[House Report 104-1]
[From the U.S. Government Publishing Office]



104th Congress                                             Report 104-1
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                  UNFUNDED MANDATE REFORM ACT OF 1995

                                _______


                January 13, 1995.--Ordered to be printed

_______________________________________________________________________


   Mr. Solomon, from the Committee on Rules, submitted the following

                              R E P O R T

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                         [To accompany H.R. 5]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Rules, to whom was referred the bill (H.R. 
5) to curb the practice of imposing unfunded Federal mandates 
on States and local governments, to ensure that the Federal 
Government pays the costs incurred by those governments in 
complying with certain requirements under Federal statutes and 
regulations, and to provide information on the cost of Federal 
mandates on the private sector, and for other purposes, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.
    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
    Page 39, strike line 23 and all that follows thereafter 
through page 40, line 9 (and redesignate the subsequent 
subsections accordingly).
    Page 44, line 13, strike ``the'' and all that follows 
thereafter through line 19 and insert the following:

        the question of whether a bill, joint resolution, 
        amendment, motion, or conference report contains a 
        Federal intergovernmental mandate shall be determined 
        after consideration of the recommendation, if 
        available, of the Chairman of the Committee on 
        Government Reform and Oversight of the House of 
        Representatives or the Chairman of the Committee on 
        Governmental Affairs of the Senate, as applicable.
    Page 44, after line 19, add the following:
    ``(e) 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 
        States, 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
    Page 44, lines 24 and 25, strike all after ``425(a)'' and 
insert in lieu thereof the following:

          : Provided, however, That pending a point of order 
        under section 425(a) or under this section a Member may 
        move to waive the point of order. Such a motion shall 
        be debatable for 10 minutes equally divided and 
        controlled by the proponent and an opponent but, if 
        offered in the House, shall otherwise be decided 
        without intervening motion except a motion that the 
        House adjourn. The adoption of a motion to waive such a 
        point of order against consideration of a bill or joint 
        resolution shall be considered also to waive a like 
        point of order against an amendment made in order as 
        original text.''.

                       Purpose of the Legislation

    The purpose of H.R. 5, the Unfunded Mandate Reform Act of 
1995, is to make Congress more accountable when imposing new 
Federal mandates on States, local governments, and tribal 
governments without providing adequate funding to comply with 
such mandates. It seeks to prevent Congress from passing ``feel 
good'' legislation that transfers the cost burden from the 
Federal Government to State and local governments.
    To accomplish this objective, the bill establishes 
mechanisms to bring information about unfunded Federal mandates 
contained in legislation to the attention of the House and 
Senate before a vote is taken. The bill creates new points of 
order that would lie on the floor of the House of 
Representatives and the Senate to ensure that Members can have 
a vote on unfunded Federal mandates contained in future 
legislation.
    The bill also establishes a Commission on Unfunded Federal 
Mandates to review existing unfunded Federal mandates and to 
make recommendations to the Congress and the President with 
respect to reconciling, terminating, suspending, consolidating 
or simplifying unfunded Federal mandates.

                        Committee Consideration

    H.R. 5 was introduced on January 4, 1995, by 
Representatives William Clinger (R-PA), Rob Portman (R-OH), 
Thomas Davis (R-VA) and Gary Condit (D-CA). It was referred to 
the Committee on Government Reform and Oversight, and 
sequentially to the Committees on Rules, the Budget, and the 
Judiciary. The jurisdiction of the Rules Committee was limited 
to Title III.
    The Rules Committee held a briefing for Members and staff 
on Thursday, January 5, 1995, in which Mr. James L. Blum, 
Deputy Director of the Congressional Budget Office, and Mr. 
Stanley Bach, a Senior Specialist in American National 
Government with the Congressional Research Service, described 
the provisions of H.R. 5 and the implications of the 
legislation with respect to the CBO and the various 
congressional committees.
    On Wednesday, January 11, 1995, the Rules Committee held an 
open hearing on H.R. 5. The Committee heard from two panels. 
Witnesses on the first panel consisted of the Hon. William 
Clinger (R-PA), the Hon. Rob Portman (R-OH), the Hon. Thomas 
Davis (R-VA), and the Hon. Gary Condit (D-CA). Witnesses on the 
second panel consisted of: Ms. Nancy Donaldson, Director of 
Political Affairs, Service Employees International Union; Mr. 
Jim St. George, Assistant Director of State Fiscal Projects, 
Center for Budget Priorities; and Greg Wetstone, Director of 
Legislation, Natural Resources Defense Council.
    The Committee met on Thursday, January 12, 1995, to mark-up 
H.R. 5. The Committee favorably reported H.R. 5 with amendments 
by a record vote of 9 to 4. During the mark-up, four amendments 
were agreed to.

                               Background

    H.R. 5 was introduced in response to the increased tendency 
on the part of Congress and the agencies of the Federal 
Government to enact laws and regulations imposing requirements 
on State and local governments without commensurate funding to 
carrying out those requirements.
    One recent example of an unfunded Federal mandate is the 
National Voter Registration Act of 1993. It requires states to 
allow residents to register at motor vehicle offices, welfare 
offices and other state offices where public services are 
delivered. California Governor Pete Wilson estimates that 
enforcement of the law will cost the state more than $35 
million annually. As a result, Governor Wilson has filed suit 
in federal court to bar the Justice Department from enforcing 
the law until the Federal Government gives the State adequate 
funds to put the law into effect.
    The Impetus for mandate reform was the election of Ronald 
Reagan as President of the United States in 1980. He made 
federalism a top policy priority and aggressively pursued an 
intergovernmental reform agenda that included shrinking the 
size and function of the Federal Government, creating Federal-
local partnerships, reducing Federal regulation of State and 
local governments, and establishing greater reliance on private 
sector institutions to achieve national priorities.
    State and local organizations have recently sponsored a 
number of events to spotlight the unfunded mandates issue, 
increase public awareness, and build support in Congress for 
mandate relief legislation. They sponsored a National Unfunded 
Mandates Day in October 1993, and Unfunded Mandates Week in 
1994, and ``Stop the Mandate Madness'' rallies on the Capitol 
steps.
    There have been a number of studies that attempted to 
identify unfunded Federal mandates and to determine their 
costs. According to a 1984 report of the Advisory Commission on 
Intergovernmental Relations (ACIR) entitled ``Regulatory 
Federalism,'' Federal laws containing mandates that affect 
State and local governments as of 1980 include: the Age 
discrimination Act of 1975, the Clean Air Act Amendments of 
1970, the Emergency Highway Energy Conservation Act, the Family 
Educational Rights and Privacy Act of 1974, the Occupational 
Safety and Health Act, and the Wholesome Poultry Products Act 
of 1968.
    Since 1980, according to a 1992 follow-up report of the 
ACIR entitled ``Federal Regulation of State and Local 
Governments: Regulatory Federalism--A Decade Later,'' another 
27 statutes were enacted that included mandates, including the 
Americans with Disabilities Act, the Cash Management 
Improvement Act of 1990, the Fair Housing Act Amendments of 
1988, the Social Security Amendments of 1983, and the Voting 
Rights Act of 1982.
    The National Association of Counties also constructed the 
following list of twelve unfunded mandates considered ``most 
burdensome and costly'':
          Underground Storage Tanks;
          Clean Water Act/Wetlands;
          Clean Air Act;
          Subtitle D of the Resource Conservation and Recovery 
        Act;
          Safe Drinking Water Act;
          Endangered Species Act;
          Superfund;
          Americans with Disabilities Act;
          Fair Labor Standards Act;
          Davis-Bacon Act;
          Arbitrage (municipal bonds);
          Immigration Act.
    Prospective legislation that might be considered unfunded 
mandates includes minimum wage increases for State and local 
employees, an increase in Social Security payroll taxes, 
welfare reform, health care reform, and crime control.
    An October 1993 Price Waterhouse study for the U.S. 
Conference of Mayors, entitled ``Impact of Unfunded Federal 
Mandates on U.S. Cities,'' contained a survey on the costs 
incurred by cities to implement the following ten unfunded 
Federal mandates:
          (1) Underground Storage Tanks;
          (2) Clean Water Act;
          (3) Clean Air Act;
          (4) Resource Conservation and Recovery Act;
          (5) Safe Drinking Water Act;
          (6) Asbestos Abatement;
          (7) Lead Paint Abatement;
          (8) Endangered Species Act;
          (9) Americans with Disabilities Act;
          (10) Fair Labor Standards Act.
    The study estimated that the total cost of these mandates 
for 1993 was $6.5 billion, and the estimated costs for the 
years 1994 through 1998 would total $54 billion. The specific 
cost estimates identified in that study are noted in the 
following chart:

