Year 2000 Problem: Chronology of Hearings and Legislation

Year 2000 Problem: Chronology of Hearings and Legislation

98-377 STM
CRS Report for Congress
Received through the CRS Web
Year 2000 Problem:
Chronology of Hearings and Legislation
Updated January 21, 1999
Richard M. Nunno
Analyst in Information Technologies
Science, Technology and Medicine
Congressional Research Service ˜ The Library of Congress

ABSTRACT
For nearly three years, congressional committees have been holding hearings and
considering legislation regarding the year 2000 computer problem. This report provides a
summary of the hearings and legislation on the issue. For additional information, see CRS
Issue Brief 97036, The Year 2000 Computer Problem: Activity in the 105th Congress,
updated regularly. This chronology will be extended as events warrant.

Year 2000 Problem:
Chronology of Hearings and Legislation
Summary
The year 2000 computer problem, the inability of many computers to process
dates beyond December 31, 1999, has been reviewed extensively by Congress. For
over two years, numerous hearings have been held to investigate various aspects of
the problem, and many legislative measures have been introduced, with some having
been enacted.
At the hearings, committees have received testimony from a variety of
government and private sector witnesses on their progress toward modifying their
computer systems to allow year 2000 dates to be read correctly. The testimony has
described the teams of programmers and managers at federal, state, and local
government agencies and the private sector, as well as their counterparts in foreign
countries, that are working to correct their computer systems for this problem. The
testimony also revealed a continuing lack of awareness of the magnitude of the
problem among many managers and others who need to renovate their systems.
While many questions have been raised about the potential for disruptions to
government and commercial activities, a high degree of uncertainty still exists over
the extent of damages that might occur as a result of the inability of organizations to
correct the problem in all of their systems.
In general, the legislation introduced attempts to forestall or mitigate problems
that might occur in government and private sector operations and services as a result
of the year 2000 problem. Although some of the less controversial legislation, as
well as appropriations, have been enacted, other bills that would call for extensive
corrective action are still pending. A key obstacle for any legislative remedy is the
limited time available for implementation of any new policy. Nevertheless,
Members and committees continue to search for ways to help government and private
sector entities address the problem.

Contents
Summary of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Hearings and Legislation in the 104 Congress
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Hearings and Legislation in the 105 Congress
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Hearings in the 105 Congress
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Legislation in the 105 Congress
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Hearings and Legislation in the 106 Congress
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Hearings in the 106 Congress
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Legislation in the 106 Congress
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Year 2000 Problem:
Chronology of Hearings and Legislation
For over two years, congressional committees have been holding hearings and
considering legislation related to the year 2000 computer problem. This report
provides a summary of the hearings and legislation, and a list of General Accounting
Office (GAO) reports requested by congressional committees. It also identifies some
additional issues that may come to congressional attention. For further discussion
of the year 2000 issue, including a more detailed description of the problem, a
summary of efforts to correct the problem by federal, state and local governments,
the private sector, and international organizations, and a discussion of policy issues
before Congress, see CRS Issue Brief 97036, The Year 2000 Computer Problem:
Activity in the 105 Congress
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, updated regularly.
1
Summary of the Problem
Most computer systems store dates using only the last two digits for the year
field (e.g., 98 for 1998). The two-digit year field is found in both hardware and
software, and is common among older systems designed when memory storage was
expensive. Two-digit year fields are also used in recently designed systems, both out
of habit and to maintain compatibility with older systems. The problem with the
two-digit year format is that the year 2000 is indistinguishable from 1900. When
dates beyond 1999 are entered under this format, computer systems could make
errors in calculating ages, sorting information by date, and comparing dates. Some
systems could cease to operate entirely.
While correcting a single year field in a software program is not difficult, the
process of analyzing, correcting, testing, and integrating software and hardware
among all computer systems that must interact is a very complex management task.
With the widespread reliance on computer systems by federal, state, and local
governments, and the private sector, the year 2000 problem is systemic to the
national and global information infrastructures and creates the potential for severe
reliability problems. Even if the problem is corrected in one computer system,
interactions with other systems that are not year 2000 compliant could cause flawed
data to corrupt the corrected system. If systems are not corrected, computer
malfunctions will cause many costly problems in commerce and government.
1 Also, the General Services Administration maintains a web site of selected legislative
reports, testimony and memoranda, at www.itpolicy.gsa.gov/mks/yr2000.legis.htm.

