I

105TH CONGRESS

1ST SESSION H. R. 62

To provide relief to State and local governments from Federal regulation.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 7, 1997

Mr. HERGER introduced the following bill; which was referred to the

Committee on Government Reform and Oversight

A BILL

To provide relief to State and local governments from

Federal regulation.

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

3 That this Act may be cited as the ‘‘Unfunded Federal

4 Mandates Relief Act of 1997’’.

5 FINDINGS AND PURPOSE

6 SEC. 2. (a) The Congress finds and declares that—

7 (1) Federal regulation of State and local gov8 ernments has become increasingly extensive and in9 trusive in recent years;
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1 (2) such regulation has adversely affected State

2 and local governments by placing excessive fiscal

3 burdens on such governments;

4 (3) such excessive fiscal burdens have weakened

5 the foundation of the Federal system of government;

6 and

7 (4) there is a lack of adequate fiscal resources

8 to carry out necessary Federal regulation of State

9 and local governments in order to enable such gov10 ernments to comply with intergovernmental regula11 tions currently in effect.

12 (b) Therefore, it is the purpose of this Act to estab13 lish procedures to assure that the Federal Government

14 pays the total amount of additional direct costs incurred

15 by State and local governments in complying with any

16 intergovernmental regulation.

17 DEFINITIONS

18 SEC. 3. For purposes of this Act, the term—

19 (1) ‘‘additional direct costs’’ means the amount

20 of costs incurred by a State or local government

21 solely in complying with an intergovernmental regu22 lation promulgated pursuant to a Federal law con23 cerning a particular activity which is in excess of the

24 amount that such State or local government would

25 be required to expend in carrying out such activity

26 in the absence of such law, except that such term
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1 does not include any amount which a State or local

2 government is required by law to contribute as a

3 non-Federal share under a Federal assistance pro4 gram;

5 (2) ‘‘Director’’ means the Director of the Office

6 of Management and Budget;

7 (3) ‘‘Federal agency’’ has the meaning given to

8 the term ‘‘executive agency’’ in section 6501(3) of

9 title 31, United States Code;

10 (4) ‘‘Federal assistance’’ means any assistance

11 provided by a Federal agency to State and local gov12 ernments or other recipients, in the form of grants,

13 loans, loan guarantees, property, cooperative agree14 ments, or technical assistance, except that such term

15 does not include direct cash assistance to individ16 uals, contracts for the procurement of goods or serv17 ices for the United States, or insurance;

18 (5) ‘‘intergovernmental regulation’’ means a

19 regulation promulgated by a Federal agency that re20 quires a State or local government to take certain

21 actions or requires a State or local government to

22 comply with certain specified conditions in order to

23 receive or continue to receive Federal assistance and

24 which requires the termination or reduction of such
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1 assistance if such government fails to comply with

2 such conditions;

3 (6) ‘‘local government’’ has the same meaning

4 as in section 6501(6) of title 31, United States

5 Code;

6 (7) ‘‘significant law’’ means any Federal law

7 which is likely to result in additional direct costs to

8 State and local governments; and

9 (8) ‘‘State’’ means each of the several States,

10 the District of Columbia, Guam, the Commonwealth

11 of Puerto Rico, the Commonwealth of the Northern

12 Mariana Islands, the Virgin Islands, American

13 Samoa, and the Trust Territory of the Pacific Is14 lands.

15 TITLE I—REVIEW OF INTERGOVERNMENTAL

16 REGULATIONS

17 REPORT REQUIRED

18 SEC. 101. (a) Not later than thirty days after the

19 date on which the President transmits a budget for a fiscal

20 year to the Congress pursuant to section 1105 of title 31,

21 United States Code, the President shall submit to the

22 Congress a report specifying and evaluating the economic

23 costs, noneconomic costs, and additional direct costs which
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1 have been incurred or which will be incurred by State gov2 ernments and local governments in complying with inter3 governmental regulations during the most recently com4 pleted fiscal year, the fiscal year in progress, and the first

5 two fiscal years immediately succeeding the fiscal year in

6 progress.

7 (b) Each report required under subsection (a) shall

8 include—

9 (1) a list of each intergovernmental regulation

10 in effect during each fiscal year for which the report

11 is made and a citation of statutory and administra12 tive authority for each such intergovernmental regu13 lation;

14 (2) an estimate, for each such intergovern15 mental regulation, of—

16 (A) the total amount of economic costs,

17 noneconomic costs, and additional direct costs

18 that have been incurred or will be incurred in

19 each such fiscal year by the government of each

20 State and all local governments in such State in

21 complying with such regulation in each such fis22 cal year; and

23 (B) the ratio (stated as a percentage)

24 which the total amount of additional direct
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1 costs that have been incurred or will be in2 curred by all local governments in a State in

3 complying with such regulation in each such fis4 cal year bears to the total amount of additional