                             ESTIMATED COSTS OF UNFUNDED FEDERAL MANDATES TO CITIES                             
                                         [Hours and costs in thousands]                                         
----------------------------------------------------------------------------------------------------------------
                                                         Fiscal year 1993                          Fiscal years 
                                 ----------------------------------------------------------------    1994-1998  
                                     Estimated                                                   ---------------
            Mandates               annual staff      Estimated       Estimated                                  
                                       hours       annual staff   annual direct/    Total costs      Projected  
                                    (excluding         costs         indirect                       total costs 
                                     overtime)                     budget costs                                 
----------------------------------------------------------------------------------------------------------------
1. Underground Storage Tank                                                                                     
 Regulations (UST)..............             862         $23,393        $137,755        $161,148      $1,040,627
2. Clean Water Act (CWA)/                                                                                       
 Wetlands.......................          57,378       1,185,549       2,426,984       3,619,533      29,303,379
3. Clean Air Act (CAA)..........          12,138         195,526         208,294         403,820       3,651,550
4. Solid Waste Disposal/RCRA....           9,680         173,384         708,191         881,575       5,475,968
5. Safe Drinking Water Act                                                                                      
 (SDWA).........................           4,444          94,549         467,783         562,332       8,644,145
6. Asbestos (AHERA).............             898          19,554         109,754         129,308         746,828
7. Lead Based Paint.............             374           7,875         110,342         118,217       1,628,228
8. Endangered Species...........             252           6,934          30,024          36,958         189,488
9. Americans With Disabilities                                                                                  
 Act............................           4,701         114,935         240,746         355,681       2,195,808
10. Fair Labor Standards Act                                                                                    
 (Exempt Employee & Other Costs)           1,227          22,765         189,358         212,123       1,121,524
                                 -------------------------------------------------------------------------------
      Total.....................          91,954       1,844,464       4,629,231       6,473,695      53,997,545
----------------------------------------------------------------------------------------------------------------

    In response to the consequences of this extraordinary 
burden, unfunded mandate reform legislation has been endorsed 
by the National Governors Association, the U.S. Conference of 
Mayors, the National League of Cities, the Council of State 
Governments, the National Association of Counties, the National 
Conference of State Legislatures, the National Federation of 
Independent Businesses, the U.S. Chamber of Commerce and the 
National School Boards Association.

