69–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 106–5

MANDATES INFORMATION ACT OF 1999

FEBRUARY 2, 1999.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. DREIER, from the Committee on Rules,

submitted the following

REPORT

together with

DISSENTING VIEWS

[To accompany H.R. 350]

[Including cost estimate of the Congressional Budget Office]

The Committee on Rules, to whom was referred the bill (H.R.

350) to improve congressional deliberation on proposed Federal private sector mandates, and for other purposes, having considered

the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Mandates Information Act of 1999’’.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Before acting on proposed private sector mandates, the Congress should

carefully consider the effects on consumers, workers, and small businesses.

(2) The Congress has often acted without adequate information concerning

the costs of private sector mandates, instead focusing only on the benefits.

(3) The implementation of the Unfunded Mandates Reform Act of 1995 has

resulted in increased awareness of intergovernmental mandates without impacting existing environmental, public health, or safety laws or regulations.

(4) The implementation of this Act will enhance the awareness of prospective

mandates on the private sector without adversely affecting existing environmental, public health, or safety laws or regulations.

(5) The costs of private sector mandates are often borne in part by consumers,

in the form of higher prices and reduced availability of goods and services.
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(6) The costs of private sector mandates are often borne in part by workers,

in the form of lower wages, reduced benefits, and fewer job opportunities.

(7) The costs of private sector mandates are often borne in part by small businesses, in the form of hiring disincentives and stunted growth.

SEC. 3. PURPOSES.

The purposes of this Act are the following:

(1) To improve the quality of the Congress’ deliberation with respect to proposed mandates on the private sector, by—

(A) providing the Congress with more complete information about the effects of such mandates; and

(B) ensuring that the Congress acts on such mandates only after focused

deliberation on the effects.

(2) To enhance the ability of the Congress to distinguish between private sector mandates that harm consumers, workers, and small businesses, and mandates that help those groups.

SEC. 4. FEDERAL PRIVATE SECTOR MANDATES.

(a) IN GENERAL.— (1) ESTIMATES.—Section 424(b)(2) of the Congressional Budget Act of 1974 (2

U.S.C. 658c(b)(2)) is amended—

(A) in subparagraph (A) by striking ‘‘and’’ after the semicolon; and

(B) by redesignating subparagraph (B) as subparagraph (C), and inserting after subparagraph (A) the following:

‘‘(B) when applicable, the impact (including any disproportionate impact

in particular regions or industries) on consumers, workers, and small businesses, of the Federal private sector mandates in the bill or joint resolution,

including—

‘‘(i) an analysis of the effect of the Federal private sector mandates

in the bill or joint resolution on consumer prices and on the actual supply of goods and services in consumer markets;

‘‘(ii) an analysis of the effect of the Federal private sector mandates

in the bill or joint resolution on worker wages, worker benefits, and employment opportunities; and

‘‘(iii) an analysis of the effect of the Federal private sector mandates

in the bill or joint resolution on the hiring practices, expansion, and

profitability of businesses with 100 or fewer employees; and’’.

(2) POINT OF ORDER.—Section 424(b)(3) of the Congressional Budget Act of

1974 (2 U.S.C. 658c(b)(3)) is amended by adding after the period the following:

‘‘If such determination is made by the Director, a point of order under this part

shall lie only under section 425(a)(1) and as if the requirement of section

425(a)(1) had not been met.’’.

(3) THRESHOLD AMOUNTS.—Section 425(a) of the Congressional Budget Act of

1974 (2 U.S.C. 658d(a)) is amended by—

(A) striking ‘‘and’’ after the semicolon at the end of paragraph (1) and redesignating paragraph (2) as paragraph (3); and

(B) inserting after paragraph (1) the following new paragraph:

‘‘(2) any bill, joint resolution, amendment, motion, or conference report that

would increase the direct costs of Federal private sector mandates (excluding

any direct costs that are attributable to revenue resulting from tax or tariff provisions of any such measure if it does not raise net tax and tariff revenues over

the 5-fiscal-year period beginning with the first fiscal year such measure affects

such revenues) by an amount that causes the thresholds specified in section

424(b)(1) to be exceeded; and’’.

(4) APPLICATION RELATING TO APPROPRIATIONS COMMITTEES.—(A) Section

425(c)(1)(A) of the Congressional Budget Act of 1974 (2 U.S.C. 658d(c)(1)(A)) is

amended by striking ‘‘except’’.

(B) Section 425(c)(1)(B) of the Congressional Budget Act of 1974 (2 U.S.C.

658d(c)(1)(B)) is amended—

(i) in clause (i) by striking ‘‘intergovernmental’’;

(ii) in clause (ii) by striking ‘‘intergovernmental’’;

(iii) in clause (iii) by striking ‘‘intergovernmental’’; and

(iv) in clause (iv) by striking ‘‘intergovernmental’’.

(5) THRESHOLD BURDEN.—(A) Section 426(b)(2) of the Congressional Budget

Act of 1974 (2 U.S.C. 658e(b)(2)) is amended by inserting ‘‘legislative’’ before

‘‘language’’.

(B) Section 426(b)(2) of the Congressional Budget Act of 1974 (2 U.S.C.

