A legislative eye on Y2K.

Legislators are scrambling to make sure state government is ready for Y2K. But if states do the right things, the public will think it's "much ado about nothing."

Experts continue the race to resolve Year 2000 (Y2K) date problems before Jan. 1. Millions and million of lines of code have to be examined and modified because many computer systems can't distinguish 2000 from 1900.

Y2K may well be the most challenging problem to face government in this century. "It has enormous potential to disrupt our homes, our businesses and our communities," says Senator Bob Jauch, chair of the NCSL Year 2000 Subcommittee and co-chair of Wisconsin's Joint Information Policy Committee.

"It will take millions of dollars to fix and countless hours to coordinate contingency plans in the event that power is lost, health care systems don't work or sewage treatment plants don't function," Jauch says. Legislators play a critical role in overseeing Y2K preparations and educating the public about the issue.

WHAT CAN GO WRONG?

Unless the date predicament is solved, computer systems and devices containing embedded chips may malfunction causing errors, miscalculations and shutdowns. For state government, this could affect everything from payroll, pensions, benefits and tax collection to transmissions of data between local, state and federal agencies and businesses. And the problem extends beyond computers to elevators, medical equipment, fire engines, buses, water and wastewater treatment facilities, phone systems, utilities, prisons, bank vaults, and nuclear power plants that contain computer chips that may malfunction. More than 50 million embedded system devices worldwide may exhibit Year 2000 problems, according to the Gartner Group, an information technology consulting firm.

WHAT ARE THE COSTS?

The costs of fixing these glitches range from a low of $4.5 million in South Dakota to $322 million in Georgia, according to a survey by the National Association of State Information Resource Executives. To fix state computer systems nationwide could cost in the neighborhood of $3.5 billion. The National Association of Counties estimates that counties will spend $1.7 billion, and the U.S. Conference of Mayors puts cities' costs at more than $300 million. Federal government estimates exceed $6 billion, and experts put worldwide costs at more than $600 billion. Legal costs stemming from year 2000 problems are projected to be in the trillions.

"State legislators face the pressure of time ticking away as they oversee the last stages of Y2K preparation efforts and consider scores of bills aimed at reducing the bite of the millennium bug," says Delaware Representative Roger Roy, chair of NCSL's Communications and Information Policy Committee. "No one knows for sure if Y2K disruptions will be a bump in the road or a major upheaval, but making sure the state is adequately prepared is an important responsibility for state legislatures."

LEGISLATIVE OVERSIGHT

Senator Steve Kelley, co-chair of the Minnesota Legislature's Ad Hoc Task Force on Year 2000, stresses the need for legislators to provide leadership. The Minnesota task force began its review with an examination of state agency preparedness. Through a series of hearings, members examined the state's preparation efforts as well as local governments and businesses that come under legislative regulatory review, such as utilities, hospitals and nursing homes. In addition, they worked with organizations, businesses and nonprofits that are critical to solving the problem.

Wisconsin's jauch says legislators have to hold the administration accountable for achieving Y2K readiness. The legislative oversight role is critical, he says. "Lawmakers need to ask the tough questions to ensure we get the right answers."

The Wisconsin Joint Information Policy Committee is holding public hearings on public and private preparedness to monitor and measure state progress. The committee intends to issue report cards to evaluate agency efforts. To ensure local government preparedness, a concern in many states, the administration plans to send out assessment teams to evaluate progress and recommend steps to take to avoid problems.

This year alone, more than 200 Y2K-related measures have been introduced in state legislatures. States are considering and passing legislation to limit government liability for Y2K problems, protect citizens caught up in Y2K snafus, limit liability and damages, and provide a safe harbor for those who share Y2K information in good faith. Other Y2K bills include stepped-up reporting requirements for agencies and utilities, emergency procurements, tax credits, loan funds, limits on price increases, and creating more government holidays around Jan. 1, to get a jump on any problems that may occur when the new year begins.

PUBLIC EDUCATION

"The best advice I can give to legislators is to focus on education, not legislation," Jauch says. "People read about and hear about Y2K every day, and they are asking legitimate questions. We need to make sure that government provides information, guidance and solutions. As legislators, we need to maintain constant oversight to make sure this information is reliable."

Senator David Magnani, chair of the Massachusetts Senate Science and Technology Committee, is holding Y2K workshops for businesses in his district. In addition to public meetings, press releases and brochures, states are setting up consumer hotlines and Web sites to inform the public,

LIMITING LIABILITY

The most difficult decision for lawmakers in many states is whether they should enact laws to limit government liability for Y2K failure. No one wants the state to become the "deep pocket" in Y2K actions, but lawmakers also don't want to eliminate the incentive to resolve the problem. Legislation has been introduced this session in more than 30 states to limit government liability. Minnesota crafted legislation that maintains the incentive for government to fully disclose potential problems and resolve them. Their "immunity carrot" law provides protection only if state agencies and local governments identify their Y2K problems and make reasonable efforts to correct or mitigate them. They also must file a disclosure of the problem with the Department of Administration by July 1.

Virginia Delegate Joe May, co-chair of the House Science and Technology Committee, says that Virginia adopted immunity legislation for both the state and local governments because it is a state in which individuals can bring suit against the state. Nevada, Florida, Georgia and Hawaii have similar laws on the books.

Other legislatures are considering bills that limit liability for those who exercise "due diligence" or "good faith efforts." South Dakota passed legislation to limit the liability for Y2K disruptions when there is evidence of Y2K compliance. Other bills limit damages recoverable.

California and Virginia have "good Samaritan" laws that provide immunity from liability for damages when Y2K information is exchanged in good faith. Other states are considering this move.

Several states are considering legislation to protect consumers who are the victims of Year 2000 failures outside their control. For example, what happens if your bank is unable to process the deposit of your paycheck and you can't pay your mortgage? Legislation co-sponsored by Minnesota Senator Kelley provides a temporary, 60-day affirmative defense for consumers so they have time to resolve these kinds of problems. Colorado, Connecticut, Hawaii, Maryland, New Mexico, Tennessee and Washington are considering legislation to protect consumers from Y2K problems.

GETTING READY

As the year winds down, state and local emergency preparedness offices, the Red Cross, utilities and information technology offices are testing and modifying plans for various kinds of failures.

"If we do the right things to prepare for Y2K, people will think it is much ado about nothing," says Jauch.

And on an optimistic note, legislators say there's a positive return on all the time and energy spent on Y2K. The more than $3 billion being spent on state information technology will upgrade systems and provide a far more advanced structure for state government. And the coalitions that have been established among various levels of government and with industry are a valuable model for other problems that may come up. Senator Kelley predicts that we will see a tremendous increase in productivity starting September 2000 as the resources devoted to Y2K are rechanneled to new accomplishments.

MORE HELP'S AVAILABLE

NCSL's Subcommittee on Year 2000 has information from two workshops available in audio and on the Web at http://www.ncsl.org/programs/lis/y2k/y2k.htm. Also on the Web page are a Y2K checklist for legislatures and a Y2K and You video that explains the Year 2000 problem and discusses the role of state legislatures.

THE CHALLENGE

"The Year 2000 is not just a computer problem, in fact, it affects water systems, utility systems, heat, light and transportation systems. And because we are linked as a world, we have an unparalleled challenge as a global society to work together. The responsibility for state lawmakers is to make sure state governments are coordinating activities among states, within local governments and within the private sector to make sure we don't have an economic meltdown."

- Wisconsin Senator Bob Jauch

Jo Anne Bourquard handles information policy and technology issues for NCSL.