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Report to the Chairman, Subcommittee on Oversight of Government 
Management, the Federal Workforce, and the District of Columbia, 
Committee on Governmental Affairs, U.S. Senate: 

May 2004: 

UNFUNDED MANDATES: 

Analysis of Reform Act Coverage: 

GAO-04-637: 

GAO Highlights: 

Highlights of GAO-04-637, a report to the Chairman, Senate Subcommittee 
on Oversight of Government Management, the Federal Workforce, and the 
District of Columbia 

Why GAO Did This Study: 

The Unfunded Mandates Reform Act of 1995 (UMRA) was enacted to address 
concerns about federal statutes and rules that require state, local, 
and tribal governments or the private sector to expend resources to 
achieve legislative goals. UMRA generates information about the nature 
and size of potential federal mandates to assist Congress and agency 
decision makers in their consideration of proposed legislation and 
rules. However, concerns about actual or perceived federal mandates 
continue. To provide information and analysis regarding UMRAs 
implementation, GAO was asked to (1) describe the applicable 
procedures, definitions, and exclusions under UMRA for identifying 
federal mandates in statutes and rules, (2) identify statutes and final 
rules that contained federal mandates under UMRA, and (3) provide 
examples of statutes and final rules that were not identified as 
federal mandates, but that affected parties might perceive as unfunded 
mandates, and the reasons these statutes and rules were not federal 
mandates under UMRA. GAO focused on statutes enacted and final rules 
issued in 2001 and 2002 to address the second and third objectives. 

What GAO Found: 

UMRA generally requires congressional committees and the Congressional 
Budget Office (CBO) to identify and estimate the costs of federal 
mandates contained in proposed legislation and federal agencies to do 
so for federal mandates contained in their rules. Identification of 
mandates is a complex process with multiple definitions, exclusions, 
and cost thresholds. Also, some legislation and rules may be enacted or 
issued via procedures that do not trigger UMRA reviews.

In 2001 and 2002, 5 of 377 statutes enacted and 9 of 122 major or 
economically significant final rules issued were identified as 
containing federal mandates at or above UMRAs thresholds. Of the other 
federal actions in those 2 years, at least 43 statutes and 65 rules 
contained new requirements on nonfederal parties that might be 
perceived as unfunded mandates. For 24 of those statutes and 26 of 
those rules, CBO or federal agencies had determined that the estimated 
direct costs or expenditures would not meet or exceed applicable 
thresholds. For the remaining examples of statues, most often UMRA did 
not require a CBO review prior to their enactment. The remaining rules 
most often did not trigger UMRA because they were issued by independent 
regulatory agencies. Despite the determinations made under UMRA, some 
statutes and rules not triggering UMRAs thresholds appeared to have 
potential financial impacts on affected nonfederal parties similar to 
those of the actions that were identified as containing mandates at or 
above the acts thresholds. 

Proposed Legislation Must Pass Multiple Steps to Be Identified as 
Containing Federal Mandates at or Above UMRAs Cost Thresholds: 

[See PDF for image]

[End of section]

www.gao.gov/cgi-bin/getrpt?GAO-04-637.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Patricia A. Dalton at 
(202) 512-6806 or daltonp@gao.gov.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Scope and Methodology: 

Identification of Federal Mandates in Statutes under Title I: 

Identification of Federal Mandates in Rules under Title II: 

Conclusions: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Examples of Statutes with Impacts on Nonfederal Parties 
that Were Not Mandates at or Above UMRA Thresholds: 

Appendix III: Final Rules with Federal Mandates under UMRA: 

Appendix IV: Reasons that Selected Final Rules Did Not Trigger UMRA: 

Appendix V: Examples of Final Rules that Did Not Trigger UMRA But Had 
Potentially Significant Financial Effects on Nonfederal Parties: 

Tables: 

Table 1: Legislation Enacted in 2001 and 2002 that CBO Identified as 
Containing Federal Mandates Under UMRA: 

Table 2: Laws Enacted in 2001 and 2002 that CBO Identified as Containing 
Federal Mandates Meeting or Exceeding UMRA's Cost Threshold: 

Table 3: Selected Examples of Statutes with Potentially Significant 
Impacts on Nonfederal Parties: 

Table 4: Selected Examples of Final Rules with Significant Impacts on 
Nonfederal Parties that Did Not Trigger UMRA: 

Table 5: Examples of Statutes with Impacts on Nonfederal Parties that 
Were Not Identified as Federal Mandates at or above Applicable Cost 
Thresholds: 

Table 6: Final Rules Published in 2001 and 2002 that Agencies Identified 
as Containing Federal Mandates Under UMRA: 

Table 7: Reasons 65 Final Rules with Significant Effects on Nonfederal 
Parties Did Not Trigger UMRA: 

Table 8: Examples of Final Rules Published in 2001 and 2002 with 
Provisions that Affected State, Local, and Tribal Governments or the 
Private Sector But Did Not Trigger UMRA: 

Figures: 

Figure 1: A Multistep Process Has to Be Followed for CBO to Identify 
Federal Mandates in Proposed Legislation: 

Figure 2: How Certain Examples of Laws with Impacts on Nonfederal 
Parties Were Treated Under UMRA: 

Figure 3: Few Final Rules Published in 2001 and 2002 Contained Federal 
Mandates Under UMRA: 

Figure 4: Agencies' Reasons for Determining that Their Rules Did Not 
Trigger UMRA's Requirements: 

Figure 5: Reasons that Agencies Could Have Claimed for Their Rules Not 
Triggering UMRA: 

Abbreviations:  

CBO: Congressional Budget Office: 

DOD: Department of Defense: 

DOJ: Department of Justice: 

DOL: Department of Labor: 

DOT: Department of Transportation: 

EPA: Environmental Protection Agency: 

FCC: Federal Communications Commission: 

FEMA: Federal Emergency Management Agency: 

GSA: General Services Administration: 

HHS: Department of Health and Human Services: 

JCT: Joint Committee on Taxation: 

NASA: National Aeronautics and Space Administration: 

NCSL: National Conference of State Legislatures: 

NRC: Nuclear Regulatory Commission: 

OIRA: Office of Information and Regulatory Affairs: 

OMB: Office of Management and Budget: 

PCAOB: Public Company Accounting Oversight Board: 

RISC: Regulatory Information Service Center: 

SEC: Securities and Exchange Commission: 

TSA: Transportation Security Administration: 

UMRA: Unfunded Mandates Reform Act of 1995: 

USDA: United States Department of Agriculture: 

VA: Department of Veterans Affairs: 

Letter May 12, 2004: 

The Honorable George V. Voinovich: 
Chairman:
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia: 
Committee on Governmental Affairs: 
United States Senate: 

Dear Mr. Chairman,

The Unfunded Mandates Reform Act of 1995 (UMRA) was enacted to address 
concerns expressed by state and local governments about federal 
statutes and regulations that require these nonfederal parties to 
expend resources to achieve legislative goals without being provided 
federal funding to cover the costs.[Footnote 1] Although UMRA was 
intended to "curb the practice of imposing unfunded Federal 
mandates,"[Footnote 2] the act does not prevent Congress or federal 
agencies from doing so.[Footnote 3] Rather, UMRA generates information 
about the nature and size of potential federal mandates on other levels 
of government and the private sector to assist Congress and agency 
decision makers in their consideration of proposed legislation and 
regulations. UMRA requires congressional committees and the 
Congressional Budget Office (CBO) to identify and provide information 
on potential federal mandates in certain legislation and federal 
agencies to identify the costs and benefits of federal mandates 
contained in certain regulations.

Concerns about actual or perceived federal mandates continue. In the 
fall of 2003, for example, the presence of an intergovernmental mandate 
as defined by UMRA was one of the issues raised by senators opposing 
the Internet Tax Nondiscrimination Act (S. 150).[Footnote 4] The 
proposed legislation would have permanently extended and expanded a 
federal moratorium prohibiting state and local governments from levying 
new taxes on Internet access and electronic commerce and also 
eliminated the "grandfather" protection for existing access taxes 
granted under the previous statutory moratorium, which expired November 
1, 2003.[Footnote 5] Pursuant to UMRA, CBO estimated that repealing the 
grandfather clause would result in revenue losses for as many as 10 
states and several local governments totaling from $80 million to $120 
million annually, beginning in 2007, and that a change in the 
definition of Internet access under the legislation could result in 
additional substantial revenue losses for states and local governments. 
In recent months, criticisms of the No Child Left Behind Act of 2001 
because of perceived "unfunded mandate" implications have also received 
increasing attention.[Footnote 6] No Child Left Behind contains a 
number of new or expanded requirements, such as the design and 
implementation of statewide achievement tests, imposed upon states and 
local educational agencies that receive federal assistance.

You asked us to provide information and analysis regarding UMRA's 
implementation and identify options for refining the act. As agreed 
with your staff, this report addresses the first portion of that 
request, in which you asked us to describe and provide examples of how 
federal statutes and rules with potentially significant financial 
implications for state, local, and tribal governments or the private 
sector may be enacted or issued without being identified as federal 
mandates under UMRA.[Footnote 7] Specifically, you asked us to: (1) 
describe the applicable procedures, definitions, and exclusions for 
identifying federal mandates in statues and rules under UMRA, (2) 
identify statutes and final rules that contained federal mandates under 
UMRA, and (3) provide examples of statutes and final rules that were 
not identified as federal mandates, but that affected parties might 
perceive as "unfunded mandates," and the reasons these statutes and 
rules were not federal mandates under UMRA. In the body of this report, 
we address the three objectives separately for title I, which covers 
the legislative process, and title II, which covers the regulatory 
process.

We reviewed UMRA and related guidance documents, analyses, and reports 
on the act's implementation, interviewed persons knowledgeable about 
the implementation of UMRA in OMB, CBO, and other congressional 
offices, and examined and analyzed sets of statutes and final rules. As 
agreed with your staff, we focused on statues enacted and final rules 
published during 2001 and 2002. We conducted our review from August 
2003 through February 2004 in Washington, D.C., in accordance with 
generally accepted government auditing standards. We have not 
previously reported on the implementation of title I. We reported on 
the implementation of title II in February 1998, concluding that UMRA 
appeared to have had a limited direct impact on agencies' rulemaking 
actions.[Footnote 8]

Results in Brief: 

The identification and analysis of federal mandates on state, local, 
and tribal governments or the private sector is a complex process under 
UMRA. Proposed legislation and regulations must pass through multiple 
steps and meet multiple conditions before being identified as 
containing mandates at or above UMRA's thresholds, and there are some 
important differences in the provisions regarding legislation compared 
to those for regulations. For example, under title I of the act, CBO 
prepares mandate statements identifying and estimating the costs of 
mandates in legislation that meets certain criteria, whether or not 
those estimated costs meet or exceed UMRA's thresholds ($50 million for 
intergovernmental and $100 million for private sector mandates, in any 
of the first 5 fiscal years the mandate would be effective).[Footnote 
9] Under title II, however, federal agencies are only required to 
prepare mandate statements for regulations containing 
intergovernmental or private sector mandates that would result in 
expenditures of $100 million or more in any year. Also, for proposed 
legislation a point of order can be raised on the floor of the House or 
Senate against consideration of any UMRA-covered mandate that lacks a 
CBO estimate or any unfunded intergovernmental mandate exceeding UMRA's 
threshold.

For both legislation and regulations, there are two general ways that 
provisions would not be identified as federal mandates at or above 
UMRA's thresholds. First, some legislation and regulations may be 
enacted or issued via procedures that do not trigger UMRA reviews by 
CBO or agencies. For example, UMRA does not require CBO to review 
potential mandates in appropriations bills, and UMRA does not apply to 
final rules that agencies issue without having published a notice of 
proposed rulemaking or to any rules issued by independent regulatory 
agencies. Second, even if the statute or rule is reviewed, UMRA limits 
the identification of federal mandates through multiple definitions, 
exclusions, and costs thresholds. For example, if the requirements on 
nonfederal parties arise from participation in a voluntary federal 
program or are a condition of federal financial assistance, as was the 
case with No Child Left Behind, those requirements are not considered 
federal mandates under UMRA.

In 2001 and 2002, 5 of 377 statutes enacted and 9 of 122 major or 
economically significant final rules issued were identified as 
containing federal mandates at or above UMRA's thresholds. All 5 
statutes and 9 rules contained private sector mandates as defined by 
UMRA. One final rule--an Environmental Protection Agency (EPA) standard 
on arsenic in drinking water--also contained an intergovernmental 
mandate. At least with regard to legislation, CBO reports and 
testimonial evidence indicated that the existence of UMRA might hinder 
the introduction of intergovernmental mandates or lead lawmakers to 
reduce the costs of some of those mandates before enactment.

Of the other federal actions in those years, at least 43 statutes and 
65 rules resulted in new costs or other negative financial impacts on 
nonfederal parties that might be perceived by those parties to have 
"unfunded mandates" implications. We analyzed each of these examples to 
identify how they were treated under UMRA's mandate identification 
process. For 24 of the statutes and 26 of the rules, CBO or federal 
agencies had determined that the estimated direct costs or 
expenditures, as defined by UMRA, would not meet or exceed the 
applicable thresholds. For the remaining examples of statutes, most 
often UMRA did not require a CBO review prior to their enactment. The 
remaining rules most often did not trigger UMRA because they were 
issued by independent regulatory agencies not covered by the act.

Despite the determinations made under UMRA, some of the statutes and 
rules that had not triggered UMRA's requirements appeared to have 
potential financial impacts on affected nonfederal parties similar to 
those of actions that had been flagged as containing federal mandates 
at or above the thresholds. Examples in the intergovernmental area 
included the Economic Growth and Tax Relief Reconciliation Act of 
2001[Footnote 10] and No Child Left Behind, both of which did not meet 
UMRA's definition of a mandate. Among other examples, the Sarbanes-
Oxley Act of 2002 was not identified as containing a federal mandate at 
or above the UMRA threshold because total costs were 
uncertain.[Footnote 11] However, the direct costs of one provision were 
estimated at $80 million annually, while the costs of other provisions 
could not be estimated. The Department of Commerce estimated that a 
rule restricting fishing off Alaska to protect sea lions could reduce 
industry gross revenues by $225 million to $401 million per year. 
However, the rule did not trigger UMRA's requirements because it did 
not require expenditures of $100 million or more in any year and there 
was no notice of proposed rulemaking.

This report provides descriptive information and analysis regarding 
UMRA's implementation, focusing specifically on the coverage and 
identification of federal mandates under UMRA. We are making no 
specific recommendations for executive action nor identifying any 
specific matters for consideration by Congress at this time. As 
requested, we will be continuing our work on other aspects of UMRA.

On April 22, 2004, we provided a draft of this report to the Director 
of the Office of Management and Budget (OMB) for his review and 
comment. On April 29, 2004, an OMB representative notified us that OMB 
had no comments on our report.

Background: 

Many federal statutes, and the regulations that implement them, impose 
requirements on state, local, and tribal governments or private sector 
parties in order to achieve certain legislative goals. Such statutes 
and their regulations can provide substantial benefits, as well as 
imposing costs. OMB's 2003 final report on the costs and benefits of 
federal regulations estimated that the total annual quantified benefits 
of major rules issued from October 1, 1992, to September 30, 2002, 
ranged from $146 billion to $230 billion, while the total annual 
quantified costs ranged from $36 billion to $42 billion.[Footnote 12]

Title I of UMRA focuses on the legislative process, and title II 
focuses on the regulatory process. For both legislation and 
regulations, UMRA was intended to provide more information on and 
prompt more careful consideration of the costs and benefits of federal 
mandates that affect nonfederal parties. UMRA generally defines a 
federal mandate as any provision in legislation, statute, or regulation 
that would impose an enforceable duty on state, local, or tribal 
governments or the private sector or that would reduce or eliminate the 
amount of funding authorized to cover the costs of existing mandates. 
However, as discussed in the body of this report, some other 
definitions, exclusions, and thresholds in the act vary according to 
whether the mandate is in legislation or a rule and whether a provision 
imposes an intergovernmental or private sector mandate.

If legislation or a rule contains a federal mandate, as defined by 
UMRA, a major consequence is that other requirements in the act are 
triggered. Under title I, when a committee of authorization of the 
Senate or the House of Representatives reports a bill or joint 
resolution that contains any federal mandates to the full legislative 
body, the committee is required to provide the bill or resolution to 
the Director of CBO and identify the mandates it contains. UMRA then 
requires CBO to analyze each of these bills and resolutions--and, on 
request, other legislative proposals--for the presence of such mandates 
and to estimate their associated costs. CBO prepares UMRA statements 
that are to be included in the authorizing committees' reports. The CBO 
mandate statements must also include an assessment of whether the 
legislation authorizes or otherwise provides funding to cover the costs 
of any new federal mandates.

