[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5 Engrossed in House (EH)]







104th CONGRESS
  1st Session
                                 H. R. 5

_______________________________________________________________________

                                 AN ACT


 
 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unfunded Mandate Reform Act of 
1995''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to strengthen the partnership between the Federal 
        Government and States, local governments, and tribal 
        governments;
            (2) to end the imposition, in the absence of full 
        consideration by Congress, of Federal mandates on States, local 
        governments, and tribal governments in a manner that may 
        displace other essential State, local, and tribal governmental 
        priorities;
            (3) to assist Congress in its consideration of proposed 
        legislation establishing or revising Federal programs 
        containing Federal mandates affecting States, local 
        governments, tribal governments, and the private sector by--
                    (A) providing for the development of information 
                about the nature and size of mandates in proposed 
                legislation; and
                    (B) establishing a mechanism to bring such 
                information to the attention of the Senate and House of 
                Representatives before the Senate and House of 
                Representatives votes on proposed legislation;
            (4) to promote informed and deliberate decisions by 
        Congress on the appropriateness of Federal mandates in any 
        particular instance;
            (5) to establish a point-of-order vote on the consideration 
        in the Senate and House of Representatives of legislation 
        containing significant Federal mandates;
            (6) to assist Federal agencies in their consideration of 
        proposed regulations affecting States, local governments, and 
        tribal governments, by--
                    (A) requiring that Federal agencies develop a 
                process to enable the elected and other officials of 
                States, local governments, and tribal governments to 
                provide input when Federal agencies are developing 
                regulations; and
                    (B) requiring that Federal agencies prepare and 
                consider better estimates of the budgetary impact of 
                regulations containing Federal mandates upon States, 
                local governments, and tribal governments before 
                adopting such regulations, and ensuring that small 
                governments are given special consideration in that 
                process;
            (7) to establish the general rule that Congress shall not 
        impose Federal mandates on States, local governments, and 
        tribal governments without providing adequate funding to comply 
        with such mandates; and
            (8) to begin consideration of methods to relieve States, 
        local governments, and tribal governments of unfunded mandates 
        imposed by Federal court interpretations of Federal statutes 
        and regulations.

SEC. 3. DEFINITIONS.

    For purposes of this Act--
            (1) the terms ``agency'', ``Federal financial assistance'', 
        ``Federal private sector mandate'', ``Federal mandate'' (except 
        as provided by section 108), ``local government'', ``private 
        sector'', ``regulation'' or ``rule'', and ``State'' have the 
        meaning given those terms by section 421 of the Congressional 
        Budget Act of 1974; and
            (2) the term ``small government'' means any small 
        governmental jurisdiction as defined in section 601(5) of title 
        5, United States Code, and any tribal government.

SEC. 4. LIMITATION ON APPLICATION.

    This Act shall not apply to any provision in a Federal statute or a 
proposed or final Federal regulation, that--
            (1) enforces constitutional rights of individuals;
            (2) establishes or enforces any statutory rights that 
        prohibit discrimination on the basis of age, race, religion, 
        gender, national origin, or handicapped or disability status;
            (3) requires compliance with accounting and auditing 
        procedures with respect to grants or other money or property 
        provided by the Federal Government;
            (4) provides for emergency assistance or relief at the 
        request of any State, local government, or tribal government or 
        any official of such a government;
            (5) is necessary for the national security or the 
        ratification or implementation of international treaty 
        obligations;
            (6) the President designates as emergency legislation and 
        that the Congress so designates in statute; or
            (7) pertains to Social Security.

              TITLE I--REVIEW OF UNFUNDED FEDERAL MANDATES

SEC. 101. REPORT ON UNFUNDED FEDERAL MANDATES BY ADVISORY COMMISSION ON 
              INTERGOVERNMENTAL RELATIONS.

