I

104TH CONGRESS

1ST SESSION H. R. 5

To curb the practice of imposing unfunded Federal mandates on States

and local governments, to ensure that the Federal Government pays

the costs incurred by those governments in complying with certain requirements under Federal statutes and regulations, and to provide information on the cost of Federal mandates on the private sector, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. CLINGER, Mr. PORTMAN, Mr. CONDIT, and Mr. DAVIS (for themselves,

Mr. SHAYS, Mr. MCHUGH, Mr. MICA, Mr. HORN, Mr. ZELIFF, Mr. BURTON of Indiana, Mr. SCHIFF, Mr. BLUTE, Mr. FOX, Mr. WALSH, and Mr.

CUNNINGHAM) introduced the following bill; which was referred to the

Committee on Government Reform and Oversight, and in addition to the

Committees on Rules, the Budget, and the Judiciary, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To curb the practice of imposing unfunded Federal mandates

on States and local governments, to ensure that the

Federal Government pays the costs incurred by those

governments in complying with certain requirements

under Federal statutes and regulations, and to provide

information on the cost of Federal mandates on the

private sector, and for other purposes.
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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 ‘‘Unfunded Mandate

5 Reform Act of 1995’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are—

8 (1) to strengthen the partnership between the

9 Federal Government and States, local governments,

10 and tribal governments;

11 (2) to end the imposition, in the absence of full

12 consideration by Congress, of Federal mandates on

13 States, local governments, and tribal governments in

14 a manner that may displace other essential State,

15 local, and tribal governmental priorities;

16 (3) to assist Congress in its consideration of

17 proposed legislation establishing or revising Federal

18 programs containing Federal mandates affecting

19 States, local governments, tribal governments, and

20 the private sector by—

21 (A) providing for the development of infor22 mation about the nature and size of mandates

23 in proposed legislation; and

24 (B) establishing a mechanism to bring

25 such information to the attention of the Senate
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1 and House of Representatives before the Senate

2 and House of Representatives votes on proposed

3 legislation;

4 (4) to promote informed and deliberate deci5 sions by Congress on the appropriateness of Federal

6 mandates in any particular instance;

7 (5) to establish a point-of-order vote on the con8 sideration in the Senate and House of Representa9 tives of legislation containing significant Federal

10 mandates;

11 (6) to assist Federal agencies in their consider12 ation of proposed regulations affecting States, local

13 governments, and tribal governments, by—

14 (A) requiring that Federal agencies de15 velop a process to enable the elected and other

16 officials of States, local governments, and tribal

17 governments to provide input when Federal

18 agencies are developing regulations; and

19 (B) requiring that Federal agencies pre20 pare and consider better estimates of the budg21 etary impact of regulations containing Federal

22 mandates upon States, local governments, and

23 tribal governments before adopting such regula24 tions, and ensuring that small governments are

25 given special consideration in that process; and
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1 (7) to establish the general rule that Congress

2 shall not impose Federal mandates on States, local

3 governments, and tribal governments without provid4 ing adequate funding to comply with such mandates.

5 SEC. 3. DEFINITIONS.

6 For purposes of this Act—

7 (1) the terms ‘‘agency’’, ‘‘Federal financial as8 sistance’’, ‘‘Federal private sector mandate’’, ‘‘Fed9 eral mandate’’ (except as provided by section 108),

10 ‘‘local government’’, ‘‘private sector’’, ‘‘regulation’’

11 or ‘‘rule’’, and ‘‘State’’ have the meaning given those

12 terms by section 421 of the Congressional Budget

13 Act of 1974; and

14 (2) the term ‘‘small government’’ means any

15 small governmental jurisdiction as defined in section

16 601(5) of title 5, United States Code, and any tribal

17 government.

18 SEC. 4. LIMITATION ON APPLICATION.

19 This Act shall not apply to any provision in a Federal

20 statute or a proposed or final Federal regulation, that—

21 (1) enforces constitutional rights of individuals;

22 (2) establishes or enforces any statutory rights

23 that prohibit discrimination on the basis of race, re24 ligion, gender, national origin, or handicapped or

25 disability status;
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1 (3) requires compliance with accounting and

2 auditing procedures with respect to grants or other

3 money or property provided by the Federal Govern4 ment;

5 (4) provides for emergency assistance or relief

6 at the request of any State, local government, or

7 tribal government or any official of such a govern8 ment;

9 (5) is necessary for the national security or the

10 ratification or implementation of international treaty

11 obligations; or

12 (6) the President designates as emergency legis13 lation and that the Congress so designates in stat14 ute.

15 TITLE I—REVIEW OF UNFUNDED

16 FEDERAL MANDATES

17 SEC. 101. ESTABLISHMENT.

18 There is established a commission which shall be

19 known as the ‘‘Commission on Unfunded Federal Man20 dates’’ (in this title referred to as the ‘‘Commission’’).

21 SEC. 102. REPORT ON UNFUNDED FEDERAL MANDATES BY

22 THE COMMISSION.

23 (a) IN GENERAL.—The Commission shall in accord24 ance with this section—
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1 (1) investigate and review the role of unfunded

2 Federal mandates in intergovernmental relations and

3 their impact on State, local, tribal, and Federal gov4 ernment objectives and responsibilities; and

5 (2) make recommendations to the President

6 and the Congress regarding—

7 (A) allowing flexibility for State, local, and

8 tribal governments in complying with specific

9 unfunded Federal mandates for which terms of

10 compliance are unnecessarily rigid or complex;

11 (B) reconciling any 2 or more unfunded

12 Federal mandates which impose contradictory

13 or inconsistent requirements;

14 (C) terminating unfunded Federal man15 dates which are duplicative, obsolete, or lacking

16 in practical utility;

17 (D) suspending, on a temporary basis, un18 funded Federal mandates which are not vital to

19 public health and safety and which compound

20 the fiscal difficulties of State, local, and tribal

21 governments, including recommendations for

22 triggering such suspension;

23 (E) consolidating or simplifying unfunded

24 Federal mandates, or the planning or reporting

25 requirements of such mandates, in order to re-
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1 duce duplication and facilitate compliance by

2 State, local, and tribal governments with those

3 mandates; and

4 (F) establishing common Federal defini5 tions or standards to be used by State, local,

6 and tribal governments in complying with un7 funded Federal mandates that use different

8 definitions or standards for the same terms or

9 principles.