                        Analysis of Legislation

    H.R. 5 is divided into three titles.
    Title I (``Review of Unfunded Federal Mandates'') 
establishes a Commission on Unfunded Federal Mandates that is 
required to: (1) Review existing Federal mandates to state, 
local and tribal governments and to the private sector; and (2) 
make non-binding recommendations to the President and Congress, 
under criteria specified in the bill, regarding any proposed 
changes in these mandates.
    The Commission is mandated by the Congress to conduct a 
thorough study of the role of unfunded Federal mandates in 
intergovernmental relations and their corresponding impact upon 
``State, local, tribal, and Federal government objectives and 
responsibilities.'' Final recommendations are to be made to the 
President and the Congress on issues pertaining to greater 
flexibility of compliance by simplifying, suspending, or 
terminating unfunded Federal mandates that are determined by 
the Commission to be unnecessarily complex, duplicative, or 
obsolete. The Commission is also required to issue proposed 
criteria not later than 60 days after enactment of H.R. 5, and 
to provide 30 days for public comment. Final criteria will 
incorporate any public responses that the Commission deems 
relevant.
    The Commission is required to submit a preliminary report 
of its activities no later than nine months after the date of 
enactment of H.R. 5. The Commission shall hold public hearings 
based on its preliminary recommendations, publish in the 
Federal Register a notice of availability of the report, and 
make copies available to the public. No later than three months 
after publication of the preliminary report, the Commission is 
required to issue a final report to the President and the 
Congress, the Senate Governmental Affairs Committee, and the 
House Committee on Government Reform and Oversight.
    The nine-member Commission should have extensive knowledge 
in intergovernmental relations. Three members are to be 
appointed by the Speaker of the House, in consultation with the 
House Minority Leader; three members are to be appointed by the 
Senate majority leader, in consultation with the Senate 
minority leader; and three members are to be appointed by the 
President. Members are appointed without pay for the duration 
of the Commission, and vacancies are to be filled in the same 
manner as the original appointments. Members may receive per 
diem and travel expenses. The Commission Chairperson is to be 
appointed by the President. The first meeting will be convened 
within 45 days after the nine members have been appointed, and 
a quorum will consist of a majority of members.
    The Director is appointed by the Commission, at a rate of 
basic pay of the Executive Schedule, Level IV. With the 
Commission's approval, the Director is authorized to appoint 
and set the rate of pay for a staff. Outside experts and 
consultants may also be hired. At the Director's request, 
Federal agency personnel may be detailed to the Commission on a 
reimbursable basis.
    The Commission may hold hearings, obtain official 
information from a Federal agency, have franking privileges, 
and contract authority. The Commission will cease to exist 90 
days after submission of its final report.
    Title II (``Regulatory Accountability and Reform'') 
generally requires Federal agencies to assess the effect of 
Federal regulations on state, local, and tribal governments and 
on the private sector and to make public such assessments for 
Federal mandates costing more than $100 million to implement.
    In addition, each agency is required to develop a process 
to permit elected officials of State, local, and tribal 
governments to provide input in the development of regulations 
containing significant Federal intergovernmental mandates. For 
regulations that will impact small governments, the agency must 
provide notice of the requirements, enable officials of the 
small government to have input, and advise small governments on 
compliance with the requirements.
    Agencies must prepare a written statement before 
promulgating any regulations that include mandates on State, 
local, and tribal governments or the private sector that may 
result in expenditures of at least $100 million in any year. 
The statement must include: (1) Estimates of the anticipated 
costs of complying with the mandate; (2) estimates of the 
future costs of the mandate and any disproportionate budgetary 
effects; (3) a qualitative and quantitative assessment of the 
costs and benefits anticipated from the mandates; (4) the 
effect of Federal private sector mandates on the national 
economy; (5) a description of the agency's consultations with 
State, local and tribal governments and representatives of the 
private sector and a summary of concerns raised by these 
representatives, a summary of the agency's evaluation of those 
comments and a summary of the agency's position supporting the 
need to issue the regulation.
    The Office of Management and Budget (OMB) shall collect 
these statements from agencies and forward them to the 
Congressional Budget Office. In addition, OMB will establish 
pilot programs in at least two agencies to test innovative and 
flexible regulatory approaches.
    Title III (``Legislative Accountability and Reform'') 
establishes new congressional procedures for identifying and 
controlling legislation that includes unfunded Federal 
mandates.
    The congressional procedures under Title III would control 
unfunded Federal mandates by establishing a method for 
identifying legislation that creates new mandates or changes 
existing mandates. It would prohibit the House and Senate from 
considering such legislation with direct costs over a statutory 
threshold unless it also includes a source of financing or a 
guarantee that any such mandates will be repealed if the 
financing is not provided.
    In general, the following three-step enforcement mechanism 
is set forth under Title III of the bill for controlling new 
legislation that contains unfunded Federal mandates:
          1. Identification by House or Senate committees, with 
        the assistance of the Congressional Budget Office 
        (CBO), of (a) Federal mandate provisions contained in 
        any legislation reported to the House or Senate (except 
        for annual appropriation measures) and (b) the ``direct 
        costs,'' If any, of such provisions to state, local, or 
        tribal governments or to the private sector;
          2. Publication in committee reports or in the 
        Congressional Record of the CBO statements regarding 
        Federal mandates and the direct costs of such mandates 
        (if in excess of certain statutory thresholds) for 
        every measure reported to the House or Senate (except 
        for annual appropriations measures); and
          3. Prohibition, under a new point of order, against 
        House or Senate consideration of (a) any reported 
        measure (except for annual appropriations measures) 
        prior to publication of the CBO statement or (b) any 
        legislation (including bills, joint resolutions, 
        amendments, motions, or conference reports, except for 
        legislation reported by the Appropriations Committees 
        or amendment thereto) with Federal mandate provisions 
        that have annual direct costs to states, localities, or 
        tribal governments, exceeding $50 million, unless the 
        legislation offsets the annual direct costs with 
        specific Federal spending or receipts law changes or 
        the mandate provisions are made effective only to the 
        extent that funds are provided in annual appropriations 
        acts.
    A point of order would not apply to any bill, joint 
resolution, amendment, motion, or conference report for the 
reauthorization of laws already on the books provided that the 
enactment would not result in: (1) A net increase in the 
aggregate amount of direct costs of Federal intergovernmental 
mandates; or (2) in a net reduction or elimination of 
authorizations of appropriations for Federal financial 
assistance that would be provided to comply with any such 
mandates if the reduction in authorizations does not reduce the 
duties imposed by the mandate by a corresponding amount.
    Title III, provides a means for the House to debate and 
vote on a motion to waive points of order on an unfunded 
mandate. The motion could be offered after a point of order is 
made and prior to the ruling of the Chair. It would apply to 
points of order against a bill, resolution, amendment or 
conference report. It would be subject to 10-minutes of debate 
divided between the proponent and an opponent.
    Title III of H.R. 5 amends Title IV of the Congressional 
Budget Act of 1974 (P.L. 93-344, as amended) to add a new 
``Part B--Federal Mandates'' setting forth new sections 421-426 
of the Act. Special rules reported by the House Rules Committee 
to waive the point of order are prohibited, and direct costs, 
for purposes of applying the point of order, are to be 
determined on the basis of estimates made by the House and 
Senate Budget Committees.
    The procedures are an enforcement device for new 
legislation only. Existing mandates, which are to be the 
subject of review and recommendations by a Commission, are not 
covered by these enforcement procedures.
    Further, the requirements of the bill, including the point 
of order, are set forth as an exercise of the constitutional 
rulemaking authority of the House and Senate and may be 
changed, under that general authority, in the same manner as 
other rules. Should Congress choose to waive the point of 
order, or if it is not raised, legislation inconsistent with 
the requirements of H.R. 5 may be enacted into law. Also, there 
is no fail-safe or automatic mechanism, such as the 
sequestration process under the Gramm-Redman-Hollings Act (P.L. 
99-177, as amended), for ensuring that the requirements of H.R. 
5 are enforced should legislation containing unfunded mandates 
be enacted into law.

                      Section-by-Section Analysis

                  unfunded mandate reform act: h.r. 5

Section 1. Short title

    Identifies the short title as the ``Unfunded Mandate Reform 
Act of 1995.''

Section 2. Purposes

    Establishes the purposes of the Act: to strengthen the 
intergovernmental partnership, to provide for informed 
consideration of Federal mandates, to establish a mechanism to 
bring information on mandates before the Congress and a point-
of-order vote on consideration of legislation containing 
significant Federal mandates, to assist Federal agencies in 
their consideration and adoption of regulations, and 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.

Sec. 3. Definitions

    States that certain terms have the meaning given those 
terms by Sec. 421 of the bill.
    Defines ``small government'' as, generally, governments 
with less than 50,000 population.

Sec. 4. Limitation on application

    Excludes from the requirements of this Act Federal 
regulation or legislation that: enforces individual 
Constitutional rights; enforces statutory rights to prohibit 
discrimination on the basis of race, religion, gender, national 
origin, or handicapped or disability status; requires 
compliance with Federal auditing and accounting procedures; 
provides emergency relief assistance or is designated as 
emergency legislation; or, is necessary for national security 
or ratification or implementation of international treaties.

              title i--review of unfunded federal mandates

Sec. 101 Establishment

    Establishes a ``Commission on Unfunded Federal Mandates.''

Sec. 102. Report on unfunded Federal mandates

    Directs the Commission to study existing mandates and make 
recommendations allowing more flexibility, reconciling 
contradictory mandates, terminating duplicative, obsolete or 
impractical mandates, suspending mandates not vital to public 
health and safety but compounding fiscal difficulties, 
consolidating or simplifying mandates or their planning or 
reporting requirements, and establishing common definitions or 
standards.
    Directs the Commission to establish criteria and make them 
available for public comment before issuing final criteria.
    Requires publication of a preliminary report 9 months after 
the enactment of this Act, and public hearings on the 
preliminary report. A final report is to be published 3 months 
after the preliminary report, and submitted to the Committees 
on Government Reform and Oversight and Governmental Affairs, 
and to the President.