    (a) In General.--The Advisory Commission shall in accordance with 
this section--
            (1) investigate and review the role of unfunded Federal 
        mandates in intergovernmental relations and their impact on 
        State, local, tribal, and Federal Government objectives and 
        responsibilities, and their impact on the competitive balance 
        between States, local and tribal governments, and the private 
        sector and consider views of and the impact on working men and 
        women on those same matters;
            (2) investigate and review the role of unfunded State 
        mandates imposed on local governments, the private sector, and 
        individuals;
            (3) investigate and review the role of unfunded local 
        mandates imposed on the private sector and individuals; and
            (4) make recommendations to the President and the Congress 
        regarding--
                    (A) allowing flexibility for State, local, and 
                tribal governments in complying with specific unfunded 
                Federal mandates for which terms of compliance are 
                unnecessarily rigid or complex;
                    (B) reconciling any 2 or more unfunded Federal 
                mandates which impose contradictory or inconsistent 
                requirements;
                    (C) terminating unfunded Federal mandates which are 
                duplicative, obsolete, or lacking in practical utility;
                    (D) suspending, on a temporary basis, unfunded 
                Federal mandates which are not vital to public health 
                and safety and which compound the fiscal difficulties 
                of State, local, and tribal governments, including 
                recommendations for triggering such suspension;
                    (E) consolidating or simplifying unfunded Federal 
                mandates, or the planning or reporting requirements of 
                such mandates, in order to reduce duplication and 
                facilitate compliance by State, local, and tribal 
                governments with those mandates;
                    (F) establishing common Federal definitions or 
                standards to be used by State, local, and tribal 
                governments in complying with unfunded Federal mandates 
                that use different definitions or standards for the 
                same terms or principles; and
                    (G) establishing procedures to ensure that, in 
                cases in which a Federal private sector mandate applies 
                to private sector entities which are competing directly 
                or indirectly with States, local governments, or tribal 
                governments for the purpose of providing substantially 
                similar goods or services to the public, any relief 
                from unfunded Federal mandates is applied in the same 
                manner and to the same extent to the private sector 
                entities as it is to the States, local governments, and 
                tribal governments with which they compete, and to 
                ensure that unfunded Federal mandate relief does not 
                increase private sector burdens.
Each recommendation under paragraph (4) shall, to the extent 
practicable, identify the specific unfunded Federal mandates to which 
the recommendation applies.
    (b) Criteria.--
            (1) In general.--The Advisory Commission shall establish 
        criteria for making recommendations under subsection (a).
            (2) Issuance of proposed criteria.--The Advisory Commission 
        shall issue proposed criteria under this subsection not later 
        than 60 days after the date of the enactment of this Act, and 
        thereafter provide a period of 30 days for submission by the 
        public of comments on the proposed criteria.
            (3) Final criteria.--Not later than 45 days after the date 
        of issuance of proposed criteria, the Advisory Commission 
        shall--
                    (A) consider comments on the proposed criteria 
                received under paragraph (4);
                    (B) adopt and incorporate in final criteria any 
                recommendations submitted in those comments that the 
                Advisory Commission determines will aid the Advisory 
                Commission in carrying out its duties under this 
                section; and
                    (C) issue final criteria under this subsection.
    (c) Preliminary Report.--
            (1) In general.--Not later than 9 months after the date of 
        the enactment of this Act, the Advisory Commission shall--
                    (A) prepare and publish a preliminary report on its 
                activities under this title, including preliminary 
                recommendations pursuant to subsection (a);
                    (B) publish in the Federal Register a notice of 
                availability of the preliminary report; and
                    (C) provide copies of the preliminary report to the 
                public upon request.
            (2) Public hearings.--The Advisory Commission shall hold 
        public hearings on the preliminary recommendations contained in 
        the preliminary report of the Advisory Commission under this 
        subsection.
    (d) Final Report.--Not later than 3 months after the date of the 
publication of the preliminary report under subsection (c), the 
Advisory Commission shall submit to the Congress, including the 
Committee on Government Reform and Oversight of the House of 
Representatives and the Committee on Governmental Affairs of the 
Senate, and to the President a final report on the findings, 
conclusions, and recommendations of the Advisory Commission under this 
section.
    (e) Priority to Mandates That Are Subject of Judicial 
Proceedings.--In carrying out this section, the Advisory Commission 
shall give the highest priority to immediately investigating, 
reviewing, and making recommendations regarding unfunded Federal 
mandates that are the subject of judicial proceedings between the 
United States and a State, local, or tribal government.
    (f) State Mandate and Local Mandate Defined.--As used in this 
title:
            (1) State mandate.--The term ``State mandate'' means any 
        provision in a State statute or regulation that imposes an 
        enforceable duty on local governments, the private sector, or 
        individuals, including a condition of State assistance or a 
        duty arising from participation in a voluntary State program.
            (2) Local mandate.--The term ``local mandate'' means any 
        provision in a local ordinance or regulation that imposes an 
        enforceable duty on the private sector or individuals, 
        including a condition of local assistance or a duty arising 
        from participation in a voluntary local program.

SEC. 102. SPECIAL AUTHORITIES OF ADVISORY COMMISSION.

    (a) Experts and Consultants.--The Advisory Commission may procure 
temporary and intermittent services of experts or consultants under 
section 3109(b) of title 5, United States Code.
    (b) Staff of Federal Agencies.--Upon request of the Executive 
Director of the Advisory Commission, the head of any Federal department 
or agency may detail, on a reimbursable basis, any of the personnel of 
that department or agency to the Advisory Commission to assist it in 
carrying out its duties under this title.
    (c) Administrative Support Services.--Upon the request of the 
Advisory Commission, the Administrator of General Services shall 
provide to the Advisory Commission, on a reimbursable basis, the 
administrative support services necessary for the Advisory Commission 
to carry out its duties under this title.
    (d) Contract Authority.--The Advisory Commission may, subject to 
appropriations, contract with and compensate Government and private 
agencies or persons for property and services used to carry out its 
duties under this title.

SEC. 103. DEFINITIONS.

    In this title:
            (1) Advisory commission.--The term ``Advisory Commission'' 
        means the Advisory Commission on Intergovernmental Relations.
            (2) Federal mandate.--The term ``Federal mandate'' means 
        any provision in statute or regulation or any Federal court 
        ruling that imposes an enforceable duty upon States, local 
        governments, or tribal governments including a condition of 
        Federal assistance or a duty arising from participation in a 
        voluntary Federal program.

             TITLE II--REGULATORY ACCOUNTABILITY AND REFORM

SEC. 201. REGULATORY PROCESS.

    (a) In General.--Each agency shall, to the extent permitted by 
subchapter II of chapter 5 of title 5, United States Code--
            (1) assess the effects of Federal regulations on States, 
        local governments, tribal governments, and the private sector 
        (other than to the extent that such regulations incorporate 
        requirements specifically set forth in legislation), including 
        specifically the availability of resources to carry out any 
        Federal mandates in those regulations; and
            (2) seek to minimize those burdens that uniquely or 
        significantly affect such governmental entities or the private 
        sector, consistent with achieving statutory and regulatory 
        objectives.
    (b) State, Local Government, and Tribal Government Input.--Each 
agency shall develop an effective process to permit elected officials 
(or their designated representatives) of States, local governments, and 
tribal governments to provide meaningful and timely input in the 
development of regulatory proposals containing significant Federal 
intergovernmental mandates.
    (c) Agency Plan.--Before establishing any regulatory requirements 
that might significantly or uniquely affect small governments, an 
agency shall have developed a plan under which the agency shall--
            (1) provide notice of the contemplated requirements to 
        potentially affected small governments, if any;
            (2) enable officials of affected small governments to 
        provide input pursuant to subsection (b); and
            (3) inform, educate, and advise small governments on 
        compliance with the requirements.
    (d) Least Burdensome Option or Explanation Required.--An agency may 
not issue a rule that contains a Federal mandate if the rulemaking 
record for the rule indicates that there are 2 or more methods that 
could be used to accomplish the objective of the rule, unless--
            (1) the Federal mandate is the least costly method, or has 
        the least burdensome effect, for--
                    (A) States, local governments, and tribal 
                governments, in the case of a rule containing a Federal 
                intergovernmental mandate, and
                    (B) the private sector, in the case of a rule 
                containing a Federal private sector mandate; or
            (2) the agency publishes with the final rule an explanation 
        of why the more costly or burdensome method of the Federal 
        mandate was adopted.

