I
104TH CONGRESS
1ST SESSION
H. R. 261
To provide relief to State and local governments from Federal regulation.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
That this Act may be cited as the ‘‘Unfunded Federal
Mandates Relief Act of 1995’’.
FINDINGS AND PURPOSE
SEC. 2. (a) The Congress finds and declares that—
(1) Federal regulation of State and local gov-
ernments has become increasingly extensive and in-
trusive in recent years;
(2) such regulation has, adversely affected
State and local governments by placing excessive fis-
cal burdens on such governments;
(3) such excessive fiscal burdens have weakened
the foundation of the Federal system of government;
and
(4) there is a lack of adequate fiscal resources
to carry out necessary Federal regulation of State
and local governments in order to enable such gov-
ernments to comply with intergovernmental regula-
tions currently in effect.
(b) Therefore, it is the purpose of this Act to estab-
lish procedures to assure that the Federal Government
pays the total amount of additional direct costs incurred
by State and local governments in complying with any
intergovernmental regulation.
DEFINITIONS
SEC. 3. For purposes of this Act, the term—
(1) ‘‘additional direct costs’’ means the amount
of costs incurred by a State or local government
solely in complying with an intergovernmental regu-
lation promulgated pursuant to a Federal law con-
cerning a particular activity which is in excess of the
amount that such State or local government would
be required to expend in carrying out such activity
in the absence of such law, except that such term
does not include any amount which a State or local
government is required by law to contribute as a
non-Federal share under a Federal assistance pro-
gram;
(2) ‘‘Director’’ means the Director of the Office
of Management and Budget;
(3) ‘‘Federal agency’’ has the meaning given to
the term ‘‘executive agency’’ in section 6501(3) of
title 31, United States Code;
(4) ‘‘Federal assistance’’ means any assistance
provided by a Federal agency to State and local gov-
ernments or other recipients, in the form of grants,
loans, loan guarantees, property, cooperative agree-
ments, or technical assistance, except that such term
does not include direct cash assistance to individ-
uals, contracts for the procurement of goods or serv-
ices for the United States, or insurance;
(5) ‘‘intergovernmental regulation’’ means a
regulation promulgated by a Federal agency that re-
quires a State or local government to take certain
actions or requires a State or local government to
comply with certain specified conditions in order to
receive or continue to receive Federal assistance and
which requires the termination or reduction of such
assistance if such government fails to comply with
such conditions;
(6) ‘‘local government’’ has the same meaning
as in section 6501(6) of title 31, United States
Code;
(7) ‘‘significant law’’ means any Federal law
which is likely to result in additional direct costs to
State and local governments; and
(8) ‘‘State’’ means each of the several States,
the District of Columbia, Guam, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, the Virgin Islands, American
Samoa, and the Trust Territory of the Pacific Is-
lands.
TITLE I—REVIEW OF INTERGOVERNMENTAL
REGULATIONS
REPORT REQUIRED
SEC. 101. (a) Not later than thirty days after the
date on which the President transmits a budget for a fiscal
year to the Congress pursuant to section 1105 of title 31,
United States Code, the President shall submit to the
Congress a report specifying and evaluating the economic
costs, noneconomic costs, and additional direct costs which
have been incurred or which will be incurred by State gov-
ernments and local governments in complying with inter-
governmental regulations during the most recently com-
pleted fiscal year, the fiscal year in progress, and the first
two fiscal years immediately succeeding the fiscal year in
progress.