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Hearings and Legislation in the 104 Congress
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The first congressional hearing on the year 2000 problem was held on April 16,
1996 by the House Government Oversight and Reform Committee, Subcommittee
on Government Management, Information and Technology. The hearing focused on
year 2000 conversion issues for federal agencies. The cost for correcting the problem
was estimated at $30 billion for the federal government, and up to $600 billion
worldwide. On May 14, 1996, the House Science Committee, Subcommittee on
Technology, conducted a hearing on potential technical solutions and possible roles
for the government in addressing the problem. On September 10, 1996, the two
subcommittees conducted a joint hearing to investigate industry liability issues and
to review the year 2000 problem for state governments, revealing that many states
were not aware of the magnitude of the problem.
The 104th Congress enacted three legislative provisions regarding the year 2000
computer problem. The FY1997 Defense Authorization Act (P.L. 104-201) directed
the Department of Defense (DOD) to assess the risks caused by the year 2000
problem and to purchase year 2000 compliant products. To avoid contract delays,
DOD was allowed to purchase noncompliant products if vendors can make them
compliant at a reasonable cost. The FY1997 Defense Appropriations Act (P.L.
104-208, Omnibus Appropriations Act) provided $5 million to DOD to validate tools
and methodologies for year 2000 solutions. The FY1997 Treasury, Postal Service,
and General Government Appropriations Act (also P.L.104-208) directed the Office
of Management and Budget (OMB) to provide a detailed cost estimate for year 2000
work, a strategy to ensure that computer systems will operate in the year 2000, and
a timetable for implementing the strategy.
Hearings and Legislation in the 105 Congress
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Hearings in the 105 Congress
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Throughout the 105 Congress, the committees mentioned above continue
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d
their oversight efforts on the year 2000 problem, and several additional committees
became involved. On February 24, 1997, the House Subcommittee on Government
Management, Information and Technology conducted a hearing with six federal
Chief Information Officers (CIOs) and the General Accounting Office (GAO).
Concurrently, GAO released a report which identified the year 2000 problem as a
“high risk” for federal agencies. On March 20, 1997, the House Subcommittee on
Government Management, Information and Technology and the House
Subcommittee on Technology conducted another joint hearing to focus on the risks
and consequences of failure, along with issues of liability and finding the year 2000
problem in the hardware of devices or systems.
The Senate Governmental Affairs Committee held three hearings on issues
raised by GAO’s high risk series report. On March 5, 1997, officials from OMB,
GAO, and the Department of Housing and Urban Development testified on how year
2000 problems will affect computer systems in all federal agencies. On April 10,
1997, Department of Treasury officials testified on year 2000 problems in Internal

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Revenue Service (IRS) systems. On May 1, 1997, DOD officials testified on year
2000 problems found in its systems.
On May 16, 1997, the House Committee on Government Reform and Oversight,
Subcommittees on Human Resources and on Government Management, Information,
and Technology, held a joint hearing on the Medical Transaction System (MTS)
being developed by the Health Care Finance Administration (HCFA). GAO revealed
that the MTS was unable to correctly process dates after the year 2000, and that
HCFA’s reliance on contractors to address MTS’s year 2000 problem was a risk.
On June 26, 1997, the House Veterans Affairs Committee, Subcommittee on
Oversight and Investigations, held a hearing on the Veterans Administration’s (VA)
efforts to ensure the readiness of VA computers for the year 2000 and on the
reliability of medical devices often used by veterans. Subsequent to the hearing, the
Food and Drug Administration (FDA) sent notices to over 13,000 medical device
manufacturers regulated by FDA, directing manufacturers to correct the year 2000
problem in their devices and to notify purchasers to modify existing devices. The
subcommittee held a second hearing on September 25, 1997, to monitor progress
correcting the problem at VA hospitals and clinics.
On July 10, 1997, the House Subcommittees on Technology, and on
Government Management Information and Technology held another joint hearing to
focus on federal agency progress toward correcting the problem. At the hearing, the
Subcommittee chairs called for the President to make a public statement on the year
2000 problem, to appoint an individual to oversee all federal year 2000 conversion
efforts, and to provide leadership to the nation on year 2000 conversion.
On July 10, 1997, the Senate Banking Committee, Subcommittee on Financial
Services and Technology held its first year 2000 hearing. Experts from the finance
industry discussed the severity of the problem. In addition to questions on testing,
contingency planning, credit risk, and liability, the issue of perception risk was
emphasized by subcommittee members. The Subcommittee has held five more
hearings to date (July 30, October 22, and November 4, 1997, and February 10 and
March 18, 1998) to review the problem with the six financial regulatory agencies
under its jurisdiction (the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, the Office of Thrift
Supervision, the National Credit Union Administration, and the Securities and
Exchange Commission) and to develop plans for legislation.
On November 4, 1997, the House Science Committee, Subcommittee on
Technology, held a hearing focusing on foreign government and international efforts
to deal with the year 2000 problem.
On November 4, 1997, the House Banking Committee held its first year 2000
hearing. On February 5, 1998, the committee held another hearing to investigate the
year 2000 problem for thrift savings institutions and credit unions, and to introduce
legislation (discussed below) that has since then been enacted.
On February 4, 1998, the House Subcommittees on Technology and on
Government Management, Information, and Technology held a joint hearing to