658e(b)(2)) is amended by striking ‘‘section 425 or subsection (a) of this section’’

and inserting ‘‘part B’’.
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(6) QUESTION OF CONSIDERATION.—(A) Section 426(b)(3) of the Congressional

Budget Act of 1974 (2 U.S.C. 658e(b)(3)) is amended by striking ‘‘section 425

or subsection (a) of this section’’ and inserting ‘‘part B’’.

(B) Section 426(b)(3) of the Congressional Budget Act of 1974 (2 U.S.C.

658e(b)(3)) is amended by inserting ‘‘, except that not more than one point of

order shall be recognized by the Chair under section 425(a)(1) or (a)(2)’’ before

the period.

(7) APPLICATION RELATING TO CONGRESSIONAL BUDGET OFFICE.—Section 427 of

the Congressional Budget Act of 1974 (2 U.S.C. 658f) is amended by striking

‘‘intergovernmental’’.

(b) RULES OF THE HOUSE OF REPRESENTATIVES.—Clause 11(b) of rule XVIII of the

Rules of the House of Representatives is amended by striking ‘‘intergovernmental’’

and by striking ‘‘section 424(a)(1)’’ and inserting ‘‘section 424 (a)(1) or (b)(1)’’.

(c) EXERCISE OF RULEMAKING POWERS.—This section is enacted by Congress—

(1) as an exercise of the rulemaking power of the Senate and the House of

Representatives, respectively, and as such it shall be considered as part of the

rules of such House, respectively, and 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 each House.

SEC. 5. FEDERAL INTERGOVERNMENTAL MANDATE.

Section 421(5)(B) of the Congressional Budget Act of 1974 (2 U.S.C. 658(5)(B)) is

amended—

(1) by striking ‘‘the provision’’ after ‘‘if’’;

(2) in clause (i)(I) by inserting ‘‘the provision’’ before ‘‘would’’;

(3) in clause (i)(II) by inserting ‘‘the provision’’ before ‘‘would’’; and

(4) in clause (ii)—

(A) by inserting ‘‘that legislation, statute, or regulation does not provide’’

before ‘‘the State’’; and

(B) by striking ‘‘lack’’ and inserting ‘‘new or expanded’’.

PURPOSE OF THE LEGISLATION

The purpose of H.R. 350, the Mandates Information Act of 1999,

is to: (1) improve the quality of the Congress’ deliberation with respect to proposed mandates on the private sector by providing the

Congress with more complete information about the effects of such

mandates, and ensuring that the Congress acts on such mandates

only after focused deliberation on the effects; and (2) enhance the

ability of the Congress to distinguish between private sector mandates that harm consumers, workers, and small businesses, and

mandates that help those groups.

SUMMARY OF THE LEGISLATION

H.R. 350 amends the Congressional Budget Act of 1974 to require a congressional committee report on any bill or joint resolution that includes a federal private sector mandate to include a

statement from CBO estimating the impact of such mandates on

consumers, workers, and small businesses, including any disproportionate impact in particular regions or industries (CBO is currently

required to estimate only the direct costs of all federal private sector mandates that exceed $100 million and the amount of federal

financial assistance, if any, provided by the legislation to assist

with compliance costs). It subjects the consideration of such legislation to a point of order if it is not feasible for CBO to prepare such

an estimate (currently under UMRA, a point of order may apply

only if it is not feasible for CBO to prepare an intergovernmental

mandates estimate).
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H.R. 350 prohibits consideration of any bill, joint resolution,

amendment, motion or conference report containing private sector

mandates whose direct costs exceed $100 million (the current unfunded mandate point of order applies only to unfunded intergovernmental mandates, the direct cost of which exceeds $50 million,

unless it is paid for with new federal financial assistance).

H.R. 350 prohibits the Chair from recognizing Members for more

than one point of order for a committee’s failure to comply with the

CBO report requirements with respect to private sector mandates,

or for private sector mandates contained in any bill, joint resolution, amendment, motion or conference report.

H.R. 350 amends clause 11(b) of House Rule XVIII to preserve

the availability in the Committee of the Whole of a motion to strike

an unfunded federal mandate (intergovernmental and private sector), unless the rule is specifically waived by the Rules Committee.

COMMITTEE CONSIDERATION

On January 19, 1999, Representatives Gary Condit and Rob

Portman introduced H.R. 350, the Mandates Information Act of

1999, which was referred to the Committee on Rules. On February

2, 1999, the Subcommittee on Rules and Organization of the House

and the Subcommittee on Legislative and Budget Process held a

joint hearing to review H.R. 350 and its implementation under the

Unfunded Mandates Reform Act (UMRA). The Committee on Rules

received testimony from the Hon. Gary Condit (D-CA); the Hon.

Rob Portman (R-OH); the Hon. Sherwood Boehlert (R-NY); Mr. Jim

Blum, Acting Director of the Congressional Budget Office; Mr.

Ryan Null, Owner of Tristate Electronic Manufacturing; Ms. Angela Antonelli, Heritage Foundation Director for Economic Policy

Studies; and Ms. Maura Kealey, Deputy Director, Public Citizen’s

Congress Watch.