SEC. 202. STATEMENTS TO ACCOMPANY SIGNIFICANT REGULATORY ACTIONS.

    (a) In General.--Before promulgating any final rule that includes 
any Federal mandate that may result in the expenditure by States, local 
governments, or tribal governments, in the aggregate, or the private 
sector of at least $100,000,000 (adjusted annually for inflation) in 
any 1 year, and before promulgating any general notice of proposed 
rulemaking that is likely to result in promulgation of any such rule, 
the agency shall prepare a written statement identifying the provision 
of Federal law under which the rule is being promulgated and 
containing--
            (1) estimates by the agency, including the underlying 
        analysis, of the anticipated costs to States, local 
        governments, tribal governments, and the private sector of 
        complying with the Federal mandates, and of the extent to which 
        such costs may be paid with funds provided by the Federal 
        Government or otherwise paid through Federal financial 
        assistance;
            (2) estimates by the agency, if and to the extent that the 
        agency determines that accurate estimates are reasonably 
        feasible; of--
                    (A) the future costs of the Federal mandate; and
                    (B) any disproportionate budgetary effects of the 
                Federal mandates upon any particular regions of the 
                country or particular States, local governments, tribal 
                governments, urban or rural or other types of 
                communities, or particular segments of the private 
                sector;
            (3) a qualitative, and if possible, a quantitative 
        assessment of costs and benefits anticipated from the Federal 
        mandates (such as the enhancement of health and safety and the 
        protection of the natural environment);
            (4) the effect of Federal private sector mandates on the 
        national economy, including the effect on productivity, 
        economic growth, full employment, creation of productive jobs, 
        worker benefits and pensions, and international competitiveness 
        of United States goods and services;
            (5) a description of the extent of the agency's prior 
        consultation with elected representatives (or their designated 
        representatives) of the affected States, local governments, and 
        tribal governments, and designated representatives of the 
        private sector;
            (6) a summary of the comments and concerns that were 
        presented by States, local governments, or tribal governments 
        and the private sector either orally or in writing to the 
        agency;
            (7) a summary of the agency's evaluation of those comments 
        and concerns; and
            (8) the agency's position supporting the need to issue the 
        regulation containing the Federal mandates (considering, among 
        other things, the extent to which costs may or may not be paid 
        with funds provided by the Federal Government).
    (b) Promulgation.--In promulgating a general notice of proposed 
rulemaking or a final rule for which a statement under subsection (a) 
is required, the agency shall include in the promulgation a summary of 
the information contained in the statement.
    (c) Preparation in Conjunction With Other Statement.--Any agency 
may prepare any statement required by subsection (a) in conjunction 
with or as part of any other statement or analysis, if the statement or 
analysis satisfies the provisions of subsection (a).

SEC. 203. ASSISTANCE TO THE CONGRESSIONAL BUDGET OFFICE.

    The Director of the Office of Management and Budget shall--
            (1) collect from agencies the statements prepared under 
        section 202; and
            (2) periodically forward copies of them to the Director of 
        the Congressional Budget Office on a reasonably timely basis 
        after promulgation of the general notice of proposed rulemaking 
        or of the final rule for which the statement was prepared.

SEC. 204. PILOT PROGRAM ON SMALL GOVERNMENT FLEXIBILITY.

    (a) In General.--The Director of the Office of Management and 
Budget, in consultation with Federal agencies, shall establish pilot 
programs in at least 2 agencies to test innovative and more flexible 
regulatory approaches that--
            (1) reduce reporting and compliance burdens on small 
        governments; and
            (2) meet overall statutory goals and objectives.
    (b) Program Focus.--The pilot programs shall focus on rules in 
effect or proposed rules or on a combination thereof.

SEC. 205. ANNUAL REPORT TO CONGRESS REGARDING FEDERAL COURT RULINGS.

    Not later than 4 months after the date of enactment of this Act, 
and no later than March 15 of each year thereafter, the Advisory 
Commission on Intergovernmental Relations shall submit to the Congress, 
including each of the Committee on Government Reform and Oversight of 
the House of Representatives and the Committee on Governmental Affairs 
of the Senate, and to the President a report describing Federal court 
rulings in the preceding calendar year which imposed an enforceable 
duty on 1 or more States, local governments, or tribal governments.

SEC. 206. JUDICIAL REVIEW.

    (a) Review of Agency Actions Subject to Review Under Other Federal 
Law.--If an agency action that is subject to section 201 or 202 is 
subject to judicial review under any other Federal law (other than 
chapter 7 of title 5, United States Code)--
            (1) any court of the United States having jurisdiction to 
        review the action under the other law shall have jurisdiction 
        to review the action under sections 201 and 202; and
            (2) in any proceeding under paragraph (1), any issue 
        relating exhaustion of remedies, the time and manner for 
        seeking review, venue, or the availability of a stay or 
        preliminary injunctive relief pending review shall be 
        determined under the other law.
    (b) Limitation on Preliminary Injunctive Relief.--The second 
sentence of section 705 of title 5, United States Code (relating to 
preliminary relief pending review), shall not apply with respect to 
review under subsection (a)(1) of an agency action, unless process 
authorized by that sentence is not authorized by the other law under 
which the action is reviewed.