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review concerns over the Federal Aviation Administration’s ability to meet the year
2000 conversion deadline, discussing the possibility that flights could be delayed or
canceled due to year 2000 failures.
On February 17, 1998, the Senate Banking, Housing and Urban Affairs
Committee held a field hearing in Hartford, CT, focusing on potential economic
impacts of the year 2000 problem on specific industries.
On March 18, 1998, the House Subcommittees on Technology and on
Government Management, Information, and Technology held a joint hearing. The
first witnesses were Mr. John Koskinen, the recently appointed Chairman of the
President’s Council on Year 2000 Conversion, the Assistant Comptroller General of
GAO, and a private consultant. Mr. Koskinen provided an overview of his role of
promoting the efforts already underway at federal agencies, and working with state
and local governments, the private sector, and foreign and international
organizations. The GAO official emphasized that federal agencies have made
insufficient progress, and pointed out that “at the current pace, it is clear that not all
mission critical systems will be fixed in time,” and further stated that “risks of
disruption to government services is high,” and that “key economic sectors are at risk
of year 2000 failures.” Then the year 2000 progress of the Department of Treasury
was reviewed. Witnesses included Treasury’s Deputy Assistant Inspector General,
the Chief Information Officers of both Treasury and Internal Revenue Service, and
the Commissioner of Information Resources of Financial Management Services.
Although the Treasury Department officials emphasized that significant progress had
been made on year 2000 conversion, Subcommittee members raised questions
regarding their ability to meet the January 1, 2000 deadline for mission critical
systems. During the hearing, a question was raised over whether legislative database
systems might also be at risk. Two reports by the House Inspector General
(December 1996 and December 1997) were cited, indicating that the House
Information Resources had not resolved its year 2000 issues.
Also on March 18, 1998, the Senate Banking Committee, Subcommittee on
Financial Services and Technology, held a hearing to investigate the efforts of the
federal Office of Thrift Supervision (OTS) to ensure that the nation’s thrift savings
and loan institutions are year 2000 compliant. The director of OTS assured the
Subcommittee that it was correcting its own systems and examining the year 2000
conversion plans of all 1,200 thrifts across the country. A representative from GAO,
however, testified that many thrift institutions are not making sufficient progress, and
risk system failures that “could lead to thrift closings and serious disruptions to both
the thrift community and customers.” GAO noted that OTS’s problems were similar
to those previously reported for the Federal Deposit Insurance Corporation and the
National Credit Union Administration, i.e., starting late and working with limited
resources.
On March 24, 1998, the House Committee on Banking and Financial Services
held a hearing to assess the year 2000 readiness of critical systems at the Departments
of Housing and Urban Development, Treasury, and the federal financial regulatory
agencies. Mr. Koskinen testified along with two GAO officials, and members and
the GAO raised serious questions about the year 2000 preparedness of these agencies
and their ability to meet the deadline.

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On April 1, 1998, the Senate Governmental Affairs Committee held a year 2000
hearing with Mr. Koskinen and the Deputy Secretaries of the Departments of Health
and Human Services and Transportation. At the hearing, Members investigated
many questions regarding federal agency year 2000 conversion efforts, asking
questions concerning a wide range of issues. These included questions about the
likelihood that federal or private sector systems will fail on January 1, 2000, the
potential for contamination of U.S. systems by interactions with foreign systems, the
status of contingency plans being developed by federal agencies, and the risks of
failure of systems used for defense, financial operations, medical devices, air traffic
control systems, and health care financing.
On April 1, 1998, the GAO testified to the House Government Management,
Information, and Technology Subcommittee, warning that computer security could
become compromised as agencies work to fix their year 2000 problems. GAO stated
that as agencies work on the year 2000, they might neglect computer security, leaving
critical financial systems vulnerable to cyber-attacks.
On April 15, 1998, the Commissioner of the IRS testified to the House
Subcommittee on Government Management, Information, and Technology, on the
management options presented in a GAO audit of the IRS FY1997 custodial financial
statements. In his remarks, the Commissioner expressed concerns about the impact
of proposed IRS reforms on the agency’s ability to meet year 2000 compliance
schedules. The GAO Assistant Comptroller General testified that “If IRS is unable
to make its mission critical systems year 2000 compliant, IRS could be rendered
unable to properly process tax returns, issue refunds, correctly calculate interest and
penalties, effectively collect taxes, or prepare accurate financial statements and other
financial reports.”
On April 21, 1998, the House Appropriations Committee, Subcommittee on
Labor, Health and Human Services, Education and Related Agencies, held a hearing
to investigate the year 2000 readiness of the agencies it oversees. Witnesses included
officials from the Departments of Health and Human Services (HHS), Education, and
Labor, and the Social Security Administration (SSA). An official from HHS listed
as obstacles to the completion of HHS’s preparations for the year 2000 as HHS’s
contingency plans, its workload/resource priorities competing with other HHS
activities, testing strategies, certification of system compliance by independent
evaluators, and the scheduling of many activities required to ensure that all systems
are compliant. HHS also emphasized the problems related to HCFA’s efforts to
make its systems and processes year 2000 compliant (discussed below), and HHS’s
efforts to ensure the year 2000 compliance of biomedical equipment. The latter effort
involved sending over 16,000 letters to biomedical equipment manufacturers, urging
them to identify non-compliant products and to provide information to the Food and
Drug Administration on actions they are taking to ensure compliance. Officials from
SSA reviewed SSA’s Disability Determination Services interface, its data exchanges
with federal agencies, states and third parties, and its contingency planning.
On April 22, the House Committee on Resources held a hearing to investigate,
among other issues, the Department of Interior’s year 2000 readiness.