On Tuesday, February 2, 1999, the Committee met to mark-up

H.R. 350. The Committee favorably reported H.R. 350, as amended,

by voice vote a quorum being present. During the mark-up, one

amendment in the nature of a substitute offered by Mr. Linder was

agreed to by voice vote. H.R. 350, as amended by this substitute,

is essentially the same as legislation (H.R. 3534) that passed the

House last year by a vote of 279 to 132.

BACKGROUND ON THE LEGISLATION

On March 22, 1995, President Clinton signed into law the Unfunded Mandates Reform Act, which amended title IV of the Congressional Budget Act of 1974. A key component of the Republican

‘‘Contract With America,’’ UMRA was one of the first bills enacted

by the 104th Congress.

Among other things, the purposes of UMRA are to: strengthen

the partnership between the federal government and state and

local governments; end the imposition of unfunded federal mandates on state and local governments without full information on

the costs and effects of such mandates; promote informed and deliberate decisions by Congress on the appropriateness of all federal

mandates affecting state and local governments and the private
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sector; and establish new points of order in the House and Senate

for failure to comply with certain requirements under the act.

A federal mandate is defined as a provision that imposes an enforceable duty upon state, local or tribal governments, or the private sector. An unfunded federal mandate is defined as a mandate

whose direct costs exceed $50 million for state and local governments, and $100 million for the private sector. Direct costs are defined as the aggregate amount that all levels of government or the

private sector are required to spend in order to comply with the

mandate or prohibited from raising in revenue.

There are three major components to UMRA. One addresses

agency regulatory responsibilities. A second directs the Advisory

Council on Intergovernmental Relations (ACIR) to undertake certain studies with respect to existing mandates (ACIR was de-funded by Congress in fiscal year 1997). The third contains congressional procedures for the consideration of legislation containing federal mandates.

Procedures in the House and Senate

UMRA’s congressional procedures are found in sections 423

through 426 of Part B of title IV of the Congressional Budget and

Impoundment Act of 1974. Sections 423 and 424 outline specific reporting and estimating responsibilities for congressional committees and the Congressional Budget Office (CBO). Section 425 prohibits the consideration of bills, joint resolutions, motions, amendments and conference reports in the House and Senate if such legislation contains unfunded intergovernmental federal mandates, or

if a committee, when reporting a bill or joint resolution, fails to include in either the committee report or the Congressional Record

a statement from CBO estimating the direct costs of any mandates

(intergovernmental or private sector) contained in the legislation.

Disposition of points of order in the House of Representatives

Section 426 prohibits the consideration of any order of business

resolution in the House of Representatives that waives points of

order against the application of Section 425. It also contains procedures for the disposition of points of order in the House of Representatives. Specifically, the chair will not rule on the point of

order. Rather, the chair will put to the House or the Committee of

the Whole, whichever the case may be, the ‘‘question of consideration with respect to the proposition that is the subject of the point

of order.’’ The question of consideration with respect to each point

of order is subject to 20 minutes of debate—10 minutes by the

Member initiating the point of order and 10 minutes by an opponent. Following debate on the question of consideration, the Members will vote on whether to proceed with consideration of the bill,

joint resolution, amendment, motion or conference report.

UMRA also amended clause 11 of House Rule XVIII (which was

further modified by H.Res. 5 at the beginning of the 105th Congress). Clause 11 of House Rule XVIII preserves the availability in

the Committee of the Whole of a motion to strike an unfunded

intergovernmental mandate. Neither a rule restricting amendments nor one waiving all points of order is sufficient to preclude
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a motion to strike an unfunded intergovernmental mandate unless

the rule specifically waives clause 11 of House Rule XVIII.

In the 105th Congress, the Committee on Rules held original jurisdiction hearings on October 30, 1997, and March 27, 1998, on

two similar private sector mandates bills and reported H.R. 3534

as amended under an open rule on May 6, 1998. The House passed

H.R. 3534 by a vote of 279–132 on May 19, 1998. The Senate Committee on Government Affairs held hearings and reported similar

private mandates legislation, S. 389, but the Senate did not take

further action.

In the 106th Congress, on January 19, 1999, Representatives

Gary Condit and Rob Portman introduced H.R. 350, the Mandates

Information Act of 1999. This legislation attempts to improve congressional deliberation and public awareness of private sector mandates similar to the procedures that were enacted in the UMRA in

1995 with regard to intergovernmental mandates.

ANALYSIS OF THE LEGISLATION (AS REPORTED)

The Rules Committee approved an amendment in the nature of

a substitute which makes a number of technical and conforming

changes to H.R. 350 as introduced.

Sec. 1 of the committee substitute establishes the short title as

the ‘‘Mandates Information Act of 1999’’.

Sec. 2 of the committee substitute establishes a number of congressional findings with respect to the need for additional information on the costs of Federal private sector mandates contained in

proposed legislation.

Sec. 3 of the committee substitute outlines the purposes of the

bill which are to: (1) improve the quality of the congressional deliberation with respect to proposed mandates on the private sector, by

providing the Congress with more complete information about the

effects of such mandates, and ensuring that the Congress acts on

such mandates only after focused deliberation on the effects; and

(2) enhance the ability of the Congress to distinguish between private sector mandates that harm consumers, workers, and small

businesses, and mandates that help those groups.

