business

The Y2K problem involves a lot of what-ifs. The Minnesota Legislature, anxious to get involved in drafting Y2K-related laws, has added a few more.

What if you couldn't pay your bills because of a Y2K problem at your bank?

What if your local school had a Y2K disaster and couldn't afford to fix it?

What if you tried to sue state or city officials over a Y2K disaster but found out they had been given Y2K protection that made it more difficult to pursue them in court?

Such concerns are at the center of three bills which have passed the Minnesota Senate and may see action soon in the House.

The Senate bill, which might seem to be the most controversial, but which hasn't caused much debate, would eliminate state and municipal liability for some Y2K occurrences. It passed the Senate unanimously, the bill's author Sen. Steve Kelley, DFL-Hopkins, said.

Another Senate bill, which would seem less controversial but isn't, would authorize the loan of up to $20 million in state funds to municipalities needing to fix Y2K problems. While the bill passed the Senate, it faces opposition from state officials who question whether the state loans to cities are a budget priority.

A third bill would protect individuals and businesses with fewer than 20 employees who temporarily are unable to pay their bills as a result of Y2K problems. That bill passed the Senate and is pending in the house, said its author, Sen. Warren Limmer, R-Maple Grove.

Limmer's bill establishes Y2K as a legal defense against creditors, and it delays when debts are judged overdue if a Y2K problem fouls up payments.

Individuals or small businesses unable pay a debt because of a Y2K problem outside their ownership or control would be given a court holiday from lawsuits and bad credit ratings. State and municipal courts would be empowered to dismiss actions involving nonpayment, with the provision that creditors could not bring those actions again for 60 days. Credit rating agencies doing business in Minnesota would be barred from reporting negative credit information based on a Y2K-related failure to pay.

"Suppose your paycheck is automatically deposited in your bank," Limmer said in an interview. "What if, due to a Y2K problem, there is no record of your check being transferred or your employer can't transfer it? What if you're in the unfortunate situation where you're just hanging on, and if you don't make payments you'll lose your house to the bank? I don't think a person in those situations should be held liable for that type of loss."

One of Kelley's bills would eliminate state or municipal Y2K liability for government units that previously identified the Y2K problem to the State Department of Administration and could show they had made reasonable efforts to correct the Y2K problem or lessen its impact.

Under the bill's provisions, suing those government entities at all would be an arduous process. No Y2K claims against state or municipal governments could be filed until 180 days after the damage resulting from a Y2K failure. People wanting to sue the state or municipality anyway would have to give 60 days advance notice before filing the claim and provide those being sued with information about the time, place and circumstances of the Y2K failures, plus the names of the government employees involved and the amount of damage allegedly incurred.

Kelley's other bill, which would provide state financial help to deal with Y2K problems, would appropriate $20 million in state money for a fund, to be handled by the state commissioner of finance, that could make loans to local government units, including the Metropolitan Council, metropolitan government agencies, school districts and counties.

"I think that the state has a responsibility to do what we can to get the problem fixed," Kelley said. "If the only reason that Y2K problems are not getting fixed is that local units of government are short of cash, that shouldn't be the barrier."

Peggy Ingison, assistant state commissioner of finance, said her chief disagreement with Kelley's bill is that state Y2K loans to municipalities aren't a high state spending priority, considering that municipalities haven't said that they need the money. Ingison said her other concern, the method by which the loans would be made out of state funds, is alleviated by changes made in the House version of Kelley's bill.