SEC. 207. ANNUAL STATEMENTS TO CONGRESS ON AGENCY COMPLIANCE WITH 
              REQUIREMENTS OF TITLE.

    Not later than one year after the effective date of title III and 
annually thereafter, the Director of the Office of Management and 
Budget shall submit to Congress, including the Committee on Government 
Reform and Oversight of the House of Representatives and the Committee 
on Governmental Affairs of the Senate, written statements detailing the 
compliance with the requirements of sections 201 and 202 by each agency 
during the period reported on.

            TITLE III--LEGISLATIVE ACCOUNTABILITY AND REFORM

SEC. 301. LEGISLATIVE MANDATE ACCOUNTABILITY AND REFORM.

    Title IV of the Congressional Budget Act of 1974 is amended by--
            (1) inserting before section 401 the following:

                  ``Part A--General Provisions''; and

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

                       ``Part B--Federal Mandates

``SEC. 421. DEFINITIONS.

    ``For purposes of this part:
            ``(1) Agency.--The term `agency' has the meaning stated in 
        section 551(1) of title 5, United States Code, but does not 
        include independent regulatory agencies, as defined by section 
        3502(10) of title 44, United States Code.
            ``(2) Director.--The term `Director' means the Director of 
        the Congressional Budget Office.
            ``(3) Federal financial assistance.--The term `Federal 
        financial assistance' means the amount of budget authority for 
        any Federal grant assistance or any Federal program providing 
        loan guarantees or direct loans.
            ``(4) Federal intergovernmental mandate.--The term `Federal 
        intergovernmental mandate' means--
                    ``(A) any provision in legislation, statute, or 
                regulation that--
                            ``(i) would impose an enforceable duty upon 
                        States, local governments, or tribal 
                        governments, except--
                                    ``(I) a condition of Federal 
                                assistance; or
                                    ``(II) a duty arising from 
                                participation in a voluntary Federal 
                                program, except as provided in 
                                subparagraph (B); or
                            ``(ii) would reduce or eliminate the amount 
                        of authorization of appropriations for Federal 
                        financial assistance that would be provided to 
                        States, local governments, or tribal 
                        governments for the purpose of complying with 
                        any such previously imposed duty unless such 
                        duty is reduced or eliminated by a 
                        corresponding amount; or
                    ``(B) any provision in legislation, statute, or 
                regulation that relates to a then-existing Federal 
                program under which $500,000,000 or more is provided 
                annually to States, local governments, and tribal 
                governments under entitlement authority, if--
                            ``(i)(I) the provision would increase the 
                        stringency of conditions of assistance to 
                        States, local governments, or tribal 
                        governments under the program; or
                            ``(II) would place caps upon, or otherwise 
                        decrease, the Federal Government's 
                        responsibility to provide funding to States, 
                        local governments, or tribal governments under 
                        the program; and
                            ``(ii) the States, local governments, or 
                        tribal governments that participate in the 
                        Federal program lack authority under that 
                        program to amend their financial or 
                        programmatic responsibilities to continue 
                        providing required services that are affected 
                        by the legislation, statute, or regulation.
            ``(5) Federal private sector mandate.--The term `Federal 
        private sector mandate' means any provision in legislation, 
        statute, or regulation that--
                    ``(A) would impose an enforceable duty on the 
                private sector except--
                            ``(i) a condition of Federal assistance; or
                            ``(ii) a duty arising from participation in 
                        a voluntary Federal program; or
                    ``(B) would reduce or eliminate the amount of 
                authorization of appropriations for Federal financial 
                assistance that will be provided to the private sector 
                for the purpose of ensuring compliance with such duty.
            ``(6) Federal mandate.--The term `Federal mandate' means a 
        Federal intergovernmental mandate or a Federal private sector 
        mandate, as defined in paragraphs (4) and (5).
            ``(7) Federal mandate direct costs.--
                    ``(A) Federal intergovernmental direct costs.--In 
                the case of a Federal intergovernmental mandate, the 
                term `direct costs' means the aggregate estimated 
                amounts that all States, local governments, and tribal 
                governments would be required to spend or would be 
                required to forgo in revenues in order to comply with 
                the Federal intergovernmental mandate, or, in the case 
                of a provision referred to in paragraph (4)(A)(ii), the 
                amount of Federal financial assistance eliminated or 
                reduced.
                    ``(B) Private sector direct costs.--In the case of 
                a Federal private sector mandate, the term `direct 
                costs' means the aggregate estimated amounts that the 
                private sector would be required to spend in order to 
                comply with a Federal private sector mandate.
                    ``(C) Exclusion from direct costs.--The term 
                `direct costs' does not include--
                            ``(i) estimated amounts that the States, 
                        local governments, and tribal governments (in 
                        the case of a Federal intergovernmental 
                        mandate), or the private sector (in the case of 
                        a Federal private sector mandate), would 
                        spend--
                                    ``(I) to comply with or carry out 
                                all applicable Federal, State, local, 
                                and tribal laws and regulations in 
                                effect at the time of the adoption of a 
                                Federal mandate for the same activity 
                                as is affected by that Federal mandate; 
                                or
                                    ``(II) to comply with or carry out 
                                State, local governmental, and tribal 
                                governmental programs, or private-
                                sector business or other activities in 
                                effect at the time of the adoption of a 
                                Federal mandate for the same activity 
                                as is affected by that mandate; or
                            ``(ii) expenditures to the extent that they 
                        will be offset by any direct savings to be 
                        enjoyed by the States, local governments, and 
                        tribal governments, or by the private sector, 
                        as a result of--
                                    ``(I) their compliance with the 
                                Federal mandate; or
                                    ``(II) other changes in Federal law 
                                or regulation that are enacted or 
                                adopted in the same bill or joint 
                                resolution or proposed or final Federal 
                                regulation and that govern the same 
                                activity as is affected by the Federal 
                                mandate.
                    ``(D) Determination of costs.--Direct costs shall 
                be determined based on the assumption that States, 
                local governments, tribal governments, and the private 
                sector will take all reasonable steps necessary to 
                mitigate the costs resulting from the Federal mandate, 
                and will comply with applicable standards of practice 
                and conduct established by recognized professional or 
                trade associations. Reasonable steps to mitigate the 
                costs shall not include increases in State, local, or 
                tribal taxes or fees.
            ``(8) Local government.--The term `local government' has 
        the same meaning as in section 6501(6) of title 31, United 
        States Code.
            ``(9) Private sector.--The term `private sector' means 
        individuals, partnerships, associations, corporations, business 
        trusts, or legal representatives, organized groups of 
        individuals, and educational and other nonprofit institutions.
            ``(10) Regulation.--The term `regulation' or `rule' has the 
        meaning of `rule' as defined in section 601(2) of title 5, 
        United States Code.
            ``(11) State.--The term `State' has the same meaning as in 
        section 6501(9) of title 31, United States Code.
            ``(12) Significant employment impact.--The term 
        `significant employment impact' means an estimated net 
        aggregate loss of 10,000 or more jobs.