Sec. 4(a)(1) of the committee substitute amends Sec. 424(b)(2) of

the Congressional Budget Act of 1974 to further require CBO to estimate, when applicable, the aggregate impact of proposed Federal

private sector mandates on consumers, workers and small businesses, including any disproportionate impact in particular regions

or industries. The estimate shall also include an analysis of the effect of proposed Federal private sector mandates on: consumer

prices and the actual supply of goods and services in consumer

markets; worker wages, worker benefits, and employment opportunities; and the hiring practices, expansion, and profitability of businesses with 100 or fewer employees.

The phrase ‘‘when applicable’’ in Sec. 4(a)(1) qualifies the requirement that CBO provide estimates under Sec. 424(b)(2)(B) of

the Congressional Budget Act of 1974 in two ways. The phrase is

not intended to grant CBO broad discretion to forgo preparing an

estimate with respect to consumers, workers and small businesses.

It is, however, intended to permit CBO to forgo an estimate of the

impact of a Federal private sector mandate on consumers, workers
7

and small businesses if CBO determines that the private sector

mandate has no impact on that group or whose impact on that

group could not be identified. Therefore, if CBO determined there

was no impact on workers, CBO would not be required to estimate

the impact on workers, or the specific areas related to workers. The

qualification is also intended to permit CBO to forgo an analysis

of any of the specific information noted for consumers, workers and

small businesses when CBO determines that the impacts on that

group do not include that specific area. Therefore, if CBO determined that there was an impact on consumers, but the impact

would not affect the supply of goods and services in consumer markets, CBO would not be required to provide an analysis of such affects.

Sec. 4(a)(2) of the committee substitute amends Sec. 424(b)(3) of

the Congressional Budget Act of 1974 to permit a point of order

against consideration of any bill or joint resolution that is reported

by a committee if it is not feasible for CBO to prepare a Federal

private sector mandates estimate for publication before consideration of the bill or joint resolution.

Sec. 4(a)(3) of the committee substitute amends Sec. 425(a)(2) of

the Congressional Budget Act of 1974 to prohibit the consideration

of any bill, joint resolution, amendment, motion, or conference report that would increase the direct costs of Federal private sector

mandates by $100 million or more (adjusted annually for inflation)

in the fiscal year in which any of the Federal private sector mandate would be effective or in any of the 4 fiscal years following such

fiscal year. In the case of a bill, joint resolution, amendment, motion or conference report that provides a net reduction in tax or

tariff revenue, the measure’s tax and tariff provisions would not be

considered in determining the direct costs of Federal private sector

mandates only for purposes of a point of order under Sec. 425(a)(2)

of the Congressional Budget Act of 1974.

For purposes of illustration, consideration of a bill reported by

the Committee on Ways and Means that contains tax or tariff provisions which cause the $100 million threshold for private sector

mandates to be exceeded, but result in an overall net reduction of

tax or tariff revenue over a five-year period, would not be subject

to a Sec. 425(a)(2) point of order, provided that the bill does not include other non-revenue related Federal private sector mandates

that exceed the $100 million threshold. In contrast, if a bill contains tax or tariff provisions which result in a net increase in revenues, a Sec. 425(a)(2) point of order may apply.

Sec. 4(a)(4) of the committee substitute amends Sec. 425(c) of the

Congressional Budget Act of 1974 to permit a point of order against

legislative provisions in appropriations bills that increase the direct

costs of a Federal private sector mandate by an amount that causes

the $100 million threshold to be exceeded.

Sec. 4(a)(5) of the committee substitute makes two technical

changes to Sec. 426(b)(2) of the Congressional Budget Act of 1974

to conform with established practices by: (1) striking the term ‘‘section 425 or subsection (a) of this section’’ and inserting ‘‘part B’’;

and (2) inserting the word ‘‘legislative’’ before the word ‘‘language’’.

Sec. 4(a)(6) of the committee substitute makes a technical change

to Sec. 426(b)(3) of the Congressional Budget Act to conform with
8

established practice by striking the term ‘‘section 425 or subsection

(a) of this section’’. Sec. 4(a)(6) further prohibits the Chair from recognizing Members for more than one point of order with respect to

the consideration of: (1) any reported bill or joint resolution in

which the reporting committee fails to publish a statement for the

Director of the CBO on the direct costs of Federal private sector

mandates; or (2) any bill, joint resolution, amendment, motion, or

conference report that would increase the direct costs of a Federal

private sector mandate by an amount that causes the $100 million

threshold to be exceeded.

Sec. 4(a)(7) of the committee substitute amends Sec. 427 of the

Congressional Budget Act of 1974 to require the Director of the

CBO, at the written request of a Senator and to the extent practical, to prepare an estimate of the direct costs of a Federal private

Sector mandate contained in an amendment of such Senator.

Sec. 4(b) of the committee substitute amends clause 11(b) of

House Rule XVIII to preserve the availability in the Committee of

the Whole of a motion to strike private sector mandates unless

such mandates are expressly prohibited by the terms of a special

order.

Sec. 4(c) of the committee substitute expresses the constitutional

authority of Congress to make the rules changes in Sec. 4 and exercise its rulemaking power in both the Senate and the House to

change such rules at any time.