UMRA's specific enforcement mechanism for the requirements of title I 
is a point of order, which a member of Congress may raise to indicate 
that a rule of procedure has been or will be violated.[Footnote 13] 
Generally, a point of order is available under UMRA if there is no CBO 
UMRA statement for the legislation or if the legislation contains an 
unfunded intergovernmental mandate with costs over UMRA's threshold or 
if it was not feasible to estimate the costs of the intergovernmental 
mandate. However, points of order are not available under UMRA for 
private sector mandates that exceed the cost threshold or if the 
private sector mandates' costs are not feasible to estimate.[Footnote 
14] UMRA's rules are not self-enforcing and a point of order must be 
actively raised to hinder the passage of unfunded federal mandates. 
Specifically raising an UMRA point of order may serve to heighten the 
profile of "unfunded mandate" implications in the challenged 
legislation. As of March 2004, 13 points of order had been raised in 
the House of Representatives and no points of order had been raised in 
the Senate under UMRA. Only 1 of these 13, regarding the minimum wage 
in the Contract with America Advancement Act in 1996, resulted in the 
House voting to reject consideration of a proposed provision.

For rules that contain federal mandates, title II of UMRA requires the 
agencies to prepare written statements containing specific descriptions 
and estimates, including a qualitative and quantitative assessment of 
the anticipated costs and benefits of the mandate. For such rules, 
agencies are to "identify and consider a reasonable number of 
regulatory alternatives and from those alternatives select the least 
costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule" or explain why that alternative 
was not selected.[Footnote 15] UMRA requires OMB to collect the written 
statements prepared by the agencies on federal mandates in rules and 
periodically forward them to CBO. UMRA also requires OMB to submit 
annual reports to Congress detailing agencies' compliance with title 
II. OMB's Office of Information and Regulatory Affairs (OIRA) has the 
primary responsibility for monitoring agencies' compliance with this 
title.

CBO and OMB regularly produce reports on, respectively, activities 
under titles I and II of UMRA.[Footnote 16] CBO has prepared an annual 
report on its activities under title I each year since UMRA's 
enactment. Included in these reports is information on two requirements 
placed on CBO by title I, identifying (1) proposed legislation that 
would have imposed federal mandates on another level of government or 
the private sector and (2) the subset of the legislation examined by 
CBO that was found to contain mandates with costs at or above the 
relevant thresholds. Although not required by UMRA to do so, CBO also 
reviews all statutes enacted to identify mandates enacted into law for 
its annual reports. Since 2001, OMB has fulfilled its requirement to 
report to Congress on compliance with title II in the same document 
used to fulfill a statutory requirement for reporting to Congress on 
the costs and benefits of federal regulations. OMB's reports provide 
information on the rules that agencies have identified as containing 
federal mandates and also discuss agencies' efforts to consult with 
state, local, and tribal governments in the development of significant 
rules.

Scope and Methodology: 

To describe the applicable procedures, definitions, and exclusions for 
identifying federal mandates in statues and rules under UMRA, we 
reviewed the act, other related guidance documents, and CBO and OMB 
reports on the implementation of UMRA. We also interviewed persons 
knowledgeable about the implementation of UMRA in OMB, CBO, and other 
congressional offices. To identify statutes and final rules that were 
and were not identified as containing federal mandates under UMRA and 
analyze the reasons for those determinations, we focused our review on 
statutes enacted and final rules published during 2001 and 2002, as 
agreed with your staff.

For our review and analysis of the implementation of title I, we relied 
on information provided to us by the CBO officials responsible for 
preparing UMRA statements on proposed legislation and the annual CBO 
reports on UMRA. At our request, CBO identified from that 2-year period 
the 5 statutes that contained federal mandates at or above UMRA's cost 
thresholds and 43 examples of statutes that were not so identified but 
nevertheless contained provisions having impacts on nonfederal parties. 
We did not ask CBO to compile a comprehensive list of all statutes in 
those years that might have impacts on nonfederal parties. For our 
review and analysis of the implementation of title II, we reviewed all 
122 major and/or economically significant final rules--generally, those 
that would have an annual effect on the economy of $100 million or more 
or raise other significant economic or policy issues--that federal 
agencies issued during 2001 and 2002. Parallel to the information on 
statutes provided by CBO, we focused on identifying two sets of final 
rules--those that were identified as containing federal mandates at or 
above UMRA's threshold and those that were not but included provisions 
affecting nonfederal parties that might be perceived by those parties 
as potential "unfunded mandates." To determine whether the statutes and 
final rules we examined were perceived by affected parties as 
potentially having "unfunded mandate" implications, we shared them with 
the following national organizations representing nonfederal levels of 
government: National Association of Counties, National Conference of 
State Legislatures (NCSL), National Governors Association, the National 
League of Cities, and the U.S. Conference of Mayors.[Footnote 17] We 
then analyzed the statutes and rules to identify how they had been 
treated under UMRA, in particular identifying the application of 
procedural, definitional, and other provisions of UMRA that guide the 
identification of federal mandates.

The scope of our review was limited to a 2-year period and, within that 
period, only to examples of legislation enacted and rules that were 
finalized (i.e., we did not include all legislation considered by 
Congress or rules that were proposed but not finalized). Therefore, the 
examples we reviewed might not illustrate all possible ways that a 
statute or rule with a perceived mandate could be enacted or issued 
without being identified as a federal mandate under UMRA. However, the 
representatives from external public sector organizations who reviewed 
the statutes and rules we examined generally concurred that they were 
perceived as potential "unfunded mandates" and that we did not exclude 
any major examples that they believed should have been included. It is 
also important to recognize that perceived "unfunded mandates" could 
result from nonstatutory, nonregulatory federal actions, such as 
Homeland Security threat level adjustments, which are not covered by 
UMRA and therefore were outside the scope of our specific objectives. 
(See app. I for a more detailed description of our objectives, scope, 
and methodology.): 

Identification of Federal Mandates in Statutes under Title I: 

Statutory provisions that impose requirements on nonfederal parties 
might not be identified as federal mandates under UMRA because some 
legislative actions do not trigger a review and even if the provisions 
are subject to review, UMRA circumscribes the definition of a federal 
mandate. When legislation containing "mandates" does undergo UMRA's 
formal scrutiny, it has to meet three definitional requirements, not 
fall into any of seven exclusions, and impose costs at or above certain 
thresholds to be identified as containing federal mandates exceeding 
the cost thresholds under UMRA. In 2001 and 2002, 5 of the 377 statutes 
enacted were identified as containing provisions that were federal 
mandates exceeding the thresholds. From the remaining statutes, CBO 
identified 43 examples that had some kind of impact on nonfederal 
parties but were not identified during the legislative process as 
containing federal mandates at or above UMRA's thresholds. For 24 of 
those examples, this was because their estimated direct costs were 
below the thresholds. There is some evidence that the existence of UMRA 
served to hinder the introduction of intergovernmental mandates, or led 
to their modification before enactment in the past. There is also 
evidence that suggests that some of CBO's cost estimates under UMRA may 
have led lawmakers to reduce the cost of some mandates before 
enactment.

Legislation Must Undergo a Multistep Process to Be Identified as 
Containing Federal Mandates at or Above Applicable Cost Thresholds: 

The type of legislation that a provision is contained in and how the 
legislation is considered determines if it is subject to automatic 
review by CBO. If provisions are subject to automatic CBO review, they 
are analyzed based on UMRA's definitional requirements and exclusions. 
The feasibility of developing a cost estimate and the level of the cost 
estimate is then compared to applicable thresholds. Figure 1 depicts 
this general sequence of conditions that must be met before a statutory 
provision would be identified as a federal mandate at or above UMRA's 
cost thresholds.

Figure 1: A Multistep Process Has to Be Followed for CBO to Identify 
Federal Mandates in Proposed Legislation: 

[See PDF for image]

[End of figure]

The following sections discuss these procedures, exclusions, 
definitions, and cost thresholds in more detail.

UMRA Procedures Do Not Require All Legislative Provisions to Be 
Automatically Reviewed by CBO: 

Provisions that are (1) not contained in authorizing bills, or (2) not 
reported by an authorizing committee are not automatically subject to 
CBO review before going to the floor (see fig. 1), and thus a CBO UMRA 
statement may not be issued. For example, appropriations bills are not 
automatically subject to CBO review under UMRA. In addition, even if a 
provision is contained in an authorizing bill, it still must be 
"reported" by that committee--as opposed to going directly to the full 
House or Senate or "discharged" by the committee without a vote to send 
it to the full House or Senate--to be subject to automatic CBO review.

CBO was not required to review seven bills that contained federal 
mandates during 2001 and 2002 that ultimately became law because they 
either were appropriations bills or were authorizing bills not reported 
by authorizing committees. For example, a provision prohibiting states 
from issuing a permit or lease for certain oil and gas drilling in the 
Great Lakes was not reviewed by CBO prior to enactment because it was 
contained in the Energy and Water Development Appropriations Act of 
2002.[Footnote 18]

Although UMRA does not require an automatic CBO review of provisions 
not contained in authorizing bills or bills not reported by authorizing 
committees, CBO told us that it initiates an informal review of 
provisions in appropriations bills and the results of these informal 
reviews are communicated to appropriations committee clerks when CBO 
finds potential mandates in these bills. During these informal reviews, 
CBO does not estimate costs unless CBO already has cost data from an 
earlier review or unless Congress requests it. CBO will also review any 
legislation on request.

UMRA does not require automatic CBO review of provisions added after 
CBO's initial review. Amendments containing mandates may be added to 
legislation after CBO issues its statement about whether the 
legislation contains any federal mandates. UMRA states, however, that 
"the committee of conference shall insure to the greatest extent 
practicable" that CBO prepare statements on amendments offered 
subsequent to its initial review that contain federal 
mandates.[Footnote 19] According to CBO's annual report for 2002, three 
laws were enacted in 2002 that contained federal mandates not reviewed 
by CBO prior to enactment because they were added after CBO reviewed 
the legislation. For example, a provision requiring insurers of 
commercial property to offer terrorism insurance was added to the 
Terrorism Risk Insurance Act of 2002 after CBO's UMRA review, and thus 
not identified as a private sector mandate under UMRA prior to 
enactment.[Footnote 20]

There is one other important caveat regarding legislative provisions 
for which a CBO UMRA review is not required. The Joint Committee on 
Taxation (JCT), rather than CBO, has jurisdiction over proposed tax 
legislation and produces revenue estimates for all such legislation 
considered by either the House or the Senate. In addition, JCT examines 
legislative provisions that affect the tax code for federal mandates 
and estimates their costs. According to a JCT legislative counsel, a 
statement regarding the existence of federal mandates should be 
included in the House or Senate committee report. Also, according to 
CBO, JCT estimates of revenue impacts are included in CBO cost 
estimates for legislation.

When Provisions Are Reviewed, They Are Subject to Many Definitional 
Requirements and Exclusions: 

A provision must meet the formal definition of a mandate and not be not 
be classified as an "exception" to be identified as a federal mandate. 
UMRA defines a federal mandate as a provision that would impose an 
enforceable duty upon state, local, or tribal governments 
(intergovernmental mandate) or upon the private sector (private sector 
mandate). Exceptions are defined as enforceable duties that are 
conditions of federal financial assistance or arise from participation 
in a voluntary federal program.

UMRA does include as intergovernmental mandates certain conditions on 
federal assistance programs and reductions in the authorization of 
appropriations for federal financial assistance and the control of 
borders under certain conditions.[Footnote 21] A provision would also 
meet the definition of a intergovernmental mandate if it relates to an 
existing federal program of $500 million or more (annually) to state, 
local, and tribal governments if the provision would increase the 
stringency of conditions of funding, place caps or reduce the funding 
and the state, local, or tribal governments cannot modify their 
financial or programmatic responsibilities regarding the federal 
program.

A private sector mandate is also a provision that would reduce or 
eliminate the amount of authorization of appropriations for federal 
financial assistance that would be provided to the private sector for 
the purposes of ensuring compliance with such an enforceable duty.

UMRA also excludes certain provisions from its application. 
Specifically, UMRA does not apply to any provision in legislation that: 

1. enforces Constitutional rights of individuals;

2. establishes or enforces any statutory rights that prohibit 
discrimination on the basis of race, color, religion, sex, national 
origin, age, handicap, or disability;

3. requires compliance with accounting and auditing procedures with 
respect to grants or other money or property provided by the federal 
government;

4. provides for emergency assistance or relief at the request of any 
state, local, or tribal government or any official of a state, local, 
or tribal government;

5. is necessary for the national security or the ratification or 
implementation of international treaty obligations;

6. the President designates as emergency legislation and that Congress 
so designates in statute; or: 

7. relates to the old age, survivors, and disability insurance program 
under title II of the Social Security Act (including taxes imposed by 
sections 3101(a) and 3111(a) of the Internal Revenue Code of 1986 
relating to old-age, survivors, and disability insurance).

If provisions are excluded, CBO will state the reason for the exclusion 
and make no statement regarding mandates in those provisions.

If a provision is not excluded and meets the definition of a federal 
mandate without exception under UMRA, CBO identifies the provision as a 
federal mandate under UMRA, and then determines if a cost estimate is 
feasible. For intergovernmental mandates, if a cost estimate is 
feasible, the direct costs (to state, local, or tribal governments) of 
all mandates contained within the legislation must equal or exceed $50 
million (in 1996 dollars) in any of the first 5 fiscal years that the 
relevant mandates would be effective for CBO to determine that the 
mandate meets or exceeds UMRA's cost threshold. The same requirements 
apply for private sector mandates, except that the cost threshold is 
$100 million (in 1996 dollars) or more. CBO adjusts both the 
intergovernmental and private sector cost thresholds annually for 
inflation. If an intergovernmental mandate exceeds the cost threshold, 
a point of order is available under UMRA. However, if a private sector 
mandate exceeds the cost threshold, a point of order is not available. 
If an intergovernmental or private sector mandate is below the 
applicable threshold, CBO states that a mandate (intergovernmental or 
private) exists with costs estimated to be below the threshold. 
Although this highlights the provision as mandate, it does not provide 
for a point of order under UMRA.

Cost Estimates May Not Be Feasible or Complete: 

Developing a cost estimate for federal mandates must be feasible, and 
their direct costs must meet or exceed applicable cost thresholds for 
CBO to identify them as such under UMRA. However, in some instances, it 
is not feasible to develop a cost estimate.

CBO indicated in its annual report for 2002 that common reasons why a 
cost estimate may not be feasible include (1) the costs depend on 
future regulations, (2) essential information to determine the scope 
and impact of the mandate is lacking, (3) it is unclear whom the bill's 
provisions would affect, and (4) language in UMRA is ambiguous about 
how to treat extensions of existing mandates. If a cost estimate for 
legislation is not feasible, CBO specifies the kind of mandate it 
contains, but that the agency cannot estimate its costs. This does not 
prevent the legislation from moving through the legislative process, 
but in the case of an intergovernmental mandate, UMRA would still allow 
a member of Congress to raise a point of order.

CBO reported that it could not estimate the costs of mandates in nine 
bills that ultimately were enacted during 2001 and 2002. Of these nine 
laws, seven contained intergovernmental mandates and two contained both 
private sector and intergovernmental mandates. For example, CBO could 
not estimate the costs of provisions requiring manufacturers of medical 
devices to comply with certain labeling and notification conventions 
and to submit their registrations electronically contained in the 
Medical Device User Fee and Modernization Act of 2002.[Footnote 22] CBO 
stated that since many of the requirements in the act would depend on 
the future actions of the Secretary of Health and Human Services, CBO 
could not determine whether their direct costs would exceed UMRA's 
threshold.

Even if costs can be estimated, UMRA focuses only on the direct costs 
imposed by federal mandates in legislation. According to UMRA, such 
costs are limited to spending that results directly from the mandates 
imposed by the legislation, rather than from the legislation's broad 
effects on the economy. The direct costs of a federal mandate also 
include any new revenues that state and local governments are 
prohibited from raising. While CBO has estimated the indirect costs of 
some federal mandates, CBO is limited to including only direct costs 
when determining if the aggregate total costs of federal mandates in 
legislation meet or exceed the applicable cost thresholds under UMRA. 
CBO testified in July 2003 that, "federal mandates often have secondary 
effects, including the effects on prices and wages when the costs of a 
mandate imposed on one party are passed along to other parties, such as 
customers or employees." CBO told us that if it determined that 
indirect costs (including secondary effects) would be significant, it 
would include the estimate in its UMRA statement, but that its 
determination of whether a mandate meets or exceeds the applicable 
thresholds is based only on direct costs. Therefore, although 
information on indirect costs may be available, legislation with 
significant total costs (direct and indirect) on nonfederal parties may 
not be identified as exceeding the cost thresholds under UMRA.

CBO may conclude that legislation contains a federal mandate and is 
funded because the legislation authorizes funds to be appropriated to 
carry out or comply with the mandates. However, if the appropriation 
subsequently provided is less than the amount authorized, the federal 
mandate's costs may be at or above the threshold.

UMRA contains a mechanism designed to help curtail mandates with 
insufficient appropriations, but it has never been utilized. UMRA 
provides language that could be included in legislation that would 
allow agencies tasked with administering funded mandates to report back 
to Congress on the sufficiency of those funds.[Footnote 23] Congress 
would then have a certain time period to decide whether to continue to 
enforce the mandate, adopt an alternate plan, or let it expire, meaning 
the provision comprising the mandate would no longer be enforceable. A 
CBO official did not recall any legislation ever containing this 
provision, and our database search has also resulted in no legislation 
found containing this provision.[Footnote 24]

CBO Identified Few Laws in 2001 and 2002 as Containing Federal Mandates 
at or Above UMRA's Cost Threshold, But UMRA May Have an Indirect 
Effect: 

Although few laws have been identified as containing federal mandates 
at or above applicable cost thresholds, there is some evidence that 
UMRA has a discouraging effect on the enactment of intergovernmental 
mandates and the magnitude of costs to nonfederal parties in proposed 
legislation.

