First Regular Session
Sixty-second General Assembly
LLS NO. 99-0402.01 Jennifer Gilroy HOUSE BILL 99-1190
STATE OF COLORADO
BY REPRESENTATIVE T. Williams;
also SENATOR Blickensderfer.
JUDICIARY
A BILL FOR AN ACT
101 CONCERNING THE LIMITATION OF LIABILITY FOR CIVIL ACTIONS RELATING
102 TO FINANCIAL SERVICE PROVIDERS ARISING FROM DATE-RELATED
103 PROBLEMS.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
Establishes the "Limited Liability of Financial Service Providers
Act of 1999". Limits the liability of financial service providers for any
civil action claim relating to a year 2000 problem to actual damages.
Provides that a financial service provider shall not be liable for punitive
damages in any civil action in which the claim for damages is based upon
a year 2000 problem. Limits a financial service provider's liability to its
customers and cuts off remedies to any persons who are not in privity of
contract with the financial service provider. Establishes an affirmative
defense for financial service providers in any claim, action, or proceeding
alleging liability based upon a year 2000 problem if the financial
institution named in the action or proceeding has complied with all
regulations and requirements established by its regulator. Defines
"financial service provider" and "year 2000 problem".
Limits the liability of directors, officers, members, and employees
of financial service providers acting in the performance of the director's,
officer's, member's, or employee's duties for civil damages arising in
connection with year 2000 problems if the financial service provider has
complied with the examination requirements imposed by its primary
regulator.
Adds to the list of confidential functions of the compliance review
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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committee the duty to seek to improve the ability of electronic computing
devices to account for the year 2000 date change and compliance with
regulations and guidelines in system preparedness for year 2000 problems
and implementation of year 2000 (Y2K) plans.
Establishes a one-year statute of limitations for civil actions
against financial service providers based upon or arising out of year 2000
problems.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. Article 21 of title 13, Colorado Revised Statutes, is
3 amended BY THE ADDITION OF A NEW PART to read:
