No such code for a '99 7.3L PSD is listed in my PC/ED (powertrain control/electronic diagnosis) manual. You probably either read it wrong, or else you used a scanner that won't properly read PSD diagnostic trouble codes (DTCs)
I glanced through all the DTCs for a '99 PSD, and didn't see any that included "bank 1 sensor 2". There were several that included "sensor circuit malfunction" but none seemed to fit your condition.
So give us an accurate DTC and maybe someone can interpret it for you.
If Action4478 is right, then:
DTC: P1316
Circuit: IDM
Problem: Injector circuit/IDM codes detected
Probable cause: Injector circuit failure/IDM codes detected
That means your scanner must be able to read injector driver module (IDM) codes to see exactly what is wrong. If that's where you got the "bank 1 sensor 2", then it's probably a problem with the under valve cover (UVC) wiring harness going to the injectors. Replace the wiring harness clip for bank 1 injector 2 and that should fix it.