I

103D CONGRESS

1ST SESSION H. R. 3005

To amend the Congressional Budget Act of 1974 to establish a Federal

regulatory budget and to impose cost controls on that budget, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 6, 1993

Mr. SMITH of Texas (for himself, Mr. KASICH, Mr. COX, and Mr. FRANKS

of New Jersey) introduced the following bill; which was referred jointly

to the Committees on Government Operations, Rules, and the Judiciary

A BILL

To amend the Congressional Budget Act of 1974 to establish

a Federal regulatory budget and to impose cost controls

on that budget, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Regulation

5 Reduction, Reform, and Budget Act of 1993’’.

6 SEC. 2. AMENDMENTS TO THE CONGRESSIONAL BUDGET

7 ACT OF 1974.

8 (a) FEDERAL REGULATORY BUDGET COST CONTROL

9 SYSTEM.—Title III of the Congressional Budget Act of
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1 1974 is amended by inserting before section 300 the fol2 lowing new center heading ‘‘PART A—GENERAL

3 PROVISIONS’’ and by adding at the end the following

4 new part:

5 ‘‘PART B—FEDERAL REGULATORY BUDGET COST

6 CONTROL

7 SEC. 321. OMB-CBO REPORTS.

8 ‘‘(a) OMB-CBO INITIAL REPORT.—Within 1 year

9 after the date of enactment of this section, OMB and CBO

10 shall jointly issue a report to the President and each

11 House of Congress that contains the following:

12 ‘‘(1) For the first budget year beginning after

13 the issuance of this report, a projection of the aggre14 gate direct cost to the private sector of complying

15 with all Federal regulations in effect immediately be16 fore issuance of the report containing the projection

17 for that budget year of the effect of current-year

18 Federal regulations into the budget year and the

19 outyears based on those regulations.

20 ‘‘(2) A calculation of the estimated aggregate

21 direct cost to the private sector of compliance with

22 all Federal regulations as a percentage of the gross

23 domestic product (GDP).

24 ‘‘(3) The estimated marginal cost (measured as

25 a reduction in estimated gross domestic product) to
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1 the private sector of compliance with all Federal reg2 ulations in excess of 5 percent of the gross domestic

3 product.

4 ‘‘(4) The effect on the domestic economy of dif5 ferent types of Federal regulation.

6 ‘‘(5) The appropriate level of personnel, admin7 istrative overhead, and programmatic savings that

8 should be achieved on a fiscal year by fiscal year

9 basis by Federal agencies that issue regulations with

10 direct costs to the private sector through the reduc11 tion of such aggregate costs to the private sector by

12 equal percentage increments in the 6 years following

13 the budget year until the aggregate level of such

14 costs does not exceed 5 percent of the estimated

15 gross domestic product for the same fiscal year as

16 the estimated costs that will be incurred.

17 ‘‘(6) Recommendations for budgeting, technical,

18 and estimating changes to improve the Federal regu19 latory budgeting process.

20 ‘‘(b) UPDATE REPORTS.—OMB and CBO shall issue

21 update reports on September 15th of the fifth year begin22 ning after issuance of the initial report and at 5-year in23 tervals thereafter containing all the information required

24 in the initial report, but based upon all Federal regula-
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1 tions in effect immediately before issuance of the most

2 recent update report.

3 ‘‘(c) INITIAL BASELINE REPORT.—Within 30 days

4 after the date of enactment of this section, OMB and CBO

5 shall jointly issue a report to the President and each

6 House of Congress that contains an initial aggregate regu7 latory baseline for the first budget year that begins at

8 least 120 days after that date of enactment. That baseline

9 will be a projection of the aggregate direct cost to the pri10 vate sector of complying with all Federal regulations in

11 effect immediately before issuance of the report containing

12 the projection for that budget year of the effect of current13 year Federal regulations into the budget year and the out14 years based on those regulations.

15 ‘‘SEC. 322. AGGREGATE REGULATORY BASELINE.