10 (3) IDENTIFICATION OF RELEVANT UNFUNDED

11 FEDERAL MANDATES.—Each recommendation under

12 paragraph (2) shall, to the extent practicable, iden13 tify the specific unfunded Federal mandates to

14 which the recommendation applies.

15 (b) CRITERIA.—

16 (1) IN GENERAL.—The Commission shall estab17 lish criteria for making recommendations under sub18 section (a).

19 (2) ISSUANCE OF PROPOSED CRITERIA.—The

20 Commission shall issue proposed criteria under this

21 subsection not later than 60 days after the date of

22 the enactment of this Act, and thereafter provide a

23 period of 30 days for submission by the public of

24 comments on the proposed criteria.
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1 (3) FINAL CRITERIA.—Not later than 45 days

2 after the date of issuance of proposed criteria, the

3 Commission shall—

4 (A) consider comments on the proposed

5 criteria received under paragraph (2);

6 (B) adopt and incorporate in final criteria

7 any recommendations submitted in those com8 ments that the Commission determines will aid

9 the Commission in carrying out its duties under

10 this section; and

11 (C) issue final criteria under this sub12 section.

13 (c) PRELIMINARY REPORT.—

14 (1) IN GENERAL.—Not later than 9 months

15 after the date of the enactment of this Act, the

16 Commission shall—

17 (A) prepare and publish a preliminary re18 port on its activities under this title, including

19 preliminary recommendations pursuant to sub20 section (a);

21 (B) publish in the Federal Register a no22 tice of availability of the preliminary report;

23 and

24 (C) provide copies of the preliminary re25 port to the public upon request.
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1 (2) PUBLIC HEARINGS.—The Commission shall

2 hold public hearings on the preliminary rec3 ommendations contained in the preliminary report of

4 the Commission under this subsection.

5 (d) FINAL REPORT.—Not later than 3 months after

6 the date of the publication of the preliminary report under

7 subsection (c), the Commission shall submit to the Con8 gress, including the Committee on Government Reform

9 and Oversight of the House of Representatives and the

10 Committee on Governmental Affairs of the Senate, and

11 to the President a final report on the findings, conclusions,

12 and recommendations of the Commission under this sec13 tion.

14 SEC. 103. MEMBERSHIP.

15 (a) NUMBER AND APPOINTMENT.—The Commission

16 shall be composed of 9 members appointed from individ17 uals who possess extensive leadership experience in and

18 knowledge of State, local, and tribal governments and

19 intergovernmental relations, including State and local

20 elected officials, as follows:

21 (1) 3 members appointed by the Speaker of the

22 House of Representatives, in consultation with the

23 minority leader of the House of Representatives.
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1 (2) 3 members appointed by the majority leader

2 of the Senate, in consultation with the minority lead3 er of the Senate.

4 (3) 3 members appointed by the President.

5 (b) WAIVER OF LIMITATION ON EXECUTIVE SCHED6 ULE POSITIONS.—Appointments may be made under this

7 section without regard to section 5311(b) of title 5, United

8 States Code.

9 (c) TERMS.—

10 (1) IN GENERAL.—Each member of the Com11 mission shall be appointed for the life of the Com12 mission.

13 (2) VACANCIES.—A vacancy in the Commission

14 shall be filled in the manner in which the original

15 appointment was made.

16 (d) BASIC PAY.—

17 (1) RATES OF PAY.—Members of the Commis18 sion shall serve without pay.

19 (2) PROHIBITION OF COMPENSATION OF FED20 ERAL EMPLOYEES.—Members of the Commission

21 who are full-time officers or employees of the United

22 States may not receive additional pay, allowances, or

23 benefits by reason of their service on the Commis24 sion.
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1 (e) TRAVEL EXPENSES.—Each member of the Com2 mission shall receive travel expenses, including per diem

3 in lieu of subsistence, in accordance with sections 5702

4 and 5703 of title 5, United States Code.

5 (f) CHAIRPERSON.—The President shall designate a

6 member of the Commission as Chairperson at the time of

7 the appointment of that member.

8 (g) MEETINGS.—

9 (1) IN GENERAL.—Subject to paragraph (2),

10 the Commission shall meet at the call of the Chair11 person or a majority of its members.

12 (2) FIRST MEETING.—The Commission shall

13 convene its first meeting by not later than 45 days

14 after the date of the completion of appointment of

15 the members of the Commission.

16 (3) QUORUM.—A majority of members of the

17 Commission shall constitute a quorum but a lesser

18 number may hold hearings.

19 SEC. 104. DIRECTOR AND STAFF OF COMMISSION; EXPERTS

20 AND CONSULTANTS.

21 (a) DIRECTOR.—The Commission shall have a Direc22 tor who shall be appointed by the Commission. The Direc23 tor shall be paid at the rate of basic pay payable for level

24 IV of the Executive Schedule.
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1 (b) STAFF.—With the approval of the Commission,

2 and without regard to section 5311(b) of title 5, United

3 States Code, the Director may appoint and fix the pay

4 of such staff as is sufficient to enable the Commission to

5 carry out its duties.

6 (c) APPLICABILITY OF CERTAIN CIVIL SERVICE

7 LAWS.—The Director and staff of the Commission may

8 be appointed without regard to the provisions of title 5,

9 United States Code, governing appointments in the com10 petitive service, and may be paid without regard to the

11 provisions of chapter 51 and subchapter III of chapter 53

12 of that title relating to classification and General Schedule

13 pay rates, except that an individual so appointed may not

14 receive pay in excess of the annual rate payable under

15 section 5376 of title 5, United States Code.

16 (d) EXPERTS AND CONSULTANTS.—The Commission

17 may procure temporary and intermittent services of ex18 perts or consultants under section 3109(b) of title 5,

19 United States Code.

20 (e) STAFF OF FEDERAL AGENCIES.—Upon request

21 of the Director, the head of any Federal department or

22 agency may detail, on a reimbursable basis, any of the

23 personnel of that department or agency to the Commission

24 to assist it in carrying out its duties under this title.
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1 SEC. 105. POWERS OF COMMISSION.