Sec. 5 of the committee substitute amends Sec. 421(5)(B) of the

Congressional Budget Act of 1974 to ensure that Federal entitlement programs such as Medicaid, child nutrition, and foster care

are considered unfunded intergovernmental mandates if Congress

imposes new conditions, places caps on funding, or cuts funding

without giving the States authority to adjust those changes.

MATTERS REQUIRED UNDER THE RULES OF THE HOUSE

Committee vote

Clause 3(b) of House rule XIII requires the results of each record

vote on an amendment or motion to report, together with the

names of those voting for and against, to be printed in the committee report. No record votes were requested during the consideration

of H.R. 350.

Committee cost estimate

Clause 3(c)(2) of rule XIII requires each committee report that

accompanies a measure providing new budget authority, new

spending authority, or new credit authority or changing revenues

or tax expenditures to contain a cost estimate, as required by section 308(a)(1) of the Congressional Budget Act of 1974, as amended

and, when practicable with respect to estimates of new budget authority, a comparison of the total estimated funding level for the

relevant program (or programs) to the appropriate levels under current law.

Clause 3(d) of rule XIII requires committees to include their own

cost estimates in certain committee reports, which include, when

practicable, a comparison of the total estimated funding level for
9

the relevant program (or programs) with the appropriate levels

under current law.

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional Budget Office, pursuant to section 403 of the Congressional Budget Act of 1974.

Congressional Budget Office estimates

Clause 3(c)(3) of rule XIII requires the report of any committee

on a measure which has been approved by the committee to include

a cost estimate prepared by the Director of the Congressional

Budget Office, pursuant to section 403 of the Congressional Budget

Act of 1974, if the cost estimate is timely submitted. The following

is the CBO cost estimate as required:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, February 2, 1999.

Hon. DAVID DREIER,

Chairman, Committee on Rules,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 350, the Mandates Information Act of 1999.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Mary Maginniss.

Sincerely,

JAMES L. BLUM,

Acting Director.

Enclosure.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 350—Mandates Information Act of 1999

The Congressional Budget Office (CBO) estimates that enacting

this legislation would result in no significant costs to the federal

government. The bill would not affect direct spending or receipts;

therefore, pay-as-you-go procedures would not apply. H.R. 350 contains no intergovernmental or private-sector mandates as defined

in the Unfunded Mandates Reform Act (UMRA) and would have no

impact on the budgets of state, local, or tribal governments.

H.R. 350 would amend the Congressional Budget Act to expand

the duties of CBO under UMRA. In particular, the bill would require CBO to provide additional information when it determines

that a bill or joint resolution contains a private-sector mandate

with costs exceeding the threshold established in UMRA ($100 million, in 1996 dollars, in any one year). That information would include the impact of private-sector mandates on consumers, workers, and small businesses (including any disproportionate impact

on particular regions or industries).

H.R. 350 also would make legislation subject to a point of order

if it includes private-sector mandates with costs exceeding the

threshold. Such costs would exclude amounts attributable to tax or

tariff provisions, if such provisions, in aggregate, do not raise net

revenues over the first five fiscal years they were in effect.
10

Finally, the legislation would amend UMRA’s definition of intergovernmental mandate as it relates to certain large entitlement

grant programs (such as Medicare). Under this amendment,

changes to those programs would be considered mandates unless

the same bill that makes the change also gives state and local governments new flexibility within the program to offset any additional costs.

Based on the experiences of CBO and the Joint Committee on

Taxation (which provides CBO with revenue estimates) in carrying

out the provisions of UMRA, CBO estimates that neither agency

would incur significant additional costs to implement the changes

that would be made by H.R. 350. The number of bills containing

private-sector mandates with costs exceeding the threshold is

small—less than 20 instances in each of the last two years—and

the additional workload would not be substantial. Furthermore, the

proposed change in UMRA’s definition of intergovernmental mandates would not affect many of the bills that CBO reviews each

year. Any increase in costs would be subject to the availability of

appropriated funds for CBO and the Joint Committee on Taxation.

In addition, CBO estimates that changes to Congressional procedures would not result in additional costs to the Congress.

The CBO staff contacts are Mary Maginniss (for federal) costs,

Theresa Gullo (for intergovernmental mandates), and Roger

Hitchner (for private-sector mandates). This estimate was approved

by Robert A. Sunshine, Deputy Assistant Director for Budget Analysis.

Constitutional authority

Clause 3(d)(1) of rule XIII requires each committee report on a

bill or joint resolution of a public character to include a statement

citing the specific powers granted to the Congress in the Constitution to enact the law proposed by the bill or joint resolution. The

Committee cites Article 1, Section 5 of the United States Constitution, which grants each House of Congress the authority to determine the rules of its proceedings, as its authority for reporting this

bill.

Federal mandates

Section 423 of the Congressional Budget Act of 1974 requires the

report of any committee on a bill or joint resolution that includes

any Federal mandate to include specific information about such

mandates. The Committee states that H.R. 350 does not include

any Federal mandate.