Of 377 laws enacted in 2001 and 2002, CBO identified at least 44 
containing a federal mandate under UMRA. Of these 44, CBO identified 5 
containing mandates at or above the cost thresholds, and all were 
private sector mandates (see tables 1 and 2 below). From 1996 to 2000, 
CBO identified 18 mandates (2 intergovernmental and 16 private sector) 
with costs at or above cost thresholds that became law.

Table 1: Legislation Enacted in 2001 and 2002 that CBO Identified as 
Containing Federal Mandates Under UMRA: 

2001: 
Number of laws enacted: 108
Type of mandate(s): 
Laws with mandate: Intergovernmental: 12; 
Laws with mandate: Private sector[A]: At least 1; 
Laws with mandate at or above cost threshold: Intergovernmental: 0; 
Laws with mandate at or above cost threshold: Private sector[A]: 

2002; 
Number of laws enacted: 269; 
Type of mandate(s): 
Laws with mandate: Intergovernmental: 8; 
Laws with mandate: Private sector[A]: 11; 
Laws with mandate: Both types: 12; 
Laws with mandate at or above cost threshold: Intergovernmental: 0; 
Laws with mandate at or above cost threshold: Private sector[A]: 4; 
Laws with mandate at or above cost threshold: Both types: 0. 

Both years; 
Number of laws enacted: 377; 
Type of mandate(s): 
Laws with mandate: Intergovernmental: 20; 
Laws with mandate: Private sector[A]: At least 12; 
Laws with mandate: Both types: 12; 
Laws with mandate at or above cost threshold: Intergovernmental: 0; 
Laws with mandate at or above cost threshold: Private sector[A]: 5; 
Laws with mandate at or above cost threshold: Both types: 0.

Source: CBO.

[A] CBO's annual report for 2001 did not separately report the number 
of laws that contained private sector mandates, but did report 1 law 
containing a private sector mandate above the cost threshold. Adding 
the 11 laws that CBO identified as containing private sector mandates 
in 2002 yields at least 12 laws during 2001 and 2002 that contained 
private sector mandates (exclusive of laws that contained both private 
sector and intergovernmental mandates).

[End of table]

Table 2: Laws Enacted in 2001 and 2002 that CBO Identified as 
Containing Federal Mandates Meeting or Exceeding UMRA's Cost Threshold: 

Law: Aviation and Transportation Security Act of 2001 (Pub. L. No. 107-
71); 
Mandate: Imposes a user fee to fund aviation-security programs; 
requires security enhancements on aircraft; imposes additional security 
procedures; 
Cost information: CBO estimated that the direct costs to air carriers 
(net of savings) would range from $313 million in 2002 to $1.0 billion 
in 2006.

Law: Bipartisan Campaign Reform Act of 2002 (Pub. L. No. 107-155); 
Mandate: Bans "soft-money" collections by national political parties; 
Changes procedures for collection and use of campaign contributions; 
Cost information: CBO estimated that net direct costs to the private 
sector (including national political parties and broadcasters) could 
exceed $300 million in a Presidential election year.

Law: Farm Security and Rural Investment Act of 2002 (Pub. L. No. 107-
171); 
Mandate: Requires that some foods carry labels indicating their country 
of origin; Establishes new minimum prices for fluid milk in different 
regions; 
Cost information: CBO estimated that increased costs to milk handlers 
could total $1.3-1.5 billion annually. Most of this cost would be passed to consumers. CBO estimated that the costs to retailers and suppliers to provide origin labeling could be as high as $1 billion annually.

Law: Job Creation and Worker Assistance Act of 2002 (Pub. L. No. 107-
147); 
Mandate: Extends the requirement that health insurers cover mental 
health and medical benefits equally; Limits nonaccrual accounting; 
Alters treatment of indebtedness for S corporations; 
Cost information: CBO estimated that the direct costs of extending the 
requirement to cover mental health would be $270 million in 2002 for 
the private sector (group health plans) and would increase premiums for 
group health insurance; 
CBO estimated the direct costs of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (COBRA) continuation to be $200 million in 
2002.

Law: Anton's Law of 2002 (Pub. L. No. 107-318); 
Mandate: Requires automobile manufacturers to install a lap and 
shoulder-belt harness in the center-rear seating position of certain 
vehicles; 
Cost information: CBO estimated that auto manufacturers would spend as 
much as $1 billion to install new belts. 

Source: CBO.

[End of table]

UMRA May Have Discouraged the Enactment of Proposed Unfunded 
Intergovernmental Mandates and Helped Reduce the Costs of Some 
Mandates: 

UMRA may have indirectly discouraged the passage of legislation 
identified as containing intergovernmental mandates at or above UMRA's 
cost threshold. Since 1996 only three proposed intergovernmental 
mandates with annual costs above the applicable threshold had become 
law (an increase in the minimum wage in 1996, a reduction in federal 
funding for Food Stamps in 1997, and a preemption of state laws on 
premiums for prescription drug coverage in 2003).

Between 1996 and 2002, CBO reported that 21 private sector mandates 
with costs over the applicable threshold were enacted. Of these, 8 
involved taxes, 4 concerned health insurance, 4 dealt with regulation 
of industries, 2 affected workers' take home pay, 1 imposed new 
requirements on sponsors of immigrants, 1 changed procedures for the 
collection and use of campaign contributions, and 1 imposed fees on 
airline travel to fund aviation security.

UMRA may have also aided in lessening the costs of some mandates. From 
1996 through 2000, CBO identified 59 proposed federal mandates with 
costs above applicable thresholds. Subsequent to CBO identification, 9 
were amended before enactment to reduce their costs below the 
applicable thresholds, while 18 mandates were enacted with costs above 
the threshold, and 32 were never enacted. Although CBO has not done an 
analysis to determine the role of UMRA in reducing the costs of 
mandates ultimately enacted, it did state in its report that "it was 
clear that information provided by CBO played a role in the Congress's 
decision to lower costs.": 

There is also some testimonial evidence regarding the effectiveness of 
UMRA on legislation. CBO stated in its July 2003 congressional 
testimony that "both the amount of information about the cost of 
federal mandates and Congressional interest in that information have 
increased considerably. In that respect, title I of UMRA has proved to 
be effective." The Chairman of the House Rules Committee was quoted in 
1998 as saying that UMRA "has changed the way that prospective 
legislation is drafted.. Anytime there is a markup [formal committee 
consideration], this always comes up." Although points of order are 
rarely used, they may be perceived as an unattractive consequence of 
including a mandate above cost thresholds in proposed legislation. The 
director of policy and federal relations at the National League of 
Cities stated, "This is like a shoal out in the water. You know it is 
there, so you steer clear of it." [Footnote 25]

Nonfederal Parties Perceived Some Enacted Provisions as Having Unfunded 
Mandate Implications: 

Overall, CBO's annual reports from 2001 and 2002 showed that most 
proposed legislation did not contain federal mandates as defined by 
UMRA. Further, most of the proposed legislation with mandates would not 
have imposed costs exceeding the thresholds set by UMRA.[Footnote 26] 
We asked CBO to compile a list of examples from among those laws 
enacted in 2001 and 2002 that it perceived as having impacts on 
nonfederal parties but were not identified as containing federal 
mandates meeting or exceeding UMRA's cost thresholds. We then analyzed 
these 43 examples to illustrate the application of UMRA's procedures, 
definitions, and exclusions on legislation that was not identified as 
containing mandates at or above UMRA's threshold, but might be 
perceived to have "unfunded mandates" implications. We shared CBO's 
list of 43 examples with national organizations representing nonfederal 
levels of government, and they generally agreed that those laws 
contained provisions perceived by their members as mandates.[Footnote 
27]

For 12 of the 43 examples, an automatic UMRA review was not required of 
at least some provisions prior to enactment because of the legislative 
process used to enact the bill, for example, not being reported by an 
authorizing committee. Out of the remaining 31 laws that did undergo a 
cost estimate, 24 were found to contain mandates with costs below 
applicable thresholds, 3 contained provisions that were excluded, 2 
contained provisions with direct costs that were not feasible to 
estimate, 1 contained a provision that did not meet UMRA's definition 
of a mandate, and 1 was reviewed by JCT and found not to contain any 
federal mandates (see fig. 2). It should be noted that the number of 
laws in any of the categories listed do not necessarily correlate with 
the magnitude of perceived or actual impact on affected nonfederal 
parties.

Figure 2: How Certain Examples of Laws with Impacts on Nonfederal 
Parties Were Treated Under UMRA: 

[See PDF for image]

[End of figure]

Of the 12 examples of laws with provisions that CBO was not required to 
review prior to enactment, CBO later determined how they would have 
been characterized under UMRA: 5 laws contained mandates with direct 
costs below UMRA's thresholds, 4 laws contained mandates with direct 
costs that could not be estimated, 1 was excluded under UMRA for 
national security so would not be reviewed for the presence of 
mandates, 1 did not meet the definition of a mandate, and 1 had some 
provisions with costs below the threshold and some provisions excluded 
(again, for national security).[Footnote 28] (See app. II for more 
detailed information on the 43 examples.): 

Some Legislation Had Potentially Significant Impacts on Nonfederal 
Parties: 

Although cost estimates of the full impact (including direct and 
indirect costs) are not available for all 43 examples discussed 
previously, table 3 describes 10 laws among the 43 that we consider 
important to highlight and/or have multiple uncertainties surrounding 
the magnitude of their potential impacts on nonfederal parties.

Table 3: Selected Examples of Statutes with Potentially Significant 
Impacts on Nonfederal Parties: 

GAO ID: L1; 
Rule: Economic Growth and Tax Relief Reconciliation Act of 2001 (Pub. 
L. No. 107-16); 
Description of potential impacts on nonfederal parties: Increases tax 
credits and phases out the estate and generation-skipping transfer tax, 
which impacts state tax revenues; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: Did not meet the definition of a 
mandate (no enforceable duty on state, local, or tribal governments or 
the private sector). JCT determined that the act did not contain any 
intergovernmental mandates or revenue raising provisions in excess of 
UMRA thresholds.

GAO ID: L7; 
Rule: USA PATRIOT Act of 2001 (Pub. L. No. 107-56); 
Description of potential impacts on nonfederal parties: Multiple 
provisions preempting state and local laws in regard to disclosure of 
financial and consumer reporting information, and liability laws 
relating to education agencies and institutions. Restricts states' 
authority to issue licenses for operating motor vehicles to transport 
hazardous materials, and prohibits certain parties from shipping or 
receiving biological toxins in interstate or foreign commerce; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: Some provisions were not reviewed 
prior to enactment because mandates were added after CBO review. Some 
provisions were excluded for national security. After enactment, CBO 
estimated that provisions that were mandates had costs below thresholds.

GAO ID: L18; 
Rule: No Child Left Behind Act of 2001; 
(Pub. L. No. 107- 110); 
Description of potential impacts on nonfederal parties: Imposes various
requirements including state standards and assessments, progress 
requirements, and other provisions, and provides grants associated with 
these requirements; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: Did not meet the definition of a 
mandate because the requirements were a condition of federal financial 
assistance.

GAO ID: L22; 
Rule: Public Health Security and Bioterrorism Preparedness and Response 
Act of 2002 (Pub. L. No. 107-188); 
Description of potential impacts on nonfederal parties: Contains 
multiple provisions requiring assessments of water supplies and other 
measures including extending prescription drug application fees, and 
registration requirements for food processors; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: Provisions were not reviewed prior 
to enactment because an authorizing committee did not report them. 
After enactment, CBO stated some provisions were funded, some were 
estimated to be below thresholds, and the costs of others were 
uncertain.

GAO ID: L25; 
Rule: Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204); 
Description of potential impacts on nonfederal parties: Established the 
Public Company Accounting Oversight Board (PCAOB), and required new 
financial disclosures of public companies; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: CBO stated the costs of several 
provisions were uncertain, but the operations of the PCAOB and another 
standard-setting body would be $80 million per year and would be funded 
by fees assessed on public companies.

GAO ID: L32; 
Rule: Medical Device User Fee and Modernization Act of 2002 (Pub. L. 
No. 107-250); 
Description of potential impacts on nonfederal parties: Allows the 
assessment of user fees from manufactures of medical devices to defray 
the cost to the Food and Drug Administration of administering the 
approval of devices. Requires medical device manufacturers to comply 
with certain labeling and notification conventions and to submit their 
registrations electronically; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: CBO stated that some costs were 
below the threshold and others were uncertain because they depended on 
the future actions of a government agency.

GAO ID: L34; 
Rule: Help America Vote Act of 2002; 
(Pub. L. No. 107- 252); 
Description of potential impacts on nonfederal parties: Places a number 
of requirements on state and local governments regarding federal 
elections including standards for voting systems, computerized 
databases, and procedural development for provisional voting. The act 
also authorized grants for these requirements; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: Some provisions excluded because 
they enforced the constitutional rights of individuals. For some other 
provisions, CBO stated that any costs to state, local, or tribal 
governments would be incurred voluntarily from participating in grant 
programs.

GAO ID: L36; 
Rule: Homeland Security Act of 2002; 
(Pub. L. No. 107- 296); 
Description of potential impacts on nonfederal parties: Contains 
provisions including the preemption of state and local laws in regard 
to disclosure of information, and requirements for training for 
airlines; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: CBO estimated some costs would be 
below the threshold and others were uncertain. A mandate requiring air 
carriers to provide flight attendants with a method of communicating 
with pilots was added after CBO review, and thus its costs were not 
estimated prior to enactment. After enactment, CBO stated the costs of 
this mandate were uncertain.

GAO ID: L37; 
Rule: Terrorism Risk Insurance Act of 2002; 
(Pub. L. No. 107-297); 
Description of potential impacts on nonfederal parties: Requires 
commercial property insurers to offer terrorism insurance, and requires 
insurers and policyholders to pay assessments; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: CBO estimated some costs were below 
thresholds, while others were uncertain. The mandate requiring insurers 
to offer terrorism insurance was added after CBO review, and thus its 
costs were not estimated. After enactment, CBO stated that the costs of 
this mandate were uncertain.

GAO ID: L41; 
Rule: Veterans Benefits Act of 2002 (Pub. L. No. 107-330); 
Description of potential impacts on nonfederal parties: Establishes a 
temporary exemption of some National Guard members from certain 
financial obligations; 
Reason(s) the statute was not identified as containing a federal 
mandate exceeding costs thresholds: CBO stated the costs of this 
mandate were uncertain since the number of National Guard members 
called to active duty in the future is uncertain. CBO stated other 
costs were below applicable thresholds. 

Source: GAO.

[End of table]

The following paragraphs provide more detailed descriptions regarding 2 
of these 10 examples. One law contained a definitional exception and 
was not identified as containing any mandates. The other law was 
identified as containing both intergovernmental and private sector 
mandates.

The No Child Left Behind Act is a well-known example that has 
intergovernmental implications, but was not identified as a federal 
mandate under UMRA. No Child Left Behind provides federal grants for a 
host of education programs, requires states to design and implement 
standards and assessments, and provides financial penalties for states 
that fail to achieve certain standards over 2 consecutive years. CBO 
stated that the bill does not contain any federal mandates as defined 
by UMRA because any costs incurred by state, local, or tribal 
governments would result from complying with conditions of financial 
aid, a definitional exception under UMRA.

Though it does not meet the UMRA definition of a federal mandate, No 
Child Left Behind is still perceived as an "unfunded mandate" by some 
interested parties. In a recent radio advertisement, the president of 
the National Education Association described this act as a "huge 
unfunded federal mandate."[Footnote 29] In response to our query, NCSL 
listed No Child Left Behind as one of the most important statutes that 
was not identified as a federal mandate, but should have been. A recent 
newspaper article identified 15 states with resolutions, bills, or 
studies that "protest" in one form or another against the act.[Footnote 
30] According to the article, some states claim that significant 
impacts resulting from No Child Left Behind may include the loss of 
funds if schools fail to make enough progress, extra costs for tutoring 
and teacher training, and costs associated with possible longer school 
days and summer school, all of which may be required to meet standards 
set by the act.

Another example among the 10 laws is the Sarbanes-Oxley Act of 2002. 
CBO identified this law as containing both intergovernmental and 
private sector mandates. The intergovernmental mandate's costs were 
estimated to not exceed the cost threshold, but the private sector 
mandates' costs were uncertain, and could possibly exceed UMRA's 
thresholds. Among the mandates contained in the law were provisions 
such as: (1) allowing PCAOB to assess fees on public companies, (2) 
establishing new standards for auditors and audit committees of public 
companies, (3) requiring public corporations to make enhanced financial 
disclosures to the Securities and: 

Exchange Commission (SEC), (4) requiring notices of blackout 
periods[Footnote 31] from pension plan administrators to investors, and 
(5) prohibiting insider trades during pension fund blackout periods if 
stock was acquired based on connection of service as a director or 
executive officer.

