[Congressional Record Volume 141, Number 6 (Wednesday, January 11, 1995)]
[Senate]
[Pages S782-S789]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          REPORTS OF COMMITTEE

  The following report of committee was submitted:

       By Mr. ROTH, from the Committee on Governmental Affairs:
       Report to accompany the bill (S. 1) to curb the practice of 
     imposing unfunded Federal mandates on States and local 
     governments; to strengthen the partnership between the 
     Federal Government and State, local and tribal governments; 
     to end the imposition, in 
      [[Page S783]] the absence of full consideration by Congress, 
     of Federal mandates on State, local, and tribal governments 
     without adequate funding, in a manner that may displace other 
     essential governmental priorities; and to ensure that the 
     Federal Government pays the costs incurred by those 
     governments in complying with certain requirements under 
     Federal statutes and regulations; and for other purposes 
     (Rept. 104-1).

  Mr. DOMENICI. Mr. President, on behalf of the Senate Budget 
Committee, I ask unanimous consent that a statement on S. 1, the 
Unfunded Mandate Reform Act of 1995, as reported, be printed in the 
Record.
  In order to expedite the business of the Senate, the committee did 
not file a report. This statement provides the same information as 
required by a report and serves as the basis of the legislative history 
of the Senate Budget Committee's actions on the bill.
   Statement of the Senate Committee on the Budget on S. 1--Unfunded 
                       Mandate Reform Act of 1995


                               i. purpose

       The primary purpose of S. 1--the ``Unfunded Mandate Reform 
     Act of 1995''--is to start the process of redefining the 
     relationship between the Federal government and State, local 
     and tribal governments. In addition, the bill would require 
     an assessment of the impact of legislative and regulatory 
     proposals on the private sector.
       The bill accomplishes this purpose by ensuring that the 
     impact of legislative and regulatory proposals on those 
     governments and the private sector are given full 
     consideration in Congress and the Executive Branch before 
     they are acted upon.
       More specifically, S. 1 achieves these objectives through 
     the following major provisions: A majority point of order in 
     the Senate against consideration of legislation that 
     establishes a Federal mandate on State, local and tribal 
     governments unless the legislation provides funding to offset 
     the costs of the mandate; a majority point of order in the 
     Senate against consideration of any reported legislation 
     unless the report includes a Congressional Budget Office 
     (CBO) estimate of the cost of Federal mandates to State, 
     local and tribal governments as well as to the private 
     sector; a requirement that Federal agencies establish a 
     process to allow State, local and tribal governments greater 
     input into the regulatory process; and, a requirement that 
     agencies analyze the impact on State, local, and tribal 
     governments and the private sector of major regulations that 
     include federal mandates.


                             ii. background

       The controversies that arise between the respective powers 
     of the Federal government and the States date back to the 
     country's origins. Concern about the cost and extent of 
     Federal mandates on State, local governments, and indian 
     tribes as well as the private sector first reached its peak 
     in the late 1970s.
       With respect to State and local mandates, the Senate Budget 
     Committee acted in 1980 and again in 1981, culminating in the 
     enactment of the State and Local Government Cost Estimate Act 
     of 1981. This law required the Congressional Budget Office 
     (CBO) to prepare
      State and local cost estimates, but did not provide for any 
     legislative enforcement procedures.
       Since the enactment of the State and Local Government Cost 
     Estimate Act, CBO has had 12 years of experience in preparing 
     State and local cost estimates. During this period, CBO has 
     examined 6,920 pieces of legislation for the impact of 
     Federal mandates. Twelve percent, or roughly 800 bills, 
     contained some impact on State and local governments. A year-
     by-year summary of the number of estimates prepared by CBO is 
     displayed in the following table.
       Although these past legislative efforts were designed to 
     monitor and, presumably, to curtail the growth of Federal 
     mandates, Federal mandates have grown while Federal resources 
     to cover the costs of these mandates have shrunk.
       While it is difficult to produce precise estimates of the 
     costs of mandates, there is little doubt that these costs 
     have grown and represent a sizeable proportion of the 
     economy. One of the purposes of S. 1 is to, in fact, create a 
     mechanism for better and more current accounting of these 
     costs. One study prepared for the GSA Regulatory Information 
     Service Center in 1992 found the cost of Federal mandates to 
     State and local governments and the private sector was 
     estimated to amount to $581 billion, or roughly 10 percent of 
     GDP. According to the Vice President's report, The National 
     Performance Review, the private sector alone spends $430 
     billion each year to comply with Federal regulations.
       During a joint hearing with the Senate Governmental Affairs 
     Committee on January 5, 1995, the Budget Committee these 
     concerns from State and local officials regarding the cost of 
     the mandates and the damaging impact of these mandates to our 
     system of government. According to the National League of 
     Cities, over the past two decades, the Congress has enacted 
     185 new laws imposing mandates on state and local 
     governments.
       In that hearing, the Mayor of Philadelphia, Edward Rendell, 
     on behalf of the U.S. Conference of Mayors, testified that 
     314 cities will spend an estimated $54 billion over the next 
     five years to comply with only 10 of these Federal mandates. 
     His testimony included the following remarks on how Federal 
     mandates severely diminish local government's ability to 
     establish priorities.
       ``The problem with unfunded Federal mandates is that the 
     Federal government has turned State and local officials into 
     Federal tax collectors. We collect the taxes to implement 
     Federal priorities and as a result we are not able to 
     establish and fund local priorities.''
       ``In my city when I became mayor, we had 19 tax increases 
     in the 11 years prior to my becoming mayor, and we still had 
     a quarter of a billion dollar budget deficit, and we had 
     driven 30 percent of our tax base out of the city.''
       ``So as a practical matter, I could not raise taxes to meet 
     the new demands and mandates.''

                                         STATE AND LOCAL COST ESTIMATES PREPARED BY CBO: 12 YEARS OF EXPERIENCE                                         
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    1983   1984   1985   1986   1987   1988   1989   1990   1991   1992   1993   1994   Total   Average 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total estimates prepared.........................    573    641    533    590    531    686    470    720    551    614    507    504   6,920        577
Estimates with no impacts........................    496    584    488    543    448    598    404    593    494    522    448    443   6,061        505
    (Percent of Total)...........................     87     91     92     92     84     87     86     82     90     85     88     88      88         88
Esimates with some impacts.......................     77     57     45     47     83     88     66    127     57     92     48     51     838         70
    (Percent of Total)...........................     13      9      8      8     16     13     14     18     10     15      9     10      12         12
Estimates with impacts above $200 million........     24      6     14      8     22     15      7     20      4     14      9      6     149         12
    (Percent of Total)...........................      4      1      3      1      4      2      1      3      1      2      2      1       2          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office: Bill Estimates Tracking System.                                                                                    

       The Governor of Ohio, George V. Voinovich, made a similar 
     point and concluded, ``* * * the Federal government is 
     bankrupt. And the Congress is on its way to bankupting state 
     and local governments.''
       Governor Voinovich also spoke to the lack of accountability 
     on the part of Federal officials when mandates are enacted 
     and regulations are promulgated to impose mandates on States 
     and local governments. He cited an example of a Federal 
     requirement that states uses scrap tires to pave their roads 
     with rubberized asphalt that will increase the cost of the 
     State of Ohio's highway program by $50 million, money that 
     could be spent to replace 700 miles of roads or rehabilitate 
     137 aging bridges. His testimony raised questions about the 
     durability of rubberized asphalt and expressed grave concerns 
     about its potentially harmful environmental effects.