Sec. 103. Membership

    The Commission shall be composed of 9 members: 3 appointed 
by the Speaker of the House in consultation with the minority 
leader; 3 appointed by the majority leader of the Senate in 
consultation with the minority leader; 3 appointed by the 
President, who will designate a member of the Commission as 
Chairperson at the time of the appointment of that member.

Sec. 104. Director and staff; experts and consultants

    Provides for the appointment by the Commission of a 
Director. Provides for staff, authorizes use of experts, 
consultants, and Federal agency staff.

Sec. 105. Powers of commission

    Authorizes Commission to hold hearings, obtain official 
data, use the mails, and secure administrative support and 
contract services.

Sec. 106. Termination

    The Commission shall terminate 90 days after submitting its 
final report.

Sec. 107. Authorization of appropriations

    Authorizes the appropriation of $1 million for the 
Commission.

Sec. 108. Definition

    For this Title only, ``Federal mandate'' means any 
provision in statute or regulation that imposes an enforceable 
duty upon State, local, or tribal governments, including a 
condition of Federal assistance or a duty arising from 
participation in a voluntary Federal program.

Sec. 109. Effective date

    Takes effect 60 days after the date of enactment of this 
Act.

             title II--regulatory accountability and reform

Sec. 201. Regulatory process

    Requires agencies to assess the effects of their 
regulations on State, local, and tribal governments, including 
resources available to carry out Federal mandates and to seek 
to minimize regulatory burdens.
    Each agency is to develop a process to permit elected 
officials (or their designated representatives) to provide 
input into the development of regulations containing 
significant Federal intergovernmental mandates. In addition, a 
plan is to be developed for providing notice of contemplated 
regulations to potentially affected small governments, to 
enable them to provide input, and to inform, educate, and 
advise them on compliance.
    Agencies are required to prepare estimates, based on 
available data, of the effect of Federal private sector 
mandates on the national economy.

Sec. 202.  Statements to accompany significant regulatory actions

    Before a Federal agency promulgates any final rule or 
notice of proposed rulemaking that includes any 
intergovernmental mandates estimated to result in aggregate 
expenditure by State, local, or tribal governments or the 
private sector of at least $100 million (adjusted annually for 
inflation) in any one year the agency must complete a written 
statement containing the following:
          Estimates of the anticipated costs to State, local 
        and tribal governments of compliance, including the 
        availability of Federal funds to pay for these costs;
          Future costs of Federal intergovernmental mandates 
        not estimated above, including estimates of any 
        disproportionate budgetary effects on any particular 
        regions or particular State, local, or tribal 
        governments, or urban, rural, or other types of 
        communities;
          A qualitative and if possible a quantitative 
        assessment of costs and benefits anticipated from 
        Federal intergovernmental mandate, including 
        enhancement of public health and safety and protection 
        of the natural environment;
          The effect of Federal private sector mandates on the 
        national economy;
          A description and summary of input, comments, and 
        concerns received from State, local and tribal 
        governments (including elected officials and their 
        representatives) and other affected parties; and
          A summary of the agency's evaluation of these 
        comments and concerns, and the agency's position 
        supporting the need to issue the regulation containing 
        the Federal intergovernmental mandates.
    Agencies are required to summarize the written statements 
and include the summary in the promulgation of the rule. These 
statements may be prepared in conjunction with other analyses.

Sec. 203.  Assistance to the Congressional Budget Office

    Requires the Director of the Office of Management and 
Budget to collect the reports required by Sec. 202 and make 
them available to the Congressional Budget Office.

Sec. 204.  Pilot programs on small Government flexibility

    Requires the Office of Management and Budget to establish 
at least two pilot programs to test innovative, more flexible 
regulatory approaches that reduce reporting and compliance 
burdens while continuing to meet overall statutory goals and 
objectives.

            TITLE III--LEGISLATIVE ACCOUNTABILITY AND REFORM

Sec. 301.  Legislative mandate accountability and reform

    Amends Title IV of the Congressional Budget Act of 1974 by 
adding a new part: Part B--Federal Mandates.

SEC. 421.  DEFINITIONS.

    ``Agency'': excludes the independent regulatory agencies 
from the definition of a Federal agency.
    ``Director'': means Director of the Congressional Budget 
Office.
    ``Federal Financial Assistance'': the amount of budget 
authority for any Federal grant assistance, or any Federal 
program providing loan guarantees or direct loans.
    ``Federal Intergovernmental Mandates'': any provision in 
legislation, statute, or regulation that would impose an 
enforceable duty upon State, local, or tribal governments, 
except a condition of Federal assistance or a duty arising from 
participation in a voluntary program, or that would reduce or 
eliminate the amount of authorization of appropriations for 
Federal financial assistance for complying with such duty 
unless the duty is reduced or eliminated by a corresponding 
amount; or
any provision that relates to a then-existing Federal program 
under which $500 million or more is provided annually under 
entitlement authority if the provision would increase the 
stringency of conditions of assistance, or place caps upon or 
otherwise decrease the Federal Government's responsibility to 
provide funding, and participating governments lack authority 
to amend their financial or programmatic responsibilities to 
continue providing required services.
    ``Federal Private Sector Mandate:'' any provision in 
legislation, statute, or regulation that would impose an 
enforceable duty on the private sector except a condition of 
Federal assistance or a duty arising from participation in a 
voluntary Federal program or that would reduce or eliminate the 
available amount of authorization of appropriations for Federal 
financial assistance.
    ``Federal Mandate:'' A Federal intergovernmental mandate or 
a Federal private sector mandate.
    ``Federal Mandate Direct Costs:'' The aggregate estimated 
amounts that all State, local, and tribal governments or the 
private sector would be required to spend or to forego in 
revenues to comply with a Federal mandate.
          Exclusion from direct costs.--The term `direct costs' 
        does not include estimated amounts that would be spent 
        to comply with laws and regulations in effect at the 
        time of the adoption of a Federal mandate for the same 
        activity, or expenditures that will be offset by direct 
        savings resulting from compliance with the mandate or 
        other changes in Federal law or regulation that are 
        included in the same measure as is affected by the 
        mandate.
          Determination of costs.--Direct costs shall be 
        determined based on the assumption that State, local 
        and 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. Increasing State, local, or tribal taxes 
        or fees is not a ``reasonable step.''
    ``Local Government:'' means unit of general local 
government, school district, or other special district 
established by State law.
    ``Private Sector'' means individual, partnership, 
associations, corporations, business trusts, or legal 
representatives, organized groups of individuals, and 
educational and other nonprofit institutions.
    ``Regulation'' or ``Rule'' means any rule for which the 
agency publishes a general notice of proposed rulemaking, or 
any other law, including any role of general applicability 
governing Federal grants to State and local governments for 
which the agency provides an opportunity for notice and public 
comment.
    ``State'' means State of the United States, the District of 
Columbia, territory or possession of the United States, and an 
agency, instrumentality, or fiscal agent of a State.