(b) Each report required under subsection (a) shall
include—
(1) a list of each intergovernmental regulation
in effect during each fiscal year for which the report
is made and a citation of statutory and administra-
tive authority for each such intergovernmental regu-
lation;
(2) an estimate, for each such intergovern-
mental regulation, of—
(A) the total amount of economic costs,
noneconomic costs, and additional direct costs
that have been incurred or will be incurred in
each such fiscal year by the government of each
State and all local governments in such State in
complying with such regulation in each such fis-
cal year; and
(B) the ratio (stated as a percentage)
which the total amount of additional direct
costs that have been incurred or will be in-
curred by all local governments in a State in
complying with such regulation in each such fis-
cal year bears to the total amount of additional
direct costs that have been incurred or will be
incurred by the government of such State and
all local governments in such State in comply-
ing with such regulation in such fiscal year;
(3) an estimate, for each such regulation, of the
economic and noneconomic benefits that will be pro-
vided in each such fiscal year to each State govern-
ment and all local governments in such State as a
result of compliance with such regulation during
each such fiscal year;
(4) recommendations for changes in laws and
regulations that will reduce the costs specified pur-
suant to paragraph (2), or that will achieve a more
favorable balance between the benefits specified pur-
suant to paragraph (3) and the costs specified pur-
suant to paragraph (2); and
(5) proposals for legislation, and a statement of
planned administrative actions, to implement the
recommendations specified pursuant to paragraph
(4).
PROCEDURES FOR PREPARATION OF REPORT
SEC. 102. (a) The President may delegate to the Di-
rector or to the head of any other Federal agency the re-
sponsibility for preparing the annual report required by
section 101.
(b)(1) In carrying out the provisions of this title, the
President, the Director, or the head of a Federal agency
to which a delegation is made under subsection (a), shall
prescribe standards to be used by Federal agencies in esti-
mating the costs of compliance with, and the benefits pro-
vided by, intergovernmental regulations administered by
such agencies.
(2) The President, the Director, or the head of a Fed-
eral agency to which a delegation is made under subsection
(a) shall prescribe the standards required under para-
graph (1)—
(A) after consultation with State and local gov-
ernments and the Comptroller General of the United
States; and
(B) after providing public notice and an oppor-
tunity for comment in accordance with section 553
of title 5, United States Code.
(3) Standards prescribed under paragraph (1) may
be revised from time to time to reflect changes in relevant
economic and social circumstances and advances in perti-
nent branches of knowledge.
(c) The standards prescribed under subsection (b)
shall provide, to the extent possible, for—
(1) uniform categories of costs of compliance
with, and benefits provided by, intergovernmental
regulations;
(2) methods to be used by the President, and
by Federal agencies, in estimating the additional di-
rect costs that will be incurred by State and local
governments in complying with each intergovern-
mental regulation, including methods to estimate the
amount of such costs that will be incurred for each
fiscal year in which each such regulation is in effect;
(3) methods to be used by Federal agencies in
compiling the information required to be submitted
under subsection (d) which shall be designed to—
(A) minimize the costs that will be in-
curred by the State and local governments and
the Federal assistance recipients from which
such information will be collected; and
(B) ensure the collection of reasonably ac-
curate information in a form that will be useful
to States in complying with section 204(c);
(4) methods for preventing disclosure of infor-
mation about individuals or businesses the confiden-
tiality of which is protected under Federal law;
(5) procedures to be followed by Federal agen-
cies in reporting the information required to be sub-
mitted under subsection (d); and
(6) such other procedures and guidelines as
may be necessary for the implementation of this
title.
(d) Each year, at a time prescribed by the President,
the Director, or the head of the Federal agency to which
a delegation is made under subsection (a), the head of
each Federal agency which administered any intergovern-
mental regulation during a fiscal year for which a report
is required under section 101, shall prepare and submit
to the President, the Director, or such agency head, a re-
port setting forth, for each such regulation, the informa-
tion required to be included for such regulation in the re-
port required under section 101.
TITLE 
II—COMPENSATION 
OF 
STATE 
AND
LOCAL GOVERNMENTS FOR ADDITIONAL
DIRECT COSTS
COMPENSATION REQUIRED
SEC. 201. (a) A Federal agency or a court of the
United States shall not require State governments or local
governments to comply, in any fiscal year, with any inter-
governmental regulation unless provisions of law have
been enacted which provide a sufficient amount of funds