                        iii. legislative history

       Senator Kempthorne introduced S. 1, the Unfunded Mandate 
     Reform Act of 1995, on January 4, 1995.
       S.1 is based on similar legislation the Senate Government 
     Affairs committee reported last Congress. Senator Kempthorne 
     introduced s. 993 on May 30, 1993 and this legislation was 
     reported by the Governmental Affairs Committee on August 10, 
     1994. The Senate considered S. 993 on October 6, 1994, but no 
     final action was taken on the bill during the 103d Congress.
       S. 993 as reported by the Governmental Committee proposed a 
     number of changes in matters that are within the jurisdiction 
     of the Senate Budget Committee. Pursuant to section 306 of 
     the Budget Act, any legislation that affects any matter 
     within the jurisdiction of the Budget Committee is subject to 
     a point of order unless it is reported by the Budget 
     Committee. This point of order can only be waived by an 
     affirmative vote of 60 Senators.
       On November 29, 1994, Senators Domenici and Exon wrote 
     Senators Roth and Glenn regarding the consideration of 
     unfunded mandates legislation and the Budget Committee's 
     jurisdiction over this legislation.
       During December, the Budget Committee worked with the 
     Government Affairs Committee and Senator Kempthorne to 
     develop the legislation that was introduced at S. 1. The 
     Senate Budget Committee worked to make the following three 
     modifications to S. 993, which are now reflected in S. 1: (1) 
     strengthened the point of order in the bill so that it would 
     apply to all legislation (bill, joint resolution, amendment, 
     motion or conference reports) and not just reported bills; 
     (2) reduced the costs to the Congressional Budget Office 
     (CBO) for its new duties required by the bill by 50 percent 
     (from $8-10 million down to $4.5 million); and, (3) 
     strengthened the bill by incorporating this new mandate 
     control process into the Congressional Budget Act and the 
     Congressional Budget process.
       [[Page S784]] On January 5, the Budget Committee held a 
     joint hearing with the Governmental Affairs Committee. On 
     January 9, the Governmental Affairs Committee voted 9-4 to 
     report the bill, S. 1, with three amendments. On the same 
     day, after the Governmental Affairs action, the Budget 
     Committee also voted by a vote of 21-0 to report S. 1 with 
     four amendments.


                    iv. section-by-section analysis

                         Section 1. Short title

       This section identifies the short title as the ``Unfunded 
     Mandate Reform Act of 1995.''

                          Section 2. Purposes

       This section establishes the purposes of the Act.

                         Section 3, Definitions

       This section amends the Congressional Budget and 
     Impoundment Control Act of 1974 by Adding Several new 
     definitions. These definitions are applicable to the entire 
     Unfunded Mandates Reform Act. However, one of the Committee 
     amendments restricts their application within the Budget Act 
     to the new Budget Act enforcement mechanisms established in 
     Title I of this Act.
       The term ``Federal mandate'' is defined as either a 
     ``Federal intergovernmental mandate'' or a ``Federal private 
     sector mandate''.
       The term ``Federal intergovernmental mandate'' is defined 
     to mean any legislation, statute, or regulation that imposes 
     a legally binding duty on State, local, or tribal 
     governments, unless the duty is a condition of Federal 
     assistance or is a condition or requirement for participation 
     in a voluntary discretionary aid program.
       The term ``Federal intergovernmental mandate'' is further 
     defined to include any legislation, statute, or regulation 
     that would reduce or eliminate the authorization of 
     appropriation for Federal financial assistance to State, 
     local, or tribal governments for purposes of complying with 
     an existing duty, unless the legislation, statute, or 
     regulation reduces or eliminates the duty accordingly. In the 
     circumstances where the Federal government has imposed legal 
     duties on State, local, and tribal governments and has 
     provided financial assistance to those entitles to comply 
     with those duties, the Committee believes that the Federal 
     government ought to be held accountable when the Federal 
     government subsequently reduces or eliminates the Federal 
     assistance to those governments while continuing to require 
     compliance
      with the existing duties. This definition, together with the 
     enforcement mechanism established in section 101, will 
     provide this accountability.
       The term ``Federal intergovernmental mandate'' is lastly 
     defined to include any legislation, statute, or regulation 
     concerning Federal entitlement programs that provide $500 
     million or more annually to State, local, or tribal 
     governments, if it would either increase the conditions of 
     assistance or would cap or decrease the Federal 
     responsibility to provide funding, and the governments have 
     no authority to amend their responsibility to provide the 
     services affected. This subparagraph relates to nine large 
     Federal entitlement programs, the spending projections for 
     which are shown in the following CBO table:

      ENTITLEMENT PROGRAMS THAT CONTAIN INTERGOVERNMENTAL MANDATES      
                    [Outlays in billions of dollars]                    
------------------------------------------------------------------------
                                   1996    1997    1998    1999    2000 
------------------------------------------------------------------------
Payments to States for AFDC work                                        
 programs.......................     0.9     1.0     1.0     1.0     1.0
Social services block grant                                             
 (Title XX).....................     3.1     3.1     3.0     2.9     2.8
Payments to States for foster                                           
 care and adoption assistance...     3.9     4.3     4.7     5.0     5.5
Rehabilitation services and                                             
 disability research............     2.4     2.5     2.6     2.6     2.7
Medicaid........................   100.1   111.0   123.1   136.0   149.5
Food Stamp Program..............    26.0    27.4    28.8    30.3    31.1
State child nutrition programs..     8.1     8.6     9.2     9.9    10.5
Family support payments to                                              
 States\1\......................    17.5    17.9    18.3    18.8    19.4
                                 ---------------------------------------
      Total.....................   162.0   175.6   190.6   206.5   222.5
------------------------------------------------------------------------
\1\Includes AFDC and child support enforcement.                         
                                                                        
Source: CBO January 1995 Baseline.                                      

       Any legislation or regulation would be considered a Federal 
     intergovernmental mandate if it: a) increases the stringency 
     of State, local or tribal government participation in any one 
     of these nine programs, or b) caps or decreases the Federal 
     government's responsibility to provide funds to State, local 
     or tribal governments to implement the program, including a 
     shifting of costs from the Federal government to those 
     governments. The legislation or regulation would not be 
     considered a Federal intergovernmental mandate if it allows 
     those governments the flexibility to amend their specific 
     programmatic or financial responsibilities within the program 
     while still remaining eligible to participate in that 
     program. In addition to the nine previously-mentioned 
     programs, also included are any new Federal-State-local 
     entitlement programs (above the $500 million threshold) that 
     may be created after the enactment of this Act.
       The Committee has included this provision in the 
     legislation because of its concern over past and possible 
     future shifting of the costs of entitlement programs by the 
     Federal government on to State governments.
       ``Federal private sector mandate'' is defined to include 
     any legislation, statute, or regulation that imposes a 
     legally binding duty on the private sector.
       ``Direct costs'' is defined to mean aggregate estimated 
     amounts that State, local and tribal governments and the 
     private sector will have to spend in order to comply with a 
     Federal mandate. Direct costs of Federal mandates are net 
     costs; they are the sum of estimated costs and estimated 
     savings associated with legislation. Further, direct costs do 
     not include costs that State, local and tribal governments 
     and the private sector currently incur or will incur to 
     implement the requirements of existing Federal law or 
     regulation. In addition, the direct costs of a Federal 
     mandate must not include costs being borne by those 
     governments and the private sector as the result of carrying 
     out a State or local government mandate.
       The Governmental Affairs Committee has proposed an 
     amendment change in the definition of ``Private sector''. The 
     revised definition covers all persons or entities in the 
     United States except for State, local or tribal governments. 
     It includes individuals, partnerships, associations, 
     corporations, and educational and nonprofit institutions.
       The Committee is troubled by the exemption of independent 
     regulatory agencies from the definition of a Federal 
     ``agency''. An amendment by Senator Domenici to delete this 
     exemption was withdrawn because of Senator Simon's request 
     that the Committee and the Senate have an opportunity to 
     study this exemption further. Many of these independent 
     regulatory agencies are a major source of costly unfunded 
     mandates, particularly on the private sector. The Committee 
     notes section 4 of the bill provides a number of exclusions 
     and believes this exemption needs to be, at a minimum, 
     significantly narrowed.
       The definition of ``small government'' is made consistent 
     with existing Federal law which classifies a government as 
     small if its population is less than 50,000. ``Tribal 
     government'' is defined according to existing law.
                         Section 4. Exclusions