5 direct costs that have been incurred or will be

6 incurred by the government of such State and

7 all local governments in such State in comply8 ing with such regulation in such fiscal year;

9 (3) an estimate, for each such regulation, of the

10 economic and noneconomic benefits that will be pro11 vided in each such fiscal year to each State govern12 ment and all local governments in such State as a

13 result of compliance with such regulation during

14 each such fiscal year;

15 (4) recommendations for changes in laws and

16 regulations that will reduce the costs specified pur17 suant to paragraph (2), or that will achieve a more

18 favorable balance between the benefits specified pur19 suant to paragraph (3) and the costs specified pur20 suant to paragraph (2); and

21 (5) proposals for legislation, and a statement of

22 planned administrative actions, to implement the

23 recommendations specified pursuant to paragraph

24 (4).
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1 PROCEDURES FOR PREPARATION OF REPORT

2 SEC. 102. (a) The President may delegate to the Di3 rector or to the head of any other Federal agency the re4 sponsibility for preparing the annual report required by

5 section 101.

6 (b)(1) In carrying out the provisions of this title, the

7 President, the Director, or the head of a Federal agency

8 to which a delegation is made under subsection (a), shall

9 prescribe standards to be used by Federal agencies in esti10 mating the costs of compliance with, and the benefits pro11 vided by, intergovernmental regulations administered by

12 such agencies.

13 (2) The President, the Director, or the head of a Fed14 eral agency to which a delegation is made under subsection

15 (a) shall prescribe the standards required under para16 graph (1)—

17 (A) after consultation with State and local gov18 ernments and the Comptroller General of the United

19 States; and

20 (B) after providing public notice and an oppor21 tunity for comment in accordance with section 553

22 of title 5, United States Code.

23 (3) Standards prescribed under paragraph (1) may

24 be revised from time to time to reflect changes in relevant
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1 economic and social circumstances and advances in perti2 nent branches of knowledge.

3 (c) The standards prescribed under subsection (b)

4 shall provide, to the extent possible, for—

5 (1) uniform categories of costs of compliance

6 with, and benefits provided by, intergovernmental

7 regulations;

8 (2) methods to be used by the President, and

9 by Federal agencies, in estimating the additional di10 rect costs that will be incurred by State and local

11 governments in complying with each intergovern12 mental regulation, including methods to estimate the

13 amount of such costs that will be incurred for each

14 fiscal year in which each such regulation is in effect;

15 (3) methods to be used by Federal agencies in

16 compiling the information required to be submitted

17 under subsection (d), which shall be designed to—

18 (A) minimize the costs that will be in19 curred by the State and local governments and

20 the Federal assistance recipients from which

21 such information will be collected; and

22 (B) ensure the collection of reasonably ac23 curate information in a form that will be useful

24 to States in complying with section 204(c);
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1 (4) methods for preventing disclosure of infor2 mation about individuals or businesses the confiden3 tiality of which is protected under Federal law;

4 (5) procedures to be followed by Federal agen5 cies in reporting the information required to be sub6 mitted under subsection (d); and

7 (6) such other procedures and guidelines as

8 may be necessary for the implementation of this

9 title.

10 (d) Each year, at a time prescribed by the President,

11 the Director, or the head of the Federal agency to which

12 a delegation is made under subsection (a), the head of

13 each Federal agency which administered any intergovern14 mental regulation during a fiscal year for which a report

15 is required under section 101, shall prepare and submit

16 to the President, the Director, or such agency head, a re17 port setting forth, for each such regulation, the informa18 tion required to be included for such regulation in the re19 port required under section 101.

20 TITLE II—COMPENSATION OF STATE AND

21 LOCAL GOVERNMENTS FOR ADDITIONAL

22 DIRECT COSTS

23 COMPENSATION REQUIRED

24 SEC. 201. (a) A Federal agency or a court of the

25 United States shall not require State governments or local
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1 governments to comply, in any fiscal year, with any inter2 governmental regulation unless provisions of law have

3 been enacted which provide a sufficient amount of funds

4 for such fiscal year to reimburse such governments for the

5 total amount of additional direct costs that will be in6 curred by such governments in complying with such regu7 lation during such fiscal year.

8 (b) For purposes of this section, the total amount of

9 additional direct costs that will be incurred by State gov10 ernments and local governments in complying with an

11 intergovernmental regulation in any fiscal year shall be the

12 total amount of such costs for such regulation estimated

13 by the Director of the Congressional Budget Office for

14 such fiscal year in the report required under section 202

15 for such fiscal year.

16 REPORT BY THE DIRECTOR OF THE CONGRESSIONAL

17 BUDGET OFFICE

18 SEC. 202. (a) For each fiscal year in which an inter19 governmental regulation promulgated pursuant to a sig20 nificant law will be in effect, the Director of the Congres21 sional Budget Office shall prepare and transmit to the

22 President and the Congress a report specifying, for such

23 fiscal year and the fiscal year succeeding such fiscal year,

24 an estimate of the total amount of additional direct costs
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1 that will be incurred by State governments and local gov2 ernments in complying with such regulation in each such

3 fiscal year.