``SEC. 422. LIMITATION ON APPLICATION.

    ``This part shall not apply to any provision in a bill, joint 
resolution, motion, amendment, or conference report before Congress 
that--
            ``(1) enforces constitutional rights of individuals;
            ``(2) establishes or enforces any statutory rights that 
        prohibit discrimination on the basis of age, race, religion, 
        gender, national origin, or handicapped or disability status;
            ``(3) requires compliance with accounting and auditing 
        procedures with respect to grants or other money or property 
        provided by the Federal Government;
            ``(4) provides for emergency assistance or relief at the 
        request of any State, local government, or tribal government or 
        any official of such a government;
            ``(5) is necessary for the national security or the 
        ratification or implementation of international treaty 
        obligations;
            ``(6) the President designates as emergency legislation and 
        that the Congress so designates in statute; or
            ``(7) pertains to Social Security.

``SEC. 423. DUTIES OF CONGRESSIONAL COMMITTEES.

    ``(a) Submission of Bills to the Director.--When a committee of 
authorization of the House of Representatives or the Senate orders a 
bill or joint resolution of a public character reported, the committee 
shall promptly provide the text of the bill or joint resolution to the 
Director and shall identify to the Director any Federal mandate 
contained in the bill or resolution.
    ``(b) Committee Report.--
            ``(1) Information regarding federal mandates.--When a 
        committee of authorization of the House of Representatives or 
        the Senate reports a bill or joint resolution of a public 
        character that includes any Federal mandate, the report of the 
        committee accompanying the bill or joint resolution shall 
        contain the information required by paragraph (2) and, in the 
        case of a Federal intergovernmental mandate, paragraph (3).
            ``(2) Reports on federal mandates.--Each report referred to 
        in paragraph (1) shall contain--
                    ``(A) an identification and description of each 
                Federal mandate in the bill or joint resolution, 
                including the statement, if available, from the 
                Director pursuant to section 424(a);
                    ``(B) a qualitative assessment, and if practicable, 
                a quantitative assessment of costs and benefits 
                anticipated from the Federal mandate (including the 
                effects on health and safety and protection of the 
                natural environment); and
                    ``(C) a statement of--
                            ``(i) the degree to which the Federal 
                        mandate affects each of the public and private 
                        sectors, including a description of the 
                        actions, if any, taken by the committee to 
                        avoid any adverse impact on the private sector 
                        or on the competitive balance between the 
                        public sector and the private sector; and
                            ``(ii) in the case of a Federal mandate 
                        that is a Federal intergovernmental mandate, 
                        the extent to which limiting or eliminating the 
                        Federal intergovernmental mandate or Federal 
                        payment of direct costs of the Federal 
                        intergovernmental mandate (if applicable) would 
                        affect the competitive balance between States, 
                        local governments, or tribal governments and 
                        the private sector.
            ``(3) Intergovernmental mandates.--If any of the Federal 
        mandates in the bill or joint resolution are Federal 
        intergovernmental mandates, the report referred to in paragraph 
        (1) shall also contain--
                    ``(A)(i) a statement of the amount, if any, of 
                increase or decrease in authorization of appropriations 
                under existing Federal financial assistance programs or 
                for new Federal financial assistance, provided by the 
                bill or joint resolution and usable for activities of 
                States, local governments, or tribal governments 
                subject to Federal intergovernmental mandates; and
                    ``(ii) a statement of whether the committee intends 
                that the Federal intergovernmental mandates be partly 
                or entirely unfunded, and, if so, the reasons for that 
                intention; and
                    ``(B) a statement of any existing sources of 
                Federal financial assistance in addition to those 
                identified in subparagraph (A) that may assist States, 
                local governments, and tribal governments in paying the 
                direct costs of the Federal intergovernmental mandates.
            ``(4) Information regarding preemption.--When a committee 
        of authorization of the House of Representatives or the Senate 
        reports a bill or joint resolution of a public character, the 
        committee report accompanying the bill or joint resolution 
        shall contain, if relevant to the bill or joint resolution, an 
        explicit statement on whether the bill or joint resolution, in 
        whole or in part, is intended to preempt any State, local, or 
        tribal law, and if so, an explanation of the reasons for such 
        intention.
    ``(c) Publication of Statement From the Director.--
            ``(1) In general.--Upon receiving a statement (including 
        any supplemental statement) from the Director pursuant to 
        section 424(a), a committee of the House of Representatives or 
        the Senate shall publish the statement in the committee report 
        accompanying the bill or joint resolution to which the 
        statement relates if the statement is available to be included 
        in the printed report.
            ``(2) Other publication of statement of director.--If the 
        statement is not published in the report, or if the bill or 
        joint resolution to which the statement relates is expected to 
        be considered by the House of Representatives or the Senate 
        before the report is published, the committee shall cause the 
        statement, or a summary thereof, to be published in the 
        Congressional Record in advance of floor consideration of the 
        bill or joint resolution.