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On April 28, 1998, the Senate Committee on Commerce, Science and
Transportation held a hearing with the following witnesses: a member of the Board
of Governors of the Federal Reserve System (FED), the Deputy Secretaries of
Commerce and Transportation, the Chairman of the Federal Communications
Commission, and the Chairman of the New York Stock Exchange. The FED official
stated that U.S. businesses have reported that they expect to spend $50 billion
correcting their computers for the year 2000 problem, and that estimate is expected
to rise. The FCC Chairman described FCC’s efforts to motivate the
telecommunications industry to make their systems year 2000 compliant and
informing the public of their risks. Committee members and witnesses raised
concerns that telephone companies were not sharing information with the public or
other industry groups on the status of their year 2000 conversion efforts. The
Commerce Department official expressed concern that small and medium sized
businesses may not be focusing on the year 2000 problem within their systems.
On May 7, 1998, the House Ways and Means Committee, Subcommittee on
Oversight, held a hearing to investigate year 2000 problems of federal agencies for
which it has oversight: HHS, SSA, and the Department of Treasury, with particular
focus on the IRS and the Financial Management Service (FMS). Each of the agencies
gave the status of their year 2000 conversion efforts, with the Commissioner of the
IRS stating that if Congress does not postpone the changes that were mandated in the
IRS restructuring legislation in 1998 and 1999, it would be “virtually impossible for
the IRS to ensure that its computer systems are year 2000 compliant on January 1,
2000, and would create a genuine risk of a catastrophic failure of the nation’s tax
collection system in the year 2000.” GAO and private sector witnesses testified on
the status of the problem domestically and internationally, and gave
recommendations for further federal action.
On May 14, 1998, the Senate Committee on Agriculture, Nutrition, and Forestry
held a hearing on the status of year 2000 conversion efforts of the Department of
Agriculture (USDA) and of the agriculture industry. At the hearing, although USDA
officials were optimistic about their progress, GAO testified that the business
operations of many USDA agencies risk failure due to year 2000 problems.
On May 14, 1998, the House Science Committee, Subcommittee on
Technology, held a hearing on the year 2000 effect on energy utilities including
electricity and natural gas. The generation and distribution systems for these utilities
are highly automated by embedded systems which could be vulnerable to year 2000
computer problems. Witnesses from the Nuclear Regulatory Commission, the
Federal Energy Regulatory Commission, the Texas Public Utilities Commission, and
the Potomac Electric Power Co. emphasized progress made on year 2000 conversion
within their organizations and the industries for which they have oversight. A
consultant to the electric utilities industry, however, emphasized the lack of focus on
the year 2000 issue by the industry in general and its potential inability to fix its
systems in time.
On June 2, 1998, the Senate Small Business Committee held a hearing on the
year 2000. Witnesses representing small businesses, and corporations and
government agencies that work with small businesses, testified that greater awareness

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of the magnitude and seriousness of the year 2000 problem is still needed among
most small businesses.
On June 4, 1998, the Senate Armed Services Committee held a hearing on the
year 2000 vulnerabilities of DOD, a particularly critical problem for DOD because
of its dependence on computers and information technology for military advantage.
DOD officials identified four areas of concern: DOD’s interconnections with other
systems, DOD’s older systems containing software code, systems with embedded
chips, and international security and the readiness of other nations.
On June 10, 1998, the House Subcommittee on Government Management,
Information, and Technology held a hearing on the status of federal agency progress
on year 2000 renovations. Particular attention was given to HHS, the Department of
Education, DOD, and the Department of Energy. In OMB’s most recent year 2000
progress report to Congress, each of those departments had been designated as Tier
1, meaning “there is insufficient evidence of adequate progress” for those
departments. GAO stated that greater leadership and coordination of private sector
efforts is required for government programs to continue functioning in the year 2000.
On June 10, 1998, the Senate Subcommittee on Financial Services and
Technology held a hearing to investigate the status of disclosures by public
companies of their year 2000 readiness. Senator Bennett, Subcommittee Chair,
stated that revised guidelines of the Securities and Exchange Commission (SEC) has
had a limited impact on encouraging companies to disclose their year 2000 readiness.
The SEC stated that of the quarterly reports it had received from companies, much
of the year 2000 disclosure is not informative, and that many companies were not
following SEC guidance.
On June 12, 1998, the Senate Special Committee on the Year 2000 Technology
Problem held a hearing on the status of year 2000 compliance of utilities and the
national power grid. Witnesses included officials from the Department of Energy,
the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory
Commission (NRC), Chair of the President’s Year 2000 Conversion Council, the
North American Electric Reliability Council (NERC), the Electric Power Research
Institute, the American Gas Association (AGA), the Interstate Natural Gas
Association of America (INGAA), and a private consultant. The federal officials
emphasized that their authority is limited in enforcing year 2000 compliance among
utility companies. The NERC witness stated that a major disturbance in one part of
an interconnected electric power system can cascade through the entire
interconnection of systems, but that such an event is extremely unlikely. NERC also
stated that the greatest threats to electricity supply are power plants with digital
controls, energy management systems, telecommunications, and relay protection
devices. The INGAA witness expressed the desire that Congress limit industry
liability for year 2000-related disruptions in service.
On June 16, 1998, the House Ways and Means Committee, Oversight
Subcommittee, held a hearing on the year 2000 problems of telecommunications
systems, on which public and private sector organizations depend. Witnesses
included officials from GAO, the Federal Communications Commission (FCC), the
Telco Year 2000 Forum (a cooperative effort for year 2000 renovation testing among