4 (b) In preparing each report required by subsection

5 (a), the Director of the Congressional Budget Office shall

6 consider the estimate of additional direct costs for a fiscal

7 year resulting from compliance with an intergovernmental

8 regulation which are specified in the report submitted by

9 the President under title I during the fiscal year preceding

10 such fiscal year.

11 (c) The Director of the Congressional Budget Office

12 shall transmit each report required by subsection (a) for

13 a fiscal year to the President and the Congress by Septem14 ber 1 of the fiscal year preceding such fiscal year.

15 IMPLEMENTATION

16 SEC. 203. For each fiscal year in which an intergov17 ernmental regulation promulgated pursuant to a signifi18 cant law will be in effect, the chairman of the committees

19 of the Senate and of the House of Representatives having

20 legislative jurisdiction over such significant law shall pro21 pose, to an appropriate bill or resolution providing funds

22 for such fiscal year, an amendment containing provisions

23 to appropriate funds to reimburse State governments and

24 local governments for the additional direct costs incurred

25 in complying with such regulation. The amount of funds

26 proposed to be appropriated by such amendment shall be
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1 equal to or in excess of the amount described in section

2 201(a).

3 PROCEDURES FOR REIMBURSEMENTS TO STATE AND

4 LOCAL GOVERNMENTS

5 SEC. 204. (a)(1) The head of each Federal agency

6 which administers an intergovernmental regulation pro7 mulgated pursuant to a significant law shall pay to each

8 State government in each fiscal year the amount deter9 mined pursuant to this section to reimburse the State gov10 ernment and local governments in the State for the addi11 tional direct costs incurred by such governments in com12 plying with such regulation in such fiscal year.

13 (2) A State government which receives payments

14 under this section for reimbursement for additional direct

15 costs incurred in complying with an intergovernmental

16 regulation in any fiscal year shall pay to each local govern17 ment in the State the amount determined pursuant to this

18 section to reimburse such local government for the addi19 tional direct costs incurred by such local government in

20 complying with such regulation in such fiscal year.

21 (b) The total amount to be paid to a State to reim22 burse the government of the State and local governments

23 in the State for additional direct costs incurred by such

24 governments in complying with an intergovernmental reg25 ulation in any fiscal year shall be an amount which bears

26 the same ratio to the total amount for reimbursement of
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1 additional direct costs for all State governments and local

2 governments described in section 201(a) with respect to

3 such regulation for such fiscal year as the total amount

4 of additional direct costs with respect to such regulation

5 which is specified in the report submitted by the President

6 under title I for such fiscal year for such State government

7 and local governments in such State for such fiscal year

8 bears to the sum of the total amounts of additional direct

9 costs with respect to such regulation which are specified

10 in such report for all State governments and all local gov11 ernments for such fiscal year.

12 (c)(1) The total amount to be paid by a State govern13 ment to local governments in such State to reimburse such

14 governments for additional direct costs incurred by such

15 governments in complying with an intergovernmental reg16 ulation in any fiscal year shall be the amount which is

17 equal to the product of the amount paid to the State under

18 subsection (b) for such fiscal year multiplied by the ratio

19 determined by the President for such State with respect

20 to such regulation for such fiscal year pursuant to section

21 101(b)(2)(B).

22 (2)(A) A State government which receives payments

23 under this section to reimburse local governments in the
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1 State for the additional direct costs incurred by such gov2 ernments in complying with an intergovernmental regula3 tion in any fiscal year shall pay to each such local govern4 ment an amount equal to the product of—

5 (i) the total amount determined under para6 graph (1) with respect to such regulation for such

7 fiscal year, multiplied by

8 (ii) the ratio (stated as a percentage and esti9 mated by the State in accordance with subparagraph

10 (B)) that the total amount of additional direct costs

11 incurred by such local government in complying with

12 such regulation in such fiscal year bears to the total

13 amount of additional direct costs incurred by all

14 local governments in such State in complying with

15 such regulation in such fiscal year.

16 (B) Each State government which receives payments

17 under this section for any fiscal year shall provide by law

18 for the estimation of the amount of additional direct costs

19 incurred by each local government in such State in com20 plying with an intergovernmental regulation for which

21 such payments are received. In providing for the esti22 mation of such costs, the State shall establish procedures

23 and methods for the estimation of such costs which are
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1 reasonably related to the actual additional direct costs in2 curred by such governments in complying with such regu3 lation in such fiscal year.

4 EFFECT OF SUBSEQUENT ENACTMENTS

5 SEC. 205. No law enacted after the date of enactment

6 of this title shall supersede the provisions of this title un7 less such law does so in specific terms, referring to this

8 title, and declares that such law supersedes the provisions

9 of this title.

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