FAIR Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fiscal Accountability and 
Intergovernmental Reform Act'' (``FAIR Act'').

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds and declares:
            (1) Federal legislation and regulatory requirements impose 
        burdens on State and local resources to implement federally 
        mandated programs without fully evaluating the costs to State 
        and local governments associated with compliance with those 
        requirements and often times without provision of adequate 
        Federal financial assistance. These Federal legislative and 
        regulatory initiatives--
                    (A) force State and local governments to utilize 
                scarce public resources to comply with Federal 
                mandates;
                    (B) prevent these resources from being available to 
                meet local needs; and
                    (C) detract from the ability of State and local 
                governments to establish local priorities for use of 
                local public resources.
            (2) Federal legislation and regulatory programs result in 
        inefficient utilization of economic resources, thereby reducing 
        the pool of resources available--
                    (A) to enhance productivity, and increase the 
                quantity and quality of goods and services produced by 
                the American economy; and
                    (B) to enhance international competitiveness.
            (3) In implementing Congressional policy, Federal agencies 
        should, consistent with the requirements of Federal law, seek 
        to implement statutory requirements, to the maximum extent 
        feasible, in a manner which minimizes--
                    (A) the inefficient allocation of economic 
                resources;
                    (B) the burden such requirements impose on use of 
                local public resources by State and local governments; 
                and
                    (C) the adverse economic effects of such 
                regulations on productivity, economic growth, full 
                employment, creation of productive jobs, and 
                international competitiveness of American goods and 
                services.
    (b) Purposes.--The purposes of this Act are:
            (1) To assist Congress in consideration of proposed 
        legislation establishing or revising Federal programs so as to 
        assure that, to the maximum extent practicable, legislation 
        enacted by Congress will--
                    (A) minimize the burden of such legislation on 
                expenditure of scarce local public resources by State 
                and local governments;
                    (B) minimize inefficient allocation of economic 
                resources; and
                    (C) reduce the adverse effect of such legislation--
                            (i) on the ability of State and local 
                        governmental entities to use local public 
                        resources to meet local needs and to establish 
                        local priorities for local public resources; 
                        and
                            (ii) on allocation of economic resources, 
                        productivity, economic growth, full employment, 
                        creation of productive jobs, and international 
                        competitiveness.
            (2) To require Federal agencies to exercise discretionary 
        authority and to implement statutory requirements in a manner 
        which consistent with fulfillment of each agency's mission and 
        with the requirements of other laws, minimizes the impact 
        regulations and other major Federal actions affecting the 
        economy have on--
                    (A) the ability of State and local governmental 
                entities to use local public resources to meet local 
                needs; and
                    (B) the allocation of economic resources, 
                productivity, economic growth, full employment, 
                creation of productive jobs, and international 
                competitiveness of American goods and services.

                      TITLE I--LEGISLATIVE REFORM

SEC. 101. REPORTS ON LEGISLATION.

    (a) Report Required.--(1) Except as provided in paragraph (2), 
whenever a committee of either House reports a bill or resolution of a 
public character to its House which mandates unfunded requirements upon 
State or local governments or the private sector, the report 
accompanying that bill or resolution shall contain an analysis, 
prepared after consultation with the Director of the Congressional 
Budget Office, detailing the effect of the new requirements on--
            (A) State and local government expenditures necessary to 
        comply with Federal mandates;
            (B) private businesses, including the economic resources 
        required annually to comply with the legislation and 
        implementing regulations; and
            (C) economic growth and competitiveness.
    (2) Exception.--The requirements of paragraph (1) shall not apply 
to any bill or resolution with respect to which the Director of the 
Congressional Budget Office certifies in writing to the Chairman of the 
Committee reporting the legislation that the estimated costs to State 
and local governments and the private sector of implementation of such 
legislation during the first three years will not exceed $50,000,000 in 
the aggregate and during the first five years will not exceed 
$100,000,000 in the aggregate. For this purpose, a year shall be a 
period of three hundred and sixty five consecutive days.
    (b) Duties and Functions of Congressional Budget Office.--The 
Director of the Congressional Budget Office shall prepare for each bill 
or resolution of a public character reported by any committee of the 
House of Representatives or of the Senate, an economic analysis of the 
effects of such bill or resolution, satisfying the requirements of 
subsection (a). The analysis prepared by the Director of the 
Congressional Budget Office shall be included in the report 
accompanying such bill or resolution if timely submitted to such 
committee before such report is filed.
    (c) Legislation Subject To Point of Order.--Any bill or resolution 
shall be subject to a point of order against consideration of the bill 
by the House of Representatives or the Senate (as the case may be) if 
such bill or resolution is reported for consideration by the House of 
Representatives or the Senate unaccompanied by the analysis required by 
this section.