Preemption clarification

Section 423 of the Congressional Budget Act of 1974 requires the

report of any committee on a bill or joint resolution to include a

committee statement on the extent to which the bill or joint resolution is intended to preempt state or local law. The Committee

states that H.R. 350 is not intended to preempt any state or local

law.
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Oversight findings

Clause 3(c)(1) of rule XIII requires each committee report to contain oversight findings and recommendations required pursuant to

clause 2(b)(1) of rule X. The Committee has oversight responsibility

for Part B of the Congressional Budget Act of 1974 and finds that,

although the Unfunded Mandates Reform Act is working as intended, Congress can benefit from having more complete information about the effects of proposed Federal private sector mandates.

The Committee recommends the passage of H.R. 350 as a means

to improve the effectiveness of UMRA.

Oversight findings and recommendations of the Committee on Government Reform and Oversight

Clause 3(c)(4) of rule XIII requires each committee report to contain a summary of the oversight findings and recommendations

made by the Government Reform Committee pursuant to clause

4(c)(2) of rule X, whenever such findings have been timely submitted. The Committee on Rules has received no such findings or recommendations from the Committee on Government Reform.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):

CONGRESSIONAL BUDGET ACT OF 1974

* * * * * * *

TITLE IV—ADDITIONAL PROVISIONS TO IMPROVE FISCAL

PROCEDURES

* * * * * * *

PART B—FEDERAL MANDATES

SEC. 421. DEFINITIONS.

For purposes of this part:

(1) * * *

* * * * * * *

(5) FEDERAL INTERGOVERNMENTAL MANDATE.—The term

‘‘Federal intergovernmental mandate’’ means—

(A) * * *

(B) any provision in legislation, statute, or regulation

that relates to a then-existing Federal program under

which $500,000,000 or more is provided annually to State,

local, and tribal governments under entitlement authority,

if øthe provision¿— (i)(I) the provision would increase the stringency of

conditions of assistance to State, local, or tribal governments under the program; or
12

(II) the provision would place caps upon, or otherwise decrease, the Federal Government’s responsibility

to provide funding to State, local, or tribal governments under the program; and

(ii) that legislation, statute, or regulation does not

provide the State, local, or tribal governments that

participate in the Federal program ølack¿ new or expanded authority under that program to amend their

financial or programmatic responsibilities to continue

providing required services that are affected by the

legislation, statute, or regulation.

* * * * * * *

SEC. 424. DUTIES OF THE DIRECTOR; STATEMENTS ON BILLS AND

JOINT RESOLUTIONS OTHER THAN APPROPRIATIONS

BILLS AND JOINT RESOLUTIONS.

(a) * * *

(b) FEDERAL PRIVATE SECTOR MANDATES IN REPORTED BILLS AND

JOINT RESOLUTIONS.—For each bill or joint resolution of a public

character reported by any committee of authorization of the Senate

or the House of Representatives, the Director of the Congressional

Budget Office shall prepare and submit to the committee a statement as follows:

(1) * * *

(2) ESTIMATES.—Estimates required under paragraph (1)

shall include estimates (and a brief explanation of the basis of

the estimates) of—

(A) the total amount of direct costs of complying with the

Federal private sector mandates in the bill or joint resolution; øand¿

(B) when applicable, the impact (including any disproportionate impact in particular regions or industries) on

consumers, workers, and small businesses, of the Federal

private sector mandates in the bill or joint resolution,

including—

(i) an analysis of the effect of the Federal private sector mandates in the bill or joint resolution on consumer

prices and on the actual supply of goods and services

in consumer markets;

(ii) an analysis of the effect of the Federal private

sector mandates in the bill or joint resolution on worker wages, worker benefits, and employment opportunities; and

(iii) an analysis of the effect of the Federal private

sector mandates in the bill or joint resolution on the

hiring practices, expansion, and profitability of businesses with 100 or fewer employees; and

ø(B)¿ (C) the amount, if any, of increase in authorization

of appropriations under existing Federal financial assistance programs, or of authorization of appropriations for

new Federal financial assistance, provided by the bill or

joint resolution usable by the private sector for the activities subject to the Federal private sector mandates.

(3) ESTIMATE NOT FEASIBLE.—If the Director determines that

it is not feasible to make a reasonable estimate that would be
13

required under paragraphs (1) and (2), the Director shall not

make the estimate, but shall report in the statement that the

reasonable estimate cannot be made and shall include the reasons for that determination in the statement. If such determination is made by the Director, a point of order under this

part shall lie only under section 425(a)(1) and as if the requirement of section 425(a)(1) had not been met.

* * * * * * *

SEC. 425. LEGISLATION SUBJECT TO POINT OF ORDER.

(a) IN GENERAL.—It shall not be in order in the Senate or the

House of Representatives to consider—

(1) any bill or joint resolution that is reported by a committee unless the committee has published a statement of the Director on the direct costs of Federal mandates in accordance

with section 423(f) before such consideration, except this paragraph shall not apply to any supplemental statement prepared

by the Director under section 424(d); øand¿

(2) any bill, joint resolution, amendment, motion, or conference report that would increase the direct costs of Federal

private sector mandates (excluding any direct costs that are attributable to revenue resulting from tax or tariff provisions of

any such measure if it does not raise net tax and tariff revenues

over the 5-fiscal-year period beginning with the first fiscal year

such measure affects such revenues) by an amount that causes

the thresholds specified in section 424(b)(1) to be exceeded; and

ø(2)¿ (3) any bill, joint resolution, amendment, motion, or

conference report that would increase the direct costs of Federal intergovernmental mandates by an amount that causes