CBO indicated that the only costs associated with Sarbanes-Oxley's 
federal mandates that the agency could estimate were for the 
notification of blackout periods by pension administrators, and the 
costs of operating PCAOB. CBO estimated the costs of providing 
notification of blackout periods fell below the UMRA thresholds but 
provided no quantified estimate, and CBO estimated the cost of running 
PCAOB and an associated standard-setting body to be approximately $80 
million per year which would be funded from fees assessed on public 
companies. CBO stated it was uncertain if the rest of the mandates 
contained in Sarbanes-Oxley exceeded UMRA's cost threshold of $115 
million adjusted for inflation.

Identification of Federal Mandates in Rules under Title II: 

Procedurally, the identification of federal mandates under title II of 
UMRA is simpler than under title I. Although regulatory agencies 
generally are to assess the intergovernmental and private sector 
effects of all their actions, under UMRA title II they only need to 
publicly identify and prepare UMRA "written statements" on those rules 
that the agencies believe include a federal intergovernmental or 
private sector mandate that may result in expenditures of $100 million 
or more (adjusted for inflation) in any year. However, there are 14 
definitional exceptions, exclusions, or other restrictions applicable 
to the identification of federal mandates in rules, compared to 10 that 
are applicable to identifying mandates in legislation. Agencies 
identified 9 of the 122 major and economically significant final rules 
published in 2001 and 2002 as containing federal mandates as defined by 
UMRA. However, based on our review of the published rules, we 
determined that 65 of the remaining rules imposed new requirements on 
nonfederal parties. Agencies cited, or could have cited, a variety of 
reasons that these 65 rules did not contain federal mandates under 
UMRA. Nevertheless, at least 29 of the 65 rules appeared to have 
significant financial impacts on affected nonfederal parties of $100 
million or more in any year.

UMRA Procedures for Rules Are Less Complex than for Legislation, But 
More Restrictions Apply to Identifying Federal Mandates: 

UMRA's process of identifying and reporting on rules with federal 
mandates is more straightforward than that for legislation. UMRA 
generally directs agencies to assess the effects of their regulatory 
actions on other levels of government and the private sector. However, 
the agencies only need to identify and prepare written UMRA statements 
on those rules that the agencies have determined include a federal 
mandate that may result in expenditures by nonfederal parties of $100 
million or more (adjusted for inflation) in any year. Thus, unlike 
CBO's reviews of proposed legislation, one cost threshold applies to 
both intergovernmental and private sector mandates in rules, and there 
is no public identification of potential federal mandates in rules 
before agencies determine whether such mandates exceed the threshold. 
As is the case for legislation, UMRA contains many definitions and 
exclusions that affect the extent to which agencies' rules are 
considered to have federal mandates at or above the threshold.

The three definitional provisions and seven general exclusions from 
UMRA that we previously identified as applicable to legislation also 
apply to federal rules. However, there are four additional restrictions 
to the identification of federal mandates in rules (i.e., in an UMRA 
statement): 

* UMRA's requirements do not apply to provisions in rules issued by 
independent regulatory agencies.[Footnote 32]

* Preparation of an UMRA statement, and related estimate or analysis of 
the costs and benefits of the rule, is not required if the agency is 
"otherwise prohibited by law" from considering such an estimate or 
analysis in adopting the rule.

* The requirement to prepare an UMRA statement does not apply to any 
rule for which the agency does not publish a general notice of proposed 
rulemaking in the Federal Register. This means that UMRA does not cover 
interim final rules and any rules for which the agency claimed a "good 
cause" or other exemption available under the Administrative Procedure 
Act of 1946 to issue a final rule without first having to issue a 
notice of proposed rulemaking.[Footnote 33]

* UMRA's threshold for federal mandates in rules is limited to 
expenditures, in contrast to title I which refers more broadly to 
direct costs. Thus, a rule's estimated annual effect might be equal to 
or greater than $100 million in any year--for example, by reducing 
revenues or incomes in a particular industry--but not trigger UMRA if 
the rule does not compel nonfederal parties to spend that amount. Under 
title I, though, the direct costs of a mandate in legislation also 
include any amounts that state and local governments are prohibited 
from raising in revenues to comply with the mandate. However, as in 
reviews of legislation, indirect costs of rules are not considered when 
determining whether a mandate meets or exceeds UMRA's threshold.

Two of these restrictions on UMRA's scope in the regulatory process are 
essentially procedural. If a rule's path to issuance was through an 
independent regulatory agency or a final rule with no prior proposed 
rule, any "mandate" included in the rule would not be subject to 
identification and review under UMRA.

OIRA Monitors Agencies' Compliance with Title II Requirements: 

OIRA is responsible for the centralized review of significant 
regulatory actions published by executive branch agencies, other than 
independent regulatory agencies. Under Executive Order 12866, which was 
issued in September 1993, agencies are generally required to submit 
their significant draft rules to OIRA for review before publishing the 
rules. As part of this regulatory review process, OIRA monitors 
agencies' compliance with UMRA. In the submission packages for their 
draft rules, federal agencies are to designate whether they believe the 
rule may constitute an unfunded mandate under UMRA. According to OIRA 
representatives, consideration of UMRA is then incorporated as part of 
these regulatory reviews, and draft rules are expected to contain 
appropriate UMRA certification statements.[Footnote 34]

OIRA's guidance to agencies notes that the analytical requirements 
under Executive Order 12866 are similar to the analytical requirements 
under UMRA, and thus the same analysis may permit agencies to comply 
with both analytical requirements.[Footnote 35] However, OIRA 
representatives pointed out that UMRA might also require agency 
consultations with state and local governments on certain rules, and 
this is something that OIRA will look for evidence of when it does its 
regulatory reviews. The officials also pointed out that UMRA provides 
OIRA a statutory basis for requiring agencies to do an analysis similar 
to that required by the executive order (which can be rescinded or 
amended at the discretion of the President).

Agencies Identified Few Final Rules Published in 2001 and 2002 as 
Containing Federal Mandates: 

Federal agencies identified 9 of the 122 major and/or economically 
significant final rules that federal agencies published in 2001 or 2002 
as containing federal mandates under UMRA (see fig. 3).[Footnote 36]

Figure 3: Few Final Rules Published in 2001 and 2002 Contained Federal 
Mandates Under UMRA: 

[See PDF for image]

[End of figure]

Only one of the nine rules that agencies identified as containing 
federal mandates under UMRA--EPA's enforceable standard for the level 
of arsenic in drinking water systems--included an intergovernmental 
mandate. The remaining rules imposed private sector mandates: 

* four Department of Energy rules that amended energy conservation 
standards for several categories of consumer products, including 
clothes washers and heat pumps;

* three EPA rules that adopted emission standards to reduce air 
pollution from various sources, including paper and pulp mills and 
heavy-duty highway engines and vehicles; and: 

* a Department of Transportation (DOT) rule that established a new 
federal motor vehicle safety standard that required tire pressure 
monitoring systems, controls, and displays.

In each of these final rules, the agencies addressed the applicable 
UMRA analytical and reporting requirements. (See app. III for more 
detailed information on these rules.) The limited number of rules 
identified as federal mandates during 2001 and 2002 is consistent with 
the findings in our 1998 report on UMRA and in OMB's annual reports on 
agencies' compliance with title II.[Footnote 37]

Most Often Rules with Financial Effects on Nonfederal Parties Did Not 
Trigger UMRA's Requirements Because They Did Not Require Expenditures 
at or Above UMRA's Threshold: 

Of the 113 major and/or economically significant rules not identified 
as including federal mandates under UMRA, we determined that 48 
contained no new requirements that would impose costs or have a 
negative financial effect on state, local, and tribal governments or 
the private sector. Often, these were economically significant or major 
rules because they involved substantial transfer payments from the 
federal government to nonfederal parties. For example, the Department 
of Agriculture (USDA) published a final rule that expanded loans, loan 
deficiency payments, and working assistance loans for certain 
agricultural commodities, such as cotton and honey, and was expected to 
increase federal outlays by about $1.1 billion annually. The Department 
of Health and Human Services (HHS) published a notice updating the 
Medicare payment system for home health agencies that was estimated to 
increase federal expenditures to those agencies by $350 million in 
fiscal year 2002.

However, we determined that 65 of the 113 rules contained new 
requirements that would impose costs or result in other negative 
financial effects on state, local, and tribal governments or the 
private sector. We shared this list of rules with national 
organizations representing other levels of government affected by these 
rules.[Footnote 38] Representatives of those organizations generally 
confirmed that all of the 65 rules were perceived by their members to 
have at least some "unfunded mandates" implications.

In 41 of the 65 published rules, the agencies cited a variety of 
reasons for determining that these rules did not trigger UMRA's 
requirements (see fig. 4). There were 26 rules in which the agencies 
stated that the rule would not compel expenditures at or above the UMRA 
threshold and 10 rules in which the agencies stated that rules imposed 
no enforceable duty. For 24 of the 65 rules, the agency did not provide 
a reason. However, independent regulatory agencies, which are not 
covered by UMRA, published 12 of these 24 rules, and there is no UMRA 
requirement for covered agencies to identify the reasons that their 
rules do not contain federal mandates.

Figure 4: Agencies' Reasons for Determining that Their Rules Did Not 
Trigger UMRA's Requirements: 

[See PDF for image]

Note: Agencies cited more than one reason for nine of the rules.

[End of figure]

Our review of the 65 rules indicated that agencies did not cite all of 
the applicable reasons they could have for determining that the rules 
did not trigger UMRA's requirements (see fig. 5). For example, although 
in only 3 of the 65 rules did the agencies identify the absence of a 
notice of proposed rulemaking as the reason the rule did not trigger 
UMRA, this reason applied to another 25. Similarly, although 5 rules 
cited the exclusion that any enforceable duties would occur as a 
consequence of participation in a voluntary federal program, another 21 
rules could have claimed this exclusion. Between what agencies cited or 
could have cited, 47 of the 65 rules (72 percent) had more than one 
applicable reason. (For each of the 65 rules, app. IV identifies the 
reasons that agencies cited or could have cited for their rules not 
triggering UMRA.): 

Figure 5: Reasons that Agencies Could Have Claimed for Their Rules Not 
Triggering UMRA: 

[See PDF for image]

Note: More than one unclaimed reason applied to 29 rules.

[End of figure]

Some Rules that Did Not Trigger UMRA Had Potentially Significant 
Effects on Nonfederal Parties: 

At least 29 of the 65 rules with new requirements appeared to result in 
significant costs or other negative financial effects on state, local, 
and tribal governments or the private sector. In these 29 rules, the 
agencies either explicitly stated that they expected the rule could 
impose significant costs or published information indicating that the 
rule could result, directly or indirectly, in financial effects on 
nonfederal parties at or above the UMRA threshold. (Appendix V provides 
more detailed information on each of the 29 rules that were not 
identified as federal mandates under UMRA, but that could impose 
significant costs or have other negative financial effects on state, 
local, and tribal governments or the private sector.): 

These 29 rules not identified as federal mandates under UMRA, but with 
significant financial impacts on nonfederal parties, can be roughly 
categorized as follows: 

* 9 that imposed costs on individuals--a category included in UMRA's 
definition of the private sector--exceeding $100 million in any 
year;[Footnote 39]

* 5 that reduced the level of federal payments to nonfederal parties by 
more than $100 million in any year;

* 4 with substantial indirect costs or economic effects on nonfederal 
parties;

* 4 from independent regulatory agencies that imposed substantial fees 
or other costs on regulated entities;

* 3 published by DOT on aviation security in the aftermath of the 
September 11, 2001, terrorist attacks, which the agency noted "may 
impose significant costs," although it did not prepare quantified 
estimates;

* 2 with voluntary options that might increase Medicaid costs to states 
by over $125 million in some years;

* 1 amending the Federal Acquisition Regulations that could result in 
nonfederal costs ranging from $92 million to $377 million annually, 
depending on the "uncertainty of manufacturers to distribute these 
costs over the general population;" and: 

* 1 USDA rule imposing private-sector costs to limit retained water in 
raw meat and poultry products.

Table 4 provides more detailed information about selected examples from 
among the 29 rules.

Table 4: Selected Examples of Final Rules with Significant Impacts on 
Nonfederal Parties that Did Not Trigger UMRA: 

GAO ID: R1; 
Rule: EPA final rule on identification of dangerous levels of lead in 
most pre-1978 housing and child-occupied facilities; 
Description of potential impacts on nonfederal parties: The rule set 
standards for the identification of lead-based paint hazards, 
residential lead dust cleanup levels, and amendments to dust and soil 
sampling requirements. EPA estimated that the total costs of actions 
that might be taken based on these hazard standards (over a 50-year 
span) would be $69 billion for the final dust and soil standards, $20 
billion for paint interventions, and $14 billion for testing; 
Reason(s) the rule did not trigger UMRA: EPA determined that the rule 
"in and of itself" did not mandate any action (no enforceable duty) or 
directly impose any costs (require expenditures of $100 million or more 
in any year).

GAO ID: R11; 
Rule: HHS final rule on revision to Medicaid upper payment limit 
requirements; 
Description of potential impacts on nonfederal parties: The rule 
revised Medicaid's upper payment limits for hospital services, nursing 
facility services, intermediate care facility services for the mentally 
retarded, and clinic services. The revisions would potentially reduce 
the federal share of payments made by states to these facilities by 
nearly $55 billion over 10 years; 
Reason(s) the rule did not trigger UMRA: The rule did not require 
states to spend $100 million or more in any year.

GAO ID: R20; 
Rule: Department of Commerce emergency interim rule to implement 
Steller sea lion protection measures in fisheries of the exclusive 
economic zone off Alaska; 
Description of potential impacts on nonfederal parties: The rule 
restricted times and places for fishing. The agency estimated that, as 
a result of these restrictions, there could be a reduction in fishing 
industry gross revenues of $225 million to $401 million per year; 
Reason(s) the rule did not trigger UMRA: The rule did not require the 
private sector to spend $100 million or more in any year, and there was 
no notice of proposed rulemaking.

GAO ID: R107; 
Rule: SEC final rule accelerating filing deadlines for annual and 
quarterly reports and adding requirements for additional reporting and 
disclosure; 
Description of potential impacts on nonfederal parties: SEC stated that 
these amendments would increase costs to some affected reporting 
companies. In the proposed rule, SEC estimated that the initial costs 
could range from $29.9 million to $11.9 billion, and the on-going 
annual costs could range from $75.5 million to $686.8 million; 
Reason(s) the rule did not trigger UMRA: The rule was issued by an 
independent regulatory agency.

GAO ID: R115; 
Rule: HHS notice on Medicare program monthly actuarial rates and 
monthly supplementary medical insurance premium rate; 
Description of potential impacts on nonfederal parties: Increased the 
cost of premiums for individuals enrolled in Medicare's Supplemental 
Medical Insurance (SMI), with an estimated cost to enrollees of over $2 
billion for 2003; 
Reason(s) the rule did not trigger UMRA: The agency said that this 
notice had "no consequential effect" on state, local, or tribal 
governments and that the private sector costs fell below UMRA's 
threshold as well; Also, there was no notice of proposed rulemaking, 
and SMI is a voluntary federal program. 

Source: GAO.

[End of table]

We determined that 1 of the 29 rules, a USDA rule on retained water in 
raw meat and poultry products, probably was a federal mandate under 
UMRA. The rule establishes a requirement of zero retained water, unless 
the water retention is unavoidable in processes necessary to meet food 
safety requirements. USDA did not mention UMRA in the rule but 
estimated that, if extensive modifications to chilling systems were 
needed throughout the poultry industry, the fixed costs could run to 
"well over $100 million." USDA provided only a "lower bound" estimate 
of $110 million in private-sector costs for the first year of 
implementation (representing the costs of reducing retained water in 
the range of 1 percent to 1.5 percent). While that estimate was under 
the $113 million UMRA threshold (adjusted for inflation) in 2001, the 
agency did not quantify median or upper bound cost estimates, which 
reference to a lower bound estimate implies. Because the lower bound 
estimate was so close to the UMRA threshold, it is reasonable to assume 
that a median or upper bound estimate would probably have equaled or 
exceeded the threshold, and the rule would have been a private sector 
mandate under UMRA. No other UMRA exclusion appeared to apply to this 
rule. However, to address the requirements of Executive Order 12866 the 
agency provided an analysis of the costs and benefits of the rule, as 
well as an analysis of the regulatory alternatives considered. As noted 
earlier, OIRA guidance points out that the same analysis may permit 
agencies to comply with both the executive order's and UMRA's 
requirements.

For the remaining 36 of the 65 rules, either the agencies provided no 
information on the potential costs and economic impacts on nonfederal 
parties or the costs imposed on them were under the UMRA threshold. For 
example, a Federal Emergency Management Agency interim final rule on a 
grant program to assist firefighters included some cost-sharing and 
other requirements on the part of grantees participating in this 
voluntary program. In return for cost-sharing of $50 million to $55 
million per year, grantees could obtain, in aggregate, federal 
assistance of approximately $345 million. Similarly, USDA's interim 
rule on the noninsured crop disaster assistance program imposed new 
reporting requirements and service fees on producers estimated to cost 
at least $15 million. But producers were expected to receive about $162 
million in benefits.