       This section provides a number of exclusions from this Act.
       Among these exclusions, the bill contains an exclusion for 
     legislation that ``establishes or enforces any statutory 
     rights that prohibit discrimination.'' The Committee believes 
     this language to mean provisions in bills and joint 
     resolutions that prohibit or are designed to prevent 
     discrimination from occurring through civil or criminal 
     sanctions or prohibitions.
       In order to maintain the discipline of S.1 to control new 
     unfunded mandates, the Committee believes that the exclusions 
     must be interpreted so that the mandate in legislation 
     completely fits within the confines of an exclusion.

                      Section 5. Agency Assistance

       Under this section, the Committee intends for Federal 
     agencies to provide information, technical assistance, and 
     other assistance to the Congressional Budget Office (CBO) as 
     CBO might need and reasonably request that might be helpful 
     in preparing the legislative cost estimates as required by 
     Title I. Through the implementation of various Presidential 
     Executive Orders over the last decade, agencies have 
     developed a wealth of expertise and data on the cost of 
     legislation and regulation on State, local and tribal 
     government and the private sector. CBO should be able tap 
     into that expertise in a useful and timely manner. Other 
     Congressional support agencies may also have developed 
     information on cost estimates and the estimating process 
     which might be helpful to CBO in performing its duties. CBO 
     should not attempt to duplicate analytical work already being 
     done by the other support agencies, but rather use as needed 
     that information.