16 ‘‘(a) IN GENERAL.—For the first budget year begin17 ning after the date of enactment of this section and for

18 every other fiscal year thereafter, the aggregate regulatory

19 baseline refers to a projection of the aggregate direct cost

20 to the private sector of complying with all Federal regula21 tions in effect immediately before issuance of the report

22 containing the projection for that budget year of the effect

23 of current-year Federal regulations into the budget year

24 and the outyears based on those regulations. However, in

25 the case of each of the succeeding fiscal years, the baseline
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1 shall be adjusted for the estimated growth during that

2 year in the gross domestic product (GDP)

3 ‘‘(b) OMB-CBO AGGREGATE REGULATORY BASE4 LINE REPORTS.—(1) The first budget year for which there

5 shall be an aggregate regulatory baseline shall be the

6 budget year to which the initial OMB-CBO baseline report

7 issued under section 321(c) pertains.

8 ‘‘(2) In the case of each budget year after the budget

9 year referred to in paragraph (1), not later than Septem10 ber 15 of the current year, OMB and CBO shall jointly

11 issue a report containing the baseline referred to in sub12 section (a) for that budget year.

13 ‘‘SEC. 323. RECONCILIATION AND ALLOCATIONS.

14 ‘‘(a) RECONCILIATION DIRECTIVES.—In addition to

15 the requirements of section 310, a concurrent resolution

16 on the budget for any fiscal year shall specify—

17 ‘‘(1) changes in laws and regulations necessary

18 to reduce the aggregate direct cost to the private

19 sector of complying with all Federal regulations by

20 6.5 percent for the budget year (as measured

21 against the aggregate regulatory baseline for the

22 first budget year to which this part applies) and by

23 equal percentage increments for each of the outyears

24 (until the aggregate level of such costs does not ex25 ceed 5 percent of the estimated gross domestic prod-
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1 uct for the same fiscal year as the estimated costs

2 that will be incurred) for Federal agencies that issue

3 regulations producing direct costs to the private sec4 tor; and

5 ‘‘(2) changes in laws necessary to achieve re6 ductions in the level of personnel and administrative

7 overhead and to achieve programmatic savings for

8 the budget year and the outyears for those agencies

9 of the following:

10 ‘‘(A) In the first outyear, one-fourth of the

11 percent of reduction in regulatory authority

12 from the aggregate regulatory base.

13 ‘‘(B) In the second outyear, one-third of

14 the percent of reduction in regulatory authority

15 from the aggregate regulatory base.

16 ‘‘(C) In the third, fourth, fifth, and sixth

17 years following the budget year, one-half of the

18 percent of reduction in regulatory authority

19 from the aggregate regulatory base.

20 Section 310(c) shall not apply with respect to directions

21 made under this section.

22 ‘‘(b) ALLOCATION OF TOTALS.—(1) The Committees

23 on the Budget of the House or Representatives and the

24 Senate shall each allocate aggregate 2-year regulatory au25 thority among each committee of its House and by major
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1 functional category for the first budget year beginning

2 after the date of enactment of this section and for the

3 second, fourth, and sixth years following the budget year

4 and then every other year thereafter.

5 ‘‘(2) As soon as practicable after receiving an alloca6 tion under paragraph (1), each committee shall subdivide

7 its allocation among its subcommittees or among pro8 grams over which it has jurisdiction.

9 ‘‘(c) POINT OF ORDER.—(1) It shall not be in order

10 in the House of Representatives or the Senate to consider

11 any bill or resolution, or amendment thereto, which would

12 cause the appropriate allocation made under subsection

13 (b) for a fiscal year of regulatory authority to be exceeded.

14 ‘‘(2) WAIVER.—The point of order set forth in para15 graph (1) may only be waived by the affirmative vote of

16 at least three-fifths of the Members voting, a quorum

17 being present.

18 ‘‘(d) DETERMINATIONS BY BUDGET COMMITTEES.—

19 For purposes of this section, the level of regulatory au20 thority for a fiscal year shall be determined by the Com21 mittee on the Budget of the House of Representatives or

22 the Senate, as the case may be.

23 ‘‘(e) EXCEEDING ALLOCATION TOTALS.—Whenever

24 any Committee of the House of Representatives exceeds

25 its allocation of aggregate 2-year regulatory authority
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1 under subsection (b)(1), any Member of the House of Rep2 resentatives may offer a bill in the House (which shall be

3 highly privileged, unamendable, and debateable for 30

4 minutes) which shall only prohibit the issuance of regula5 tions by any agency under the jurisdiction of that commit6 tee for the fiscal years covered by that allocation until that

7 committee eliminates its breach.