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;
          establishes or enforces any statutory rights that 
        prohibit discrimination on the basis of 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; or
          (6) the President designates as emergency legislation 
        and that the Congress so designates in statute.

SEC. 423. DUTIES OF CONGRESSIONAL COMMITTEES.

    Authorizing committees must include in their reports a list 
of Federal mandates in the measure, along with a report from 
the Director, if available; a qualitative and if possible a 
quantitative assessment of costs and benefits associated with 
the mandates; and an estimate of the effects on public and 
private sectors.
    For Federal intergovernmental mandates, the report also 
must contain the amount of increase or decrease in 
authorization for new or existing Federal financial assistance 
programs provided in the measure; a statement of whether the 
committee intends that the mandate shall be partly or entirely 
unfunded, and the reasons; and a statement of existing sources 
of Federal financial assistance that might help pay the direct 
costs of the mandates.
    The committee report must state whether the measure 
preempts State, local, or tribal law, and if so, explain the 
reasons why.
    The statement required from the Director in Sec. 424 is to 
be included in the committee report or in the Congressional 
Record before floor consideration.

SEC. 424. DUTIES OF THE DIRECTOR.

    (a) Statements on Bills and Joint Resolutions Other Than 
Appropriations Bills and Joint Resolutions
    For each public bill reported by an authorizing committee, 
the Director shall prepare a statement as to whether the 
estimated direct costs will equal or exceed $50 million in the 
first year or any of the 4 fiscal years following; the 
statement should include estimates of the total amount of 
direct cost and the amount of increase in authorization of 
appropriations or of budget or entitlement authority for 
existing programs or new authorization provided in the measure 
for the new activities.
    A similar report must be prepared for any private sector 
mandate whose direct cost will equal or exceed $100 million.
    If the Director determines that a reasonable estimate is 
not feasible, he must so report, giving the reasons.
    If the Director estimates that the direct costs will be 
less than the thresholds, he must so state, giving the basis of 
the estimate.
    Conference committees must, to the greatest extent 
practicable, include a supplemental statement from the Director 
regarding the amended form of the measure.
    (b) Assistance to Committees and Studies
    The Director is required to consult with and assist any 
committee to analyze proposed legislation that might have a 
significant budgetary impact on State, local, or tribal 
governments or the private sector.
    The Director is to conduct continuing studies to enhance 
comparisons of budget outlays, credit authority, and tax 
expenditures.
    The Director is to conduct studies of legislative proposals 
containing a Federal mandate, when requested by a committee; in 
conducting the studies, the Director is to solicit and consider 
information from private sector and elected officials or their 
representatives, consider establishing advisory panels if the 
Director determines they would be helpful, and if feasible 
include estimates of long-term future direct costs and any 
disproportionate effects on particular industries or sectors of 
the economy, States, regions, and urban and rural or other 
types of communities. Similar studies are to be conducted on 
private sector mandates.
    (c) Views and Estimates of Committees.
    Committees are to include in their views and estimates to 
the Budget Committees information on proposed legislation 
establishing, amending, or reauthorizing any Federal program 
likely to have significant budgetary impact on State, local, or 
tribal governments or the private sector, including proposals 
submitted by the executive branch.
    (d) Authorization of Appropriations.
    Authorizes the appropriation of $4.5 million to the 
Congressional Budget Office annually for fiscal years 1996 
through 2002.

SEC. 425. POINT OF ORDER.

    (a) In General.
    It shall not be in order to consider any bill reported by a 
committee unless the statement of the Director has been 
published by the Committee, or any bill, joint resolution, 
amendment, motion, or conference report containing a Federal 
intergovernmental mandate with direct costs of more than $50 
million or that would cause the direct costs of any other 
Federal intergovernmental mandate to exceed that level unless:
          The measure provides new budget or entitlement 
        authority in the House or direct spending authority in 
        the Senate for each fiscal year that equals or exceeds 
        the estimated direct costs; or
          The measure provides an increase in receipts or a 
        decrease in new budget or entitlement authority in the 
        House or direct spending authority in the Senate and an 
        increase in new budget or entitlement authority in the 
        House or an increase in direct spending authority in an 
        amount that equals or exceeds the estimated direct 
        costs; or
          The measure provides that the mandate shall be 
        effective only if appropriations are provided for a 
        given fiscal year, and the mandate is repealed on the 
        first day of any fiscal year for which appropriations 
        for all direct costs are not provided or
          Requires a Federal agency to reduce programmatic and 
        financial responsibilities for meeting the objectives 
        so that the direct costs do not exceed the amount of 
        Federal funding provided. The agencies are to establish 
        criteria and procedures for such a reduction.
    (b) Limitation on Application to Appropriations Bills.
    Bills reported by the Committee on Appropriations are not 
covered by the requirements in Subsection (a).
    (c) Determination of Direct Costs Based on Estimates.
    The Budget Committees, in consultation with the Director, 
shall estimate the amount of direct costs of a Federal mandate 
for a fiscal year.
    (d) Determination of Existence of Federal Mandate.
    The question of whether a measure contains a Federal 
intergovernmental mandate will be determined after 
consideration of the recommendation, if available, of the 
Chairman of the Committee on Government Reform and Oversight in 
the House or the Chairman of the Committee on Governmental 
Affairs in the Senate, as applicable.
    (e) Limitation on Application of Direct Cost Threshold.
    A point of order on any bill, joint resolution, amendment, 
motion, or conference report that contains a Federal 
intergovernmental mandate having direct costs that exceed $50 
million would not apply if the measure: (1) Would not result in 
a new increase in the aggregate amount of direct costs of 
Federal intergovernmental mandates; and (2) would not result in 
a net reduction or elimination of authorizations of 
appropriations for Federal financial assistance that would be 
provided to States, local governments, or tribal governments 
for use to comply with any Federal intergovernmental mandate, 
unless such reduction would be accompanied by a reduction in 
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 to consider a rule or 
order that waives the application of Section 425 (a): provided, 
however, that pending a point of order under Section 425(a) or 
under this section a Member may move to waive the point of 
order. Such a motion shall be debatable for 10 minutes equally 
divided and controlled by the proponent and an opponent but, if 
ordered in the House, shall otherwise be decided without 
intervening motion except a motion that the House adjourn. The 
adoption of a motion to waive such a point of order against 
consideration of a bill or joint resolution shall be considered 
also to waive a like point of order against an amendment made 
in order as original text.

Section 302. Enforcement in the House of Representatives

    (a) Amends Clause 5 of rule XXIII of the House by adding a 
provision making it always in order, unless specifically waived 
by the rule, to move to strike from the portion of the bill 
then open to amendment any Federal mandate whose direct costs 
exceed the $50 million threshold.
    (b) The Committee on Rules shall include in its annual 
report on the activities of the Committee 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 terms of Title III are enacted as an exercise of the 
rulemaking powers of the House and Senate and either House may 
change the rule at any time.

Sec. 304. Conforming amendment to table of contents

    Provides for change in the table of contents of the 
Congressional Budget and Impoundment Control Act of 1974.

Sec. 305. Technical amendment

    Repeals the State and Local Government Cost Estimate Act of 
1981 (P.L. 97-109).

