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November 6, 1998

The Speaker of the

House of Representatives

Sir:

In accordance with provisions of Public Law 105-277, the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, I hereby request the following transfers from the Information Technology Systems and Related Expenses account:
Department of Education

Department of Energy

Department of Health and Human Services

Department of the Interior

Department of Justice

Department of Labor

Department of State

Department of the Treasury

Other Defense -- Civil Programs

Executive Office of the President

General Services Administration

Corporation for National and Community Service

Federal Communications Commission

Federal Trade Commission

Securities and Exchange Commission

United States Holocaust Memorial Council

United States Information Agency

This funding will support efforts to make Federal information technology systems Year 2000 compliant and outreach to non-Federal entities in support of the Year 2000 Conversion Council.

I hereby designate all of the above requests as emergency requirements pursuant to section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.

The details of these actions are set forth in the enclosed letter from the Director of the Office of Management and Budget. I concur with his comments and observations.

Enclosure


Estimate No.                    22                   
105th Congress, 2nd Session                 

November 6, 1998

The President

The White House

Submitted for your consideration are requests to transfer $891 million from the contingent emergency fund for Year 2000 (Y2K) compliance to 18 Federal agencies.

These transfers will support a range of activities to ensure that important computer systems will operate smoothly through the year 2000 and beyond. Emergency funding would be allocated both for activities that were included in your FY 1999 Budget but were not funded in the FY 1999 appropriations process (based on the assumption that funds would be allocated from this fund), and for critical Y2K requirements that have been identified since the FY 1999 Budget was transmitted. Federal agencies would use this funding for additional remediation for information technology systems, testing to ensure that systems are Y2K compliant, replacement of embedded computer chips, creation and verification of continuity of operations and contingency plans, and outreach to non-Federal entities by agencies in support of the Year 2000 Conversion Council.

Your FY 1999 Budget anticipated that Y2K requirements would emerge over the course of the year and included an allowance to provide flexible funding to address emerging needs. As you requested, P.L. 105-277, the FY 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act, provided contingent emergency funding for Y2K computer conversion activities -- $1.1 billion for defense-related activities and $2.25 billion for non-defense activities. The enclosed requests for transfers are for non-defense agencies; therefore, the funds would be transferred from the Information Technology Systems and Related Expenses account established by P.L. 105-277.

OMB continues its oversight of Federal agency progress toward fixing the Y2K problem. We are working to ensure that Federal agencies have sufficient FY 1999 resources to address Y2K and that flexible contingent emergency funding remains available to address emerging needs. Pursuant to the requirements of Public Law 105-277, OMB will prepare and submit reports to Congress on the proposed allocation and plan for each affected agency to achieve year 2000 compliance for technology information systems before funds can be released to the agency. The report for agencies represented in this first release of Y2K contingent emergency funds will be transmitted to the congressional committees specified in P.L. 105-277 concurrent with this request for release of the funds. In addition, each agency will provide detailed justification material to these committees and the relevant appropriations subcommittees.

I recommend that you designate the amounts listed on the enclosure as emergency requirements in accordance with section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. No further congressional action will be required.

I have carefully reviewed these proposals and am satisfied that they are necessary at this time. Therefore, I join the heads of the affected Departments and agencies in recommending that you make the requested funds available by signing the enclosed letter to the Speaker of the House of Representatives.

OMB will continue to monitor agency requirements and will address additional funding needs as they emerge.

Enclosure


EMERGENCY APPROPRIATIONS: AMOUNTS PREVIOUSLY APPROPRIATED
MADE AVAILABLE BY THE PRESIDENT

YEAR 2000 (Y2K) CONVERSION

Department of Education

Departmental Administration, Program Administration.............................          $1,561,000

Department of Energy

Atomic Energy Defense Activities:
   Defense Environmental Restoration and Waste Management....................     $10,340,000

   Defense Facilities Closure Projects.........................................................        $3,500,000

   Departmental Administration, Departmental Administration .....................     $10,000,000

Department of Health and Human Services

Departmental Management:
   Public Health and Social Services Emergency Fund.................................   $189,053,000

Department of the Interior

Departmental Management, Working Capital Fund.....................................     $32,900,000

Department of Justice

General Administration:
   Salaries and Expenses...........................................................................            $120,000
   Office of Inspector General..................................................................          $2,835,000
   United States Parole Commission, Salaries and Expenses.....................               $20,000

Legal Activities and U.S. Marshals:
   Salaries and Expenses, General Legal Activities.....................................         $6,389,000
   Salaries and Expenses, Antitrust Division...............................................                $8,000
   Salaries and Expenses, United States Attorneys.....................................            $427,000
   Salaries and Expenses, United States Marshals Service..........................           $700,000
   United States Trustee System Fund.......................................................         $1,003,000

Federal Bureau of Investigation, Salaries and Expenses..............................     $10,293,000

Drug Enforcement Administration, Salaries and Expenses..........................        $1,967,000

Immigration and Naturalization Service, Salaries and Expenses...................       $9,268,000

Federal Prison System, Salaries and Expenses...........................................          $200,000

Department of Labor

Employment and Training Administration:
   Training and Employment Services.........................................................           $791,000
   Program Administration...........................................................................      $1,572,000