``SEC. 424. DUTIES OF THE DIRECTOR.

    ``(a) Statements on Bills and Joint Resolutions Other Than 
Appropriations Bills and Joint Resolutions.--
            ``(1) Federal intergovernmental mandates in reported bills 
        and resolutions.--For each bill or joint resolution of a public 
        character reported by any committee of authorization of the 
        House of Representatives or the Senate, the Director shall 
        prepare and submit to the committee a statement as follows:
                    ``(A) If the Director estimates that the direct 
                cost of all Federal intergovernmental mandates in the 
                bill or joint resolution will equal or exceed 
                $50,000,000 (adjusted annually for inflation) in the 
                fiscal year in which such a Federal intergovernmental 
                mandate (or in any necessary implementing regulation) 
                would first be effective or in any of the 4 fiscal 
                years following such year, the Director shall so state, 
                specify the estimate, and briefly explain the basis of 
                the estimate.
                    ``(B) The estimate required by subparagraph (A) 
                shall include estimates (and brief explanations of the 
                basis of the estimates) of--
                            ``(i) the total amount of direct cost of 
                        complying with the Federal intergovernmental 
                        mandates in the bill or joint resolution; and
                            ``(ii) the amount, if any, of increase in 
                        authorization of appropriations or budget 
                        authority or entitlement authority under 
                        existing Federal financial assistance programs, 
                        or of authorization of appropriations for new 
                        Federal financial assistance, provided by the 
                        bill or joint resolution and usable by States, 
                        local governments, or tribal governments for 
                        activities subject to the Federal 
                        intergovernmental mandates.
            ``(2) Federal private sector mandates in reported bills and 
        joint resolutions.--For each bill or joint resolution of a 
        public character reported by any committee of authorization of 
        the House of Representatives or the Senate, the Director shall 
        prepare and submit to the committee a statement as follows:
                    ``(A) If the Director estimates that the direct 
                cost of all Federal private sector mandates in the bill 
                or joint resolution will equal or exceed $50,000,000 
                (adjusted annually for inflation) in the fiscal year in 
                which any Federal private sector mandate in the bill or 
                joint resolution (or in any necessary implementing 
                regulation) would first be effective or in any of the 4 
                fiscal years following such fiscal year, the Director 
                shall so state, specify the estimate, and briefly 
                explain the basis of the estimate.
                    ``(B) The estimate required by subparagraph (A) 
                shall include estimates (and brief explanations of the 
                basis of the estimates) of--
                            ``(i) the total amount of direct costs of 
                        complying with the Federal private sector 
                        mandates in the bill or joint resolution; and
                            ``(ii) the amount, if any, of increase in 
                        authorization of appropriations under existing 
                        Federal financial assistance programs, or of 
                        authorization of appropriations for new Federal 
                        financial assistance, provided by the bill or 
                        joint resolution usable by the private sector 
                        for the activities subject to the Federal 
                        private sector mandates.
                    ``(C) If the Director determines that it is not 
                feasible to make a reasonable estimate that would be 
                required under subparagraphs (A) and (B), the Director 
                shall not make the estimate, but shall report in the 
                statement that the reasonable estimate cannot be made 
                and shall include the reasons for that determination in 
                the statement.
            ``(3) Legislation falling below the direct costs 
        thresholds.--If the Director estimates that the direct costs of 
        a Federal mandate will not equal or exceed the threshold 
        specified in paragraph (1)(A) or (2)(A), the Director shall so 
        state and shall briefly explain the basis of the estimate.
            ``(4) Amended bills and joint resolutions; conference 
        reports.--If the Director has prepared the statement pursuant 
        to subsection (a) for a bill or joint resolution, and if that 
        bill or joint resolution is reported or passed in an amended 
        form (including if passed by one House as an amendment in the 
        nature of a substitute for the text of a bill or joint 
        resolution from the other House) or is reported by a committee 
        of conference in an amended form, the committee of conference 
        shall ensure, to the greatest extent practicable, that the 
        Director shall prepare a supplemental statement for the bill or 
        joint resolution in that amended form.
    ``(b) Assistance to Committees and Studies.--
            ``(1) In general.--At the request of any committee of the 
        House of Representatives or of the Senate, the Director shall, 
        to the extent practicable, consult with and assist such 
        committee in analyzing the budgetary or financial impact of any 
        proposed legislation that may have--
                    ``(A) a significant budgetary impact on State, 
                local, or tribal governments;
                    ``(B) a significant financial impact on the private 
                sector; or
                    ``(C) significant employment impact on the private 
                sector.
            ``(2) Continuing studies.--The Director shall conduct 
        continuing studies to enhance comparisons of budget outlays, 
        credit authority, and tax expenditures.
            ``(3) Federal mandate studies.--
                    ``(A) At the request of any committee of the House 
                of Representatives or the Senate, the Director shall, 
                to the extent practicable, conduct a study of a 
                legislative proposal containing a Federal mandate.
                    ``(B) In conducting a study under subparagraph (A), 
                the Director shall--
                            ``(i) solicit and consider information or 
                        comments from elected officials (including 
                        their designated representatives) of States, 
                        local governments, tribal governments, 
                        designated representatives of the private 
                        sector, and such other persons as may provide 
                        helpful information or comments;
                            ``(ii) consider establishing advisory 
                        panels of elected officials (including their 
                        designated representatives) of States, local 
                        governments, tribal governments, designated 
                        representatives of the private sector, and 
                        other persons if the Director determines, in 
                        the Director's discretion, that such advisory 
                        panels would be helpful in performing the 
                        Director's responsibilities under this section; 
                        and
                            ``(iii) include estimates, if and to the 
                        extent that the Director determines that 
                        accurate estimates are reasonably feasible, 
                        of--
                                    ``(I) the future direct cost of the 
                                Federal mandates concerned to the 
                                extent that they significantly differ 
                                from or extend beyond the 5-year period 
                                after the mandate is first effective; 
                                and
                                    ``(II) any disproportionate 
                                budgetary effects of the Federal 
                                mandates concerned upon particular 
                                industries or sectors of the economy, 
                                States, regions, and urban, or rural or 
                                other types of communities, as 
                                appropriate.
                    ``(C) In conducting a study on private sector 
                mandates under subparagraph (A), the Director shall 
                provide estimates, if and to the extent that the 
                Director determines that such estimates are reasonably 
                feasible, of--
                            ``(i) future costs of Federal private 
                        sector mandates to the extent that such 
                        mandates differ significantly from or extend 
                        beyond the 5-year period referred to in 
                        subparagraph (B)(iii)(I);
                            ``(ii) any disproportionate financial 
                        effects of Federal private sector mandates and 
                        of any Federal financial assistance in the bill 
                        or joint resolution upon any particular 
                        industries or sectors of the economy, States, 
                        regions, and urban or rural or other types of 
                        communities; and
                            ``(iii) the effect of Federal private 
                        sector mandates in the bill or joint resolution 
                        on the national economy, including the effect 
                        on productivity, economic growth, full 
                        employment, creation of productive jobs, and 
                        international competitiveness of United States 
                        goods and services.
    ``(c) Views of Committees.--Any committee of the House of 
Representatives or the Senate which anticipates that the committee will 
consider any proposed legislation establishing, amending, or 
reauthorizing any Federal program likely to have a significant 
budgetary impact on the States, local governments, or tribal 
governments, or likely to have a significant financial impact on the 
private sector, including any legislative proposal submitted by the 
executive branch likely to have such a budgetary or financial impact, 
shall provide its views and estimates on such proposal to the Committee 
on the Budget of its House.
    ``(d) Estimates.--If the Director determines that it is not 
feasible to make a reasonable estimate that would be required for a 
statement under subsection (a)(1) for a bill or joint resolution, the 
Director shall not make such a statement and shall inform the 
committees involved that such an estimate cannot be made and the 
reasons for that determination. The bill or joint resolution for which 
such statement was to be made shall be subject to a point of order 
under section 425(a)(1).
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Congressional Budget Office to carry out this part 
$4,500,000 for each of fiscal years 1996 through 2002.