Even when the requirements of UMRA did not apply, agencies generally 
provided some quantitative information on the potential costs and 
benefits of the rule to meet the requirements of Executive Order 12866. 
Rules published by independent regulatory agencies were the major 
exception because they are not covered by the executive order. In 
general, though, the type of information that UMRA was intended to 
produce was developed and published by the agencies even if they did 
not identify their rules as federal mandates under UMRA.[Footnote 40]

Conclusions: 

UMRA was intended to restrain the imposition of unfunded federal 
mandates on state, local, and tribal governments and the private 
sector, primarily by providing more information and focusing more 
attention on potential federal mandates in legislation and regulations. 
There is some evidence that the information provided under UMRA and the 
spotlight that information places on potential mandates may have helped 
to discourage or limit federal mandates. CBO's annual reports indicate 
that, at least with regard to the legislative process, UMRA sometimes 
does have such an indirect preventive effect.

However, there are multiple ways that both statutes and final rules 
containing what affected parties perceive as "unfunded mandates" can be 
enacted or published without being identified as federal mandates with 
costs or expenditures at or above the thresholds established in UMRA. 
Our review demonstrated that many statutes and final rules with 
potentially significant financial effects on nonfederal parties were 
enacted or published without being identified as federal mandates at or 
above UMRA's thresholds. Further, if judged solely by their financial 
consequences for nonfederal parties, there was little difference 
between some of these statutes and rules and the ones that had been 
identified as federal mandates with costs or expenditures exceeding 
UMRA's thresholds. Although the examples cited in our review were 
limited to a 2-year period, our findings on the limited effect and 
applicability of UMRA are similar to the data reported in previous GAO, 
CBO, and OMB reports on the implementation of UMRA. The findings raise 
the question of whether UMRA's procedures, definitions, and exclusions 
adequately capture and subject to scrutiny federal statutory and 
regulatory actions that might impose significant financial burdens on 
affected nonfederal parties.

This report provides descriptive information and analysis regarding 
UMRA's implementation, focusing specifically on the coverage and 
identification of federal mandates under UMRA. We are making no 
specific recommendations for executive action nor identifying any 
specific matters for consideration by Congress at this time. As 
requested, we will be continuing our work on other aspects of UMRA.

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we will not distribute it until 30 days from 
the date of this letter. We will then send copies of this report to the 
Director of OMB and will provide copies to others on request. It will 
also be available at no charge on GAO's Web site at [Hyperlink, 
http://www.gao.gov].

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-6806 or [Hyperlink, daltonp@gao.gov]. Key 
contributors to this report were Curtis Copeland, Naved Qureshi, 
Michael Rose, and Tim Bober.

Signed by: 

Patricia A. Dalton, 
Director, Strategic Issues: 

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

In this report, you asked us to describe and provide examples of how 
federal statutes and rules with potentially significant financial 
implications for state, local, and tribal governments or the private 
sector may be enacted or issued without being identified as federal 
mandates under titles I and II of UMRA, which respectively address the 
legislative and regulatory processes. Our specific reporting objectives 
were to: 

1.Describe the applicable procedures, definitions, and exclusions for 
identifying federal mandates in statutes and rules under UMRA.

2.Identify statutes and final rules that contained federal mandates 
under UMRA.

3.Provide examples of statutes and final rules that were not 
identified as federal mandates, but that affected parties might 
perceive as "unfunded" mandates, and the reasons these statutes and 
rules were not federal mandates under UMRA.

As agreed with your staff, we focused on statutes enacted and final 
rules published during 2001 and 2002 to address the second and third 
objectives.

To address the first objective, regarding the procedures, definitions, 
and exclusions applicable to the identification of federal mandates 
under titles I and II of UMRA, we reviewed the act and other related 
guidance documents and reports on the implementation of UMRA. These 
other related documents included the various annual reports on UMRA 
prepared by CBO and OMB, materials used in a congressional 
parliamentary process training seminar on unfunded mandates and points 
of order, and OMB's March 1995 guidance to federal agencies on the 
implementation of title II. We also interviewed persons knowledgeable 
about the implementation of UMRA in congressional offices, CBO, and 
OMB.

To address the second and third objectives regarding statutes that were 
and were not identified as federal mandates under title I of UMRA, we 
consulted with the CBO officials responsible for preparing UMRA 
statements on individual bills. The CBO officials identified the 5 
statutes enacted during 2001 and 2002 that contained federal mandates 
at or above UMRA's cost thresholds. At our request, they also 
identified 43 examples of statutes enacted during that 2-year period 
that they believed, based on professional judgment, had potential 
intergovernmental or private sector impacts but had not been identified 
as containing mandates at or above UMRA's thresholds. (We did not ask 
CBO to compile a comprehensive list of all statutes passed by the 107th 
Congress that may have had intergovernmental or private sector 
impacts.) To assure that this set of examples was relevant for our 
purposes and to confirm CBO's characterization of the potential impacts 
of these statutes and the reasons why provisions were or were not 
identified as federal mandates, we reviewed available source material 
on each of these statutes. In particular, we examined the detailed 
descriptions and information on each statute that were contained in CBO 
mandate statements, cost estimates, annual reports, and testimony, as 
well as other relevant information on each statute from the Legislative 
Information System of Congress.

To address the second and third objectives regarding final rules that 
were and were not identified as federal mandates under title II of 
UMRA, we conducted a content analysis of all 122 major and/or 
economically significant final rules that agencies published in 2001 or 
2002 to identify the rules that could have significant financial 
effects on nonfederal parties and determine why they were or were not 
considered federal mandates.[Footnote 41] We chose not to review other 
rules because, by definition, they were less likely to have significant 
effects on nonfederal parties, although arguably some could have had a 
significant effect. To arrive at our final set of 122 rules, we relied 
primarily on the list of 119 major rules published during the 2-year 
period, as identified in GAO's compilation of reports on federal agency 
major rules.[Footnote 42] Our Office of General Counsel takes several 
steps to assure the completeness of the list of major rules; however, 
to generally corroborate that this list of major rules included those 
that could have significant effects on nonfederal parties, we also 
compared GAO's major rules list to the rules identified as 
"economically significant" by the Regulatory Information Service Center 
(RISC).[Footnote 43] As a result of this exercise, we supplemented our 
initial list with 3 additional rules.[Footnote 44] We then reviewed the 
Federal Register notices that agencies published for all 122 of these 
rules to confirm that they were major and/or economically significant 
and to identify whether, and to what extent, they imposed requirements 
on nonfederal parties. On the basis of our comparisons and reviews, we 
concluded that these data were sufficiently reliable for our purposes.

Because we were asked to identify rules that affected parties might 
perceive as intergovernmental or private sector mandates, even if not 
technically identified as such under UMRA, our initial screening used a 
broader definition of a potential mandate than delineated in UMRA. For 
this screening, we used the information in the published rules to make 
a team consensus judgment on whether a nonfederal party (state, local, 
and tribal governments or the private sector) might consider provisions 
of the rule to impose requirements or mandates that had at least some 
costs or negative financial effects. In particular, we focused on 
identifying rules that imposed new requirements and costs (direct or 
indirect) on affected parties. For each rule identified as including a 
potential "mandate," team members then independently reviewed the text 
of each rule to code the reasons agencies may have cited that their 
rules were not federal mandates under UMRA, as well as other reasons 
available under UMRA that might have applied to these rules. The team 
members generally concurred in their initial coding, and, based on team 
discussions, we were able to resolve any differences and determine a 
team consensus judgment on the appropriate coding for each rule.

To provide corroboration that the examples of statutes CBO identified 
and final rules we identified to address objective three were perceived 
by affected parties as having "unfunded mandate" implications, we 
shared our draft lists of examples with national organizations 
representing other levels of government.[Footnote 45] These 
organizations included the National Association of Counties, National 
Conference of State Legislatures, National Governors Association, the 
National League of Cities, and the U.S. Conference of Mayors. Their 
representatives generally concurred that the statutes and rules we 
focused on were perceived by their members to have "mandate" 
implications and that we had not left out any major examples from our 
time period that they believed were important.

One limitation of our review was that, in agreement with your staff, we 
focused on statutes enacted and final rules published during 2001 and 
2002. Those statutes and rules may not reveal all of the ways in which 
provisions with significant cost effects might not be identified as 
federal mandates. Neither CBO nor we reviewed the many bills that were 
not enacted and rules that were proposed, but not finalized, during 
2001 and 2002. However, our findings and the specific examples we 
identified were sufficient to illustrate how statutes and rules with 
potentially significant effects on nonfederal parties might not be 
identified as federal mandates under UMRA. In addition, our findings 
for this review were consistent with those in prior GAO, CBO, and OMB 
reports on the implementation of UMRA. In general, we also recognize 
that perceived "unfunded mandates" could also result from other 
nonstatutory, nonregulatory federal actions, such as Homeland Security 
threat level adjustments. However, UMRA does not cover such 
nonstatutory or nonregulatory actions, so they were out of the scope of 
this review.

We conducted our review from August 2003 through February 2004 in 
Washington, D.C., in accordance with generally accepted government 
auditing standards. On April 22, 2004, we provided a draft of this 
report to the Director of the Office of Management and Budget (OMB) for 
his review and comment. On April 29, 2004, an OMB representative 
notified us that OMB had no comments on our report. We also provided 
the draft to CBO officials for their technical review. We incorporated 
their comments and suggestions as appropriate.

[End of section]

Appendix II: Examples of Statutes with Impacts on Nonfederal Parties 
that Were Not Mandates at or Above UMRA Thresholds: 

CBO provided us the following examples of laws enacted in 2001 and 2002 
that it believed had impacts on nonfederal parties, but were not 
identified as federal mandates at or above applicable cost thresholds 
(see table 5). A number of groups representing nonfederal parties 
generally agreed that these examples were statutes perceived to have 
"unfunded mandate" implications.

Table 5: Examples of Statutes with Impacts on Nonfederal Parties that 
Were Not Identified as Federal Mandates at or above Applicable Cost 
Thresholds: 

GAO ID: L1; 
Law: Economic Growth and Tax Relief Reconciliation Act of 2001 (Pub. L. 
No. 107-16); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Increases the unified tax credit and reduces the 
tax rates to phase out the estate and generation-skipping transfer tax; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Did not meet the definition of a mandate (no enforceable duty on state, 
local, or tribal governments or the private sector); JCT determined 
that the act did not contain any intergovernmental mandates or revenue 
raising provisions in excess of UMRA thresholds.

GAO ID: L2; 
Law: Supplemental Appropriations Act, 2001 (Pub. L. No. 107-20); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Places new reporting requirements on the District 
of Columbia; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provision prior to enactment; Not contained in an 
authorizing bill. Contained in an appropriations bill; CBO estimated 
costs were below threshold.

GAO ID: L3; 
Law: ILSA Extension Act of 2001 (Pub. L. No. 107-24); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires the President to impose certain sanctions on U.S. entities or 
foreign companies that have invested more than a specified amount of 
money in developing the petroleum and natural gas resources of Libya or 
Iran; The act allows the President discretion to make exceptions in 
applying such sanctions; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L4; 
Law: Authorization for Use of Military Force (Pub. L. No. 107-40); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
The act is intended to constitute specific statutory authorization to 
use U.S. armed forces within the meaning of the War Powers Resolution; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Excluded for national security; CBO did not review provision prior to 
enactment because an authorizing committee did not report it.

GAO ID: L5; 
Law: Air Transportation Safety and System Stabilization Act (Pub. L. No. 107-42); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private sector) 
Sets forth certain insurance requirements, including limiting air 
carrier liability for losses to no more than $100 million in the 
aggregate for all claims arising as a result of an act of terrorism; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provision prior to enactment because an authorizing 
committee did not report it; Did not meet definition of a mandate.

GAO ID: L6; 
Law: Defense Production Act Amendments of 2001 (Pub. L. No. 107-47); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Provides the President the authority to require preferential 
performance on contracts and orders to meet approved national defense 
requirements, and to allocate materials, services, and facilities as 
necessary to promote the national defense in a major national 
emergency; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Excluded for national security.

GAO ID: L7; 
Law: USA PATRIOT Act of 2001 (Pub. L. No. 107-56); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Prohibits state, local, tribal, or territorial 
governments from disclosing that they have reported a suspicious 
financial transaction to a federal agency; (Intergovernmental) 
Preempts state liability laws and regulations relating to consumer 
reporting agencies that disclose consumer reports for counterterrorism 
purposes; (Intergovernmental) Requires education agencies and 
institutions to disclose records to the Attorney General in a terrorism 
investigation or prosecution; preempts state liability laws relating to 
those agencies; (Intergovernmental) Restricts states' authority to 
issue licenses for operating motor vehicles to transport hazardous 
materials; (Private Sector) 
Prohibits certain parties from shipping or receiving biological toxins 
in interstate or foreign commerce; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review some provisions prior to enactment because some 
mandates were added to the bill after it was reviewed by CBO. After 
enactment, CBO estimated that provisions that were mandates had costs 
below thresholds; For provisions reviewed prior to enactment, CBO 
estimated costs for some to be below threshold, and some other 
provisions were excluded for national security.

GAO ID: L8; 
Law: Energy and Water Development Appropriations Act, 2002 (Pub. L. No. 
107-66); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) 
Prohibits states from issuing a permit or lease for certain oil and gas 
drilling in the Great Lakes; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provisions prior to enactment; Not contained in an 
authorizing bill. Contained in an appropriations bill; CBO estimated 
costs were below threshold.

GAO ID: L9; 
Law: Internet Tax Nondiscrimination Act; (Pub. L. No. 107- 75); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Extends the prohibition on collecting certain types 
of state and local taxes; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L10; 
Law: Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, 2002 (Pub. L. No. 107-76); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires some tobacco producers to have their product graded by the 
government for a fee; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L11; 
Law: Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriations Act, 2002 (Pub. L. No. 107-77); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Expands an existing requirement that transportation 
officials report to the Immigration and Naturalization Service certain 
information about people traveling to the United States; authorizes the 
Attorney General to extend that requirement to cover any public or 
private carrier transporting people by land to the United States; 
(Private Sector) Increases the entry fee for certain passengers 
arriving by airplane and authorizes the Attorney General to charge and 
collect a $3 entry fee on commercial vessel passengers; authorizes the 
Attorney General to require arrival and departure manifests in advance 
for land travel (train or bus) 
as well as travel by air or water; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provisions prior to enactment; Not contained in an 
authorizing bill. Contained in an appropriations bill; CBO estimated 
costs were below threshold.

GAO ID: L12; 
Law: Department of Transportation and Related; Agencies Appropriations; 
Act, 2002 (Pub. L. No. 107-87); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Requires the Washington Metropolitan Area Transit 
Authority to change the name of the National Airport station and to 
change all signage and related documentation; (Intergovernmental) 
Perhaps contained grants that were perceived as "under funded."; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L13; 
Law: District of Columbia Appropriations Act, 2002 (Pub. L. No. 107-96); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Places new reporting and other requirements on the 
District of Columbia; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provisions prior to enactment; Not contained in an 
authorizing bill. Contained in an appropriations bill; CBO estimated 
costs were below threshold.

GAO ID: L14; 
Law: An act to amend chapter 90 of Title 5, United States Code, 
relating to Federal long-term care insurance (Pub. L. No. 107- 104); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Preempts state authority to tax certain federal 
long-term care policies; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L15; 
Law: National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 
No. 107-107); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Allows the Secretary of Defense, under some 
circumstances, to waive compliance with state or territorial fish and 
game laws at military installations or facilities; (Intergovernmental) 
Preempts certain California state laws that would prohibit or restrict 
the construction or approval of a road or highway on an easement within 
the Camp Pendleton Marine Corps base; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L16; 
Law: Intelligence Authorization Act for Fiscal Year 2002 (Pub. L. No. 
107-108); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Establishes the Commission on Preparedness and 
Performance of the Federal Government for the September 11 Acts of 
Terrorism and gives it authority to subpoena testimony and evidence; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L17; 
Law: Best Pharmaceuticals for Children Act (Pub. L. No. 107-109); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Extends the time period that drug manufacturers are prohibited from 
marketing generic versions of certain drugs by 6 months; repeals waiver 
of user fees for all applications for pediatric supplements; and 
requires drug manufacturers to revise labeling of drugs based upon 
findings of pediatric studies; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L18; 
Law: No Child Left Behind Act of 2001(Pub. L. No. 107- 110); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Calls for designing and implementing statewide 
standards and assessments and various other requirements; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Did not meet UMRA's definition of a mandate because the requirements 
were a condition of federal financial assistance.

GAO ID: L19; 
Law: District of Columbia Family Court Act of 2001 (Pub. L. 107-114); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Places new reporting and administrative 
requirements on the mayor and court system of the District of Columbia; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L20; 
Law: Enhanced Border Security and Visa Entry Reform Act of 2002 (Pub. 
L. No. 107-173); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires manifests for arriving and departing commercial vessels or 
aircraft; (Private Sector) 
Increases fees for certain visas; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L21; 
Law: Clergy Housing Allowance Clarification Act of 2002 (Pub. L. No. 
107-181); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Restricted the amount of rental-allowance income that members of the 
clergy may exclude for tax purposes to no more than the fair rental 
value of the home (including furnishings) 
plus utilities; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Not reported by an authorizing committee; CBO did not review provision 
prior to enactment; CBO estimated costs were below threshold.