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nine major telephone service providers), AT&T, GTE, TRW, Lucent Inc., and
Schwab Inc. (an investment firm). The public telecommunications network includes
interconnected networks operated by hundreds of local, long distance, cellular, and
satellite-based telephone companies, which can affect the operations of each other.
While the FCC and the industry representatives stressed the steps being taken to
correct their year 2000 problems, the GAO official stated that improvement is still
needed in milestone setting, contingency planning, and reporting of the status of
renovations, both by industry and the FCC.
On June 22, 1998, the House Subcommittee on Government Management,
Information, and Technology held a hearing focusing on the biggest problems and
proposed solutions of the year 2000 problem.
On June 23, 1998, the House Committee on Banking and Financial Services
held a hearing to investigate the potential problem facing international banking and
finance. Because of the broad, complex interdependencies between the U.S. and
foreign economies, any failures of foreign financial institutions can have an impact
on U.S. institutions.
On July 6, 1998, the Senate Special Committee on the Year 2000 Technology
Problem held a field hearing in New York City, focusing on international financial
and economic aspects of the year 2000 problem.
On July 15, the House Small Business Committee held a hearing where federal
and private sector witnesses discussed the lack of year 2000 planning by most small
businesses, and federal efforts to help them.
On July 22, the Senate Agriculture, Nutrition, and Forestry Committee held a
hearing where witnesses from the private sector outlined several year 2000 issues for
the agriculture industry, including food production and distribution, and financing.
The Senate Special Committee on the Year 2000 Problem held two hearings in
July, one on July 23 to investigate year 2000 issues for the health care industry, and
one on July 31 to explore year 2000 issues in the telecommunications sector.
On August 6, the House Science Committee, Subcommittee on Technology held
a hearing on technology development at the FAA, at which GAO testified that serious
challenges remain in resolving year 2000 problems in FAA systems.
On August 6, the House Ways and Means Committee, Subcommittee on Health,
held a hearing on delays to implementing the payment systems for Medicare’s Home
Health Benefit program, caused by the year 2000 conversion.

The House Government Reform and Oversight Committee, Subcommittee on
Government Management, Information, and Technology held a series of field
hearings focusing on the experiences of state and local governments and selected
private sector organizations in addressing the year 2000 issue. The hearings were
held on August 13 in New York City, August 17 in Dallas County, TX; August 19
in New Orleans, LA; September 1 in Cleveland, OH; September 2 in Indianapolis,
IN; and September 3 in Chicago, IL.

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On September 10, the Senate Special Committee on the Year 2000 Problem held
a hearing focusing on the transportation industry. On September 17, the Committee
held a hearing on the potential threat of the millennium bug on pension plans and
mutual funds.
On September 17, the House Committee on Banking and Financial Services
hearing focused on the domestic banking and finance infrastructure.
On September 17, the House Committee on Education and the Workforce,
Subcommittee on Oversight and Investigations, held a hearing on year 2000 issues
for the Departments of Education and Labor, and of the institutions they oversee.
On September 24, the House Subcommittees on Technology and on
Government Management, Information and Technology held a joint hearing titled
“What Every Consumer Should Know to Prepare for the Year 2000 Computer
Problem.” Witnesses included representatives of the software and consumer
electronics industries, and other researchers of consumer and industry issues.
On September 29, the House Committee on Transportation and Infrastructure
hearing focused on year 2000 issues in the aviation industry. On October 2, the
Committee held a joint hearing with the Subcommittee on Technology and the
Subcommittee on Government Management, Information and Technology on the
year 2000 compliance efforts in the railroad public transit systems. On October 6,
the Transportation Committee led a hearing investigating year 2000 issues for public
buildings, highways, and pipelines. On October 7, the Transportation Committee led
a hearing on year 2000 issues for the U.S. Coast Guard, the maritime industry, and
water resources.
On October 2, the House Committee on Government Reform and Oversight,
Subcommittee on the District of Columbia, held a hearing on the District’s year 2000
compliance efforts, emphasizing that the year 2000 status of the District is probably
representative of many other cities throughout the country.
On October 2, the Senate Special Committee on the Year 2000 Problem held a
hearing on the readiness of emergency services, such as police, fire and emergency
medical services. On October 7, the Committee held its final hearing of the 105th
Congress, investigating year 2000 issues for general business (especially small
businesses) and the pharmaceutical industry.
In addition to hearings, Members have conducted numerous press conferences
to announce assessments of the progress of federal agencies in correcting the year
2000 problem or to introduce legislation. The chairman of the House Government
Management, Information, and Technology Subcommittee periodically releases
grades to federal agencies on their efforts to correct their year 2000 problems. Since
the fall of 1997, the House and Senate Banking Committees have been receiving
quarterly staff briefings from each of the six financial regulatory agencies on the
status of year 2000 efforts of the finance industry. Committees have also requested
numerous GAO studies and testimony addressing the year 2000 problem.