             Title I--Legislative Accountability and Reform

       Section 101. Legislative mandate accountability and reform

       This section amends title IV of the Congressional Budget 
     and Impoundment Control Act of 1974 by creating a new section 
     408 on Legislative Mandate Accountability and Reform. 
     Subsection (a) establishes procedures and requirements for 
     Committee reports accompanying legislation that imposes a 
     Federal mandate. It requires a committee, when it orders 
     reported legislation containing Federal mandates, to provide 
     the reported bill to CBO promptly. The Committee is concerned 
     that this bill imposes significant new responsibilities on 
     CBO to provide a variety of estimates for legislation. 
     Therefore, the Committee would urge the relevant authorizing 
     committees to work closely with CBO during the committee 
     process to ensure that legislation containing federal 
     mandates, as well as possible related amendments to be 
     offered in markup, be provided to CBO in a timely fashion so 
     as not to impede the legislative process.
       The committee report shall include: an identification and 
     description of Federal mandates
     in the bill, including an estimate of their expected direct 
     costs to State, local and tribal governments and the private 
     sector, and a qualitative assessment of the costs and 
     benefits of the Federal mandates, including their anticipated 
     costs and benefits to human health and safety and protection 
       of the natural environment.If a mandate affects both the 
     public and the private sectors, and it is intended that 
      [[Page S785]] the Federal Government pay the public sector 
     costs, the report should also state what effect, if any, this 
     would have on any competitive balance between government and 
     privately-owned businesses. One of the Committee's amendments 
     expanded this requirement to include an assessment of the 
     impact of any mandate on the competitive balance between 
     states, local governments, and tribal governments and 
     privately-owned businesses if that mandate is contingent on 
     funding being provided in appropriations Acts.
       Some federal mandates will affect both the public and 
     private sectors in similar and, in some cases, nearly 
     identical ways. For example, the costs of compliance with 
     minimum wage laws or environmental standards for landfill 
     operations or municipal waste incineration are incurred by 
     both sectors. There has been some concern expressed that the 
     Federal subsidization of the public sector in these cases 
     could create a competitive advantage for activities owned by 
     State, local or tribal governments in those areas where they 
     compete with the private sector. If future mandate 
     legislation causes this to be the case, S. 1 provides that 
     Congress will be aware of this impact and the effect on the 
     continuing ability of private enterprises to remain viable. 
     The authorizing committees are required to provide an 
     assessment in their reports in order for Congress to 
     carefully consider and decide whether the granting of a 
     competitive advantage to the public sector is fair and 
     appropriate.
       For Federal intergovernmental mandates, Committee reports 
     must also contain a statement of the amount, if any, of the 
     increased authorization of appropriations for Federal 
     financial assistance to fund the costs of the 
     intergovernmental mandates.
       This section also requires the authorizing Committee to 
     state in the report whether it intends the Federal 
     intergovernmental mandate to be funded or not. There may be 
     occasions when a Committee decides that it is entirely 
     appropriate that State, local or tribal governments should 
     bear the cost of a mandate without receiving Federal aid. If 
     so, the Committee report should state this and give an 
     explanation for it. Likewise, the Committee report must state 
     the extent to which the report legislation preempts State, 
     local or tribal law, and, if so, explain the reasons why. To 
     the maximum extent possible, this intention to preempt should 
     also be clear in the statutory language.
       Also set out in this section are procedures to ensure that 
     the Committee publishes the CBO cost estimate, either in the 
     Committee report or in the Congressional Record prior to 
     floor consideration of the legislation.
       Duties of the Director:
       Section 408(b) of the Congressional Budget and Impoundment 
     Control Act, as added by section 101, requires the Director 
     of CBO to analyze and prepare a statement on all bills 
     reported by committees of the Senate or House of 
     Representatives other than the appropriations committees. 
     This subsection stipulates, first, that the Director of CBO 
     must estimate whether all direct costs of Federal 
     intergovernmental mandates in the bill will equal or exceed a 
     threshold of $50,000,000 annually. If the Director estimates 
     that the direct costs will be below this threshold, the 
     Director must state this fact in his statement on the bill, 
     and must briefly explain the estimate. Although this 
     provision requires only a determination by CBO that the 
     threshold will not be equalled or exceeded, if, in cases 
     below the threshold, the Director actually estimates the 
     amount of direct costs, this section is not intended to 
     preclude the Director from including the estimate in his 
     explanatory statement. If the Director estimates that the 
     direct costs will equal or exceed the threshold, the Director 
     must so state and provide an explanation, and must also 
     prepare the required estimates.
       In estimating whether the threshold will be exceeded, the 
     Director must consider direct costs in the year when the 
     Federal intergovernmental mandate will first be effective, 
     plus each of the succeeding four fiscal years. In some cases, 
     the new duties or conditions that constitute the mandate will 
     not become effective against State, local and tribal 
     governments when the statute becomes effective, but will 
     become effective when the implementing regulations become 
     effective. The Committee notes that current Federal 
     comprehensive budget projects are made for five years and is 
     aware that estimates that reach beyond this five year window 
     are more difficult to make with precision. The Committee is 
     concerned about and recognizes the difficulty of making out-
     year estimates, particularly beyond the five-year window. The 
     Committee notes that the new enforcement procedures are based 
     on thresholds being exceeded. However, if a range of 
     estimates is made and that range estimate is less than to 
     greater than the threshold, the Committee believes the 
     enforcement procedures would apply.
       The $50,000,000 threshold in this legislation for Federal 
     intergovernmental mandates is significantly lower than the 
     threshold of $200,000,000 in the State and Local Cost 
     Estimate Act of 1981 (2 U.S.C. 403(c)). The threshold in the 
     1981 Act also included a test of whether the proposed 
     legislation is likely to have an exceptional fiscal 
     consequence for a geographic region or a level of government. 
     The bill provides that at the request of any Chairman or 
     Ranking Minority Member of a committee, CBO must conduct a 
     study on the disproportionate effects of mandates on specific 
     geographic regions or industries.
       If the Director determines that the direct costs of the 
     Federal intergovernmental mandates will equal or exceed the 
     threshold, he must make the required additional estimates and 
     place them in the statement.
       The Director of CBO must also estimate whether all direct 
     costs of Federal private sector mandates in the bill will 
     equal or exceed a threshold of $200,000,000 annually. In 
     making this estimate, the Director must consider direct costs 
     in the year when the Federal private sector mandate will 
     first be effective, plus each of the succeeding four fiscal 
     years. In some cases, the
      new duties or conditions that constitute the mandate will 
     not become effective for the private sector when the 
     statute becomes effective, but will become effective when 
     the implementing regulations become effective.
       Similar to State and local estimates, the Committee is 
     concerned about and recognizes the difficulty of making out-
     year estimates, particularly beyond the five-year window. CBO 
     has 12 years of experience of including estimates of the 
     impact on State and local governments in its cost estimates 
     for legislation. While CBO has conducted studies assessing 
     the impact of mandates on the private sector, CBO has little 
     experience with providing point estimates on private sector 
     impacts as the part of its cost estimates to committees on 
     legislation.
       The Committee is aware that the most costly aspect of this 
     legislation is the requirement on CBO to produce estimates on 
     the impact to the private sector and is concerned about the 
     cost of these new requirements. Even so, private sector 
     mandates have an enormous impact on the economy and is 
     critical that Congress understand these impacts as it 
     considers legislation affecting the private sector.
       If the Director estimates that the direct costs will equal 
     or exceed the threshold, the Director must so state and 
     provide an explanation. If the Director determines that it is 
     not feasible for him to make a reasonable estimate that would 
     be required with respect to Federal private sector mandates, 
     the Director shall not make the estimate, but shall report in 
     the statement that an estimate cannot be reasonably made.
       If the Director estimates that the direct costs of a 
     Federal private sector mandate will be below the specified 
     threshold, the Director must state this fact in his statement 
     on the bill, and must briefly explain the estimate. Although 
     this provision requires only a determination by CBO that the 
     threshold will not be equalled or exceeded, if, in cases 
     below the threshold, the Director actually estimates the 
     amount of direct costs, this section is not intended to 
     preclude the Director from including the estimate in his 
     explanatory statement.
       Point of order in the Senate:
       This section provides two new Budget Act points of order in 
     the Senate. The first makes it out of order in the Senate to 
     consider any bill or joint resolution reported by a committee 
     that contains a Federal mandate unless a CBO statement of the 
     mandate's direct costs has been printed in the Committee 
     report or the Congressional Record prior to consideration. 
     The second point of order would lie against any bill, joint 
     resolution, amendment, motion, or conference report that 
     increased the costs of a Federal intergovernmental mandate by 
     more than the $50,000,000, unless the legislation fully 
     funded the mandate in one of three ways:
       1. an increase in direct spending with a resulting increase 
     in the Federal budget deficit (unless the new direct spending 
     was offset by direct spending reductions in other programs);
       2. an increase in direct spending with an offsetting 
     increase in tax receipts, or
       3. an authorization of appropriations and a limitation on 
     the enforcement of the mandate to the extent of such amounts 
     provided in Appropriations acts.
       The Committee notes that ``direct spending'' is a defined 
     term in the Balanced Budget and Emergency Deficit Control 
     Act. The Committee also intends that in order to avoid the 
     point of order under this section, any direct spending 
     authority or authorization of appropriations must offset the 
     direct costs to states, local governments, and indian tribes 
     from the Federal mandate.
       If the third alternative is used (authorization of 
     appropriations), a number of criteria must be met in order to 
     avoid the point of order. First, any appropriation bill that 
     is expected to provide funding must be identified, Second, 
     the mandate legislation must also designate a responsible 
     Federal agency that shall either: implement an appropriately 
     less costly mandate if less than full funding is ultimately 
     appropriated (pursuant to criteria and procedures also 
     provided in the mandate legislation), or declare such mandate 
     to be ineffective. To avoid the point of order, the 
     authorizing committee must provide in the authorization 
     legislation for one of two options:
       1. The agency will void the mandate if the appropriations 
     committees at any point in the future provides insufficient 
     funding to states, local governments, and tribal governments 
     to offset the direct cost of the mandate.
       2. The agency can provide a ``less money, less mandate'' 
     alternative, but this alternative requires the authorizing 
     legislation to specify clearly how the agency shall implement 
     that alternative.
       When an intergovernmental mandate is either declared 
     ineffective or scaled back because of lack of funding, these 
     changes in the mandate will be effectuated consistent with 
      [[Page S786]] the requirements of the Administrative 
     Procedures Act. This will ensure that all affected parties 
     including the private sector, state, local and tribal 
     governments and the intended beneficiaries of the mandate 
     will have adequate opportunity to address their concerns.
       The bill provides that matters within the jurisdiction of 
     the Appropriations Committee are not subject to a point of 
     order under this section. However, this is not a blanket 
     exemption for an appropriations bill. If an appropriations 
     bill or joint resolution (or an amendment, motion, or 
     conference report thereto) included legislation imposing a 
     mandate on states, local governments, or tribal governments, 
     such legislation would not be in the Appropriations 
     Committee's jurisdiction. Therefore, these provisions would 
     be subject to the point of order under this section.
       One of the Committee amendments struck two provisions in 
     the bill regarding determinations and the point of order. The 
     first provision gives the Senate Governmental Affairs the 
     sole authority to determine what constitutes a mandate. The 
     second struck a provision in the
      bill that is identical to other provisions in the Budget Act 
     providing that the determinations of the levels of 
     mandates would be based on estimates made by the Senate 
     Budget Committee.
       The language the Committee struck regarding the Budget 
     Committee's role in making determinations on budgetary levels 
     is identical or similar to language in sections 201(g), 
     310(d)(4), 311(c), and 313(e) of the Congressional Budget 
     Act, sections 258B(h)(4) of the Balanced Budget and Emergency 
     Deficit Control Act, and sections 23(e) and 24(d) of the 
     Concurrent Resolution on the Budget for Fiscal Year 1995.
       The Senate, the Senate Parliamentarian's office and the 
     Budget Committees have 20 years of experience with these 
     Budget Act points of order and the Budget Committee's role in 
     making determinations of levels for the purposes of enforcing 
     these points of order. In practice, the Senate Budget 
     Committee's staff monitors legislation, works with the 
     Parliamentarian's office to determine violations, and works 
     with CBO to provide the Parliamentarian's office with 
     estimates to determine whether legislation would violate the 
     Budget Act.
       S. 1 would establish an identical process for state and 
     local estimates. CBO would produce costs estimates on 
     legislation. To the extent legislation, such as an amendment, 
     did not have a cost estimate, Budget Committee staff would 
     seek such an estimate from CBO, in order to determine whether 
     the bill violated S. 1's point of order.
       While there is 20 years of history and experience with the 
     Budget Committee's role in determining levels for the 
     purposes of enforcement of Budget Act point of order, there 
     appears to be a precedent, as envisioned in S. 1 as 
     introduced, to provide the Senate Governmental Affairs 
     Committee the authority to make ``final determinations'' on 
     what constitutes a mandate. This provision also raises a 
     possibility where the two committees would have conflicting 
     opinions on the application of this new point of order and 
     needlessly complicates the enforcement of S. 1.
       Viewing the questions and problems this language creates 
     and the fact that the Budget Committee relies on CBO 
     estimates for the purposes of making these determinations, 
     the Committee amendment struck the language regarding Budget 
     Committees and Governmental Affairs Committees 
     determinations. The Committee does not believe that this 
     authority needs to be explicitly stated in section 408. In 
     the absence of a CBO estimate, the Committee intends that the 
     determinations of levels of mandates be based on estimates 
     provided by the Senate Budget Committee.
       At the request of the House of Representatives, the 
     Committee amendment retains these provisions for the House.