GAO ID: L22; 
Law: Public Health Security and Bioterrorism Preparedness and Response 
Act of 2002 (Pub. L. No. 107-188); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Preempts state laws that conflict with quarantine 
requirements for communicable diseases; (Intergovernmental) 
Requires assessments of water supplies in communities of more than 
3,300 people; (Intergovernmental) Extends prescription drug application 
fees; (Intergovernmental and Private Sector) Requires registration with 
the federal government of the possession, use, and transfer of listed 
agents and toxins; (Private Sector) Requires that certain facilities 
engaged in manufacturing, possessing, packing, or holding food for 
consumption in the United States register with the Department of 
Agriculture; (Private Sector) Requires that if food has been refused 
admission into the United States, owners or consignees of the food must 
affix a label stating such on the container; (Private Sector) Requires 
importers of certain drugs and their devices to register annually with 
the federal government; (Private Sector) 
Allows prescription drug application fees to be raised under certain 
conditions; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review provisions prior to enactment; Not reported by an 
authorizing committee; CBO estimated the costs of preemption of state 
laws was below the threshold, the costs of the water assessments were 
funded, and other costs were uncertain.

GAO ID: L23; 
Law: Terrorist Bombings Convention Implementation Act of 2002 (Pub. L. 
No. 107-197); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
The act would establish a sentence of life in prison or death for those 
who are convicted of participating in bombings in public places, 
government facilities, public transportation systems, or infrastructure 
facilities. In addition, the act would establish minimum prison 
sentences and criminal fines for those who provide or collect funds 
with the intent that such funds be used to carry out terrorism crimes; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Excluded for treaty implementation.

GAO ID: L24; 
Law: Approving the site at Yucca Mountain, Nevada, for the development 
of a repository for the disposal of high-level radioactive waste and 
spent nuclear fuel, pursuant to the Nuclear Waste Policy Act of 1982 
(Pub. L. No. 107-200); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Approves the placement of a nuclear waste site in 
Nevada (additional costs to Nevada and neighboring states could result 
from existing federal mandates); 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L25; 
Law: Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Allows the Public Company Accounting Oversight 
Board to conduct operations and maintain offices in any state without 
regard to any conflicting state law; (Private sector) 
Establishes the Public Company Accounting Oversight Board to regulate 
the accounting industry and a standard-setting body to write national 
standards for accounting practices; the two regulatory bodies will 
assess fees on public companies to cover their costs; (Private sector) 
Requires that auditors and audit committees of public companies comply 
with new standards; (Private sector) Prohibits insider trades of stock 
during pension fund blackout periods if the stock was acquired in 
connection with service as a director or executive officer; (Private 
sector) Requires pension plan administrators to notify plan 
participants, beneficiaries, and the insurer of employer securities of 
an impending blackout period; (Private sector) Requires that public 
corporations make enhanced financial disclosures to the Securities and 
Exchange Commission; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review intergovernmental provision prior to enactment 
because it was added to the bill after it was reviewed by CBO; CBO 
estimated the costs of notification of blackout periods by pension plan 
administrators were below applicable thresholds, and other costs were 
uncertain.

GAO ID: L26; 
Law: Trade Act of 2002 (Pub. L. No. 107-210); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires each land, air, or vessel carrier to provide by electronic 
transmission cargo manifest information in advance of entry into the 
United States or clearance by Customs; (Private Sector) 
Increases compliance cost of existing requirement to provide health 
insurance for certain separated workers; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L27; 
Law: An Act to rename Wolf Trap Farm Park as "Wolf Trap National Park 
for the Performing Arts", and for other purposes; (Pub. L. No. 107-
219); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Renames "Wolf Trap Farm Park" and requires Virginia 
to erect signs referring to the park by its new full name; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L28; 
Law: An act to amend the Public Health Service Act to redesignate a 
facility as the National Hansen's Disease Programs Center, and for 
other purposes; (Pub. L. No. 107-220); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Places requirements on manufacturers of medical 
devices; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L29; 
Law: John F. Kennedy Center Plaza Authorization Act of 2002 (Pub. L. 
No. 107-224); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Allows the mayor of the District of Columbia to 
dispose of property without City Council approval; allows the U.S. 
Secretary of Transportation to require the District to reconfigure 
streets in the Kennedy Center construction area; may require the 
District to transfer air or property rights to the construction 
project; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L30; 
Law: Foreign Relations Authorization Act, Fiscal Year 2003 (Pub. L. No. 
107-228); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires exporters or their agents not covered under current 
regulations to file their export declarations through the Automated 
Export System; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L31; 
Law: National Construction Safety Team Act (Pub. L. No. 107-231); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Requires private-sector entities, if subpoenaed, to provide testimony 
and evidence related to matters the National Construction Safety Team 
would be empowered to investigate; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L32; 
Law: Medical Device User Fee and Modernization Act of 2002 (Pub. L. No.
107-250); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private Sector) 
Gives the Secretary the authority to assess and collect user fees from 
manufacturers of medical devices to defray the cost to FDA of reviewing 
applications for approval to market those devices; (Private Sector) 
Requires manufacturers of medical devices to comply with certain 
labeling and notification conventions and to submit their registrations 
electronically; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO stated some costs were below applicable thresholds and others were 
uncertain.

GAO ID: L33; 
Law: Health Care Safety Net Amendments of 2002 (Pub. L. No. 107-251); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Preempts state statutes of limitations in cases in 
which the beneficiary of a medical loan fails to make payments. States 
have flexibility to offset costs; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L34; 
Law: Help America Vote Act of 2002 (Pub. L. No. 107-252); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Places a number of new requirements on state and 
local governments, specifically setting new standards for voting 
systems used in federal elections, requiring each state to develop a 
computerized database of all registered voters in the state, and 
requiring local election jurisdictions to develop procedures for 
provisional voting; The act also authorizes grant programs to reimburse 
state and local governments for costs incurred in complying with these 
requirements; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
Some provisions excluded because they enforced the constitutional 
rights of individuals. For some other provisions, CBO stated that any 
costs to state, local, or tribal governments would be incurred 
voluntarily from participating in grant programs.

GAO ID: L35; 
Law: 21st Century Department of Justice Appropriations Authorization 
Act (Pub. L. No. 107-273); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Eliminates federal interest payments to states 
related to costs for incarcerating illegal aliens; (Private Sector) 
Limits access to body armor by violent felons; (Private Sector) 
Waives copyright infringement rules for educators who teach long-
distance classes over the Internet and thus restricts copyright owners 
from receiving compensation for such use by educators; (Private Sector) 
Provides that contract disputes between motor vehicle manufacturers and
dealers can be resolved by arbitration only after both parties agree to 
arbitration as a means of settling the dispute; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L36; 
Law: Homeland Security Act of 2002; (Pub. L. No. 107-296); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Preempts state or local laws to the extent that 
they require disclosure or information records; (Intergovernmental) 
Preempts state liability laws in cases involving alleged negligence 
related to smallpox vaccines; (Private sector) 
Requires that air carriers provide additional training to flight and 
cabin crews; (Private sector) 
Requires airline carriers to provide flight attendants with a method of 
communicating with pilots; (Private sector) 
Requires manufacturers and importers of explosive materials to furnish 
samples to the Bureau of Alcohol, Tobacco, and Firearms; imposes new 
licensing and reporting requirements for people handling explosive 
materials; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO did not review a private sector provision prior to enactment 
because it was added to the bill after it was reviewed by CBO; CBO 
stated some costs were below applicable thresholds and others were 
uncertain.

GAO ID: L37; 
Law: Terrorism Risk Insurance Act of 2002; (Pub. L. No. 107-297); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Private sector) 
Requires that insurers and policyholders of commercial property and 
casualty insurance pay assessments and surcharges for repayment of the 
federal financial assistance provided in connection with acts of 
terrorism; (Private sector) 
Requires insurers of commercial property to offer terrorism insurance; 
(Intergovernmental) Nullifies any terrorism exclusion in a contract for 
property and casualty insurance; that nullification preempts any 
previous state approval of insurance with terrorism exclusions; 
(Intergovernmental) Preempts any state definition of an "act of 
terrorism" that is inconsistent with the federal definition; requires 
insurers to disclose books and records to the Secretary of the 
Treasury, notwithstanding state laws to the contrary; 
(Intergovernmental) Creates an exclusive federal cause of action for 
losses resulting from an act of terrorism; preempts all state causes of 
action; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated some costs were below thresholds, while others were 
uncertain. The mandate requiring insurers to offer terrorism insurance 
was added after CBO review, and thus its costs were not estimated. 
After enactment, CBO stated that the costs of this mandate were 
uncertain.

GAO ID: L38; 
Law: Real Interstate Driver Equity Act of 2002 (Pub. L. No. 107-298); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Exempts ground transportation carriers that provide 
prearranged service from state licensing and fee requirements as long 
as the carriers are properly licensed in their home states and meet 
federal interstate transportation requirements; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L39; 
Law: Intelligence Authorization Act for Fiscal Year 2003 (Pub. L. No. 
107-306); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Intergovernmental 
and Private Sector) Requires public and private sector entities, if 
subpoenaed, to provide testimony and evidence to the National 
Commission on Terrorist Attacks upon the United States; 
(Intergovernmental) Preempts state and local laws that would require a 
government body to disclose information; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L40; 
Law: An act to amend the Consumer Product Safety Act to provide that 
low-speed electric bicycles are consumer products subject to such act 
(Pub. L. No. 107-319); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Preempts state laws and regulations governing 
low-speed electric bicycles that are more stringent than regulations 
established by the Consumer Product Safety Commission; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L41; 
Law: Veterans Benefits Act of 2002 (Pub. L. No. 107-330); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: (Intergovernmental 
and Private Sector) Establishes a temporary exemption of some National 
Guard members who are performing homeland security activities from 
certain financial obligations; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO stated some costs were below applicable thresholds and others were 
uncertain.

GAO ID: L42; 
Law: Indian Financing Amendments Act 'of 2002 (Pub. L. No. 107-331); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Extinguishes outstanding legal claims of the 
Cherokee, Choctaw, and Chickasaw nations; (Private Sector) 
Prohibits anyone from condemning certain land owned in fee by the 
Pechanga band until the Secretary of the Interior renders a final 
decision on the band's pending application to transfer that land into a 
trust and until final decisions have been made about all appeals 
relating to that application; (Private Sector) 
Limits the fees payable to attorneys under contract with the Cherokee, 
Choctaw, and Chickasaw nations to 10 percent of the funds allocated by 
the government to each of those nations; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

GAO ID: L43; 
Law: Pipeline Safety Improvement Act of 2002 (Pub. L. No. 107-355); 
CBOs description of potential impacts, or requirements on state, 
local, and tribal governments or the private sector: 
(Intergovernmental) Requires operators of natural gas pipelines to 
adhere to minimum safety standards, provide whistleblower protection 
for employees, create an employee qualification program, honor orders
by the Department of Transportation to correct unsafe conditions, 
conduct facility risk analysis, develop an integrity management 
program, create a terrorism security plan, and provide mapping data; 
(Private Sector) Requires operators of natural gas and hazardous-liquid 
pipelines to adhere to minimum safety standards, provide whistleblower protection for employees, create an employee qualification program, honor orders by the Department of Transportation to correct unsafe conditions, conduct facility risk analysis, develop an integrity management program, create a terrorism security plan, and provide mapping data; 
Reason(s) CBO did not identify one or more provisions as 
unfunded federal mandates at or above the costs thresholds under UMRA: 
CBO estimated costs were below threshold.

Source: CBO.

[End of table] 

[End of section]

Appendix III: Final Rules with Federal Mandates under UMRA: 

The following table presents information on each of the nine final 
rules published by federal regulatory agencies during 2001 and 2002 
that the agencies identified as federal mandates under UMRA (see table 
6). For each rule, we provide (1) GAO's identification number for the 
rule, (2) the title of the rule and its date of publication in the 
Federal Register, (3) the agency that published the rule, (4) summary 
information about the potential costs or other negative financial 
effects of the rule on affected nonfederal parties, and (5) the 
agency's statement, as it appeared in the Federal Register notice, 
regarding the applicability of UMRA.

Table 6: Final Rules Published in 2001 and 2002 that Agencies 
Identified as Containing Federal Mandates Under UMRA: 

GAO ID: R8; 
Rule: National Emission Standards for Hazardous Air Pollutants for 
Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-
Alone Semichemical Pulp Mills; (Jan. 12, 2001); 
Agency: Environmental Protection Agency (EPA); 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Required chemical recovery combustion 
sources to meet standards reflecting the application of maximum 
achievable control technology (MACT) to control hazardous air 
pollutants emissions from these sources; 
EPA estimated that the pulp and paper industry would incur total 
capital costs of control for this rule of $240 million (1997$) under 
the final rule. EPA projected annualized compliance expenditures of 
$30 million (1997$); 
Agencys statement in the Federal Register about the 
applicability of UMRA: "The EPA has determined that this rule (in 
conjunction with the MACT I and MACT III rules and the effluent 
guidelines recently promulgated for the pulp and paper industry) 
contains a Federal mandate that may result in estimated costs of $100 
million or more to either State, local, or tribal governments, in the 
aggregate, or to the private sector in any 1 year."

GAO ID: R9; 
Rule: Energy Conservation Program for Consumer Products: Clothes Washer 
Energy Conservation Standards; 
(Jan. 12, 2001); 
Agency: Department of Energy; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Amended existing energy conservation 
standards for standard-size and compact clothes washers as well as 
making minor amendments to the test procedure for measuring the energy 
efficiency of clothes washers; 
To meet the 2004 standard in this rule, the department estimated that 
the price of a washer would increase $53, offset by an annual savings 
of about $15 on utility bills and, to meet the 2007 standard, the price 
would increase $249, offset by an annual savings of about $48. The 
estimated economic impact on manufacturers was a cumulative net present 
value loss of between $421.1 million and $528.4 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "Today's final rule may impose expenditures of 
$100 million or more on the private sector. It does not contain a 
Federal intergovernmental mandate."

GAO ID: R12; 
Rule: Energy Conservation Program for Consumer Products: Energy 
Conservation Standards for Water Heaters; 
(Jan. 17, 2001); 
Agency: Department of Energy; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Amended the existing energy conservation 
standards for water heaters; The department estimated that the total 
average increased cost to a consumer for an electric and gas water 
heater would be $105 and $118, respectively. The department's 
manufacturer impact analysis noted that energy efficiency standards 
could result in losses of industry net present value from about $8 
million to $57 million, while requiring investments of $33 million to 
$229 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "Today's Final Rule may impose expenditures of 
$100 million or more in a year in the private sector. It does not 
contain a Federal intergovernmental mandate."

GAO ID: R14; 
Rule: Control of Air Pollution from New Motor Vehicles: Heavy-Duty 
Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control 
Requirements; (Jan. 18, 2001); 
Agency: Environmental Protection Agency; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Established a national control program to 
regulate the heavy-duty vehicle and its fuel as a single system. Set 
new emission standards applicable to heavy-duty highway engines and 
vehicles, to begin to take effect in model year 2007. Set new standard 
to reduce the level of sulfur in highway diesel fuel by mid-2006; EPA 
estimated annual costs starting out at less than $1.0 billion in 2006 
and increasing during the initial years to about $3.6 billion in 2010. 
Thereafter, total annual costs are projected to continue increasing due 
to the effects of projected growth in engine sales and fuel 
consumption; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "This rule contains no federal mandates for 
state, local, or tribal governments as defined by the provisions of 
Title II of the UMRA. The rule imposes no enforceable duties on any of 
these governmental entities. Nothing in this rule will significantly or 
uniquely affect small governments; EPA has determined that this rule 
contains federal mandates that may result in expenditures of more than 
$100 million to the private sector in any single year. EPA considered 
and evaluated a wide range of regulatory alternatives before arriving 
at the program finalized today. EPA believes that today's final rule 
represents the least costly, most cost effective approach to achieve 
the air quality goals of the rule."

GAO ID: R21; 
Rule: Energy Conservation Program for Consumer Products: Central Air 
Conditioners and Heat Pumps Energy Conservation Standards; (Jan. 22, 
2001); 
Agency: Department of Energy; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Amended the existing energy conservation 
standards for central air conditioners and heat pumps; 
To meet the 2006 standard in this rule for air conditioners, the 
department estimated that the installed price of a typical air 
conditioner would increase $335, offset by annual energy savings of 
about $42 on utility bills. To meet the 2006 standard for heat pumps, 
the installed price of a typical heat pump would increase $332, offset 
by annual energy savings of about $70. The decrease in the net present 
value of the air conditioning and heat pump manufacturing industry is 
expected to be $300 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "Today's final rule may impose expenditures of 
$100 million or more on the private sector. It does not contain a 
Federal intergovernmental mandate."