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Legislation in the 105 Congress
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The following legislation, introduced in the 105 Congress, addressed various
th
aspects of the year 2000 problem:
! The Treasury, Postal Service, and General Government Appropriations Act
for FY1998 (P.L. 105-61) was enacted October 20, 1997. The House
Committee report (H.Rept.105-240) directs OMB to report to Congress on a
quarterly basis, on the progress being made on year 2000 conversion. The
conference report (H.Rept. 105-284) retains this provision and also directs the
Internal Revenue Service (IRS) to use $376.7 million from its information
systems development account for century date change efforts and to reprogram
an additional $77 million from FY1997 funds, and $10 million from FY1996
funds from the Tax Systems Modernization program, to use for year 2000
efforts. The Act further directs the IRS to develop a century date change
strategy and provide quarterly reports to the Appropriations Committees.
! The Departments of Veterans Affairs, Housing and Urban Development, and
Independent Agencies Appropriations Act for FY1998 (P.L. 105-65) was
enacted October 27, 1997. The conference report (H.Rept. 105-297), Title I
under General Operating Expenses, allocates $8 million from existing
appropriations for the Veterans Benefits Administration to work on the year
2000 problem and other activities.
! The Departments of Labor Health and Human Services, and Education, and
Related Agencies Appropriations Act for FY1998 (P.L. 105-78), enacted
November 13, 1997, made $200 million available from existing
appropriations for the Labor Department’s Labor Unemployment Insurance
program to assist states to convert their automated state employment agency
systems to be year 2000 compliant.
! The Commission on the Year 2000 Computer Problem Act (S. 22), introduced
January 21, 1997 by Senator Moynihan, would establish a commission to
study the year 2000 problem and report to the President with proposals for
new procedures or regulations to address the year 2000 computer problem for
systems of federal, state, and local governments, and recommendations for
levels of appropriations that might be needed.
! The Millennium Computer Act of 1997 (H.R. 1177), introduced by
Representative Maloney on March 20, 1997, required all federal agencies to
meet a timetable to ensure their computers function after the year 2000.
! In April 1997, the House Science Committee introduced FY1998-1999
authorization bills for eight federal agencies. These include the National
Institute of Standards and Technology (H.R. 1274), Federal Aviation
Administration Research and Development (R&D) (H.R. 1271), the National
Science Foundation (H.R. 1273), Civilian Space (H.R. 1275), Environmental
R&D (H.R. 1276), Department of Energy Civilian R&D (H.R. 1277), Fire
Administration (H.R. 1272), and the National Oceanic and Atmospheric
Administration (H.R. 1278). Each of these bills contains a “sense of Congress

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on the year 2000" statement that these agencies correct their computer systems
to operate effectively after 2000 and develop contingency plans for those
systems they are unable to correct in time. Five of the bills passed the House
and were sent to the Senate and the others (H.R. 1276, H.R. 1277, and H.R.
1278) were reported to the House.
! The Millennium Act (S. 1218), introduced September 24, 1997, by Senator
Kerrey, sought to assure the integrity of information, transportation, and
telecommunications systems upon the arrival of the year 2000, by directing:
the Federal Communications Commission to evaluate potential dangers to the
nation’s telecommunications system and to make necessary regulatory
changes, the National Institute of Standards and Technology to assess the
threat to information stored on personal computers and to propose solutions
and information to the public, and the Department of Transportation to
develop a plan to assure that the year 2000 problem does not cause a safety
risk to the transportation workers and the general public.
! The Year 2000 Computer Remediation and Shareholder (CRASH) Protection
Act of 1997 (S. 1518), introduced November 10, 1997 by Senator Bennett,
would direct the Securities and Exchange Commission to require publicly
traded corporations to make specific disclosures in their offering statements
and quarterly reports regarding the ability of their computers to operate after
January 1, 2000.
! The Examination Parity and Year 2000 Readiness for Financial Institutions
Act (H.R. 3116), introduced January 28, 1998, by Representative Leach,
extends the authority of Office of Thrift Supervision and the National Credit
Union Administration to examine the operations of service corporations or
other entities that perform services under contract for thrifts and credit unions,
such as data processing and the maintenance of computer systems, thereby
giving those agencies statutory parity with the other financial regulatory
agencies. The bill passed the House (amended) on February 24, and passed the
Senate by unanimous consent March 6. On March 20, President Clinton
signed the bill, enacting P.L. 105-164.
! The USDA Year 2000 Compliance Enhancement Act (H.R. 3280), introduced
February 26, 1998, by Representative Goodlatte, is designed to clarify and
enhance the authority of the Chief Information Officer of USDA.
! On April 2, 1998, the Department of Health and Human Services (HHS)
submitted a proposal for legislation to Congress, which includes a provision
that would amend the Social Security Act to give the Health Care Finance
Administration (HCFA) greater flexibility with its contractors. HCFA uses
about 70 contractors to process the billions of dollars of Medicare claims
made per year. The proposal would give HCFA a greater ability to increase
competition among its contractors which HHS believes would stimulate
contractors to make their systems year 2000 compliant. In 1997, GAO
reported that HCFA’s contractors might not be year 2000 compliant, nor have
any incentive to become compliant. To date, no congressional action has been
taken on the proposal.