2 (a) HEARINGS AND SESSIONS.—The Commission

3 may, for the purpose of carrying out this title, hold hear4 ings, sit and act at times and places, take testimony, and

5 receive evidence as the Commission considers appropriate.

6 (b) POWERS OF MEMBERS AND AGENTS.—Any mem7 ber or agent of the Commission may, if authorized by the

8 Commission, take any action which the Commission is

9 authorized to take by this section.

10 (c) OBTAINING OFFICIAL DATA.—The Commission

11 may secure directly from any department or agency of the

12 United States information necessary to enable it to carry

13 out this title, except information—

14 (1) which is specifically exempted from disclo15 sure by law; or

16 (2) which that department or agency deter17 mines will disclose—

18 (A) matters necessary to be kept secret in

19 the interests of national defense or the con20 fidential conduct of the foreign relations of the

21 United States;

22 (B) information relating to trade secrets or

23 financial or commercial information pertaining

24 specifically to a given person if the information

25 has been obtained by the Government on a con26 fidential basis, other than through an applica-
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1 tion by such person for a specific financial or

2 other benefit, and is required to be kept secret

3 in order to prevent undue injury to the competi4 tive position of such person; or

5 (C) personnel or medical data or similar

6 data the disclosure of which would constitute a

7 clearly unwarranted invasion of personal pri8 vacy;

9 unless the portions containing such matters, infor10 mation, or data have been excised.

11 Upon request of the Chairperson of the Commission, the

12 head of that department or agency shall furnish that infor13 mation to the Commission.

14 (d) MAILS.—The Commission may use the United

15 States mails in the same manner and under the same con16 ditions as other departments and agencies of the United

17 States.

18 (e) ADMINISTRATIVE SUPPORT SERVICES.—Upon

19 the request of the Commission, the Administrator of Gen20 eral Services shall provide to the Commission, on a reim21 bursable basis, the administrative support services nec22 essary for the Commission to carry out its duties under

23 this title.

24 (f) CONTRACT AUTHORITY.—The Commission may,

25 subject to appropriations, contract with and compensate
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1 government and private agencies or persons for property

2 and services used to carry out its duties under this title.

3 SEC. 106. TERMINATION.

4 The Commission shall terminate 90 days after sub5 mitting its final report pursuant to section 102(d).

6 SEC. 107. AUTHORIZATION OF APPROPRIATIONS.

7 There is authorized to be appropriated to the Com8 mission $1,000,000 to carry out this title.

9 SEC. 108. DEFINITION.

10 As used in this title, the term ‘‘Federal mandate’’

11 means any provision in statute or regulation that imposes

12 an enforceable duty upon States, local governments, or

13 tribal governments including a condition of Federal assist14 ance or a duty arising from participation in a voluntary

15 Federal program.

16 SEC. 109. EFFECTIVE DATE.

17 This title shall take effect 60 days after the date of

18 the enactment of this Act.

19 TITLE II—REGULATORY

20 ACCOUNTABILITY AND REFORM

21 SEC. 201. REGULATORY PROCESS.

22 (a) IN GENERAL.—Each agency shall, to the extent

23 permitted by subchapter II of chapter 5 of title 5, United

24 States Code—
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1 (1) assess the effects of Federal regulations on

2 States, local governments, tribal governments, and

3 the private sector (other than to the extent that such

4 regulations incorporate requirements specifically set

5 forth in legislation), including specifically the avail6 ability of resources to carry out any Federal man7 dates in those regulations; and

8 (2) seek to minimize those burdens that unique9 ly or significantly affect such governmental entities

10 or the private sector, consistent with achieving statu11 tory and regulatory objectives.

12 (b) STATE, LOCAL GOVERNMENT, AND TRIBAL GOV13 ERNMENT INPUT.—Each agency shall develop an effective

14 process to permit elected officials (or their designated rep15 resentatives) of States, local governments, and tribal gov16 ernments to provide meaningful and timely input in the

17 development of regulatory proposals containing significant

18 Federal intergovernmental mandates.

19 (c) AGENCY PLAN.—

20 (1) IN GENERAL.—Before establishing any reg21 ulatory requirements that might significantly or

22 uniquely affect small governments, an agency shall

23 have developed a plan under which the agency

24 shall—
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1 (A) provide notice of the contemplated re2 quirements to potentially affected small govern3 ments, if any;

4 (B) enable officials of affected small gov5 ernments to provide input pursuant to sub6 section (b); and

7 (C) inform, educate, and advise small gov8 ernments on compliance with the requirements.

9 (2) EFFECTS ON PRIVATE SECTOR.—Before es10 tablishing any regulatory requirements, agencies

11 shall prepare estimates, based on available data, of

12 the effect of Federal private sector mandates on the

13 national economy, including the effect on productiv14 ity, economic growth, full employment, creation of

15 productive jobs, and international competitiveness of

16 United States goods and services.

17 SEC. 202. STATEMENTS TO ACCOMPANY SIGNIFICANT REG18 ULATORY ACTIONS.

19 (a) IN GENERAL.—Before promulgating any final

20 rule that includes any Federal mandate that may result

21 in the expenditure by States, local governments, or tribal

22 governments, in the aggregate, or the private sector of at

23 least $100,000,000 (adjusted annually for inflation) in

24 any 1 year, and before promulgating any general notice

25 of proposed rulemaking that is likely to result in promul-
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1 gation of any such rule, the agency shall prepare a written

2 statement containing—

3 (1) estimates by the agency, including the un4 derlying analysis, of the anticipated costs to States,

5 local governments, tribal governments, and the pri6 vate sector of complying with the Federal mandates,

7 and of the extent to which such costs may be paid

8 with funds provided by the Federal Government or

9 otherwise paid through Federal financial assistance;

10 (2) estimates by the agency, if and to the ex11 tent that the agency determines that accurate esti12 mates are reasonably feasible, of—

13 (A) the future costs of the Federal man14 date; and

15 (B) any disproportionate budgetary effects

16 of the Federal mandates upon any particular

17 regions of the country or particular States, local

18 governments, tribal governments, urban or

19 rural or other types of communities, or particu20 lar segments of the private sector;

21 (3) a qualitative, and if possible, a quantitative

22 assessment of costs and benefits anticipated from

23 the Federal mandates (such as the enhancement of

24 health and safety and the protection of the natural

25 environment);
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1 (4) the effect of Federal private sector man2 dates on the national economy, including the effect

3 on productivity, economic growth, full employment,

4 creation of productive jobs, and international com5 petitiveness of United States goods and services;

6 (5) a description of the extent of the agency’s

7 prior consultation with elected representatives (or

8 their designated representatives) of the affected

9 States, local governments, and tribal governments,

10 and designated representatives of the private sector;

11 (6) a summary of the comments and concerns

12 that were presented by States, local governments, or

13 tribal governments and the private sector either oral14 ly or in writing to the agency;

15 (7) a summary of the agency’s evaluation of

16 those comments and concerns; and

17 (8) the agency’s position supporting the need to

18 issue the regulation containing the Federal man19 dates (considering, among other things, the extent to

20 which costs may or may not be paid with funds pro21 vided by the Federal Government).