Sec. 306. Effective date

    Title III shall take effect on October 1, 1995.

             Matters Required Under the Rules of the House

                             Committee Vote

    Clause 2(l)(2)(B) of rule XI requires each committee report 
to accompany any bill or resolution of a public character, 
ordered to be reported, to include the total number of votes 
cast for and against on each rollcall vote on a motion to 
report and on any amendment offered to the measure or matter, 
and the names of those members voting for and against.
    On January 12, 1995, the Committee ordered H.R. 5, as 
amended, reported to the House by a record vote of 9-4, a 
quorum being present.

Rules Committee Roll Call No. 1

    Date: January 12, 1995.
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995.
    Motion By: Mr. Dreier.
    Summary of Motion: Amend Sec. 426 (Enforcement in House) to 
allow for a motion to waive point of order under Act prior to 
the Chair's ruling, subject to 10-minutes of debate on waiver 
motion.
    Results: Adopted, 10 to 2.
    Vote by Members: Quillen--Yea; Dreier--Yea; Goss--Yea; 
Linder--Yea; Pryce--Yea; Diaz-Balart--Yea; McInnis--Yea; 
Waldholtz--Yea; Moakley--Nay; Beilenson--Yea; Frost--Not 
voting; Hall--Nay; Solomon--Yea.

Rules Committee Roll Call No. 2

    Date: January 12, 1995.
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995.
    Motion By: Mr. Beilenson.
    Summary of Motion: Strike sec. 425(b) which exempts 
appropriations measures from points of order under the Act.
    Results: Rejected, 3 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Not 
voting; Hall--Yea; Solomon--Nay.

Rules Committee Roll Call No. 3

    Date: January 12, 1995.
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995.
    Motion By: Hall.
    Summary of Motion: Add to the list of exclusions from 
application of Act in sec. 422 all low income programs exempted 
from sequestration.
    Rusults: Rejected, 3 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Not 
voting; Hall--Yea; Solomon--Nay.

Rules Committee Roll Call No. 4

    Date: January 12, 1995.
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995.
    Motion By: Mr. Dreier
    Summary of Motion: Substitute amendment for Hall amendment 
providing for Chair to make determination on points of order 
under sec. 425 after considering the recommendation, if 
available, of the chairman of the House Government Reform and 
Oversight Committee, or the Senate Committee on Governmental 
Affairs.
    Results: Adopted, 9 to 4.
    Vote by Member: Quillen--Yea; Dreier--Yea; Goss--yea; 
Linder--Yea; Pryce--Yea; Diaz-Balart--Yea; McInnis--Yea; 
Waldholtz--Yea; Moakley--Nay; Beilenson--Nay; Frost--Nay; 
Hall--Nay; Solomon--Yea.

Rules Committee Roll Call No. 5

    Date: Jan. 12, 1995
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995
    Motion By: Mr. Moakley
    Summary of Motion: Change effective date of Title 3 from 
Oct. 1, 1995 to the day of enactment.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

Rules Committee Roll Call No. 6

    Date: Jan. 12, 1995
    Measure: H.R. 5, Unfunded Mandate Reform Act of 1995
    Motion By: Mr. Quillen.
    Summary of Motion: Favorably report bill with 
recommendation that it do pass as amended.
    Results: Adopted, 9 to 4.
    Vote by Member:
    Vote by Member: Quillen--Yea; Dreier--Yea; Goss--Yea; 
Linder--Yea; Pryce--Yea; Diaz-Balart--Yea; McInnis--Yea; 
Waldholtz--Yea; Moakley--Nay; Beilenson--Nay; Frost--Nay; 
Hall--Nay; Solomon--Yea.

                        COMMITTEE COST ESTIMATE

    Clause 2(l)(3)(B) of rule XI requires each committee report 
that accompanies a measure providing new budget authority, new 
spending authority, or new credit authority or changing 
revenues or tax expenditures to contain a cost estimate, as 
required by section 308(a)(1) of the Congressional Budget Act 
of 1974, as amended and, when practicable with respect to 
estimates of new budget authority, a comparison of the total 
estimated funding level for the relevant program (or programs) 
to the appropriate levels under current law.
    Clause 7(a) of rule XIII requires committees to include 
their own cost estimates in certain committee reports, which 
include, when practicable, a comparison of the total estimated 
funding level for the relevant program (or programs) with the 
appropriate levels under current law.
    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office, pursuant to 
section 403 of the Congressional Budget Act of 1974.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Clause 2(l)(3)(C) of rule XI requires each Committee to 
include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the CBO cost estimate as 
required:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 12, 1995.
Hon. Gerald B.H. Solomon,
Chairman, Committee on the Rules,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 5, the Unfunded Mandate Reform Act of 1995.
    Enactment of H.R. 5 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, Director.

               Congressional Budget Office Cost Estimate

    1. Bill number: H.R. 5.
    2. Bill title: Unfunded Mandate Reform Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on the Rules on January 12, 1995.
    4. Bill purpose: H.R. 5 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. Costs would include any revenues 
forgone in order to comply with the mandates.
    Mandates are defined to include provisions that impose 
duties on states, localities, or Indian tribes 
(``intergovernmental mandates'') or on the private (``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 provision that enforce the 
constitutional rights of individuals, that are necessary for 
national security, or that meet certain other conditions.
    For legislation other than appropriation bills, the 
Congressional Budget Office (CBO) would be required to provide 
committees with estimates of the direct cost of mandates in 
reported bills and to the greatest extent practicable, for 
conference agreements. Specific estimates would be required for 
intergovernmental mandates costing $50 million or more and, if 
feasible, for private sector mandates costing $100 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 probably would be asked to assist the Budget 
Committees by preparing estimates for amendments and at other 
stages of a bill's consideration. Also, at other times, 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. H.R. 5 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 October 1, 1995, and would be permanent.
    H.R. 5 would establish a point of order in both the House 
and the Senate 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. 
It also would be in order if it provided that the mandate shall 
be effective for any fiscal year only if sufficient funds are 
appropriated in that year to pay for the direct costs of 
carrying out the mandate, or if it required the relevant 
federal agency to reduce state, local, and tribal 
responsibilities under the mandate such that their costs would 
not exceed the amount of federal funding provided.
    Finally, H.R. 5 would require executive branch agencies to 
take actions to ensure that 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. Before establishing new regulations, agencies would 
be required to determine the effect that private sector 
mandates could have on the national economy, the international 
competitiveness of the United States, and other factors. 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                                                                 
     appropriation                                                      
     s............  .......      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                                                                 
     appropriation                                                      
     s............      1.0  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      0.4      0.6  .......  .......  .......  .......
Bill total:                                                             
    Authorization                                                       
     of                                                                 
     appropriation                                                      
     s............      1.0      4.5      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: H.R. 5 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 H.R. 5 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: On January 9, 1995, CBO prepared 
cost estimates for S. 1, the Unfunded Mandate Reform Act of 
1995, as ordered reported on January 9, 1995, by both the 
Senate Committees on Governmental Affairs and on the Budget. 
The estimated cost of each version of S. 1 is identical to the 
estimated cost of H.R. 5.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Mary Maginniss.
    12. Estimate approved by: Paul Van de Water, Assistant 
Director for Budget Analysis.