the thresholds specified in section 424(a)(1) to be exceeded,

unless—

(A) the bill, joint resolution, amendment, motion, or conference report provides new budget authority or new entitlement authority in the House of Representatives or direct spending authority in the Senate for each fiscal year

for such mandates included in the bill, joint resolution,

amendment, motion, or conference report in an amount

equal to or exceeding the direct costs of such mandate; or

(B) the bill, joint resolution, amendment, motion, or conference report includes an authorization for appropriations

in an amount equal to or exceeding the direct costs of such

mandate, and—

(i) * * *

* * * * * * *

(c) COMMITTEE ON APPROPRIATIONS.—

(1) APPLICATION.—The provisions of subsection (a)—

(A) shall not apply to any bill or resolution reported by

the Committee on Appropriations of the Senate or the

House of Representatives; øexcept¿

(B) shall apply to—

(i) any legislative provision increasing direct costs of

a Federal øintergovernmental¿ mandate contained in

any bill or resolution reported by the Committee on
14

Appropriations of the Senate or House of Representatives;

(ii) any legislative provision increasing direct costs

of a Federal øintergovernmental¿ mandate contained

in any amendment offered to a bill or resolution reported by the Committee on Appropriations of the Senate or House of Representatives;

(iii) any legislative provision increasing direct costs

of a Federal øintergovernmental¿ mandate in a conference report accompanying a bill or resolution reported by the Committee on Appropriations of the Senate or House of Representatives; and

(iv) any legislative provision increasing direct costs

of a Federal øintergovernmental¿ mandate contained

in any amendments in disagreement between the two

Houses to any bill or resolution reported by the Committee on Appropriations of the Senate or House of

Representatives.

* * * * * * *

SEC. 426. PROVISIONS RELATING TO THE HOUSE OF REPRESENTATIVES.

(a) * * *

(b) DISPOSITION OF POINTS OF ORDER.—

(1) APPLICATION TO THE HOUSE OF REPRESENTATIVES.—This

subsection shall apply only to the House of Representatives.

(2) THRESHOLD BURDEN.—In order to be cognizable by the

Chair, a point of order under øsection 425 or subsection (a) of

this section¿ part B must specify the precise legislative language on which it is premised.

(3) QUESTION OF CONSIDERATION.—As disposition of points of

order under øsection 425 or subsection (a) of this section¿ part

B, the Chair shall put the question of consideration with respect to the proposition that is the subject of the points of

order, except that not more than one point of order shall be recognized by the Chair under section 425(a)(1) or (a)(2).

* * * * * * *

SEC. 427. REQUESTS TO THE CONGRESSIONAL BUDGET OFFICE FROM

SENATORS.

At the written request of a Senator, the Director shall, to the extent practicable, prepare an estimate of the direct costs of a Federal øintergovernmental¿ mandate contained in an amendment of

such Senator.

* * * * * * *

COMPARATIVE PRINT

Clause 3(g) of rule XIII requires that, whenever the Committee

on Rules reports a resolution amending or repealing the Rules of

the House of Representatives, the accompanying report must contain a comparative print showing the changes in existing rules

proposed to be made by the resolution.
15

Changes in existing Rules of the House of Representatives made

by the bill, as reported, are shown as follows (existing rules proposed to be omitted are enclosed in black brackets, new matter is

printed in italic, existing rules in which no change is proposed are

shown in roman):

CLAUSE 11(b) OF RULE XVIII OF THE HOUSE OF

REPRESENTATIVES

RULE XVIII.

* * * * * * *

Unfunded mandates

11. (a)***

(b) In this clause the term ‘‘unfunded mandate’’ means a Federal

øintergovernmental¿ mandate the direct costs of which exceed the

threshold otherwise specified for a reported bill or joint resolution

in section ø424(a)(1)¿ 424(a)(1) or (b)(1) of the Congressional Budget Act of 1974.

* * * * * * *

Views of committee members

Clause 2(c) of rule XIII requires each committee to afford a three

day opportunity for members of the committee to file supplemental,

minority, or additional views and to include the views in its report.

Although neither requirement applies to the Committee, the Committee always makes the maximum effort to provide its members

with such an opportunity. The following views were submitted:
(16)

DISSENTING VIEWS

The Democratic Members of the Rules Committee have three

major concerns about this bill.

First, we are concerned about the ‘‘point of order’’ scheme developed in the original bill and continued in this one. It can be too

easily abused to close off debate for partisan, political purposes.

The ‘‘point of order’’ is not a ‘‘point of order’’ in the true sense.

Rather it is automatically transformed into a question of consideration. That is, if any Member asserts the existence of an unfunded

mandate in a measure, the House must, without any judgment by

the Chair, debate for 20 minutes and, by a simple majority vote,

determine whether to proceed to consider the measure. In fact, the

very first time the unfunded mandate point of order was raised, in

1996, the majority party used it to block consideration of a motion

to recommit that, according to the Congressional Budget Office, did

not contain an unfunded mandate. It was an offensive breach of

fair play because the motion to recommit is the only procedural tool

guaranteed to the minority in a House which is run and ruled by

the majority.