22 (b) PROMULGATION.—In promulgating a general no23 tice of proposed rulemaking or a final rule for which a

24 statement under subsection (a) is required, the agency
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1 shall include in the promulgation a summary of the infor2 mation contained in the statement.

3 (c) PREPARATION IN CONJUNCTION WITH OTHER

4 STATEMENT.—Any agency may prepare any statement re5 quired by subsection (a) in conjunction with or as part

6 of any other statement or analysis, if the statement or

7 analysis satisfies the provisions of subsection (a).

8 SEC. 203. ASSISTANCE TO THE CONGRESSIONAL BUDGET

9 OFFICE.

10 The Director of the Office of Management and Budg11 et shall—

12 (1) collect from agencies the statements pre13 pared under section 202; and

14 (2) periodically forward copies of them to the

15 Director of the Congressional Budget Office on a

16 reasonably timely basis after promulgation of the

17 general notice of proposed rulemaking or of the final

18 rule for which the statement was prepared.

19 SEC. 204. PILOT PROGRAM ON SMALL GOVERNMENT FLEXI20 BILITY.

21 (a) IN GENERAL.—The Director of the Office of

22 Management and Budget, in consultation with Federal

23 agencies, shall establish pilot programs in at least 2 agen24 cies to test innovative and more flexible regulatory ap25 proaches that—
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1 (1) reduce reporting and compliance burdens on

2 small governments; and

3 (2) meet overall statutory goals and objectives.

4 (b) PROGRAM FOCUS.—The pilot programs shall

5 focus on rules in effect or proposed rules, or on a combina6 tion thereof.

7 TITLE III—LEGISLATIVE

8 ACCOUNTABILITY AND REFORM

9 SEC. 301. LEGISLATIVE MANDATE ACCOUNTABILITY AND

10 REFORM.

11 Title IV of the Congressional Budget Act of 1974 is

12 amended by—

13 (1) inserting before section 401 the following:

14 ‘‘PART A—GENERAL PROVISIONS’’; and

15 (2) adding at the end the following new part:

16 ‘‘PART B—FEDERAL MANDATES

17 ‘‘SEC. 421. DEFINITIONS.

18 ‘‘For purposes of this part:

19 ‘‘(1) AGENCY.—The term ‘agency’ has the

20 meaning stated in section 551(1) of title 5, United

21 States Code, but does not include independent regu22 latory agencies, as defined by section 3502(10) of

23 title 44, United States Code.

24 ‘‘(2) DIRECTOR.—The term ‘Director’ means

25 the Director of the Congressional Budget Office.
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1 ‘‘(3) FEDERAL FINANCIAL ASSISTANCE.—The

2 term ‘Federal financial assistance’ means the

3 amount of budget authority for any Federal grant

4 assistance or any Federal program providing loan

5 guarantees or direct loans.

6 ‘‘(4) FEDERAL INTERGOVERNMENTAL MAN7 DATE.—The term ‘Federal intergovernmental man8 date’ means—

9 ‘‘(A) any provision in legislation, statute,

10 or regulation that—

11 ‘‘(i) would impose an enforceable duty

12 upon States, local governments, or tribal

13 governments, except—

14 ‘‘(I) a condition of Federal as15 sistance; or

16 ‘‘(II) a duty arising from partici17 pation in a voluntary Federal pro18 gram, except as provided in subpara19 graph (B); or

20 ‘‘(ii) would reduce or eliminate the

21 amount of authorization of appropriations

22 for Federal financial assistance that would

23 be provided to States, local governments,

24 or tribal governments for the purpose of

25 complying with any such previously im-
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1 posed duty unless such duty is reduced or

2 eliminated by a corresponding amount; or

3 ‘‘(B) any provision in legislation, statute,

4 or regulation that relates to a then-existing

5 Federal program under which $500,000,000 or

6 more is provided annually to States, local gov7 ernments, and tribal governments under entitle8 ment authority, if—

9 ‘‘(i)(I) the provision would increase

10 the stringency of conditions of assistance

11 to States, local governments, or tribal gov12 ernments under the program; or

13 ‘‘(II) would place caps upon, or other14 wise decrease, the Federal Government’s

15 responsibility to provide funding to States,

16 local governments, or tribal governments

17 under the program; and

18 ‘‘(ii) the States, local governments, or

19 tribal governments that participate in the

20 Federal program lack authority under that

21 program to amend their financial or pro22 grammatic responsibilities to continue pro23 viding required services that are affected

24 by the legislation, statute, or regulation.
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1 ‘‘(5) FEDERAL PRIVATE SECTOR MANDATE.—

2 The term ‘Federal private sector mandate’ means

3 any provision in legislation, statute, or regulation

4 that—

5 ‘‘(A) would impose an enforceable duty on

6 the private sector except—

7 ‘‘(i) a condition of Federal assistance;

8 or

9 ‘‘(ii) a duty arising from participation

10 in a voluntary Federal program; or

11 ‘‘(B) would reduce or eliminate the amount

12 of authorization of appropriations for Federal

13 financial assistance that will be provided to the

14 private sector for the purpose of ensuring com15 pliance with such duty.

16 ‘‘(6) FEDERAL MANDATE.—The term ‘Federal

17 mandate’ means a Federal intergovernmental man18 date or a Federal private sector mandate, as defined

19 in paragraphs (4) and (5).