SEC. 102. EXERCISE OF RULEMAKING POWERS.

    The provisions of this title are enacted by the Congress--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate, respectively, and as such they 
        shall be considered as part of the rules of each House, 
        respectively, and such rules shall supersede other rules only 
        to the extent that they are inconsistent therewith; and
            (2) with full recognition of the constitutional right of 
        either House to change such rules (so far as relating to such 
        House) at any time, in the same manner, and to the same extent 
        as in the case of any other rule of such House.

SEC. 103. EFFECTIVE DATE.

    This title shall apply to any bill or resolution ordered reported 
by any committee of the House of Representatives or of the Senate after 
the date of enactment of this Act.

             TITLE II--FEDERAL INTERGOVERNMENTAL RELATIONS

SEC. 201. GENERAL REQUIREMENTS.

    The Congress authorizes and directs that, to the fullest extent 
practicable:
            (1) the policies, regulations, and public laws of the 
        United States shall be interpreted and administered in 
        accordance with the purposes of this Act;
            (2) all agencies of the Federal Government shall, 
        consistent with attainment of the requirements of Federal law, 
        minimize--
                    (A) the burden which rules and other major Federal 
                actions affecting the economy impose on State and local 
                governments,
                    (B) the effect of rules and other major Federal 
                actions affecting the economy on allocation of private 
                economic resources, and
                    (C) the adverse effects of rules and other major 
                Federal actions affecting the economy on productivity, 
                economic growth, full employment, creation of 
                productive, and international competitiveness of 
                American goods and services; and
            (3) in promulgating new rules, reviewing existing rules, 
        developing legislative proposals, or initiating any other major 
        Federal action affecting the economy, whenever an agency 
        identifies two or more alternatives which will satisfy the 
        agency's statutory obligations, the agency shall--
                    (A) select the alternative which, on balance--
                            (i) imposes the least burden on expenditure 
                        of local public resources by State and local 
                        governments, and
                            (ii) has the least adverse effect on 
                        productivity, economic growth, full employment, 
                        creation of productive jobs, and international 
                        competitiveness of American goods or services; 
                        or
                    (B) provide a written statement--
                            (i) that the agency's failure to select 
                        such alternative is precluded by the 
                        requirements of Federal law; or
                            (ii) that the agency's failure to select 
                        such alternative is consistent with the 
                        purposes of this Act.

SEC. 202. INTERGOVERNMENTAL AND ECONOMIC IMPACT ASSESSMENT.

    (a) Requirement.--Whenever an agency publishes a general notice of 
proposed rulemaking for any proposed rule, and before initiating any 
other major Federal action affecting the economy, the agency shall 
prepare and make available for public comment an Intergovernmental and 
Economic Impact Assessment. Such Assessment shall be published in the 
Federal Register at the time of the publication of general notice of 
proposed rulemaking for the rule or prior to implementing such other 
major agency action affecting the economy.
    (b) Content.--Each Intergovernmental and Economic Impact Assessment 
required under this section shall contain--
            (1) a description of the reasons why action by the agency 
        is being considered;
            (2) a succinct statement of the objective of, and legal 
        basis for, the proposed rule or other action; and
            (3) a description and an estimate of the effect the 
        proposed rule or other major Federal action will have on--
                    (A) expenditure of State or local public resources 
                by State and local governments,
                    (B) allocation of economic resources, and
                    (C) productivity, economic growth, full employment, 
                creation of productive jobs, and international 
                competitiveness of American goods and services.
    (c) Alternatives Considered.--Each Intergovernmental and Economic 
Impact Assessment shall also contain a detailed description of any 
significant alternatives to the proposed rule or other major Federal 
action which would accomplish applicable statutory objectives while 
reducing--
            (1) the need for expenditure of State or local public 
        resources by State and local governments; and
            (2) the potential adverse effects of such proposed rule or 
        other major Federal action on productivity, economic growth, 
        full employment, creation of productive jobs, and international 
        competitiveness of American goods and services.