                       Inflation Impact Statement

    Clause 2(l)(4) of rule XI requires each committee report on 
a bill or joint resolution of a public character to include an 
analytical statement describing what impact enactment of the 
measure would have on prices and costs in the operation of the 
national economy. The Committee has determined that H.R. 5 has 
no inflationary impact on the nation's economy.

                           Oversight Findings

    Clause 2(l)(3)(A) of rule XI requires each committee report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(l) of rule X. The Committee has no 
oversight findings.

 Oversight Findings and Recommendations of the Committee on Government 
                          Reform and Oversight

    Clause 2(l)(3)(D) of rule XI requires each committee report 
to contain a summary of the oversight findings and 
recommendations made by the Government Reform and Oversight 
Committee pursuant to clause 4(c)(2) of rule X, whenever such 
findings have been timely submitted. The Committee on Rules has 
received no such findings or recommendations from the Committee 
on Government Reform and Oversight.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

        CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974

          * * * * * * *

                    short titles: table of contents

  Section 1. (a) Short Titles.--This Act may be cited as the 
``Congressional Budget and Impoundment Control Act of 1974''. 
Titles I through IX may be cited as the ``Congressional Budget 
Act of 1974'' and title X may be cited as the ``Impoundment 
Control Act of 1974''.
  (b) Table of Contents.--

Sec. 1. Short titles; table of contents.
     * * * * * * *

      TITLE IV--ADDITIONAL PROVISIONS TO IMPROVE FISCAL PROCEDURES

                       Part A--General Provisions

Sec. 401. Bills providing new spending authority.
     * * * * * * *

                        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.
          * * * * * * *

      TITLE IV--ADDITIONAL PROVISIONS TO IMPROVE FISCAL PROCEDURES

                       Part A--General Provisions

                 bills providing new spending authority

  Sec. 401. (a) Controls on Legislation Providing Spending 
Authority.--It shall not be in order in either the House of 
Representatives or the Senate to consider any bill, joint 
resolution, amendment, motion, or conference report, as 
reported to its House which provides new spending authority 
described in subsection (c)(2) (A) or (B), unless that bill, 
resolution, conference report, or amendment also provides that 
such new spending authority as described in subsection (c)(2) 
(A) or (B) is to be effective for any fiscal year only to such 
extent or in such amounts as are provided in appropriation 
Acts.
          * * * * * * *

                        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 
                forego 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.

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 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; or
          (6) the President designates as emergency legislation 
        and that the Congress so designates in statute.

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 the degree to which the 
                Federal mandate affects each of the public and 
                private sectors and the extent to which Federal 
                payment of public sector costs would affect the 
                competitive balance between States, local 
                governments, or tribal governments and 
                privately owned businesses.
          (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 $100,000,000 (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; or
                  (B) a significant financial 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) 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 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) Determination of Existence of Federal Mandate by 
Government Reform and Oversight and Governmental Affairs 
Committees.--For the purposes of this section, the question of 
whether a bill, joint resolution, amendment, motion, or 
conference report contains a Federal intergovernmental mandate 
shall be determined after consideration of the recommendation, 
if available, of the Chairman of the Committee on Government 
Reform and Oversight of the House of Representatives or the 
Chairman of the Committee on Governmental Affairs of the 
Senate, as applicable.
  (e) 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 
        States, 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): Provided, however, That pending a point of order under 
section 425(a) or under this section a Member may move to waive 
the point of order. Such a motion shall be debatable for 10 
minutes equally divided and controlled by the proponent and an 
opponent but, if offered in the House, shall otherwise be 
decided without intervening motion except a motion that the 
House adjourn. The adoption of a motion to waive such a point 
of order against consideration of a bill or joint resolution 
shall be considered also to waive a like point of order against 
an amendment made in order as original text.
          * * * * * * *
                              ----------                              


          STATE AND LOCAL GOVERNMENT COST ESTIMATE ACT OF 1981

  AN ACT To amend the Congressional Budget Act of 1974 to require the 
 Congressional Budget Office, for every significant bill or resolution 
reported in the House or the Senate, to prepare and submit an estimate 
 of the cost which would be incurred by State and local governments in 
        carrying out or complying with such bill or resolution.

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, [That this 
Act may be cited as the ``State and Local Government Cost 
Estimate Act of 1981''.
  [Sec. 2. (a) Section 403 of the Congressional Budget Act of 
1974 is amended--
          [(1) by inserting ``(a)'' before ``The'';
          [(2) by striking out ``and'' after the semicolon in 
        clause (1) of subsection (a) (as redesignated by clause 
        (1) of this subsection);
          [(3) by inserting after clause (1) the following new 
        clause:
          [``(2) an estimate of the cost which would be 
        incurred by State and local governments in carrying out 
        or complying with any significant bill or resolution in 
        the fiscal year in which it is to become effective and 
        in each of the four fiscal years following such fiscal 
        year, together with the basis for each such estimate; 
        and'';
          [(4) by redesignating clause (2) of such subsection 
        as clause (3);
          [(5) by striking out ``(1)'' in clause (3) of 
        subsection (a) (as redesignated by clauses (1) and (4) 
        of this subsection) and inserting in lieu thereof ``(1) 
        and (2)'';
          [(6) by striking out ``estimate'' each place it 
        appears in clause (3) of subsection (a) and in the last 
        sentence of such subsection, and inserting in lieu 
        thereof ``estimates''; and
          [(7) by inserting at the end thereof the following 
        new subsections;
  [``(b) For purposes of subsection (a)(2), the term `local 
government' has the same meaning as in section 103 of the 
Intergovernmental Cooperation Act of 1968.
  [``(c) For purposes of subsection (a)(2), the term 
`significant bill or resolution' is defined as any bill or 
resolution which in the judgment of the Director of the 
Congressional Budget Office is likely to result in an annual 
cost to State and local governments of $200,000,000 or more, or 
is likely to have exceptional fiscal consequences for a 
geographic region or a particular level of government.''.
  [(b) The amendments made by subsection (a) shall apply with 
respect to bills or resolutions reported by committees of the 
House of Representatives and the Senate after September 30, 
1982.
  [Sec. 3. There are authorized to be appropriated such sums as 
may be necessary to carry out this Act.]
                              ----------                              


Changes in the Rules of the House of Representatives Made by the Bill, 
                              as Reported

  In compliance with clause 4(d) of rule XI of the Rules of the 
House of Representatives, changes in the Rules of the House of 
Representatives made by the bill, as reported, are shown as 
follows (new matter is printed in italic, existing law in which 
no change is proposed is shown in roman):

        RULE XXIII OF THE RULES OF THE HOUSE OF REPRESENTATIVES

                               Rule XXIII

                    of committees of the whole house

          * * * * * * *
  5. (a)  * * *
          * * * * * * *
  (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.
          * * * * * * *