20 ‘‘(7) FEDERAL MANDATE DIRECT COSTS.—

21 ‘‘(A) FEDERAL INTERGOVERNMENTAL DI22 RECT COSTS.—In the case of a Federal inter23 governmental mandate, the term ‘direct costs’

24 means the aggregate estimated amounts that all

25 States, local governments, and tribal govern-
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1 ments would be required to spend or would be

2 required to forego in revenues in order to com3 ply with the Federal intergovernmental man4 date, or, in the case of a provision referred to

5 in paragraph (4)(A)(ii), the amount of Federal

6 financial assistance eliminated or reduced.

7 ‘‘(B) PRIVATE SECTOR DIRECT COSTS.—In

8 the case of a Federal private sector mandate,

9 the term ‘direct costs’ means the aggregate esti10 mated amounts that the private sector would be

11 required to spend in order to comply with a

12 Federal private sector mandate.

13 ‘‘(C) EXCLUSION FROM DIRECT COSTS.—

14 The term ‘direct costs’ does not include—

15 ‘‘(i) estimated amounts that the

16 States, local governments, and tribal gov17 ernments (in the case of a Federal inter18 governmental mandate), or the private sec19 tor (in the case of a Federal private sector

20 mandate), would spend—

21 ‘‘(I) to comply with or carry out

22 all applicable Federal, State, local,

23 and tribal laws and regulations in ef24 fect at the time of the adoption of a

25 Federal mandate for the same activity
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1 as is affected by that Federal man2 date; or

3 ‘‘(II) to comply with or carry out

4 State, local governmental, and tribal

5 governmental programs, or private6 sector business or other activities in

7 effect at the time of the adoption of

8 a Federal mandate for the same activ9 ity as is affected by that mandate; or

10 ‘‘(ii) expenditures to the extent that

11 they will be offset by any direct savings to

12 be enjoyed by the States, local govern13 ments, and tribal governments, or by the

14 private sector, as a result of—

15 ‘‘(I) their compliance with the

16 Federal mandate; or

17 ‘‘(II) other changes in Federal

18 law or regulation that are enacted or

19 adopted in the same bill or joint reso20 lution or proposed or final Federal

21 regulation and that govern the same

22 activity as is affected by the Federal

23 mandate.

24 ‘‘(D) DETERMINATION OF COSTS.—Direct

25 costs shall be determined based on the assump-
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1 tion that States, local governments, tribal gov2 ernments, and the private sector will take all

3 reasonable steps necessary to mitigate the costs

4 resulting from the Federal mandate, and will

5 comply with applicable standards of practice

6 and conduct established by recognized profes7 sional or trade associations. Reasonable steps to

8 mitigate the costs shall not include increases in

9 State, local, or tribal taxes or fees.

10 ‘‘(8) LOCAL GOVERNMENT.—The term ‘local

11 government’ has the same meaning as in section

12 6501(6) of title 31, United States Code.

13 ‘‘(9) PRIVATE SECTOR.—The term ‘private sec14 tor’ means individuals, partnerships, associations,

15 corporations, business trusts, or legal representa16 tives, organized groups of individuals, and edu17 cational and other nonprofit institutions.

18 ‘‘(10) REGULATION.—The term ‘regulation’ or

19 ‘rule’ has the meaning of ‘rule’ as defined in section

20 601(2) of title 5, United States Code.

21 ‘‘(11) STATE.—The term ‘State’ has the same

22 meaning as in section 6501(9) of title 31, United

23 States Code.
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1 ‘‘SEC. 422. LIMITATION ON APPLICATION.

2 ‘‘This part shall not apply to any provision in a bill,

3 joint resolution, motion, amendment, or conference report

4 before Congress that—

5 ‘‘(1) enforces constitutional rights of individ6 uals;

7 ‘‘(2) establishes or enforces any statutory rights

8 that prohibit discrimination on the basis of race, re9 ligion, gender, national origin, or handicapped or

10 disability status;

11 ‘‘(3) requires compliance with accounting and

12 auditing procedures with respect to grants or other

13 money or property provided by the Federal Govern14 ment;

15 ‘‘(4) provides for emergency assistance or relief

16 at the request of any State, local government, or

17 tribal government or any official of such a govern18 ment;

19 ‘‘(5) is necessary for the national security or

20 the ratification or implementation of international

21 treaty obligations; or

22 ‘‘(6) the President designates as emergency leg23 islation and that the Congress so designates in stat24 ute.
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1 ‘‘SEC. 423. DUTIES OF CONGRESSIONAL COMMITTEES.

2 ‘‘(a) SUBMISSION OF BILLS TO THE DIRECTOR.—

3 When a committee of authorization of the House of Rep4 resentatives or the Senate orders a bill or joint resolution

5 of a public character reported, the committee shall

6 promptly provide the text of the bill or joint resolution

7 to the Director and shall identify to the Director any Fed8 eral mandate contained in the bill or resolution.

9 ‘‘(b) COMMITTEE REPORT.—

10 ‘‘(1) INFORMATION REGARDING FEDERAL MAN11 DATES.—When a committee of authorization of the

12 House of Representatives or the Senate reports a

13 bill or joint resolution of a public character that in14 cludes any Federal mandate, the report of the com15 mittee accompanying the bill or joint resolution shall

16 contain the information required by paragraph (2)

17 and, in the case of a Federal intergovernmental

18 mandate, paragraph (3).

19 ‘‘(2) REPORTS ON FEDERAL MANDATES.—Each

20 report referred to in paragraph (1) shall contain—

21 ‘‘(A) an identification and description of

22 each Federal mandate in the bill or joint resolu23 tion, including the statement, if available, from

24 the Director pursuant to section 424(a);

25 ‘‘(B) a qualitative assessment, and if prac26 ticable, a quantitative assessment of costs and
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1 benefits anticipated from the Federal mandate

2 (including the effects on health and safety and

3 protection of the natural environment); and

4 ‘‘(C) a statement of the degree to which

5 the Federal mandate affects each of the public

6 and private sectors and the extent to which

7 Federal payment of public sector costs would

8 affect the competitive balance between States,

9 local governments, or tribal governments and

10 privately owned businesses.