8 ‘‘SEC. 324. ANALYSIS OF REGULATORY COSTS BY CONGRES9 SIONAL BUDGET OFFICE.

10 ‘‘CBO shall prepare for each bill or resolution of a

11 public character reported by any committee of the House

12 of Representatives or the Senate (except the Committee

13 on Appropriations of each House), and submit to such

14 committee—

15 ‘‘(1) an estimate of the costs which would be in16 curred by the private sector in carrying out or com17 plying with such bill or resolution in the fiscal year

18 in which it is to become effective and in each of the

19 4 fiscal years following such fiscal year, together

20 with the basis of each such estimate; and

21 ‘‘(2) a comparison of the estimate of costs de22 scribed in paragraph (1) with any available esti23 mates of costs made by such committee or by any

24 Federal agency.
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1 ‘‘SEC. 325. DEFINITIONS.

2 ‘‘As used in this part:

3 ‘‘(1) The term ‘CBO’ refers to the Director of

4 the Congressional Budget Office.

5 ‘‘(2) The term ‘OMB’ refers to the Director of

6 the Office of Management and Budget.

7 ‘‘(3) The term ‘regulatory authority’ or ‘regu8 latory cost’ means the direct cost to the private sec9 tor of complying with Federal regulations.

10 ‘‘(4) The term ‘direct costs’ means (recognizing

11 that direct costs are not the only costs associated

12 with Federal regulation) all expenditures occurring

13 as a direct result of complying with Federal regula14 tion, rule, statement, or legislation, except those ap15 plying to the military or agency organization, man16 agement, and personnel.’’.

17 SEC. 3. PRESIDENT’S ANNUAL BUDGET SUBMISSIONS.

18 Section 1105(a) of title 31, United States Code, is

19 amended by adding at the end the following new para20 graph:

21 ‘‘(29) a regulatory authority budget analysis of

22 the aggregate direct cost to the private sector of

23 complying with all current and proposed Federal

24 regulations and proposals for complying with section

25 323 of the Congressional Budget Act of 1974 for the

26 budget year and the outyears.’’
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1 SEC. 4. ESTIMATION AND DISCLOSURE OF COSTS OF FED2 ERAL REGULATION.

3 (a) COSTS TO PRIVATE SECTOR OF NEW FEDERAL

4 REGULATIONS.—Chapter 6 of title 5, United States Code,

5 popularly known as the ‘‘Regulatory Flexibility Act’’, is

6 amended—

7 (1) in section 603(a) in the second sentence by

8 inserting before the period the following: ‘‘and the

9 monetary costs to small entities, other businesses,

10 and individuals of complying with the proposed

11 rule’’;

12 (2) by adding at the end of section 603 the

13 following:

14 ‘‘(d) Each initial regulatory flexibility analysis shall

15 also contain a description of the nature and amount of

16 monetary costs that will be incurred by small entities,

17 other businesses, and individuals in complying with the

18 proposed rule.’’;

19 (3) in section 604(a)—

20 (A) in paragraph (2) by striking ‘‘and’’

21 after the semicolon;

22 (B) in paragraph (3) by striking the period

23 and inserting ‘‘; and’’; and

24 (C) by adding at the end the following:

25 ‘‘(4) a statement of the nature and amount of

26 monetary costs that will be incurred by small enti-
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1 ties, other businesses, and individuals in complying

2 with the rule.’’; and

3 (4) in section 607 by inserting before the period

4 the following: ‘‘, except that estimates of monetary

5 costs under sections 603(d) and 604(a)(4) shall only

6 be in the form of a numerical description’’.

7 (b) AGENCY REPORTS.—Each agency that prepares

8 an initial regulatory flexibility analysis under chapter 6

9 of title 5, United States Code, shall, at the same time sub10 mit to each House of Congress and to CBO and OMB

11 a cost estimate and cost benefit analysis of any new pro12 posed regulations that would have an aggregate direct cost

13 to the private sector of at least $10,000,000 for any fiscal

14 year.

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