        Section 102. Enforcement in the House of Representatives

       This section specifies the procedures to be followed in the 
     House of Representatives in enforcing the provisions of this 
     Act.
           Section 103. Assistance to committees and studies

       This section adds among CBO existing duties under the 
     Budget Act a requirement that the Director of CBO, to the 
     extent practicable, to consult with and assist committees of 
     the Senate and the House of Representatives, at their 
     request, in analyzing proposed legislation that may have a 
     significant budgetary impact on State, local or tribal 
     governments or a significant financial impact on the private 
     sector. It provides for the assistance that committees will 
     need from CBO to fulfill their obligations under the 
     provisions of S. 1.
       This section also states that CBO should set up a process 
     to allow meaningful input from these knowledgeable, affected, 
     and concerned about the Federal mandates in question. Once 
     possible way to establish this process is through the 
     formation of advisory panels composed of relevant outside 
     experts. The Committee leaves it to the discretion of the 
     Director as to when and where it is appropriate to form an 
     advisory panel.
       This section encourages authorizing committees to take a 
     prospective look at the impact of Federal intergovernmental 
     and private sector mandates before considering new 
     legislation by requiring committees to submit information on 
     mandate legislation as part of their views and estimates to 
     the Budget Committees.
       The Committee is concerned about the potential workload 
     that such studies could impose on CBO and how this might 
     affect CBO's other responsibilities under the Act and intends 
     that CBO consult with the Committee on the nature, the 
     extent, and the cost of conducting these studies.

              Section 104. Authorization of appropriations

       This paragraph authorizes appropriations for CBO of 
     $4,500,000 per year for FY 1996 through 2002. The Committee 
     recognizes that additional resources and personnel are needed 
     for CBO to fully perform its duties under this Act along with 
     continuing to carry out its current responsibilities. The 
     Committee understands that the current policy and practice at 
     CBO is to rely on in-house personnel to conduct studies and 
     cost estimates, rather than contracting these duties to 
     outside entities. The Committee supports this policy and 
     urges the Appropriations Committee, in funding this 
     authorization, to increase CBO's authority to hire additional 
     personnel in order to fulfill its new duties under this Act.
       The Committee is particularly concerned that if the 
     Appropriations Committee does not provide sufficient funding 
     for these new duties CBO's existing responsibilities under 
     Title II of the Budget Act should not be impeded.

               Section 105. Exercise of rulemaking powers
       The Constitution already reserves the rulemaking powers of 
     each House. This section provides that the terms of title I 
     are enacted as an exercise of the rulemaking power of the 
     Senate and the House of Representatives, and that either 
     house may change such rules at any time.

  Section 106. Repeal of the State and Local Cost Estimate Act of 1981

       This paragraph rescinds the provisions of the State and 
     Local Cost Estimate Act of 1981.

                      Section 107. Effective date

       Title I will take effect on January 1, 1996. One of the 
     Committee amendments provided that this title would apply 
     only to legislation considered on or after that date. This is 
     to give Congress time to enact additional appropriations for 
     CBO and to give CBO and the Budget Committees the necessary 
     time to prepare for implementing the new requirements of this 
     Act.
       The Committee notes that there has been some confusion 
     surrounding the question of retroactivity in S.1. This 
     section makes clear that Title I only applies to new 
     legislation considered after January 1, 1996. Laws enacted 
     prior to that date are not subject to Title I of this Act. 
     The Committee intends that when Congress considers 
     legislation reauthorizing existing laws that this Title apply 
     to how this reauthorization legislation would change existing 
     mandates or add new mandates.

             Title II--Regulatory Accountability and Reform

                    Section 201. Regulatory Process

       This section requires agencies to assess the effects of 
     their regulations on State, local and tribal governments, and 
     the private sector. This section specifically requires 
     agencies to notify, consult, and educate State, local 
     governments, and tribal governments before establishing 
     regulations that significantly affect these entities.

  Section 202. Statements to accompany significant regulatory actions

       This section sets out requirements for Agencies prior to 
     issuing final regulations. Before promulgating any final 
     regulation with a cost of more than $100 million annually to 
     State, local, tribal governments, and the private sector.

       Section 203. Assistance to the Congressional Budget Office
       This section requires the Director of the Office of 
     Management and Budget to collect the written statements 
     prepared by agencies under Section 202 and submit them on a 
     timely basis to CBO. OMB and CBO already work closely 
     regarding the Federal budget. This section will assist the 
     CBO in performing its duties under Title I.

       Section 204. Pilot program on small government flexibility

       This section requires OMB to establish pilot programs in at 
     least two agencies on regulatory flexibility.

                       Title III--Baseline Study

           Section 301. Baseline study of costs and benefits

       This section establishes a Commission on Unfunded Federal 
     Mandates.

   Section 302. Report on unfunded Federal mandates by the Commission

       This section requires the Commission to issue a preliminary 
     report within 9 months of enactment and a final report within 
     3 months thereafter.

                        Section 303. Membership

       This section provides that the Commission shall be composed 
     of 9 members and establishes the requirements for their 
     appointment.

 Section 304. Director and staff of commission; experts and consultants

       This section provides for the appointment of the staff and 
     Director of the Commission.
            [[Page S787]] Section 305. Powers of commission

       This section provides the Commission with the authority to 
     hold hearings, obtain official data, use the U.S. mails, 
     acquire administrative support services from the General 
     Services Administration, and contract, subject to the 
     appropriations, for property and services.

                        Section 306. Termination

       This section provides that the Commission shall terminate 
     90 days after submitting its final report.