11 ‘‘(3) INTERGOVERNMENTAL MANDATES.—If any

12 of the Federal mandates in the bill or joint resolu13 tion are Federal intergovernmental mandates, the

14 report referred to in paragraph (1) shall also con15 tain—

16 ‘‘(A)(i) a statement of the amount, if any,

17 of increase or decrease in authorization of ap18 propriations under existing Federal financial

19 assistance programs or for new Federal finan20 cial assistance, provided by the bill or joint res21 olution and usable for activities of States, local

22 governments, or tribal governments subject to

23 Federal intergovernmental mandates; and

24 ‘‘(ii) a statement of whether the committee

25 intends that the Federal intergovernmental
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1 mandates be partly or entirely unfunded, and,

2 if so, the reasons for that intention; and

3 ‘‘(B) a statement of any existing sources of

4 Federal financial assistance in addition to those

5 identified in subparagraph (A) that may assist

6 States, local governments, and tribal govern7 ments in paying the direct costs of the Federal

8 intergovernmental mandates.

9 ‘‘(4) INFORMATION REGARDING PREEMPTION.—

10 When a committee of authorization of the House of

11 Representatives or the Senate reports a bill or joint

12 resolution of a public character, the committee re13 port accompanying the bill or joint resolution shall

14 contain, if relevant to the bill or joint resolution, an

15 explicit statement on whether the bill or joint resolu16 tion, in whole or in part, is intended to preempt any

17 State, local, or tribal law, and if so, an explanation

18 of the reasons for such intention.

19 ‘‘(c) PUBLICATION OF STATEMENT FROM THE DI20 RECTOR.—

21 ‘‘(1) IN GENERAL.—Upon receiving a statement

22 (including any supplemental statement) from the Di23 rector pursuant to section 424(a), a committee of

24 the House of Representatives or the Senate shall

25 publish the statement in the committee report ac-
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1 companying the bill or joint resolution to which the

2 statement relates if the statement is available to be

3 included in the printed report.

4 ‘‘(2) OTHER PUBLICATION OF STATEMENT OF

5 DIRECTOR.—If the statement is not published in the

6 report, or if the bill or joint resolution to which the

7 statement relates is expected to be considered by the

8 House of Representatives or the Senate before the

9 report is published, the committee shall cause the

10 statement, or a summary thereof, to be published in

11 the Congressional Record in advance of floor consid12 eration of the bill or joint resolution.

13 ‘‘SEC. 424. DUTIES OF THE DIRECTOR.

14 ‘‘(a) STATEMENTS ON BILLS AND JOINT RESOLU15 TIONS OTHER THAN APPROPRIATIONS BILLS AND JOINT

16 RESOLUTIONS.—

17 ‘‘(1) FEDERAL INTERGOVERNMENTAL MAN18 DATES IN REPORTED BILLS AND RESOLUTIONS.—

19 For each bill or joint resolution of a public character

20 reported by any committee of authorization of the

21 House of Representatives or the Senate, the Director

22 shall prepare and submit to the committee a state23 ment as follows:

24 ‘‘(A) If the Director estimates that the di25 rect cost of all Federal intergovernmental man-
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1 dates in the bill or joint resolution will equal or

2 exceed $50,000,000 (adjusted annually for in3 flation) in the fiscal year in which such a Fed4 eral intergovernmental mandate (or in any nec5 essary implementing regulation) would first be

6 effective or in any of the 4 fiscal years following

7 such year, the Director shall so state, specify

8 the estimate, and briefly explain the basis of

9 the estimate.

10 ‘‘(B) The estimate required by subpara11 graph (A) shall include estimates (and brief ex12 planations of the basis of the estimates) of—

13 ‘‘(i) the total amount of direct cost of

14 complying with the Federal intergovern15 mental mandates in the bill or joint resolu16 tion; and

17 ‘‘(ii) the amount, if any, of increase in

18 authorization of appropriations or budget

19 authority or entitlement authority under

20 existing Federal financial assistance pro21 grams, or of authorization of appropria22 tions for new Federal financial assistance,

23 provided by the bill or joint resolution and

24 usable by States, local governments, or
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1 tribal governments for activities subject to

2 the Federal intergovernmental mandates.

3 ‘‘(2) FEDERAL PRIVATE SECTOR MANDATES IN

4 REPORTED BILLS AND JOINT RESOLUTIONS.—For

5 each bill or joint resolution of a public character re6 ported by any committee of authorization of the

7 House of Representatives or the Senate, the Director

8 shall prepare and submit to the committee a state9 ment as follows:

10 ‘‘(A) If the Director estimates that the di11 rect cost of all Federal private sector mandates

12 in the bill or joint resolution will equal or ex13 ceed $100,000,000 (adjusted annually for infla14 tion) in the fiscal year in which any Federal

15 private sector mandate in the bill or joint reso16 lution (or in any necessary implementing regu17 lation) would first be effective or in any of the

18 4 fiscal years following such fiscal year, the Di19 rector shall so state, specify the estimate, and

20 briefly explain the basis of the estimate.

21 ‘‘(B) The estimate required by subpara22 graph (A) shall include estimates (and brief ex23 planations of the basis of the estimates) of—

24 ‘‘(i) the total amount of direct costs of

25 complying with the Federal private sector
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1 mandates in the bill or joint resolution;

2 and

3 ‘‘(ii) the amount, if any, of increase in

4 authorization of appropriations under ex5 isting Federal financial assistance pro6 grams, or of authorization of appropria7 tions for new Federal financial assistance,

8 provided by the bill or joint resolution usa9 ble by the private sector for the activities

10 subject to the Federal private sector man11 dates.

12 ‘‘(C) If the Director determines that it is

13 not feasible to make a reasonable estimate that

14 would be required under subparagraphs (A) and

15 (B), the Director shall not make the estimate,

16 but shall report in the statement that the rea17 sonable estimate cannot be made and shall in18 clude the reasons for that determination in the

19 statement.

20 ‘‘(3) LEGISLATION FALLING BELOW THE DI21 RECT COSTS THRESHOLDS.—If the Director esti22 mates that the direct costs of a Federal mandate

23 will not equal or exceed the threshold specified in

24 paragraph (1)(A) or (2)(A), the Director shall so
36

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1 state and shall briefly explain the basis of the esti2 mate.