GAO ID: R22; 
Rule: National Primary Drinking Water Regulations; 
Arsenic and Clarifications to Compliance and New Source Contaminants 
Monitoring; 
(Jan. 22, 2001); 
Agency: Environmental Protection Agency; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Among other provisions, established an 
enforceable Maximum Contaminant Level for arsenic of 0.01 milligrams 
per liter, applicable to nontransient, noncommunity water systems and 
to community water systems. EPA's analysis identified both publicly 
owned and privately owned water systems that would be regulated under 
the arsenic rule; 
EPA estimated that this rule would have a total annualized cost of 
approximately $181 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "EPA has determined that this rule contains a 
Federal mandate that may result in expenditures of $100 million or more 
for State, Tribal, and local governments, in the aggregate, or the 
private sector in any one year."

GAO ID: R87; 
Rule: Energy Conservation Program for Consumer Products; 
Central Air Conditioners and Heat Pumps Energy Conservation Standards; 
(May 23, 2002); 
Agency: Department of Energy; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Amended existing energy conservation 
standards for central air conditioners and heat pumps and withdrew the 
final rule published on January 22, 2001, [ID 21] that would have 
established even higher standards; 
To meet the 2006 standard in this rule for air conditioners, the 
department estimated that the installed price of a typical air 
conditioner would increase $213, offset by annual energy savings of 
about $31 on utility bills. To meet the 2006 standard for heat pumps, 
the installed price of a typical heat pump would increase $144, offset 
by annual energy savings of about $50. The decrease in the net present 
value of the air conditioning and heat pump manufacturing industry is 
expected to be $159 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "Today's rule will impose expenditures of $100 
million or more on the private sector. It does not contain a Federal 
intergovernmental mandate."

GAO ID: R88; 
Rule: Federal Motor Vehicle Safety Standards; 
Tire Pressure Monitoring Systems; 
Controls and Displays; 
(June 5, 2002); 
(In August 2003, the U.S. Court of Appeals held that this rule was 
contrary to the intent of the tire safety legislation and arbitrary and 
capricious under the Administrative Procedure Act (see Public Citizen, 
Inc. v. Mineta, 340 F.3d 39 (2003)). However, because DOT identified 
the rule as a federal mandate when originally published in 2002, we are 
including it in our list of rules identified as mandates under UMRA.); 
Agency: Department of Transportation; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Established a new Federal Motor Vehicle 
Safety Standard that requires the installation of tire pressure 
monitoring systems that warn the driver when a tire is significantly 
under-inflated. The rule presented two compliance options, (1) a four 
tires, 25 percent under-inflation option and (2) a one tire, 30 percent 
under-inflation option; 
The agency estimated that, under the first option, compliance with this 
rule would cost about $771 million per year, and under the second 
option would cost about $533 million per year; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "This final rule will not result in the 
expenditure by State, local, or tribal governments, in the aggregate, 
of more than $100 million annually, but it will result in the 
expenditure of that magnitude by vehicle manufacturers and/or their 
suppliers."

GAO ID: R119; 
Rule: Control of Emissions From Nonroad Large Spark- Ignition Engines, 
and Recreational Engines (Marine and Land-Based); 
(Nov. 8, 2002); 
Agency: Environmental Protection Agency; 
Potential costs or negative financial effects of the 
rule on nonfederal parties: Adopted emission standards for several 
groups of nonroad engines that have not been subject to EPA's emission 
standards; 
EPA estimated that, annually, the cost to manufacturers would be 
approximately $210 million; 
Agencys statement in the Federal Register about the 
applicability of UMRA: "This rule contains no federal mandates for 
state, local, or tribal governments as defined by the provisions of 
Title II of the UMRA. The rule imposes no enforceable duties on any of 
these governmental entities. Nothing in this rule would significantly 
or uniquely affect small governments. EPA has determined that this rule 
contains federal mandates that may result in expenditures of more than 
$100 million to the private sector in any single year." 

Source: GAO.

[End of table]

[End of section]

Appendix IV: Reasons that Selected Final Rules Did Not Trigger UMRA: 

The following table provides information on 65 major or economically 
significant final rules published during that 2001 and 2002 that did 
not trigger UMRA but that would result in at least some costs or 
negative financial effects on state, local, and tribal governments or 
the private sector (see table 7). The table displays the various 
reasons that agencies cited or could have cited to explain why the 
rules did not trigger UMRA. Code "A" identifies reasons the agencies 
cited, and code "O" identifies other reasons that could have applied. 
Note that only 11 of the 14 possible reasons under UMRA were applicable 
to any of these rules.[Footnote 46]

Table 7: Reasons 65 Final Rules with Significant Effects on Nonfederal 
Parties Did Not Trigger UMRA: 

[See PDF for image]

[End of table]

[End of section]

Appendix V: Examples of Final Rules that Did Not Trigger UMRA But Had 
Potentially Significant Financial Effects on Nonfederal Parties: 

The following table presents information on 29 final rules published by 
federal regulatory agencies during 2001 and 2002 that did not trigger 
UMRA but that had potentially significant costs or financial effects on 
state, local, and tribal governments or the private sector (see table 
8). For each rule, we provide (1) GAO's unique identification number 
for the rule, (2) the title of the rule and its date of publication in 
the Federal Register, (3) the agency that published the rule, (4) 
summary information about the potential costs or negative financial 
effects of the rule on affected nonfederal parties, and (5) the 
agency's statement in the Federal Register notice, if any, regarding 
the applicability of UMRA.

Table 8: Examples of Final Rules Published in 2001 and 2002 with 
Provisions that Affected State, Local, and Tribal Governments or the 
Private Sector But Did Not Trigger UMRA: 

GAO ID: R1; 
Rule: Lead; Identification of Dangerous Levels of Lead; (Jan. 5, 2001); 
Agency: EPA; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Established standards for the identification of 
lead-based paint hazards in most pre-1978 housing and child-occupied 
facilities, residential lead dust cleanup levels and amendments to dust 
and soil sampling requirements, and amendments to state program 
authorization requirements; Although EPA stated that the rule "in and 
of itself" did not contain a mandate, the agency estimated the 
potential costs of actions that might be taken based on the hazard 
standards. Those total costs (estimated over a 50-year span and 
discounted at 3 percent) were $69 billion for the final dust and soil 
standards, $20 billion for paint interventions, and $14 billion for 
testing; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any 1 year. As indicated previously, this rule does not, in 
and of itself, mandate any action, or directly impose any costs. The 
UMRA requirements in sections 202, 204, and 205 do not apply to this 
rule, because this action does not contain any 'Federal mandates' or 
impose any 'enforceable duty' on State/Tribal, or local governments or 
on the private sector."

GAO ID: R2; 
Rule: Interim Final Rules for Nondiscrimination in Health Coverage in 
the Group Market; (Jan. 8, 2001); 
Agency: Departments of the Treasury, Labor, and Health and Human 
Services; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Prohibited discrimination based on a health factor 
for group health plans and issuers of health insurance coverage offered 
in connection with a group health plan; The departments estimated a one-
time cost to health plans and insurers to implement this regulation of 
less than $19 million. They also provided a rough estimate of more than 
$400 million annually for the transfer in premium and claims costs 
incurred by group health plans to provide coverage to individuals 
previously denied coverage or offered restricted coverage based on
health factors. The departments noted that plan sponsors generally can 
pass these costs back to participants in health plans through changes 
to employee premiums or benefits; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "For purposes of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4), as well as Executive Order 12875, this interim final 
rule does not include any Federal mandate that may result in 
expenditures by State, local, or tribal governments, nor does it 
include mandates which may impose an annual burden of $100 million or 
more on the private sector."

GAO ID: R4; 
Rule: Retained Water in Raw Meat and Poultry Products; Poultry Chilling 
Requirements; (Jan. 9, 2001); 
Agency: USDA; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Limited the amount of water retained by raw, 
single-ingredient meat and poultry products as a result of post-
evisceration processing, such as carcass washing and chilling; The 
agency estimated that the lower bound of costs to the private sector in 
the first year of implementation would be $110 million; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA).

GAO ID: R5; 
Rule: Medicaid Program; Change in Application of Federal Financial; 
Participation Limits; (Jan. 11, 2001); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Gave states additional flexibility in setting 
Medicaid eligibility requirements; According to the agency, the rule 
did not require that states make any changes in their programs. 
However, the agency projected a cost to state Medicaid of removing 
federal financial participation limits that was estimated at $680 
million over federal fiscal years 2001-2005; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This final rule will have no impact on the private sector. 
The rule imposes no requirements on State, local or tribal governments. 
Rather, it offers State governments additional flexibility in operating 
their Medicaid programs, but does not require that they make any 
changes in their programs."

GAO ID: R10; 
Rule: Special Areas; Roadless Area Conservation; (Jan. 12, 2001); 
Agency: USDA; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Established prohibitions on road construction, road 
reconstruction, and timber harvesting in inventoried roadless areas on 
the National Forest System's lands; Among the estimated costs of the 
rule, the agency identified lost jobs and lost income in certain 
industries (timber, road construction, mineral resources, and 
recreation) plus other effects (e.g., lost coal, phosphate, and gas 
resources). For example, the agency estimated that up to 546 direct and 
3,095 total jobs related to limitations on exploration for and 
development of leasable minerals could be affected, with a potential 
effect on mining-related annual income of $36.2 million less direct and 
$127.8 million less total income; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This proposed rule does not compel the expenditure of $100 
million or more by any State, local, or tribal government, or anyone in 
the private sector. Therefore, a statement under Section 202 of the Act 
is not required."

GAO ID: R11; 
Rule: Medicaid Program; Revision to Medicaid Upper Payment Limit 
Requirements for Hospital Services, Nursing Facility Services, 
Intermediate Care; Facility Services for the Mentally Retarded, and 
Clinic Services; (Jan. 12, 2001); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Modified the Medicaid upper payment limits for 
certain health care services; Budget projections indicated that 
potentially two-thirds of the federal share of enhanced payments to 
government facilities that are not state- owned or operated could be in 
excess of the upper payment limits imposed by this final rule. The 
limits imposed by this rule could therefore result in federal financial 
participation reductions of nearly $55 billion over the next 10 years; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "Absent FFP [federal financial participation], we do not 
believe States will continue to set excessive payment rates for 
Medicaid services furnished by government providers. Generally, 
discontinuing an expenditure should not result in new costs, unless the 
State has to fund the portion of the expenditure that is no longer 
Federally funded with all State and local dollars. We do not believe 
the aggregate upper payment limits in this final rule have any unfunded 
mandates implications because they do not require any additional 
expenditures by States to providers under their Medicaid program."

GAO ID: R17; 
Rule: Medicaid Program; Medicaid Managed Care; (Jan. 19, 2001); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended the Medicaid regulations to implement 
provisions of the Balanced Budget Act of 1997 that, among other 
changes, allowed states greater flexibility by permitting them to amend 
their state plan to require certain categories of Medicaid 
beneficiaries to enroll in managed care entities without obtaining 
waivers, if beneficiary choice is provided; The agency said that some 
of the new provisions "represent new requirements for States, MCOs, 
PHPs, and PCCMs but also provide expanded opportunities for 
participation in Medicaid managed care." Also, "a large number of 
entities, such as hospitals, State agencies, and MCOs will be affected 
by the implementation of these statutory provisions, and a substantial 
number of these entities may be required to make changes in their 
operations" The state costs of the 6-month guaranteed eligibility 
option were projected to exceed $100 million in 2 fiscal years; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule does not impose any mandates on State, local, or 
tribal governments, or the private sector that will result in an annual 
expenditure of $100 million or more."

GAO ID: R20; 
Rule: Fisheries of the Exclusive Economic Zone Off Alaska; Steller Sea 
Lion Protection Measures for the Groundfish Fisheries Off Alaska; Final 
2001 Harvest Specifications and Associated Management Measures for the 
Groundfish Fisheries Off Alaska; (Jan. 22, 2001); 
Agency: Department of Commerce; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Implemented Steller sea lion protection measures; 
Under one set of assumptions, the agency estimated that, as a result of 
the reduced harvest in restricted times and places due to this rule, 
processing and fishing industry revenues could drop by between $225 
million to $401 million per year; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA).

GAO ID: R31; 
Rule: Adjustment of Status To That Person Admitted for Permanent; 
Residence; Temporary Removal of Certain Restrictions of Eligibility; 
(Mar. 26, 2001); 
Agency: DOJ; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended regulations governing eligibility for 
adjustment of status under section 245(i) of the Immigration and 
Nationality Act to conform the regulations to existing policy and 
procedures and to remove language that had been superseded by 
subsequent legislation; DOJ estimated that the effect on the economy 
"directly associated with the expected increase in the number of 
applications for adjustment of statuswith the required $1,000 penalty 
fee and other associated applications" would be about $178.3 million in 
2001, $99.2 million in 2002, and $91.9 million in 2003; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule will not result in the expenditure by State, local 
and tribal governments, in the aggregate, or the private sector, of 
$100 million or more in 1 year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995."

GAO ID: R34; 
Rule: Federal Acquisition Regulations; Electronic and Information 
Technology; Accessibility; (April 25, 2001); 
Agency: DOD, GSA, NASA; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended the Federal Acquisition Regulations to 
incorporate standards for electronic and information technology (EIT) 
to ensure that EIT allows those with disabilities to have access and 
use of information comparable to that of other federal employees (with 
the standards applying to federal contracts awarded on or after the 
effective date of this final rule and to indefinite-quantity contract 
delivery orders or task orders issued on or after the effective date); 
Summary information on the potential costs of the rule indicated that 
nonfederal costs could range from $92 million to $377 million annually. 
The range of costs was attributed to the "uncertainty of manufacturers 
to distribute these costs over the general consumer population."; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA).

GAO ID: R39; 
Rule: Adjustment of Status Under Legal Immigration Family Equity (LIFE) 
Act Legalization Provisions and LIFE Act Amendments Family Unity; 
Provisions; (June 1, 2001); 
Agency: DOJ; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Established procedures for certain class action 
participants to become lawful permanent residents of the United States; 
Fees were required of applicants, with an expected impact on the 
economy, directly associated with the expected increase in the number 
of applications and an increase in fees, of approximately $152.4 
million in 2001; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule will not result in the expenditure by State, local 
and tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any 1 year, and it will not significantly or 
uniquely effect [sic] small governments. Therefore, no actions were 
deemed necessary under the provisions of the Unfunded Mandates Reform 
Act of 1995."

GAO ID: R44; 
Rule: Assessment and Collection of Regulatory Fees for Fiscal Year 2001; (July 11, 2001); 
Agency: FCC; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Revised FCC's regulatory fee schedule; For fiscal 
year 2001, the amount to be recovered through fees was $200,146,000; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA, but, as an independent regulatory agency, 
not subject to UMRA).

GAO ID: R60; 
Rule: Medicare Program; Monthly Actuarial Rates and Monthly 
Supplementary Medical Insurance Premium Rate Beginning January 1, 2002; 
(Oct. 26, 2001); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Announced the monthly actuarial rates for aged and 
disabled enrollees in the Medicare Supplementary Medical Insurance 
(SMI) program for 2002 and the monthly SMI premium rate to be paid by 
all enrollees in 2002; Increased premium costs to beneficiaries by 
about $1.83 billion for 2002; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA).

GAO ID: R61; 
Rule: Medicare Program; Inpatient Hospital Deductible and Hospital and 
Extended Care Services Coinsurance Amounts for 2002; (Oct. 26, 2001); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Announced the inpatient hospital deductible and the 
hospital and extended care services coinsurance amounts for calendar 
year 2002 under Medicare Part A; The agency estimated that the total 
increased cost to beneficiaries for the deductible and coinsurance 
amounts would be about $430 million; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This notice has no consequential effect on State, local, or 
tribal governments or on the private sector."

GAO ID: R67; 
Rule: Copayments for Medications; (Dec. 6, 2001); 
Agency: VA; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended VA's medical regulations to set forth 
copayment requirements for medications; Raised the copayment amount for
medications from $2 to $7, with an estimated total impact of an 
increase in VA collections from veterans of $250 million annually; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule would have no consequential effect on State, local, 
or tribal governments."

GAO ID: R70; 
Rule: Adjustment of Certain Fees of the Immigration Examinations Fee 
Account; (Dec. 21, 2001); 
Agency: DOJ; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Adjusted (increased) the fee schedule for certain 
immigration and naturalization applications and fees, as well as the 
fee for fingerprinting of applicants who apply for certain immigration 
and naturalization benefits; The agency anticipated collecting an 
additional $127 million in fees from individuals and businesses filing 
immigration applications and petitions in fiscal year 2002. The agency 
also stated that the rule would have an effect on the economy of $169 
million, in order to generate the revenue necessary to fund the 
increased expenses of processing the Service's immigration and 
naturalization applications and petitions; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule will not impose a mandate of enforceable duty on 
State, local, and tribal governments in the aggregate, or on the 
private sector, and it will not significantly or uniquely affect small 
governments. Accordingly, no further actions are necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995."