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! On April 2, 1998, the Senate passed S.Res. 208, to establish a “Special
Committee on the Year 2000 Technology Problem.” The committee will
study the impact of the year 2000 problem on the executive and judicial
branches of the federal government, state governments, and private sector
operations in the United States and abroad. The committee’s members
include four Republicans and three Democrats, and the chairman and ranking
minority member of the Appropriations Committee as ex-officio members.
! The FY1998 Supplemental Appropriations and Rescissions Act (P.L. 105-
174) provides an additional $86 million for year 2000 conversion work at
federal agencies:$40.8 million to the Treasury Department, $25 million to the
Federal Aviation Administration, and $20 million to HCFA (The latter two
provisions are made in conference report 105-504). The Act also rescinds
$30.3 million from the IRS that was to be used for other information
technology investments. Passed Congress April 30; enacted May 1, 1998.
! S. 2000, introduced by Senator Bennett on April 29, 1998, to ensure that
businesses, financial markets, and the federal government are taking adequate
steps to resolve the year 2000 computer problems. The measure was referred
to the Governmental Affairs Committee.
! The National Year 2000 Readiness Act (H.R. 3968), introduced by
Representative Leach on May 22, 1998, requiring the President’s Year 2000
Conversion Council to submit to Congress within 90 days a national
assessment of the year 2000 problem and a strategy to ensure that critical
services provided by government and economic sectors (including banking
and financial services, provision and distribution of power and fuel,
telecommunications, transportation, public health and safety, water supply,
and the environment) will be prepared for the year 2000 date change. The bill
would also require (1) steps to ensure the availability of technical personnel
to work on the year 2000 problem, (2) U.S. consultation with international
financial institutions on the year 2000 issue, (3) quarterly reports to Congress
on progress made by industry sectors, and (4) revision of the Federal
Acquisition Regulation to disqualify from further business, contractors that
knowingly provides non-compliant goods or services to a federal agency. The
bill was referred to the Committees on Science, Government Reform and
Oversight, and Banking and Financial Services.
! The Defense Authorization Act for FY1999 prohibits DOD from purchasing
using funds on the development or modernization of any information
technology or national security system if the system is not year 2000
compliant according to DOD’s definition. It further requires DOD to submit
a report by December 1, 1998, describing its strategy for year 2000
compliance , including testing facilities, tools and personnel, criteria and
process to be used to certify compliance, a list of mission critical systems, and
guidelines for contingency plans. It further requires DOD to develop year
2000 simulations for training exercises to evaluate military preparedness in the
actual year 2000. It also requires DOD and the Central Intelligence Agency
to report to Congress on their plans for ensuring continuity of operations,

