design, programming, and testing. This bill will encourage software developers to continue cutting corners by protecting them even if they create cheap software.

4. Dean A. Morehous (an attorney who practices in the high technology industry) This bill is potentially harmful and extremely unlikely to achieve its authors legislative objectives, and instead will inject additional confusion into the law and further burden California businesses already struggling to achieve Year 2000 compliance. The bill is based on the faulty assumption that the problem will jeopardize the growth of the high technology industry. On the contrary, most evidence indicates that Year 2000 compliance and conversion efforts have spawned a thriving sub-market within the high technology sector as users scramble to remediate their systems and traditional technology vendors (and newcomers) offer Year 2000 product solutions and consulting services. Additionally, this bill will spawn collateral litigation concerning its scope and application, thereby negating its purpose of limiting litigation.

The bill was amended twice and re-referred to the Committee on the Judiciary. On April 21, the bill failed passage in the committee hearing (Ayes 6, Noes 7). On May 5, reconsideration was granted, however the bill once again failed passage during the second hearing (Ayes 6, Noes 6). This was mainly due to unclear wording and unanswered questions. As a result, the bill was returned from committee without further action.

If the bill had passed both committees it was referred to, it would have been read a second and third time on the Assembly floor, discussed by the Members and voted on by a roll call vote. The bill would have required 41 votes to pass.

If the bill passed the Assembly, the same process must be repeated in the Senate. If the Senate amends the bill it must be returned to the Assembly for concurrence on the amendments. If a disagreement ensues, a joint committee of three Assembly members and three Senate members attempt to reach a compromise, and if so, the bill is returned to both houses for a vote.

If both houses were to approve the bill, it then is passed on to the Governor. The Governor can sign the bill into law, or allow it to become law without signature, or veto it. If it is vetoed, then the veto can be overridden by a two-thirds vote in both houses.

I feel that the intention of this bill was good, but it was poorly written. There are now 34 pieces of legislation in 14 states that address Y2K liability, some that all but blocks civil litigation from being filed after failures. Although companies should be held accountable for the quality of their work, they must be protected somehow while they complete their Year 2000 work. This is not to suggest that the states should be shielded from liability for actual consequences of these failures, but from liability from excessive punitive damages. However, the true focus must continue to be on solving the problem of Y2K failures before they occur. If it can be shown that a company failed to take appropriate steps to attempt to prevent the failure before it occurred (negligence), then recourse for obtaining punitive damages should exist.

References

1. Kappelman, Leon (editor); Solving the Year 2000 Problem; International Thomson Computer Press, 1997.

2. Office of Assemblyman Brooks Firestone: Firestone to Limit Millenium Bug Litigation, Press Release 1/28/98.

3. NASIRE web site; www.nasire.org: Year 2000 Remediation Results, 11/2/98.

4. California Government web site; www.ca.gov: Overview of the Legislative Process

5. California Assembly web site; www.assembly.ca.gov: AB 1710 Assembly Bill