STAND. COM. REP. NO. 1166

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1111
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Education and Technology and Commerce and
Consumer Protection, to which was referred H.B. No. 1111, H.D. 2,
entitled: 

     "A BILL FOR AN ACT RELATING TO YEAR 2000 ERRORS BY
     COMPUTER-BASED SYSTEMS,"

beg leave to report as follows:

     The purpose of this measure is to address potential legal
problems arising from Year 2000 computer errors by:

     (1)  Creating a process for resolving disputes that includes
          non-binding arbitration; and

     (2)  Providing protections for persons who exercise
          reasonable efforts to identify and solve these errors.

     Testimony in support of this measure was submitted by the
Department of the Attorney General, the Department of Accounting
and General Services, the Hawaii Medical Service Association, the
Hawaii Credit Union League, the Hawaii Long Term Care
Association, AT&T, Kaiser Permanente, The Chamber of Commerce of
Hawaii, the Queen's Health Systems, the National Accountants
Coalition, Bank of Hawaii, and the Hawaii Bankers Association.
Testimony in opposition to this measure was submitted by a
concerned individual.  The Judiciary submitted comments on this
measure.


 
a                                                     HB1111 SD1
                                   STAND. COM. REP. NO. 1166
                                   Page 2


     Because there is widespread uncertainty about what claims
may be brought based on Year 2000 errors, your Committees find
that this measure will provide guidance as to what steps should
be taken as part of a commercially reasonable approach to
identifying and fixing problems.  This measure will further help
those with potential Year 2000 problems to focus on remediation
of these potential problems in the time remaining, rather than
predicting the possible basis for future claims.  

     Your Committees have amended this measure as recommended by
the Judiciary and the Department of the Attorney General.  Your
Committees have further amended this measure to replace the
noneconomic damages provisions with those of S.B. No. 1320,
S.D. 2.  Your Committees also made other technical,
nonsubstantive amendments for the purposes of clarity and style.

     Specifically, these amendments:

     (1)  Replace the process for resolving disputes that
          includes non-binding arbitration with a provision
          calling for an early alternative dispute resolution
          status conference before the court and explicitly
          permitting the court to order any form of alternative
          dispute resolution;

     (2)  Delete the limit on the maximum amount recoverable for
          noneconomic damages; and

     (3)  Set the repeal date of section 2 of this measure as
          December 31, 2003.

     Your Committees have also amended the effective date of this
measure to make it effective on December 1, 2003.  Your
Committees believe that this will allow for continued discussion
on this very important issue.

     As affirmed by the records of votes of the members of your
Committees on Education and Technology and Commerce and Consumer
Protection that are attached to this report, your Committees are
in accord with the intent and purpose of H.B. No. 1111, H.D. 2,
as amended herein, and recommend that it pass Second Reading in
the form attached hereto as H.B. No. 1111, H.D. 2, S.D. 1, and be
referred to the Committee on Judiciary.


 
a                                                     HB1111 SD1
 
 
 
                                   STAND. COM. REP. NO. 1166
                                   Page 3


                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Education and
                                   Technology and Commerce and
                                   Consumer Protection,



____________________________       ______________________________
BRIAN KANNO, Co-Chair              DAVID Y. IGE, Chair



____________________________
BRIAN T. TANIGUCHI, Co-Chair

 
a                                                     HB1111 SD1