              Section 307. Authorization of appropriations

       This section authorizes the appropriations to Commission of 
     $1 million.

                        Section 308. Definition
       This section defines the term ``unfunded Federal mandate'', 
     as used in title III.

                      Section 309. Effective Date

       This section provides that Title III takes effect 60 days 
     after the date of enactment.

                       Title IV--Judicial Review

                      Section 401. Judicial review

       This section provides that nothing under the Act shall be 
     subject to judicial review.


                     v. regulatory impact statement

       Paragraph 11(b) of Rule XXVI of the Standing Rules of the 
     Senate requires Committee reports to evaluate the 
     legislation's regulatory, paperwork, and privacy impact on 
     individuals, businesses, and consumers.
       S. 1 addresses Federal government process, not output. It 
     will directly affect and change both the legislative and 
     regulatory process. It will not have a direct regulatory 
     impact on individuals, consumers, and businesses as these 
     groups are not covered by the bill's requirements.
       However, the implementation of S. 1 will likely have an 
     indirect regulatory impact on these groups since a primary 
     focus of the bill is to ensure that Congress assess the cost 
     impact of new legislation on the private sector before 
     acting. In so much as information on private sector costs of 
     any particular bill or resolution may influence its outcome 
     during the Congressional debate, it is possible that this 
     bill may ease the regulatory impact on the private sector--
     both on individual pieces of legislation as well as overall. 
     However, it is impossible at this time to determine with any 
     specificity what that level of regulatory relief may be.
       S. 1 does address the Federal regulatory process in three 
     ways:
       (1) It requires agencies to estimate the costs to State, 
     local and tribal governments of complying with major 
     regulations that include Federal intergovernmental mandates; 
     (2) It compels agencies to set up a process to permit State, 
     local and tribal officials to provide input into the 
     development of significant regulatory proposals; and (3) It 
     requires agencies to establish plans for outreach to small 
     governments.
       However, with the exception of the third provision, the 
     bill will not impose new requirements for agencies to 
     implement in the regulatory process that are not already 
     required under Executive Orders 12866 and 12875. The bill 
     merely codifies the major provisions of the E.O.s that 
     pertain to smaller governments.
       The legislation will have no impact on the privacy of 
     individuals. Nor will it add additional paperwork burdens to 
     businesses, consumers and individuals. To the extent that CBO 
     and Federal agencies will need to collect more data and 
     information from State, local and tribal governments and the 
     private sector, as they conduct their requisite legislative 
     and regulatory cost estimates, it is possible that those 
     entities will face additional paperwork. However, although 
     smaller governments are certainly encouraged to comply with 
     agency and CBO requests for information, they are not bound 
     to.


                         vi. cbo cost estimate
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                  Washington, DC, January 9, 1995.
     Hon. Pete V. Domenici,
     Chairman, Committee on the Budget, U.S. Senate, Washington, 
         DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 1, the Unfunded 
     Mandate Reform Act of 1995.
       Enactment of S. 1 would not affect direct spending or 
     receipts. Therefore, pay-as-you-go procedures would not apply 
     to the bill.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                             Robert D. Reischauer.
       Enclosure.

       Congressional Budget Office Cost Estimate, January 9, 1995

       1. Bill number: S. 1.
       2. Bill title: Unfunded Mandate Reform Act of 1995.
       3. Bill status: As ordered reported by the Senate Committee 
     on the Budget on January 9, 1995.
       4. Bill purpose: S. 1 would require authorizing committees 
     in the House and Senate to include in their reports on 
     legislation a description and an estimate of the cost of any 
     Federal mandates in that legislation, along with an 
     assessment of their anticipated benefits. Mandates are 
     defined to include provisions that impose duties on States, 
     localities, or Indian tribes (``intergovernmental mandates'') 
     or on the private sector (``private sector mandates''). 
     Mandates also would include provisions that reduce or 
     eliminate any authorization of appropriations to assist 
     State, local, and tribal governments or the private sector in 
     complying with Federal requirements, unless the requirements 
     are correspondingly reduced. In addition, intergovernmental 
     mandates would include changes in the conditions governing 
     certain types of entitlement programs (for example, 
     Medicaid). Conditions of Federal assistance and duties 
     arising from participation in most voluntary Federal programs 
     would not be considered mandates.
       Committee reports would have to provide information on the 
     amount of Federal financial assistance that would be 
     available to carry out any intergovernmental mandates in the 
     legislation. In addition, committees would have to note 
     whether the legislation preempts any State or local laws. The 
     requirements of the bill would not apply to provisions that 
     enforce the constitutional rights of individuals, that are 
     necessary for national security, or that meet certain other 
     conditions.
       The Congressional Budget Office (CBO) would be required to 
     provide committees with estimates of the direct cost of 
     mandates in reported legislation other than appropriation 
     bills. Specific estimates would be required for 
     intergovernmental mandates costing $50 million or more and, 
     if feasible, for private sector mandates costing $200 million 
     or more in a particular year. (CBO currently prepares 
     estimates of costs to States and localities of reported 
     bills, but does not project costs imposed on Indian tribes or 
     the private sector.) In addition, CBO would probably be asked 
     to assist the Budget Committees by preparing estimates for 
     amendments and at later stages of a bill's consideration. 
     Also, at times other than when a bill is reported,
     when requested by Congressional committees, CBO would analyze 
     proposed legislation likely to have a significant budgetary 
     or financial impact on State, local, or tribal governments or 
     on the private sector, and would prepare studies on proposed 
     mandates. S. 1 would authorize the appropriation of $4.5 
     million to CBO for each of the fiscal years 1996-2002 to 
     carry out the new requirements. These requirements would take 
       effect on January 1, 1996, and would be permanent.S. 1 
     would amend Senate rules to establish a point of order 
     against any bill or joint resolution reported by an 
     authorizing committee that lacks the necessary CBO statement 
     or that results in direct costs (as defined in the bill) of 
     $50 million or more in a year to State, local, and tribal 
     governments. The legislation would be in order if it provided 
     funding to cover the direct costs incurred by such 
     governments, or if it included an authorization of 
     appropriations and identified the minimum amount that must be 
     appropriated in order for the mandate to be effective, the 
     specific bill that would provide the appropriation, and a 
     federal agency responsible for implementing the mandate.
       Finally, S. 1 would require executive branch agencies to 
     take actions to ensure that State, local, and tribal concerns 
     are fully considered in the process of promulgating 
     regulations. These actions would include the preparation of 
     estimates of the anticipated costs of regulations to States, 
     localities, and Indian tribes, along with an assessment of 
     the anticipated benefits. In addition, the bill would 
     authorize the appropriation of $1 million, to be spent over 
     fiscal years 1995 and 1996, for a temporary Commission on 
     Unfunded Federal Mandates, which would recommend ways to 
     reconcile, terminate, suspend, consolidate, or simplify 
     federal mandates.
       5. Estimated cost to the Federal Government:

------------------------------------------------------------------------
                                 1995   1996   1997   1998   1999   2000
------------------------------------------------------------------------
  Congressional Budget Office                                           
Authorization of                                                        
 appropriations...............  .....    4.5    4.5    4.5    4.5    4.5
Estimated outlays.............  .....    4.0    4.4    4.4    4.4    4.4
Commission on unfunded Federal                                          
           Mandates                                                     
Authorization of                                                        
 appropriations...............    1.0  .....  .....  .....  .....  .....
Estimated outlays.............    0.4    0.6  .....  .....  .....  .....
          Bill total:                                                   
Authorization of                                                        
 appropriations...............    1.0    5.5    4.5    4.5    4.5    4.5
Estimated outlays.............    0.4    4.6    4.4    4.4    4.4    4.4
------------------------------------------------------------------------