SEC. 203. INTERGOVERNMENTAL AND ECONOMIC IMPACT STATEMENT.

    (a) Requirement.--When an agency promulgates a final rule or 
implements any other major Federal action affecting the economy, the 
agency shall prepare an Intergovernmental and Economic Impact 
Statement. Each Intergovernmental and Economic Impact Statement shall 
contain--
            (1) a succinct statement of the need for, and the 
        objectives of, such rule or other major Federal action;
            (2) a summary of the issues raised by the public comments 
        in response to the publication by the agency of the Economic 
        Impact Assessment, a summary of the agency's evaluation of such 
        issues, and a statement of any changes made in the proposed 
        rule or other proposed action as a result of such comments;
            (3) a description of each of the significant alternatives 
        to the rule or other major Federal action affecting the 
        economy, considered by the agency, which, consistent with 
        fulfillment of agency statutory obligations, would--
                    (A) lessen the need for expenditure of State or 
                local public resources by State and local governments; 
                or
                    (B) reduce the potential adverse effects of such 
                proposed rule or other major Federal action on 
                productivity, economic growth, full employment, 
                creation of productive jobs, and international 
                competitiveness of American goods and services,
        along with a statement of the reasons why each such 
        alternatives was rejected by the agency; and
            (4) an estimate of the effect the rule or other major 
        Federal action will have on--
                    (A) expenditure of State or local public resources 
                by State and local governments; and
                    (B) productivity, economic growth, full employment, 
                creation of productive jobs, and international 
                competitiveness of American goods and services.
    (b) Availability.--The agency shall make copies of each 
Intergovernmental and Economic Impact Statement available to members of 
the public and shall publish in the Federal Register at the time of 
publication of any final rule or at the time of implementing any other 
major Federal action affecting the economy, a statement describing how 
the public may obtain copies of such Statement.

SEC. 204. EFFECT ON OTHER LAWS.

    The requirements of this title shall not alter in any manner the 
substantive standards otherwise applicable to the implementation by an 
agency of statutory requirements or to the exercise by an agency of 
authority delegated by law.

SEC. 205. EFFECTIVE DATE AND EXEMPTION.

    This title shall apply to any rule proposed, any final rule 
promulgated, and any other major Federal action affecting the economy 
implemented by any agency after the date of the enactment of this Act. 
This title shall not apply to any agency which is not an agency within 
the meaning of section 551(1) of title 5, United States Code.

Summary: TABLE OF CONTENTS: Title I: Legislative Reform Title II: Federal Intergovernmental Relations Fiscal Accountability and Intergovernmental Reform Act - Title I: Legislative Reform - Provides that, with certain exceptions, whenever a committee of either House reports a bill or resolution of a public character to its House mandating unfunded requirements upon State or local governments or the private sector, the report accompanying that bill or resolution shall analyze the effect of the new requirements on: (1) State and local government expenditures necessary to comply with Federal mandates, (2) private businesses. And (3) economic growth and competitiveness. Title II: Federal Intergovernmental Relations - Requires, to the fullest extent practicable, that: (1) the policies, regulations, and public laws of the United States be interpreted and administered in accordance with this Act. (2) all Federal agencies, consistent with attainment of the requirements of Federal law, minimize the adverse effects of rules affecting the economy. And (3) Federal agencies take certain actions in promulgating new rules, reviewing existing rules, developing legislative proposals, or initiating any other major Federal action affecting the economy whenever an agency identifies two or more alternatives which will satisfy the agency's statutory obligations. Provides that, whenever an agency publishes a general notice of proposed rulemaking, promulgates a final rule, or before initiating or implementing any other major Federal action affecting the economy, the agency shall prepare and make available for public comment an Intergovernmental and Economic Impact Assessment. Specifies the contents of such an assessment.