3 ‘‘(4) AMENDED BILLS AND JOINT RESOLU4 TIONS; CONFERENCE REPORTS.—If the Director has

5 prepared the statement pursuant to subsection (a)

6 for a bill or joint resolution, and if that bill or joint

7 resolution is reported or passed in an amended form

8 (including if passed by one House as an amendment

9 in the nature of a substitute for the text of a bill

10 or joint resolution from the other House) or is re11 ported by a committee of conference in an amended

12 form, the committee of conference shall ensure, to

13 the greatest extent practicable, that the Director

14 shall prepare a supplemental statement for the bill

15 or joint resolution in that amended form.

16 ‘‘(b) ASSISTANCE TO COMMITTEES AND STUDIES.—

17 ‘‘(1) IN GENERAL.—At the request of any com18 mittee of the House of Representatives or of the

19 Senate, the Director shall, to the extent practicable,

20 consult with and assist such committee in analyzing

21 the budgetary or financial impact of any proposed

22 legislation that may have—

23 ‘‘(A) a significant budgetary impact on

24 State, local, or tribal governments; or
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1 ‘‘(B) a significant financial impact on the

2 private sector.

3 ‘‘(2) CONTINUING STUDIES.—The Director

4 shall conduct continuing studies to enhance compari5 sons of budget outlays, credit authority, and tax ex6 penditures.

7 ‘‘(3) FEDERAL MANDATE STUDIES.—

8 ‘‘(A) At the request of any committee of

9 the House of Representatives or the Senate, the

10 Director shall, to the extent practicable, con11 duct a study of a legislative proposal containing

12 a Federal mandate.

13 ‘‘(B) In conducting a study under subpara14 graph (A), the Director shall—

15 ‘‘(i) solicit and consider information

16 or comments from elected officials (includ17 ing their designated representatives) of

18 States, local governments, tribal govern19 ments, designated representatives of the

20 private sector, and such other persons as

21 may provide helpful information or com22 ments;

23 ‘‘(ii) consider establishing advisory

24 panels of elected officials (including their

25 designated representatives) of States, local
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1 governments, tribal governments, des2 ignated representatives of the private sec3 tor, and other persons if the Director de4 termines, in the Director’s discretion, that

5 such advisory panels would be helpful in

6 performing the Director’s responsibilities

7 under this section; and

8 ‘‘(iii) include estimates, if and to the

9 extent that the Director determines that

10 accurate estimates are reasonably feasible,

11 of—

12 ‘‘(I) the future direct cost of the

13 Federal mandates concerned to the

14 extent that they significantly differ

15 from or extend beyond the 5-year pe16 riod after the mandate is first effec17 tive; and

18 ‘‘(II) any disproportionate budg19 etary effects of the Federal mandates

20 concerned upon particular industries

21 or sectors of the economy, States, re22 gions, and urban, or rural or other

23 types of communities, as appropriate.

24 ‘‘(C) In conducting a study on private sec25 tor mandates under subparagraph (A), the Di-
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1 rector shall provide estimates, if and to the ex2 tent that the Director determines that such es3 timates are reasonably feasible, of—

4 ‘‘(i) future costs of Federal private

5 sector mandates to the extent that such

6 mandates differ significantly from or ex7 tend beyond the 5-year period referred to

8 in subparagraph (B)(iii)(I);

9 ‘‘(ii) any disproportionate financial ef10 fects of Federal private sector mandates

11 and of any Federal financial assistance in

12 the bill or joint resolution upon any par13 ticular industries or sectors of the econ14 omy, States, regions, and urban or rural or

15 other types of communities; and

16 ‘‘(iii) the effect of Federal private sec17 tor mandates in the bill or joint resolution

18 on the national economy, including the ef19 fect on productivity, economic growth, full

20 employment, creation of productive jobs,

21 and international competitiveness of

22 United States goods and services.

23 ‘‘(c) VIEWS AND ESTIMATES OF COMMITTEES.—Any

24 committee of the House of Representatives or the Senate

25 that anticipates that it will consider any proposed legisla-
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1 tion establishing, amending, or reauthorizing any Federal

2 program likely to have a significant budgetary impact on

3 any State, local, or tribal government, or likely to have

4 a significant financial impact on the private sector, includ5 ing any legislative proposal submitted by the executive

6 branch likely to have such a budgetary or financial impact,

7 shall include that information in its views and estimates

8 on that proposal to the Committee on the Budget of the

9 applicable House pursuant to section 301(d).

10 ‘‘(d) VIEWS OF COMMITTEES.—Any committee of the

11 House of Representatives or the Senate which anticipates

12 that the committee will consider any proposed legislation

13 establishing, amending, or reauthorizing any Federal pro14 gram likely to have a significant budgetary impact on the

15 States, local governments, or tribal governments, or likely

16 to have a significant financial impact on the private sector,

17 including any legislative proposal submitted by the execu18 tive branch likely to have such a budgetary or financial

19 impact, shall provide its views and estimates on such pro20 posal to the Committee on the Budget of its House.

21 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There

22 is authorized to be appropriated to the Congressional

23 Budget Office to carry out this part $4,500,000 for each

24 of fiscal years 1996 through 2002.
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1 ‘‘SEC. 425. POINT OF ORDER.

2 ‘‘(a) IN GENERAL.—It shall not be in order in the

3 House of Representatives or the Senate to consider—

4 ‘‘(1) any bill or joint resolution that is reported

5 by a committee unless the committee has published

6 the statement of the Director pursuant to section

7 424(a) prior to such consideration, except that this

8 paragraph shall not apply to any supplemental state9 ment prepared by the Director under section

10 424(a)(4); or

11 ‘‘(2) any bill, joint resolution, amendment, mo12 tion, or conference report that contains a Federal

13 intergovernmental mandate having direct costs that

14 exceed the threshold specified in section

15 424(a)(1)(A), or that would cause the direct costs of

16 any other Federal intergovernmental mandate to ex17 ceed the threshold specified in section 424(a)(1)(A),

18 unless—

19 ‘‘(A) the bill, joint resolution, amendment,

20 motion, or conference report provides new budg21 et authority or new entitlement authority in the