``SEC. 425. POINT OF ORDER.

    ``(a) In General.--It shall not be in order in the House of 
Representatives or the Senate to consider--
            ``(1) any bill or joint resolution that is reported by a 
        committee unless the committee has published the statement of 
        the Director pursuant to section 424(a) prior to such 
        consideration, except that this paragraph shall not apply to 
        any supplemental statement prepared by the Director under 
        section 424(a)(4); or
            ``(2) any bill, joint resolution, amendment, motion, or 
        conference report that contains a Federal intergovernmental 
        mandate having direct costs that exceed the threshold specified 
        in section 424(a)(1)(A), or that would cause the direct costs 
        of any other Federal intergovernmental mandate to exceed the 
        threshold specified in section 424(a)(1)(A), unless--
                    ``(A) the bill, joint resolution, amendment, 
                motion, or conference report provides new budget 
                authority or new entitlement authority in the House of 
                Representatives or direct spending authority in the 
                Senate for each fiscal year for the Federal 
                intergovernmental mandates included in the bill, joint 
                resolution, amendment, motion, or conference report in 
                an amount that equals or exceeds the estimated direct 
                costs of such mandate; or
                    ``(B) the bill, joint resolution, amendment, 
                motion, or conference report provides an increase in 
                receipts or a decrease in new budget authority or new 
                entitlement authority in the House of Representatives 
                or direct spending authority in the Senate and an 
                increase in new budget authority or new entitlement 
                authority in the House of Representatives or an 
                increase in direct spending authority for each fiscal 
                year for the Federal intergovernmental mandates 
                included in the bill, joint resolution, amendment, 
                motion, or conference report in an amount that equals 
                or exceeds the estimated direct costs of such mandate; 
                or
                    ``(C) the bill, joint resolution, amendment, 
                motion, or conference report--
                            ``(i) provides that--
                                    ``(I) such mandate shall be 
                                effective for any fiscal year only if 
                                all direct costs of such mandate in the 
                                fiscal year are provided in 
                                appropriations Acts, and
                                    ``(II) in the case of such a 
                                mandate contained in the bill, joint 
                                resolution, amendment, motion, or 
                                conference report, the mandate is 
                                repealed effective on the first day of 
                                any fiscal year for which all direct 
                                costs of such mandate are not provided 
                                in appropriations Acts; or
                            ``(ii) requires a Federal agency to reduce 
                        programmatic and financial responsibilities of 
                        State, local, and tribal governments for 
                        meeting the objectives of the mandate such that 
                        the estimated direct costs of the mandate to 
                        such governments do not exceed the amount of 
                        Federal funding provided to those governments 
                        to carry out the mandate in the form of 
                        appropriations or new budget authority or new 
                        entitlement authority in the House of 
                        Representatives or direct spending authority in 
                        the Senate, and establishes criteria and 
                        procedures for that reduction.
    ``(b) Limitation on Application to Appropriations Bills.--
Subsection (a) shall not apply to a bill that is reported by the 
Committee on Appropriations or an amendment thereto.
    ``(c) Determination of Direct Costs Based on Estimates by Budget 
Committees.--For the purposes of this section, the amount of direct 
costs of a Federal mandate for a fiscal year shall be determined based 
on estimates made by the Committee on the Budget, in consultation with 
the Director, of the House of Representatives or the Senate, as the 
case may be.
    ``(d) Limitation on Application of Subsection (a)(2).--Subsection 
(a)(2) shall not apply to any bill, joint resolution, amendment, or 
conference report that reauthorizes appropriations for carrying out, or 
that amends, any statute if enactment of the bill, joint resolution, 
amendment, or conference report--
            ``(1) would not result in a net increase in the aggregate 
        amount of direct costs of Federal intergovernmental mandates; 
        and
            ``(2)(A) would not result in a net reduction or elimination 
        of authorizations of appropriations for Federal financial 
        assistance that would be provided to State, local governments, 
        or tribal governments for use to comply with any Federal 
        intergovernmental mandate; or
            ``(B) in the case of any net reduction or elimination of 
        authorizations of appropriations for such Federal financial 
        assistance that would result from such enactment, would reduce 
        the duties imposed by the Federal intergovernmental mandate by 
        a corresponding amount.