CRS-13
including a prioritization of mission critical systems to be renovated first, a
comprehensive contingency plan for systems that are not repaired in time, and
the status of public and private sector systems outside DOD that are used by
the military. The report will also outline efforts to repair telecommunications,
utility systems, and other infrastructure on which the intelligence community
relies, and outline any agreements between the United States and foreign
countries to ensure that year 2000 problems with strategic systems of those
countries do not pose a threat. The bill transfers $1 billion from DOD’s other
information technology and national security programs for year 2000
conversion. The bill passed the Senate (S. 2060, replaced by S. 2057) on June
25 (S.Rept. 105-189 released May 11); passed the House (H.R. 3616) May 21
(H.Rept. 105-532 released May 12); House agreed to conference report
(H.Rept. 105-736) September 24; Senate agreed October 1; enacted October
17 as P.L. 105-261.
! Emergency appropriations for federal agency year 2000 conversion projects
were removed from two FY1999 House appropriations bills prior to House
passage. The House Treasury, Postal Services, and General Government
Appropriations bill (H.R. 4104) passed by the Committee (H.Rept. 105-592)
on June 22, 1998, provided $2.25 billion for all federal agency year 2000
conversion programs except within DOD. The House Defense Appropriations
bill (H.R. 4103) passed by the Committee (H.Rept. 105-591) on June 22,
provided $1.6 billion to DOD for year 2000 conversion of information
technology, national security, and related systems. Due to concerns that the
year 2000 funds should be offset by budget cuts, the year 2000 funding was
removed from both bills prior to passage by the House (H.R. 4103 on June 24
and H.R. 4104 on July 15). On May 14, the Senate Appropriations Committee
allocated $2.25 billion for an emergency reserve fund that federal agencies’
year 2000 conversion efforts. The Senate Treasury and General Government
Appropriations Act (S. 2312) contains $3.25 billion for emergency year 2000
expenses for federal agencies. OMB would determine which agencies could
withdraw money from the fund after March 1999. That bill was reported by
the Appropriations Committee (S.Rept. 105-251) on July 14 and passed the
Senate on September 3. The emergency year 2000 problem funding was
included in the Omnibus Appropriations Act (P.L. 105-277) along with the
remaining appropriations bills, which was enacted October 21, 1998.
! The USDA Information Technology Reform and Year 2000 Compliance Act
of 1998 (S. 2116) introduced by Senator Lugar on May 22, 1998, to enhance
the authorities of the USDA CIO (a companion to H.R. 3280).
! H.R. 4134, introduced by Representative Thurman on June 24, 1998, would
amend the Internal Revenue Code of 1986 to permit year 2000 conversion
costs to be expensed by small businesses under 179 (depreciable business
assets) and to provide a $20,000 increase in the limitation for such costs.
! On July 14, the President announced draft legislation that would promote
information sharing among companies testing their year 2000 renovations of
their computer systems. Called the “Good Samaritan” bill, it would allow
firms to disclose their year 2000 problems without risking potential law suits.

CRS-14
On July 30, the bill was introduced as the Year 2000 Information Disclosure
Act (H.R. 4355) by Representative Burton, and (S. 2392) by Senator Bennett.
Passed Senate (amended) September 28; passed House October 1, and enacted
as the Year 2000 Information and Readiness Disclosure Act (P.L. 105-271)
on October 19, 1998.
! The Y2K Liability and Anti-Trust Reform Act (H.R. 4240), introduced by
Representatives Dreier and Cox on July 16, 1998, limits damages related to
year 2000 computer failures to the business losses for companies that make
certain efforts to avoid problems. It also suspends Federal Trade Commission
antitrust law for activities involving computer date repairs.
! The Small Business Year 2000 Readiness Act (S. 2372), introduced by
Senator Bond on July 30, would provide loan guarantees for small businesses
to address their year 2000 computer problems.
! The Year 2000 Enhance Cooperation Solution (S. 2384), introduced by
Senator Ashcroft on July 30, would provide antitrust liability protections to
companies that disclose their year 2000 problems.
! The Y2K Readiness Disclosure Act (H.R. 4455) introduced by Representative
Dreier et al. on August 6, would provide limited liability protection to
companies that disclose information on the year 2000 readiness of their
products or services.
! On October 2, Representative Barcia introduced H.R. 4682 intended to
minimize the disruption of government and private sector operations caused
by the year 2000 problem.
! On October 6, Representative Morella introduced H.R. 4706 intended to
ensure that the United States is prepared to meet the year 2000 computer
challenge.
! On October 9, Representative Morella introduced H.R. 4756, a combination
of language from H.R. 3968, H.R. 4682, and H.R. 4756, and called the Year
2000 Preparedness Act. Called under suspension of the rules October 13 and
passed the House; received in Senate October 14. No floor action was taken.
Hearings and Legislation in the 106 Congress
th
Hearings in the 106 Congress
th
On January 15, 1999, the Senate Appropriations Committee reviewed the status
of federal agencies and other issues with the Chair of the President’s Y2K Council.
On January 20, the House Government Management, Information and
Technology Subcommittee and House Technology Subcommittee investigated the
Y2K status of federal, state, local, and foreign governments.

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Legislation in the 106 Congress
th
! On January 6, Representative Thurman introduced H.R. 179, Business
Undergoing the Glitch Act, to allow small businesses to deduct Y2K
conversion costs from their gross income for federal income tax reporting.
Referred to Committee on Ways and Means.
! On January 6, Representative Manzullo introduced H.R. 192, Year 2000
Protection Plan Act of 1999, to establish judicial and administrative
proceedings for the resolution of Y2K processing failures. The bill sets a
standard of proof, places limits on damages, makes arbitration mandatory, and
allows no Y2K legal actions after January 1, 2002. Referred to the Judiciary
Committee.
! On January 19, Senator McCain introduced S. 96 to limit liability and
damages for defendants in suits involving Y2K failures.
! On January 19, Senator Moynihan introduced S. 174 to provide funding for
states to correct Y2K problems in computers used to administer state and local
programs. Referred to Finance Committee.