Mine Safety and Health Administration, Salaries and Expenses...................        $1,800,000

Departmental Management, Departmental Management..............................       $3,087,000

Department of State

Administration of Foreign Affairs, Capital Investment Fund........................       $47,890,000

Department of the Treasury

Departmental Offices:
   Salaries and Expenses............................................................................        $1,238,000
   Departmental Offices, Automation Enhancement.....................................        $2,762,000

Financial Management Service, Salaries and Expenses................................       $6,000,000

Bureau of Alcohol, Tobacco and Firearms, Salaries and Expenses...............      $5,000,000

United States Customs Service, Salaries and Expenses................................    $10,200,000

Bureau of the Public Debt, Administering the Public Debt............................       $1,000,000

Internal Revenue Service, Information Systems...........................................   $483,000,000

United States Secret Service, Salaries and Expenses....................................      $3,000,000

Other Defense -- Civil Programs

Selective Service System, Salaries and Expenses.........................................         $250,000

Executive Office of the President

Office of Administration, Salaries and Expenses.........................................      $12,200,000

Office of the United States Trade Representative:
   Salaries and Expenses...........................................................................           $498,000

General Services Administration

General Activities, Policy and Operations................................................          $4,800,000

Corporation for National and Community Service

Domestic Volunteer Service Programs, Operating Expenses....................             $800,000

Federal Communications Commission

Salaries and Expenses............................................................................          $8,516,000

Federal Trade Commission

Salaries and Expenses...........................................................................             $550,000

Securities and Exchange Commission

Salaries and Expenses...........................................................................           $7,400,000

United States Holocaust Memorial Council

Holocaust Memorial Council................................................................                $680,000

United States Information Agency

Technology Fund...................................................................................           $7,062,000

The funds made available will enable these agencies to address the Y2K problem by supporting additional remediation for information technology systems, testing to ensure that systems are indeed Y2K compliant, replacement of embedded computer chips, creation and verification of continuity of operations and contingency plans, and outreach to non-Federal entities by agencies in support of the Year 2000 Conversion Council.

November 6, 1998

The Honorable Ted Stevens
Chairman
Committee on Appropriations
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman:

In accordance with provisions of Public Law 105-277, the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, I am transmitting a proposed allocation and plan for the following agencies to achieve Year 2000 (Y2K) compliance for technology information systems:

Department of Education
Department of Energy
Department of Health and Human Services
Department of the Interior
Department of Justice
Department of Labor
Department of State
Department of the Treasury
Other Defense -- Civil Programs, Selective Service System
Executive Office of the President -- Office of Administration
Executive Office of the President -- Office of the United States Trade Representative
General Services Administration
Corporation for National and Community Service
Federal Communications Commission
Federal Trade Commission
Securities and Exchange Commission
United States Holocaust Memorial Council
United States Information Agency

In monitoring Federal agency progress towards Y2K compliance, OMB directed agencies to estimate the total FY 1999 resources necessary for Y2K compliance and related expenses. Now that the FY 1999 appropriations process has been completed, OMB has worked with the agencies to determine whether the resource requirements associated with Y2K can be accommodated within appropriated levels, or whether contingent emergency funds should be allocated. For the agencies listed above, the allocation of contingent emergency funds required at this time are displayed on the enclosed table. In addition, these agencies will provide detailed justification material for these requirements to the committees specified in Public Law 105-277, as well as the relevant appropriations subcommittees, concurrent with the transmittal of this letter. OMB will continue to monitor agency requirements and will address additional funding needs as they emerge.

OMB's strategy to ensure agency Y2K compliance is predicated on agency accountability. We have systematically monitored agency progress through agency goals for: compliance of mission critical systems, progress on the status of mission critical systems, status of mission critical systems being repaired, and agency Y2K cost estimates.

These performance measures have proved useful in ensuring agency accountability without diverting vital resources from Y2K compliance activities to reporting requirements. Provided with this package is OMB's most recent Y2K Quarterly Report to the House and Senate Appropriations Committees, which includes an assessment of these performance measures. Our next quarterly report will be forwarded to Congress in December. In assessing agency progress towards compliance, OMB has focused on the four measures described above. The report also details other initiatives -- such as the Year 2000 Information Disclosure Act -- that are part of the Administration's overall plan for achieving Y2K compliance.

For most of the agencies listed in this transmittal, the following constitutes the agency plan required by Public Law 105-277:

For several small, independent agencies included in this transmittal -- Selective Service System, Corporation for National and Community Service, Federal Trade Commission, Securities and Exchange Commission, United States Holocaust Memorial Council, and the United States Information Agency -- the justification materials provided serves as the agency plan. OMB has been monitoring the progress of these small agencies, and will ask them to report back on their status early next year.

We look forward to working with you to ensure a smooth transition on January 1, 2000.

Enclosures

Identical Letter Sent To:

The Honorable Bob Livingston
The Honorable David R. Obey
The Honorable Ted Stevens
The Honorable Robert C. Byrd
The Honorable Robert F. Bennett
The Honorable Christopher J. Dodd
The Honorable F. James Sensenbrenner, Jr.
The Honorable George E. Brown, Jr.
The Honorable Dan Burton
The Honorable Henry A. Waxman

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