4 PART 6
5 LIMITED LIABILITY OF FINANCIAL SERVICE PROVIDERS
6 13-21-601. Short title. THIS PART 6 SHALL BE KNOWN AND MAY
7 BE CITED AS THE "LIMITED LIABILITY OF FINANCIAL SERVICE PROVIDERS
8 ACT OF 1999".
9 13-21-602. Legislative declaration. THE GENERAL ASSEMBLY
10 HEREBY FINDS, DETERMINES, AND DECLARES THAT THE ABILITY OF
11 FINANCIAL SERVICE PROVIDERS TO CONTINUE TO OPERATE THROUGH AND
12 DURING ANY ISSUES ARISING OUT OF THE DATE CHANGE TO THE YEAR 2000
13 IS ESSENTIAL TO THE CUSTOMERS OF FINANCIAL SERVICE PROVIDERS, TO
14 THE COMMUNITIES SERVED BY FINANCIAL SERVICES PROVIDERS, AND TO
15 THE ENTIRE ECONOMY. THE GENERAL ASSEMBLY RECOGNIZES THAT
16 FINANCIAL SERVICE PROVIDERS ARE REGULATED ENTITIES AND, UNDER THE
17 GUIDANCE OF REGULATORS, HAVE UNDERTAKEN EXHAUSTIVE EFFORTS,
18 UTILIZING THE KNOWLEDGE OF THE ENTIRE INDUSTRY AND ITS
19 REGULATORS, TO IDENTIFY AND REMEDY ANY POTENTIAL ISSUES RELATING
20 TO THE YEAR 2000 DATE CHANGE. IT IS THE INTENT OF THE GENERAL
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1 ASSEMBLY TO REDUCE THE RISKS OF THE YEAR 2000 PROBLEMS FOR
2 CUSTOMERS OF THESE INSTITUTIONS BY ASSURING THAT FINANCIAL
3 SERVICE PROVIDERS CONTINUE TO PREPARE FOR OPERATION DURING THE
4 YEAR 2000 DATE CHANGE.
5 13-21-603. Definitions. AS USED IN THIS PART 6, UNLESS THE
6 CONTEXT OTHERWISE REQUIRES:
7 (1) "FINANCIAL SERVICE PROVIDER" MEANS A FEDERALLY INSURED
8 AND REGULATED FINANCIAL INSTITUTION INCLUDING SECURITIES
9 BROKERAGE FIRMS, CREDIT UNIONS, STATE AND FEDERAL SAVINGS AND
10 LOANS, STATE AND NATIONAL BANKS, AND TRUST COMPANIES.
11 (2) (a) "YEAR 2000 PROBLEM" MEANS, WITH RESPECT TO
12 INFORMATION TECHNOLOGY, ANY PROBLEM, INCLUDING ELECTRICAL OR
13 TELECOMMUNICATIONS, THAT PREVENTS SUCH TECHNOLOGY FROM
14 ACCURATELY PROCESSING, CALCULATING, COMPARING, OR SEQUENCING
15 DATE OR TIME DATA:
16 (I) FROM, INTO, OR BETWEEN:
17 (A) THE TWENTIETH AND TWENTY-FIRST CENTURIES; OR
18 (B) THE YEARS 1999 AND 2000; OR
19 (II) WITH REGARD TO LEAP YEAR CALCULATIONS.
20 (b) "YEAR 2000 PROBLEM" ALSO INCLUDES ANY INABILITY OF A
21 FINANCIAL SERVICE PROVIDER TO PERFORM ITS INTENDED OR REQUESTED
22 FUNCTIONS BECAUSE OF THE SYSTEM FAILURE OF AN OUTSIDE PARTY,
23 INCLUDING, BUT NOT LIMITED TO, THE FAILURE OF A GOVERNMENTAL BODY
24 TO PROVIDE DATA, TRANSPORTATION DELAYS, ENERGY FAILURES, OR
25 COMMUNICATION FAILURES.
26 13-21-604. Affirmative defense - financial service providers.