       The costs of this bill fall within budget function 800.
       Basis of Estimate--CBO assumes that the specific amounts 
     authorized will be appropriated and that spending will occur 
     at historical rates.
       We estimate that executive branch agencies would incur no 
     significant additional costs in carrying out their 
     responsibilities associated with the promulgation of 
     regulations because most of these tasks are already required 
     by Executive Orders 12875 and 12866.
       6. Comparison with spending under current law: S. 1 would 
     authorize additional appropriations of $4.5 million a year 
     for the Congressional Budget Office beginning in 1996. CBO's 
     1995 appropriation is $23.2 million. If funding for current 
     activities were to remain unchanged in 1996, and if the full 
     additional amount authorized were appropriated, CBO's 1996 
     appropriation would total $27.7 million, an increase of 19 
     percent.
       Because S. 1 would create the Commission on Unfunded 
     Federal Mandates, there is no funding under current law for 
     the commission.
       7. Pay-as-you-go considerations: None.
       8. Estimated cost to State and local governments: None.
       9. Estimate comparison: None.
       10. Previous CBO estimate: None.
       10. Estimate prepared by: James Hearn.
       11. Estimate approved by: Paul Van de Water, Assistant 
     Director for Budget Analysis.

[[Page S788]]

                   vii. roll call votes in committee

       Pursuant to paragraph 7 of rule XXVI of the Standing Rules 
     of the Senate, each committee is to announce the results of 
     roll call votes taken in any meeting of the committee on any 
     measure or amendment. The Senate Budget Committee met on 
     Monday, January 9, 1995, at 2 pm to markup S. 1. The 
     following roll call votes occurred on S. 1 and amendments 
     proposed thereto:
       (1) The Boxer amendment to sunset S. 1 on January 1, 1998. 
     The amendment was not agreed to: 9 yeas, 12 nays.
       Yeas: Mr. Exon; Mr. Hollings (P); Mr. Lautenberg (P); Mr. 
     Simon; Mr. Conrad; Mr. Dodd; Mr. Sarbanes (P); Mrs. Boxer; 
     Mrs. Murray.
       Nays: Mr. Domenici; Mr. Grassley (P); Mr. Nickles (P); Mr. 
     Gramm (P); Mr. Bond (P); Mr. Lott (P); Mr. Brown; Mr. Gorton; 
     Mr. Gregg; Ms. Snowe; Mr. Abraham; Mr. Frist.
       (2) The Boxer amendment to sunset S. 1 on January 1, 2000. 
     The amendment was not agreed to: 9 yeas, 12 nays.
       Yeas: Mr. Exon; Mr. Hollings (P); Mr. Lautenberg (P); Mr. 
     Simon; Mr. Conrad; Mr. Dodd; Mr. Sarbanes (P); Mrs. Boxer; 
     Mrs. Murray.
       Nays: Mr. Domenici; Mr. Grassley (P); Mr. Nickles (P); Mr. 
     Gramm (P); Mr. Bond (P); Mr. Lott (P); Mr. Brown; Mr. Gorton; 
     Mr. Gregg; Ms. Snowe; Mr. Abraham; Mr. Frist.
       (3) The Boxer amendment to sunset S. 1 on January 1, 2002. 
     The amendment was not agreed to: 9 yeas, 12 nays.
       Yeas: Mr. Exon; Mr. Hollings (P); Mr. Lautenberg (P); Mr. 
     Simon; Mr. Conrad; Mr. Dodd; Mr. Sarbanes (P); Mrs. Boxer; 
     Mrs. Murray.
       Nays: Mr. Domenici; Mr. Grassley (P); Mr. Nickles (P); Mr. 
     Gramm (P); Mr. Bond (P); Mr. Lott (P); Mr. Brown; Mr. Gorton; 
     Mr. Gregg; Ms. Snowe; Mr. Abraham; Mr. Frist.
       (4) Motion to report S. 1, as amended. The motion was 
     adopted: 21 yeas, 0 nays.
       Yeas: Mr. Domenici; Mr. Grassley (P); Mr. Nickles (P); Mr. 
     Gramm (P); Mr. Bond (P); Mr. Lott (P); Mr. Brown; Mr. Gorton; 
     Mr. Gregg; Ms. Snowe; Mr. Abraham; Mr. Frist; Mr. Exon; Mr. 
     Hollings (P); Mr. Lautenberg (P); Mr. Simon; Mr. Conrad; Mr. 
     Dodd; Mr. Sarbanes (P); Mrs. Boxer; Mrs. Murray.
       Nays: 0.
       (5) Motion that the committee report S. 1 without filing a 
     written report. The motion was agreed to: 12 years, 9 nays.
       Yeas: Mr. Domenici; Mr. Grassley (P); Mr. Nickles (P); Mr. 
     Gramm (P); Mr. Bond (P); Mr. Lott (P); Mr. Brown; Mr. Gorton; 
     Mr. Gregg; Ms. Snowe; Mr. Abraham; Mr. Frist.
       Nays: Mr. Exon; Mr. Hollings (P); Mr. Lautenberg (P); Mr. 
     Simon; Mr. Conrad (P); Mr. Dodd; Mr. Sarbanes (P); Mrs. 
     Boxer; Mrs. Murray.

     (P) indicates a vote by proxy.


              viii. views of members of committee members
                   additional views of senator conrad

       With the consideration, of S. 1, Congress is taking a big 
     step in addressing the continuing issue of unfunded federal 
     mandates upon state, local, and tribal governments, as well 
     as mandates upon those in the private sector.
       Some federal mandates serve important purposes and have 
     helped to accomplish safer, better lives for all Americans. 
     These mandates have ensured our health and safety with regard 
     to things like radiation contamination, hazardous waste, and 
     other health and safety concerns.
       However, unfunded mandates have grown in recent years and 
     have, at times, become unrealistic and overly oppressive. As 
     the federal government tried to cut spending and reduce the 
     federal budget deficit, it passed responsibilities onto state 
     and local governments without providing money to pay for 
     them. I oppose placing unreasonably fiscal demands on states 
     and localities.
       I am pleased that S. 1 includes provision to study the 
     disproportionate impact mandates may have on rural 
     communities. Last year, during the Government Affairs 
     Committee's consideration of S. 993, the unfunded mandates 
     bill of the 103rd Congress, Susan Ritter of North Dakota, 
     testified that one half of the annual budget of Sherwood, ND, 
     is spent to test their water supply. In April 1994, the Minot 
     Daily News reported that each resident of Mohall, ND, 
     population 931, would need to contribute to a water testing 
     bill of $2,400 for the year. The Minot Daily News further 
     stated that the water testing budget for Minot, ND, was 
     $3,300 five years ago, but had since risen to $26,100. These 
     numbers illustrate the difficulties local governments face in 
     meeting their budgets in the face of federal mandates.
       The federal government must do a better job of listening to 
     local governments when developing laws and regulations. It is 
     important for Congress to consider the actual impact that 
     federal legislation can have on state and local governments, 
     as well as the private sector. It is always essential to 
     weigh costs and benefits of legislation when enacting new 
     laws.
       I am proud to be a cosponsor of S. 1, however I do 
     recognize there are some areas of the legislation which can 
     be fine-tuned. For example, S. 1 amends provisions of the 
     Congressional Budget Act of 1974. Attempts to amend, or 
     improve, provisions of S. 1, which are incorporated into the 
     Budget Act, will be subject to a super-majority point of 
     order under the Budget Act. Also, we cannot be one hundred 
     percent sure how this legislation will work; it may be too 
     weak or it may be too restrictive. It is for these two 
     reasons that I support including a sunset date for S. 1.
       It is also my hope that my colleagues in the Senate will 
     join me in a colloquy during consideration of this bill, so 
     that questions regarding application to reauthorization 
     bills, the competitive balance between local governments and 
     the private sector, a sunset provision, and exclusions with 
     S. 1 are thoroughly discussed. Given the fast pace with which 
     S. 1 is moving, it is only appropriate that all aspects of S. 
     1 are addressed to remove concern.
       I am greatly pleased to see this important issue before the 
     Budget Committee and it is my hope that a fair and 
     comprehensive bill regarding this issue is favorably 
     considered by the Senate.
   ADDITIONAL MINORITY VIEWS OF SENATOR BOXER ON S. 1, THE UNFUNDED 
                          MANDATES REFORM ACT