The first experience was, fortunately, not the norm. On the

whole, we are encouraged that the unfunded mandate point of

order has not been misused. Important information has been available about the impact of legislation on the public sector, and Members generally have used restraint against exploiting the parliamentary procedure for political purposes. We urge Members to

continue to act in a responsible way but the potential for abuse remains and the majority has done nothing to fix this defect.

Our second objection is about the effect of the measure on efforts

to promote social justice. Some of the finest legislative efforts of

this nation—providing food to the hungry, protecting public health

and safety, cleaning up pollution, enforcing the civil rights of persecuted individuals or compelling parents to fulfill their financial

obligations to their children—have, by necessity, imposed burdens

on businesses and individuals. We fear that, without amendment,

the bill tilts the playing field against such legislation. One witness

at the hearing, Maura Kealey of Public Citizen’s Congress Watch,

said: ‘‘[H.R. 350] will allow Members of Congress to hide behind a

procedural vote to torpedo vital legislation with strong public support—food safety, clean air and water, minimum wage increase, patients’ bill of rights—rather than vote it up or down on its merits.’’

Amendments such as the one offered by Representative Waxman

during last year’s debate would vastly improve the legislation.

Our third objection to the bill is aimed at a provision which was

added by the majority leadership at the last minute last year and

is included again in the bill reported by the Committee. The language, as proposed by Mr. Dreier, excludes from the point of order

those measures containing revenue increases that net out with tax
17

cuts over a five year period. This provision is flawed in two ways:

it moves us away from the goal of reviewing all private sector mandates and it injects the unfunded mandate process into the fundamentally political battleground of decisions on taxes and spending.

We want to be perfectly clear. Tax cuts are not unfunded mandates under the definition of the law, nor do we believe they should

be. Members who supported Mr. Dreier’s exemption argued last

year that the budget rules require tax cuts to be paid for by either

spending cuts or tax increases. They contend that, without the

Dreier language, the new unfunded mandates provisions will unfairly penalize efforts to pay for those cuts with tax increases. We

would point out, in all fairness, that decisions to pay for tax cuts

by decreasing spending would also be caught up in the point of

order if it imposes direct costs on businesses or causes a loss of revenue to states, localities or tribal governments. If certain spending

cuts can be subject to unfunded mandate points of order, there is

no reason certain tax increases should not be. We should not favor

one form of paying for a tax cut over another, or to limit the various ways of paying for tax cuts.

We believe that the point of order should apply in all cases without bias as we debate policy options. One of the main objectives of

the unfunded mandate laws is to encourage bill authors and committees to consider burdens as well as benefits at an early stage

of development. Mr. Portman made the point in last year’s floor debate that the point of order acts as a deterrent in committee as

well as a final enforcement tool on the floor. He noted that public

sector mandates were more often not stopped on the Floor but curtailed at the committee level because the committees were forced

to come up with ways of getting things through Congress.

Certainly, the unfunded mandate law should stimulate debate

and new ways of thinking, but we believe the procedural tool

should be neutral. It should not be weighted to influence or direct

a particular type of policy solution. The exemption proposed in this

legislation forces us to look at the way revenues are used before applying the unfunded mandate point of order, and presents a parliamentary bias toward tax hikes over spending reductions. For example, a tax increase on coal that is spent on black lung benefits

or environmental clean-up would be subject to a point of order, but

the same tax increase on coal that is spent for a tax break for ethanol would not be subject to a point of order.

We also believe a tax is a mandate regardless of where it appears. The Dreier proposal to exempt certain tax hikes creates a

loophole in the mandates bill, and erodes the basic intent to focus

attention on the potential burden of any policy on individuals and

businesses. In other words, the new language tells the small businesses in our districts that a tax hike facing them is not worth the

consideration of the House as long as it is used to give a tax break

to someone else.

Finally, we would point out a certain inconsistency in the arguments of some Members against our concern about social justice

and for the exemption of tax hikes which are used to offset tax

cuts. These Members assure those of us who are concerned about

losing important environmental protections or worker rights that
18

the point of order scheme is intended to provide information and

the time to make an informed decision; a majority vote will allow

Members to take up the measure. In other words, the point of order

is a speed bump not a red light. By that reasoning, Members who

support the Dreier exemption should have nothing to fear from an

informed debate about tax increases, no matter where they fall.

We remain concerned over this bill for these reasons. While our

experience with public sector mandates has been reasonably encouraging, we continue to be deeply concerned about the point of

order scheme and will remain vigilant that it not be abused for any

purpose.

We also believe we need a procedure that is fair, even handed,

and not tilted toward one policy outcome over another. The special

exemption for certain tax increases should be dropped; we should

not have to tell our constituents that a gas tax spent to repair

bridges would be subject to debate, but the same tax used to give

a tax break to a competing part of the transportation industry

would not need separate debate. And H.R. 350 should not be used

to erect procedural hurdles against legislation designed to promote

social justice. Amendments should be adopted so that the bill does

not so concentrate on the burdens to businesses that it ignores the

benefits of feeding the hungry, cleaning the environment, protecting public health and safety, and enforcing civil rights.

JOE MOAKLEY.

MARTIN FROST.

TONY P. HALL.

LOUISE MCINTOSH SLAUGHTER.

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