22 House of Representatives or direct spending au23 thority in the Senate for each fiscal year for the

24 Federal intergovernmental mandates included

25 in the bill, joint resolution, amendment, motion,

26 or conference report in an amount that equals
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1 or exceeds the estimated direct costs of such

2 mandate; or

3 ‘‘(B) the bill, joint resolution, amendment,

4 motion, or conference report provides an in5 crease in receipts or a decrease in new budget

6 authority or new entitlement authority in the

7 House of Representatives or direct spending au8 thority in the Senate and an increase in new

9 budget authority or new entitlement authority

10 in the House of Representatives or an increase

11 direct spending authority for each fiscal year

12 for the Federal intergovernmental mandates in13 cluded in the bill, joint resolution, amendment,

14 motion, or conference report in an amount that

15 equals or exceeds the estimated direct costs of

16 such mandate; or

17 ‘‘(C) the bill, joint resolution, amendment,

18 motion, or conference report—

19 ‘‘(i) provides that—

20 ‘‘(I) such mandate shall be effec21 tive for any fiscal year only if all di22 rect costs of such mandate in the fis23 cal year are provided in appropria24 tions Acts, and
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1 ‘‘(II) in the case of such a man2 date contained in the bill, joint resolu3 tion, amendment, motion, or con4 ference report, the mandate is re5 pealed effective on the first day of any

6 fiscal year for which all direct costs of

7 such mandate are not provided in ap8 propriations Acts; or

9 ‘‘(ii) requires a Federal agency to re10 duce programmatic and financial respon11 sibilities of State, local, and tribal govern12 ments for meeting the objectives of the

13 mandate such that the estimated direct

14 costs of the mandate to such governments

15 do not exceed the amount of Federal fund16 ing provided to those governments to carry

17 out the mandate in the form of appropria18 tions or new budget authority or new enti19 tlement authority in the House of Rep20 resentatives or direct spending authority in

21 the Senate, and establishes criteria and

22 procedures for that reduction.

23 ‘‘(b) LIMITATION ON APPLICATION TO APPROPRIA24 TIONS BILLS.—Subsection (a) shall not apply to a bill that
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1 is reported by the Committee on Appropriations or an

2 amendment thereto.

3 ‘‘(c) DETERMINATION OF DIRECT COSTS BASED ON

4 ESTIMATES BY BUDGET COMMITTEES.—For the purposes

5 of this section, the amount of direct costs of a Federal

6 mandate for a fiscal year shall be determined based on

7 estimates made by the Committee on the Budget, in con8 sultation with the Director, of the House of Representa9 tives or the Senate, as the case may be.

10 ‘‘(d) DETERMINATION OF EXISTENCE OF FEDERAL

11 MANDATE BY GOVERNMENT REFORM AND OVERSIGHT

12 AND GOVERNMENTAL AFFAIRS COMMITTEES.—For the

13 purposes of this section, the Committee on Government

14 Reform and Oversight of the House of Representatives or

15 the Committee on Governmental Affairs of the Senate, as

16 applicable, shall have the authority to make final deter17 minations of whether a bill, joint resolution, amendment,

18 motion, or conference report contains a Federal intergov19 ernmental mandate.

20 ‘‘SEC. 426. ENFORCEMENT IN THE HOUSE OF REPRESENTA21 TIVES.

22 ‘‘It shall not be in order in the House of Representa23 tives to consider a rule or order that waives the application

24 of section 425(a) to a bill or joint resolution reported by

25 a committee of authorization.’’.
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1 SEC. 302. ENFORCEMENT IN THE HOUSE OF REPRESENTA2 TIVES.

3 (a) MOTIONS TO STRIKE IN THE COMMITTEE OF

4 THE WHOLE.—Clause 5 of rule XXIII of the Rules of the

5 House of Representatives is amended by adding at the end

6 the following:

7 ‘‘(c) In the consideration of any measure for amend8 ment in the Committee of the Whole containing any Fed9 eral mandate the direct costs of which exceed the threshold

10 in section 424(a)(1)(A) of the Unfunded Mandate Reform

11 Act of 1995, it shall always be in order, unless specifically

12 waived by terms of a rule governing consideration of that

13 measure, to move to strike such Federal mandate from

14 the portion of the bill then open to amendment.’’.

15 (b) COMMITTEE ON RULES REPORTS ON WAIVED

16 POINTS OF ORDER.—The Committee on Rules shall in17 clude in the report required by clause 1(d) of Rule XI (re18 lating to its activities during the Congress) of the Rules

19 of the House of Representatives a separate item identify20 ing all waivers of points of order relating to Federal man21 dates, listed by bill or joint resolution number and the sub22 ject matter of that measure.

23 SEC. 303. EXERCISE OF RULEMAKING POWERS.

24 The provisions of this title (except section 305) are

25 enacted by Congress—
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1 (1) as an exercise of the rulemaking powers of

2 the House of Representatives and the Senate, and as

3 such they shall be considered as part of the rules of

4 the House of Representatives and the Senate, re5 spectively, and such rules shall supersede other rules

6 only to the extent that they are inconsistent there7 with; and

8 (2) with full recognition of the constitutional

9 right of the House of Representatives and the Sen10 ate to change such rules at anytime, in the same

11 manner, and to the same extent as in the case of

12 any other rule of the House of Representatives or

13 the Senate, respectively.

14 SEC. 304. CONFORMING AMEMDMENT TO TABLE OF CON15 TENTS.

16 Section 1(b) of the Congressional Budget and Im17 poundment Control Act of 1974 is amended by inserting

18 ‘‘PART A—GENERAL PROVISIONS’’ before the item relat19 ing to section 401 and by inserting after the item relating

20 to section 407 the following:

‘‘PART B—FEDERAL MANDATES

‘‘Sec. 421. Definitions.

‘‘Sec. 422. Limitation on application.

‘‘Sec. 423. Duties of congressional committees.

‘‘Sec. 424. Duties of the Director.

‘‘Sec. 425. Point of order.

‘‘Sec. 426. Enforcement in the House of Representatives.’’.
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1 SEC. 305. TECHNICAL AMENDMENT.

2 The State and Local Government Cost Estimate Act

3 of 1981 (Public Law 97–108) is repealed.

4 SEC. 306. EFFECTIVE DATE.

5 This title shall take effect on October 1, 1995.

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