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1 (1) A FINANCIAL SERVICE PROVIDER'S LIABILITY FOR DAMAGES IN WHICH
2 THE CLAIM FOR DAMAGES IS BASED UPON A YEAR 2000 PROBLEM OR IS THE
3 RESULT OF OR ARISES OUT OF THE FAILURE OF ANY COMPUTER SYSTEM
4 BECAUSE OF A YEAR 2000 PROBLEM SHALL NOT EXCEED THE AMOUNT OF
5 ACTUAL DAMAGES IN ANY CIVIL ACTION AGAINST A FINANCIAL SERVICE
6 PROVIDER. A FINANCIAL SERVICE PROVIDER SHALL NOT BE LIABLE FOR
7 PUNITIVE DAMAGES IN ANY CIVIL ACTION WHERE THE CLAIM FOR DAMAGES
8 IS BASED UPON A YEAR 2000 PROBLEM OR IS THE RESULT OF OR ARISES OUT
9 OF THE FAILURE OF ANY COMPUTER SYSTEM BECAUSE OF A YEAR 2000
10 PROBLEM.
11 (2) A FINANCIAL SERVICE PROVIDER MAY BE FOUND LIABLE TO ITS
12 CUSTOMERS BUT SHALL NOT BE LIABLE TO PERSONS NOT IN PRIVITY OF
13 CONTRACT WITH THE FINANCIAL SERVICE PROVIDER FOR CIVIL DAMAGES
14 RESULTING FROM ACTS, OMISSIONS, DECISIONS, OR OTHER CONDUCT IN
15 CONNECTION WITH A YEAR 2000 PROBLEM.
16 (3) IF A FINANCIAL SERVICE PROVIDER HAS COMPLIED WITH ALL
17 REGULATIONS AND REQUIREMENTS TO ADDRESS YEAR 2000 PROBLEM
18 COMPLIANCE AS SET FORTH BY ITS PRIMARY REGULATOR AND IS NAMED IN
19 A CIVIL ACTION OR PROCEEDING, THE FINANCIAL SERVICE PROVIDER SHALL
20 HAVE AN AFFIRMATIVE DEFENSE THAT IT COMPLIED WITH ALL
21 REGULATIONS AND REQUIREMENTS AGAINST ANY CLAIM, ACTION, OR
22 PROCEEDING ALLEGING LIABILITY BASED UPON, RESULTING FROM, OR
23 ARISING OUT A YEAR 2000 PROBLEM.
24 SECTION 2. 11-3-114, Colorado Revised Statutes, is amended
25 BY THE ADDITION OF A NEW SUBSECTION to read:
26 11-3-114. Directors and officers - limited liability for year
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1 2000 problems. (8) (a) A MEMBER OF THE BOARD OF DIRECTORS, A
2 MEMBER OF ANY COMMITTEE DESIGNATED BY THE BOARD OF DIRECTORS,
3 AN OFFICER, A MEMBER, AND AN EMPLOYEE OF A FINANCIAL SERVICE
4 PROVIDER, SHALL, IN THE PERFORMANCE OF THE DIRECTOR'S, MEMBER'S,
5 OFFICER'S, OR EMPLOYEE'S DUTIES, BE FULLY PROTECTED FROM, AND HAVE
6 NO LIABILITY FOR, ANY CLAIMS ARISING OUT OF, REGARDING, OR RELATING
7 TO A YEAR 2000 PROBLEM, OR CLAIMS ARISING OUT OF THE FAILURE OF
8 ANY COMPUTER SYSTEM BECAUSE OF A YEAR 2000 PROBLEM, IF THE
9 FINANCIAL SERVICE PROVIDER HAS COMPLIED WITH THE EXAMINATION
10 REQUIREMENTS IMPOSED BY ITS PRIMARY REGULATOR.
11 (b) FOR PURPOSES OF THIS SUBSECTION (8):
12 (I) "FINANCIAL SERVICE PROVIDER" SHALL HAVE THE SAME
13 MEANING SET FORTH IN SECTION 13-21-603 (1), C.R.S.
14 (II) "YEAR 2000 PROBLEM" SHALL HAVE THE SAME MEANING SET
15 FORTH IN SECTION 13-21-603 (2), C.R.S.
16 SECTION 3. 11-71-103 (1) (c), Colorado Revised Statutes, is
17 amended, and the said 11-71-103 (1) is further amended BY THE
18 ADDITION OF THE FOLLOWING NEW PARAGRAPHS, to read:
19 11-71-103. Applicability of article - confidentiality of
20 compliance review committee documents. (1) This article applies to
21 a compliance review committee the functions of which are to evaluate
22 and seek to improve:
23 (c) Compliance with federal or state statutory or regulatory
24 requirements; or
25 (e) THE ABILITY OF COMPUTERS, SOFTWARE PROGRAMS,
26 DATABASES, NETWORK INFORMATION SYSTEMS, FIRMWARE,
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1 MICROPROCESSORS, INTERNAL TIME CLOCKS, HARDWARE, OR ANY OTHER
2 DEVICE USED TO INTERPRET, PRODUCE, CALCULATE, GENERATE, COMPARE,
3 ACCOUNT FOR, OR SEQUENCE A DATE FROM, INTO, OR BETWEEN THE YEARS
4 1999 AND 2000; OR
5 (f) (I) COMPLIANCE WITH REGULATIONS AND GUIDELINES FOR
6 PREPARING SYSTEMS TO HANDLE A YEAR 2000 PROBLEM AND THE
7 IMPLEMENTATION OF ANY PLANS FOR ADDRESSING THE SITUATION.
8 (II) FOR THE PURPOSES OF THIS SECTION:
9 (A) "FINANCIAL SERVICE PROVIDER" SHALL HAVE THE SAME
10 MEANING SET FORTH IN SECTION 13-21-603 (1), C.R.S.
11 (B) "YEAR 2000 PROBLEM" SHALL HAVE SAME THE MEANING SET
12 FORTH IN SECTION 13-21-603 (2), C.R.S.
13 SECTION 4. 13-80-103 (1), Colorado Revised Statutes, is
14 amended BY THE ADDITION OF A NEW PARAGRAPH to read:
15 13-80-103. General limitation of actions - one year. (1) The
16 following civil actions, regardless of the theory upon which suit is
17 brought, or against whom suit is brought, shall be commenced within one
18 year after the cause of action accrues, and not thereafter:
19 (i) (I) ALL ACTIONS AGAINST A FINANCIAL SERVICE PROVIDER
20 REGARDING, BASED UPON, OR ARISING OUT OF A YEAR 2000 PROBLEM.
21 (II) FOR PURPOSES OF THIS PARAGRAPH (I):
22 (A) "FINANCIAL SERVICE PROVIDER" SHALL HAVE THE SAME
23 MEANING SET FORTH IN SECTION 13-21-603 (1).
24 (B) "YEAR 2000 PROBLEM" SHALL HAVE THE SAME MEANING SET
25 FORTH IN SECTION 13-21-103 (2).
26 SECTION 5. Effective date - applicability. This act shall take
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1 effect July 1, 1999, and shall apply to all causes of action accruing on or
2 after said date.
3 SECTION 6. Safety clause. The general assembly hereby finds,
4 determines, and declares that this act is necessary for the immediate
5 preservation of the public peace, health, and safety.