``SEC. 426. ENFORCEMENT IN THE HOUSE OF REPRESENTATIVES.

    ``It shall not be in order in the House of Representatives to 
consider a rule or order that waives the application of section 425(a).

``SEC. 427. DISPOSITION OF POINTS OF ORDER.

    ``(a) Threshold Burden.--In order to be cognizable by the Chair, a 
point of order under section 425(a) or 426 must specify the precise 
language on which it is premised.
    ``(b) Question of Consideration.--As disposition of points of order 
under section 425(a) or 426, the Chair shall put the question of 
consideration with respect to the proposition that is the subject of 
the points of order.
    ``(c) Debate and Intervening Motions.--A question of consideration 
under this section shall be debatable for 10 minutes by each Member 
initiating a point of order and for 10 minutes by an opponent on each 
point of order, but shall otherwise be decided without intervening 
motion except one that the House adjourn or that the Committee of the 
Whole rise, as the case may be.
    ``(d) Effect on Amendment in Order as Original Text.--The 
disposition of the question of consideration under this section with 
respect to a bill or joint resolution shall be considered also to 
determine the question of consideration under this section with respect 
to an amendment made in order as original text.''.

SEC. 302. ENFORCEMENT IN THE HOUSE OF REPRESENTATIVES.

    (a) Motions To Strike in the Committee of the Whole.--Clause 5 of 
rule XXIII of the Rules of the House of Representatives is amended by 
adding at the end the following:
    ``(c) In the consideration of any measure for amendment in the 
Committee of the Whole containing any Federal mandate the direct costs 
of which exceed the threshold in section 424(a)(1)(A) of the Unfunded 
Mandate Reform Act of 1995, it shall always be in order, unless 
specifically waived by terms of a rule governing consideration of that 
measure, to move to strike such Federal mandate from the portion of the 
bill then open to amendment.''.
    (b) Committee on Rules Reports on Waived Points of Order.--The 
Committee on Rules shall include in the report required by clause 1(d) 
of rule XI (relating to its activities during the Congress) of the 
Rules of the House of Representatives a separate item identifying all 
waivers of points of order relating to Federal mandates, listed by bill 
or joint resolution number and the subject matter of that measure.

SEC. 303. EXERCISE OF RULEMAKING POWERS.

    The provisions of this title (except section 305) are enacted by 
Congress--
            (1) as an exercise of the rulemaking powers of the House of 
        Representatives and the Senate, and as such they shall be 
        considered as part of the rules of the House of Representatives 
        and the Senate, respectively, and such rules shall supersede 
        other rules only to the extent that they are inconsistent 
        therewith; and
            (2) with full recognition of the constitutional right of 
        the House of Representatives and the Senate to change such 
        rules at anytime, in the same manner, and to the same extent as 
        in the case of any other rule of the House of Representatives 
        or the Senate, respectively.

SEC. 304. CONFORMING AMENDMENT TO TABLE OF CONTENTS.

    Section 1(b) of the Congressional Budget and Impoundment Control 
Act of 1974 is amended by inserting ``Part A--General Provisions'' 
before the item relating to section 401 and by inserting after the item 
relating 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.''.

SEC. 305. TECHNICAL AMENDMENTS.

    (a) Technical Amendment.--The State and Local Government Cost 
Estimate Act of 1981 (Public Law 97-108) is repealed.
    (b) Technical Amendment.--Section 403 of the Congressional Budget 
Act of 1974 is amended to read as follows:

               ``analysis by congressional budget office

    ``Sec. 403. The Director of the Congressional Budget Office shall, 
to the extent practicable, prepare for each bill or resolution of a 
public character reported by any committee of the House of 
Representatives or the Senate (except the Committee on Appropriations 
of each House), and submit to such committee--
            ``(1) an estimate of the costs which would be incurred in 
        carrying out such bill or resolution in the fiscal year in 
        which it is to become effective and in each of the 4 fiscal 
        years following such fiscal year, together with the basis for 
        each such estimate; and
            ``(2) a comparison of the estimate of costs described in 
        paragraph (1) with any available estimate of costs made by such 
        committee or by any Federal agency.
The estimate and comparison so submitted shall be included in the 
report accompanying such bill or resolution if timely submitted to such 
committee before such report is filed.''.

SEC. 306. EFFECTIVE DATE.

    This title shall take effect on October 1, 1995.

            Passed the House of Representatives February 1, 1995.

            Attest:

                                                                 Clerk.
104th CONGRESS

  1st Session

                                H. R. 5

_______________________________________________________________________

                                 AN ACT

 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.