       My first elected office in California was in 1976 when I 
     won a seat on the Marin County Board of Supervisors. In that 
     capacity I encountered laws passed by the state government 
     and the federal government that impacted on our governance. 
     Some of these were very good laws, paid for in whole or in 
     part, and some of these were bad laws which made no sense.
       The example that stands out in my mind was a law which came 
     down from the federal government and was tied to our receipt 
     of emergency planning monies. This law required our Board of 
     Supervisors to plan for the orderly exit from the country of 
     all our citizens in the case of nuclear war with the Soviet 
     Union. It was very clear to public health and law enforcement 
     people as well as all other residents of the county that 
     there was no way a county so close to a targeted Soviet site 
     in San Francisco could survive in any condition worth living 
     under. Yet, that never stopped the federal bureaucracy then.
       They had certain rules laid out for us. We were to all get 
     in our cars and go to a county to the north which was dubbed 
     the ``host'' county. It was like a party . . . with the Marin 
     County guests and the Sonoma County hosts. We were instructed 
     by the feds to make sure we had cash as we all would have to 
     get gasoline for our cars because the attendants at the gas 
     stations would be quite busy.
       I am happy to report that the Marin Board of Supervisors, a 
     bi-partisan board at the time, chose to give all the planning 
     monies back to Uncle Sam rather than give our constituents 
     the false hope that they could survive an all-out nuclear 
     war.
       With regard to S. 1, I think the goal of this bill makes a 
     lot of sense. If a federal mandate places an undue financial 
     burden on state and local governments, then Congress should 
     recognize and address the problem. There should be exceptions 
     to this rule, however, and S. 1 deals with areas which are of 
     vital importance to the nation that should be protected from 
     the provisions of this bill.
       S. 1 currently shields bills and federal rules that help 
     secure our constitutional rights, prevent discrimination, 
     ensure national security, and implement international 
     agreements such as NAFTA from its requirements. In my view, 
     unfortunately, two other areas of nation-wide importance have 
     been overlooked.
       I am deeply concerned that bill fails to adequately ensure 
     our ability to protect the most vulnerable members of our 
     society; our children, our pregnant women, and our elderly. 
     Why should we deny our children, pregnant women, and elderly 
     the same protections? I am prepared to offer an amendment to 
     add legislation involving children and others to the list of 
     S. exemptions. It will simply provide that any bill which 
     ``provides for the protection of the health of children, 
     pregnant women, or the elderly'' would not be subject to S. 
     1's point of order and other requirements.
       I am also concerned that S. 1 fails to distinguished 
     between mandates that affect state and local governments as 
     ``employers'' and state and local governments as 
     ``governments.'' I plan to offer an amendment on the floor 
     that will add labor standards to the list of mandates 
     exempted from S. 1's requirements.
       I am also disappointed that the bill fails to directly 
     address one of the biggest unfunded federal mandates faced by 
     California: the costs imposed by illegal immigration. I 
     therefore plan to offer an amendment on the floor to ensure 
     that the costs to states and local governments from illegal 
     immigration be addressed in the bill.
       One point of concern was particularly overlooked and I 
     offered an amendment in the Committee markup to address this 
     area. The amendment which I offered with the support of the 
     ranking member would have added a provision to sunset S. 1 in 
     1998. Since the enforcement mechanisms of the Budget Act will 
     expire in 1998, I believe that it is only reasonable to 
     revisit the unfunded mandates issue at the same time that we 
     revisit the whole budget process to ensure that it is working 
     as it should.
       However, the Committee rejected this amendment, along with 
     two additional amendments to sunset the bill in 2000 and 
     2002, respectively, by a party line vote. This deeply upsets 
     me. How will we know whether the whole new process will work? 
     S. 1 may simply not work. It is crucial that we set a 
     reasonable time to revisit the bill and make any 
     improvements--either strengthening or weakening--that our 
     experience with it will have shown to be necessary.
       I do hope that this bill will truly meet its very fair goal 
     of reimbursing the states and 
      [[Page S789]] local governments for laws that we pass. 
     However, I will reserve judgment on final passage of the bill 
     until the amendment process has been completed.
       Unrelated to the bill, but very timely, I plan to offer a 
     Sense of Senate Resolution that the campaign of violence 
     against women's health clinics must end. My amendment calls 
     on the Attorney General to take all necessary steps to 
     protect reproductive health clinics and their staff. I know 
     all of my colleagues share my views that this violence is 
     deplorable.
                                                      U.S. Senate,


                                      Committee on the Budget,

                                Washington, DC, November 29, 1994.
     Hon. William V. Roth, Jr.,
     Hon. John Glenn,
     Committee on Governmental Affairs, U.S. Senate, Washington, 
         DC
       Dear Bill and John: We expect the Senate to consider 
     legislation early in the session regarding Federal mandates 
     on State and local governments and the private sector. We may 
     initiate such legislation in the Budget Committee and we want 
     to work with you to assure that any state, local, or private 
     sector mandate legislation moves quickly and is a 
     constructive improvement to the congressional budget process.
       Such legislation raised budget and economic issues that the 
     Budget Committee must confront in writing a federal budget 
     each year. Moreover, most versions of this legislation 
     contain a significant expansion in the Congressional Budget 
     Office's responsibilities. In the past, our committees have 
     worked jointly on such legislation. In 1981, our two 
     committees both reported legislation that led to the 
     enactment of the State and Local Government Cost Estimate 
     Act.
       Some versions of this legislation may be referred to the 
     Budget Committee under the standing order governing referral 
     of budget-related legislation. If the Budget Committee does 
     not report such legislation and it includes provisions 
     affecting the Congressional Budget Office or the 
     congressional budget process, such legislation could be in 
     jeopardy under section 306 of the Budget Act.
       We want to work with you to assure such legislation is 
     considered expeditiously. Should you have any questions, 
     please to do no hesitate to contact us or our staff (Bill 
     Hoagland at 4-0539 and Bill Dauster at 4-3961).
           Sincerely,
     James Exon.
     Pete V. Domenici.
     

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