GAO ID: R73; 
Rule: Medicaid Program; Modification of the Medicaid Upper Payment; 
Limit for Non-State Government-Owned or Operated Hospitals; (Jan. 18, 
2002); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Modified the Medicaid upper payment limit (UPL) 
provisions to remove the 150-percent UPL for inpatient hospital 
services and outpatient hospital services furnished by nonstate 
government-owned or operated hospitals; The limits on aggregate federal 
payments to a group of hospitals were estimated to reduce potential 
federal costs by about $9 billion over fiscal years 2002 through 2006; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "Because this final rule does not mandate any new spending 
requirements or costs, but rather limits aggregate payments to a group 
of hospitals, we do not believe it has any unfunded mandate 
implications."

GAO ID: R76; 
Rule: Aviation Security Infrastructure Fees; (Feb. 20, 2002); 
Agency: DOT; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Imposed a fee (the Aviation Security Infrastructure 
Fee) on air carriers and foreign air carriers engaged in air 
transportation, foreign air transportation, and intrastate air 
transportation; The agency noted that this rulemaking "may impose 
significant costs on air carriers and foreign air carriers."; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "The requirements of Title II of the Unfunded Mandates Reform 
Act of 1995 do not apply when rulemaking actions are taken without the 
issuance of a notice of proposed rulemaking. Accordingly, the TSA 
[Transportation Security Administration] has not prepared a statement 
under the Act."

GAO ID: R77; 
Rule: Civil Aviation Security Rules; (Feb. 22, 2002); 
Agency: DOT; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Required additional qualifications, training, and 
testing of individuals who screen people and property carried in 
passenger aircraft; Although the agency did not complete an economic 
analysis for this rule, it recognized that "this rule may impose 
significant costs on aircraft operators and foreign air carriers."; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "The requirements of Title II of the Unfunded Mandates Reform 
Act of 1995 do not apply when rulemaking actions are taken without the 
issuance of a notice of proposed rulemaking. Therefore, the FAA 
[Federal Aviation Administration] and TSA have not prepared a statement 
under the Act."

GAO ID: R78; 
Rule: Security Programs for Aircraft 12,500 Pounds or More; (Feb. 22, 
2002); 
Agency: DOT; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Required certain aircraft operators using aircraft 
with a maximum certified takeoff weight of 12,500 pounds or more to 
carry out security measures, conduct criminal history records checks on 
their flight crew members, and restrict access to the flight deck; 
Although the agency did not complete an economic analysis for this 
rule, it recognized that "this rule may impose significant costs on 
aircraft operators."; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "The requirements of Title II of the Unfunded Mandates Reform 
Act of 1995 do not apply when rulemaking actions are taken without the 
issuance of a notice of proposed rulemaking. Accordingly, TSA has not 
prepared a statement under the Act."

GAO ID: R89; 
Rule: Adjustment of Status Under Legal Immigration Family Equity (LIFE) 
Act Legalization Provisions and LIFE Act Amendments Family Unity; 
Provisions; (June 4, 2002); 
Agency: DOJ; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Final adoption of procedures for certain class 
action participants to become lawful permanent residents of the United 
States; Fees were required of applicants, with an expected impact on 
the economy, directly associated with the expected increase in the 
number of applications and an increase in fees of about $43.3 million 
in 2001, $152.2 million in 2002, and $37.9 million in 2003; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This rule will not result in the expenditure by State, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any one year, and it will not significantly or 
uniquely effect [sic] small governments. Therefore, no actions were 
deemed necessary under the provisions of the Unfunded Mandates Reform 
Act of 1995."

GAO ID: R90; 
Rule: TRICARE; Sub-Acute Care Program; Uniform Skilled Nursing Facility 
Benefit; Home Health Care Benefit; Adopting Medicare Payment Methods 
for Skilled Nursing Facilities and Home Health Care Providers; (June 13, 2002); 
Agency: DOD; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Established a sub- acute care benefits program with 
skilled nursing facility and home health care benefits modeled after 
those of the Medicare program and implemented other reforms enacted in 
the National Defense Authorization Act for Fiscal Year 2002; The rule 
was expected to result in reduced federal TRICARE payments to skilled 
nursing facilities in excess of $100 million per year, partially offset 
by increases in Medicare payments to skilled nursing facilities, home 
health agencies, and other institutional providers of $4 million in 
fiscal year 2003; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA).

GAO ID: R91; 
Rule: Medicaid Program; Medicaid Managed Care: New Provisions; (June 
14, 2002); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended Medicaid regulations to implement 
provisions of the Balanced Budget Act of 1997 that allow states greater 
flexibility to amend their state plans regarding managed care, 
established some new beneficiary protections, and eliminated certain 
requirements viewed by state agencies as impediments to the growth of 
managed care programs; The agency recognized that "a large number of 
entities, such as hospitals, State agencies, MCOs, PIHPs, PAHPs, and 
PCCMs will be affected by the implementation of these statutory 
provisions, and a substantial number of these entities may be required 
to make changes in their operations.." The agency discussed potential 
impacts on states and providers in 12 different areas, projecting that 
some of the changes (such as new quality standards and a 6-month 
guaranteed eligibility option) could result in costs to providers or 
states of $125 million or more in fiscal years 2004 and 2005; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "We have determined that this final rule does not impose any 
mandates on State, local, or tribal governments, or the private sector 
that will result in an annual expenditure of $110 million or more."

GAO ID: R93; 
Rule: Revision of Fee Schedules; Fee Recovery for FY 2002; (June 24, 
2002); 
Agency: NRC; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Amended the NRC's licensing, inspection, and annual 
fees charged to applicants and licensees; The final rule resulted in 
increases in the annual fees charged to certain licensees and holders 
of certificates, registrations, and approvals, and decreases in annual 
fees for others. For fiscal year 2002, NRC's fee recovery amount was to 
be approximately $479.5 million; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA, but, as an independent regulatory agency, 
not subject to UMRA).

GAO ID: R96; 
Rule: Assessment and Collection of Regulatory Fees For Fiscal Year 
2002; (July 12, 2002); 
Agency: FCC; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Revised FCC's regulatory fees for fiscal year 2002; 
The expected total amount of fees was $218,757,000; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA, but, as an independent regulatory agency, 
not subject to UMRA).

GAO ID: R97; 
Rule: Medicare Program; Prospective Payment System and Consolidated 
Billing for Skilled Nursing Facilities--Update; Notice; (July 31, 
2002); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Updated the payment rates used under the 
prospective payment system (PPS) for skilled nursing facilities (SNFs) 
for fiscal year 2003, as required by statute; The updating of rates was 
projected to increase payments to SNFs by approximately $400 million, 
but the agency also identified an estimated aggregate decrease in 
payments associated with this notice of $1 billion for fiscal year 2003 
because of the expiration of previous temporary add-ons to the 
prospective payment rates to SNFs; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This notice will have no consequential effect on State, 
local, or tribal governments. We believe the private sector cost of 
this notice falls below these thresholds [$110 million or more] as 
well. Because this notice does not impose unfunded mandates, as defined 
by section 202 of UMRA, we have not prepared an assessment."

GAO ID: R107; 
Rule: Acceleration of Periodic Report Filing Dates and Disclosure 
Concerning Web Site Access to Reports; (Sept. 16, 2002); 
Agency: SEC; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Accelerated filing deadlines for annual and 
quarterly reports and included requirements for additional reporting 
and disclosure; The amendments accelerating quarterly and annual report 
due dates were estimated to increase costs to some affected reporting 
companies--including costs for preparing the reports, using additional 
in-house and outside resources, and making additional capital 
investments, such as in information systems. SEC provided cost ranges 
and median estimates regarding initial costs (from about $29.9 million 
to $11.9 billion--median value of $298.6 million) and on-going annual 
costs (from $75.5 million to $686.8 million--median value of $247.2 
million) of accelerating reporting deadlines, but noted that these 
estimates might overstate the actual costs from the amendments being 
adopted in this final rule. The final rule's amendments regarding Web-
site access to information were estimated to increase the costs to 
affected companies by a total of $463,525; 
Agencys statement in the Federal Register about the applicability 
of UMRA: (No mention of UMRA, but, as an independent regulatory agency, 
not subject to UMRA).

GAO ID: R115; 
Rule: Medicare Program; Monthly Actuarial Rates and Monthly 
Supplementary Medical Insurance Premium Rate Beginning January 1, 2003; 
(Oct. 21, 2002); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Increased the cost of premiums for Medicare's 
Supplemental Medical Insurance (SMI) enrollees; The agency estimated 
that the cost of the increase in the premium to the approximately 38 
million SMI enrollees would be about $2.161 billion in 2003; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This notice has no consequential effect on State, local, or 
tribal governments. We believe the private sector costs of this notice 
fall below this threshold [$110 million] as well."

GAO ID: R116; 
Rule: Medicare Program; Inpatient Hospital Deductible and Hospital and 
Extended Care Services Coinsurance Amounts for 2003; (Oct. 21, 2002); 
Agency: HHS; 
Potential costs or negative financial effects of the rule on 
nonfederal parties: Announced inpatient hospital deductible and 
hospital extended care coinsurance amounts for services furnished in 
calendar year 2003 under Medicare Part A; The total increase in cost to 
beneficiaries, due to the increase in deductible and coinsurance 
amounts and the change in the number of deductibles and daily 
coinsurance amounts paid, was estimated at about $580 million in 2003; 
Agencys statement in the Federal Register about the applicability 
of UMRA: "This notice has no consequential effect on State, local, or 
tribal governments or on the private sector." 

Source: GAO.

[End of table] 

(450238): 

FOOTNOTES

[1] Pub. L. No. 104-4, 2 U.S.C. 658-658g, 1501-71.

[2] Pub. L. No. 104-4 pmbl.

[3] Although UMRA defines a federal mandate, it includes no specific 
definition of an unfunded mandate. Therefore, as in the act, we 
generally refer to the identification of federal mandates, rather than 
unfunded mandates, in this report.

[4] The Senate passed an amended version of this legislation in April 
2004. The House passed a related version of this legislation, H.R. 49, 
in September 2003.

[5] Pub. L. No. 105-277. 

[6] Pub. L. No. 107-110. 

[7] We are continuing our work on the other parts of the request, to be 
reported separately.

[8] U.S. General Accounting Office, Unfunded Mandates: Reform Act Has 
Had Little Effect on Agencies' Rulemaking Actions, GAO/GGD-98-30 
(Washington, D.C.: Feb. 4, 1998).

[9] The dollar thresholds in UMRA are in 1996 dollars and are adjusted 
annually for inflation.

[10] Pub. L. No. 107-16.

[11] Pub. L. No. 107-204.

[12] Office of Management and Budget, Office of Information and 
Regulatory Affairs, Informing Regulatory Decisions: 2003 Report to 
Congress on the Costs and Benefits of Federal Regulations and Unfunded 
Mandates on State, Local, and Tribal Entities (Washington, D.C.: 2003).

[13] The point of order is a parliamentary term used in committee or on 
the floor of either chamber of Congress to object to an alleged 
violation of a rule and to demand that the chair enforce the rule. When 
raised in the House of Representatives, the point of order is voted on 
by the full House. When raised in the Senate, the Presiding Officer 
makes an initial ruling on an UMRA point of order, but the ruling can 
be appealed to the full Senate and overruled by a simple majority. If a 
point of order is sustained against a measure, amendment, or motion, it 
may not be considered; if sustained against a provision in a measure, 
the provision is immediately deleted. 

[14] See 2 U.S.C. 658d of UMRA for more specific information on the 
availability of a point of order.

[15] 2 U.S.C. 1535.

[16] Title III of UMRA included requirements for the Advisory 
Commission on Intergovernmental Relations (ACIR) to report on various 
issues related to federal mandates, but Congress terminated funding for 
the commission in 1996. 

[17] We also shared our lists with organizations representing the 
private sector, but received no formal responses from them.

[18] Pub. L. No. 107-66. 

[19] 2 U.S.C. 658c(d).

[20] Pub. L. No. 107-297.

[21] Specifically, UMRA includes reductions in appropriations to state, 
local, or tribal governments for complying with previously imposed 
duties unless they are reduced or eliminated by the amount of 
reduction; or the control of borders by the federal government; or 
reimbursement to state, local, or tribal governments for various costs 
associated with illegal aliens, when such a reduction or elimination 
would result in increased costs to state, local, or tribal governments 
for costs associated with illegal aliens; except if the state, local, 
or tribal governments have not cooperated with the federal government 
to locate, apprehend, and deport illegal aliens.

[22] Pub. L. No. 107-250.

[23] 2 U.S.C.  658d(a)(2)(B).

[24] Search conducted on Lexis on January 22, 2004, for bills and 
committee reports containing this provision. 

[25] See Congressional Quarterly Weekly Reports, p. 2318 (Washington, 
D.C.: Sept. 5, 1998). 

[26] For more detailed information on all legislation from 2001 and 
2002 identified by CBO as including federal mandates, see CBO's annual 
reports on its activities under UMRA (www.cbo.gov).

[27] We also shared this list with organizations representing the 
private sector, but received no response.

[28] Among the four laws containing mandates for which direct costs 
could not be estimated, some provisions had cost(s) estimated to be 
below the applicable cost threshold and others had cost(s) that were 
uncertain.

[29] National Education Association radio advertisement, First Order of 
Business (Washington, D.C.: January 2004).

[30] See, Washington Post, "More States Are Fighting 'No Child Left 
Behind Law'" (Washington, D.C.: Feb. 19, 2004): A3. 

[31] Blackout periods are the specified time periods when trades 
(purchase, sale, acquisition, or transfer of any equity security) are 
prohibited.

[32] According to the Paperwork Reduction Act, these include agencies 
such as the Commodity Futures Trading Commission, the Consumer Product 
Safety Commission, the Federal Communications Commission, the Federal 
Trade Commission, the Nuclear Regulatory Commission, the Securities and 
Exchange Commission, and "any other similar agency designated by 
statute as a Federal independent regulatory agency or commission" (44 
U.S.C. 3502(5)).

[33] 5 U.S.C. 553. See also U.S. General Accounting Office, Federal 
Rulemaking: Agencies Often Published Final Actions Without Proposed 
Rules, GAO/GGD-98-126 (Washington, D.C.: Aug. 31, 1998).

[34] OIRA also checks for related statements and certifications from 
agencies on the Regulatory Flexibility Act (5 U.S.C. 601-612), which 
requires agencies to assess the impact of forthcoming regulations on 
"small entities," Executive Order 13132 which requires agencies to 
assess the federalism implications of their regulations, and other 
requirements that might be triggered by the nature of the draft rule. 

[35] As pointed out in our previous report on UMRA (GAO/GGD-98-30), the 
committee reports for the Senate bill that ultimately resulted in UMRA 
indicate that Congress was aware that, in many respects, the bill 
duplicated existing requirements, including those already required 
under Executive Order 12866.

[36] Although we refer broadly to "final rules," these also included 
other regulatory actions with legal effect (such as interim rules, 
temporary rules, and some notices), in contrast to proposed rules that 
do not have legal effect.

[37] See GAO/GGD-98-30.

[38] We also shared our lists with organizations representing the 
private sector, but received no formal responses from them.

[39] UMRA section 421(9) defines the private sector as including all 
persons or entities in the United States, including individuals, 
partnerships, associations, corporations, and educational and 
nonprofit institutions, but not including state, local, or tribal 
governments.

[40] One exception might be that OMB's guidance to agencies for 
regulatory analyses prepared under Executive Order 12866 does not 
include instructions regarding distributional effects of regulations 
that are as specific as those called for in UMRA. See 2 U.S.C. 
1532(a)(3). 

[41] The terms "major" and "economically significant" rules are 
defined, respectively, by the Congressional Review Act and Executive 
Order 12866. However, both definitions are similar and refer generally 
to rules that will have an annual effect on the economy of $100 million 
or more or raise other significant policy issues.

[42] The Congressional Review Act requires agencies to submit their 
major rules to Congress and to us before those rules can take effect. 
We are required to prepare a report on each major rule to assure that 
the agency has complied with procedural requirements regarding cost-
benefit analysis, regulatory flexibility analysis, and specified 
sections of UMRA. Pursuant to the Congressional Review Act, we provide 
these reports on major rules to the standing committees of jurisdiction 
of both Houses of Congress. The database is publicly available at 
www.gao.gov under GAO Legal Products. 

[43] RISC is part of the General Services Administration, but works 
closely with OMB to provide the President, Congress, and the public 
with information on federal regulatory policies. Its major project has 
been to coordinate the development and publication of the Unified 
Agenda of Federal Regulatory and Deregulatory Actions, which is 
published twice a year.

[44] Discrepancies between the two lists were expected because, 
although most rules defined as "major" under the Congressional Review 
Act are also defined as "economically significant" under Executive 
Order 12866, there is not an exact match. The major rules include those 
published by independent regulatory agencies not covered by the 
executive order, and rules from nonindependent agencies may be 
identified as economically significant for purposes of OMB regulatory 
reviews without necessarily triggering the $100 million impact 
threshold that would define them as major.

[45] We also shared our lists with organizations representing the 
private sector, but received no formal responses from them.

[46] The reasons that were not applicable to any of the 65 rules 
included: (1) enforcing the constitutional rights of individuals, (2) 
providing emergency assistance or relief at the request of any state, 
local, or tribal government, and (3) relating to the old age, 
survivors, and disability insurance program under the Social Security 
Act and the Internal Revenue Code.

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