                       Views of Committee Members

    Clause 2(l)(5) of rule XI requires each committee to afford 
a three day opportunity for members of the committee to file 
additional, minority, or dissenting views and to include the 
views in its report. Although neither requirement applies to 
the Committee, the Committee always makes the maximum effort to 
provide its members with such an opportunity. The following 
views were submitted:
                 additional views of hon. deborah pryce

    The Unfunded Mandate Reform Act of 1995 (H.R. 5), reported 
by the House Committee on Rules on January 12, 1995, is a 
fitting first step in restoring balance to the vital 
partnership that exists between the federal government and 
state, local and tribal governments--a balance that has been 
steadily eroded in recent years by the growing federal practice 
of imposing unfunded mandates.
    Clearly, no level of government in our country has the 
luxury of unlimited financial resources. Yet, increasingly 
Congress has been content with enacting costly and onerous 
federal mandates without providing the financial assistance 
necessary for states and localities to achieve compliance.
    As governors, mayors, and city managers across the country 
scramble to reorder their priorities and revamp their budgets 
in order to respond to new federal mandates, they send a clear 
message to Washington: Congress must take responsibility for 
the laws it passes. They have been forced to cut vital services 
and raise taxes just to pay for mandates that Congress believes 
are necessary to address what is often a local problem in 
search of a local solution.
    At a minimum, Congress needs to have better information on 
the costs of the mandates it considers. We need to build a 
solid legislative record with respect to any such mandates, and 
we need to bring accountability back to the legislative and 
federal regulatory processes. In my opinion, H.R. 5 
accomplishes these essential objectives and I was pleased to 
support it during the Rules Committee mark-up session.
    In H.R. 5, we have the opportunity to restore public faith 
in basic federalism by asking ourselves, ``What should 
government do, and what level of government should do it?'' 
Furthermore, the legislation goes a long way toward restoring 
honesty and accountability in governing. It forces Congress to 
recognize that mandates impose real costs on taxpayers. It 
strongly encourages Congress to fund new federal mandates, and 
it sets up procedural barriers to passing new mandates.
    The required cost estimates, new points of order, and 
additional enforcement mechanisms, among other provisions in 
the bill, will help ensure that Members of Congress are fully 
aware of the financial burdens imposed on state and local 
governments by unfunded mandates before they are enacted.
    H.R. 5 is the end-product of strong bipartisan efforts to 
relieve state and local governments of the burden of unfunded 
mandates. The ``Big-7'' group of associations representing 
state and local leaders has worked very hard to advance mandate 
relief legislation in the 104th Congress. From my own State of 
Ohio, Governor George Voinovich and Mayor Greg Lashutka of the 
City of Columbus have worked tirelessly to reform the way 
Congress considers, and then enacts mandates.
    As a cosponsor of H.R. 5, I congratulate the Republican 
leadership on our committee and in the House for moving the 
legislation forward in a timely manner. I encourage Members to 
support H.R. 5, without any weakening amendments, when it 
reaches the House floor.
                                                     Deborah Pryce.
                             MINORITY VIEWS

    While we agree that the issue of unfunded mandates needs to 
be addressed by Congress, we take serious issue with both the 
substance of H.R. 5 and the manner in which it is being moved 
through the legislative process.
    First, the bill was referred to four House committees: the 
Government Reform and Oversight Committee, the Budget 
Committee, the Judiciary Committee, and the Rules Committee. 
However, of those four committees, only the Rules Committee 
heard testimony from private and public witnesses. The 
Government Reform and Oversight Committee, which has been 
designated the lead committee on the issue of mandates took no 
testimony at all. We find this very troubling considering the 
fact that over one-half of its current membership are freshmen 
who have had no opportunity to examine this bill. By excluding 
outside experts from testifying, the Committee's new majority 
denied the basic right of other committee Members to hear 
opposing views and opinions on this major piece of legislation 
which will impact every other piece of legislation considered 
after this Congress. These new members deserve the opportunity 
to ask questions and to have those questions adequately 
answered.
    In addition, the other two committees of jurisdiction are 
not going to consider a bill which greatly impacts the way 
these committees will conduct their business. We owe the 
American people much more deliberation on this legislation than 
this.
    Secondly, from the testimony given before the Rules 
Committee during its one day of hearings, many questions were 
raised about the effects of the bill and its implementation. 
For example: will this bill lower food safety and clean air 
standards or will it require the deficit-ridden federal 
government to pay more to maintain current standards? What will 
be the future of Medicaid, Food Stamps and other nutrition 
programs, or the lead and asbestos removal programs under this 
bill? The Federal government has a basic responsibility to 
protect its citizens from harm. Will one state be concerned 
with the effects of its air pollution on the states that are 
down wind? No one can deny that all U.S. citizens deserve equal 
treatment and protection under the law. How can the basic 
Constitutional principle of ``promoting the general welfare'' 
be carried out when basic standards of protection and decency 
are not uniform throughout the nation? These questions have not 
been answered to our satisfaction nor does it appear they will 
be answered before the vote.
    Of major concern to us are questions about the bill's 
implementation. Why is the Appropriations Committee not covered 
by the provisions of the bill? It would seem that this 
exemption creates a large loophole. While the House rules tend 
to safeguard against such action in the House, the other body 
may use an Appropriations bill as a vehicle to circumvent the 
process. Also, how does the point of order work on the House 
floor against an amendment which has an unfunded mandate, but 
does not provide the required information? The bill requires 
the Budget Committee to consult with the Director of the 
Congressional Budget Office (CBO) in determining whether a 
mandate is unfunded. How is that supposed to happen in the 
middle of floor debate?
    In addition, there are thousands of pages of new studies, 
reports and supplemental reports for CBO to prepare. CBO has to 
consult and be available to all committees at all times. How 
much additional money and staff will it take for CBO to carry 
out the new duties imposed by this bill? Is $4.5 million 
annually enough?
    The bill, as amended by the Rules Committee, requires that 
the presiding officer look to the Chairman of the Government 
Reform Committee for advice in making a final determination if 
legislative language is an unfunded mandate. This is both risky 
and unusual. What is the definition of the term ``unfunded 
mandate''? An examination of testimony before the Rules 
Committee and of the various bills that have been introduced on 
the subject indicates no consensus. The definition of a mandate 
could be easily clouded by the viewpoint and level of support 
that an individual has for a legislative matter. Also, should 
the Chairman of one legislative committee be given the 
authority to determine whether a bill or language from another 
committee qualifies as a ``mandate''? If the House is going to 
grant this type of authority to one committee chairman, should 
the House grant the authority to determine the ``germaneness'' 
of a bill or amendment to another committee chairman? We are 
sure that most Members would think that ludicrous. What happens 
if the presiding officer of the House disagrees--is the 
determination binding on the chair? That point is not clear. No 
one knows because the House has never operated under this type 
of procedure before.
    The Chair in making rulings is supposed to be an 
independent voice following the rules and precedents of the 
House. Granting such authority to a committee chairman clearly 
constrains the ability of the presiding officer to make 
rulings. While it has been the tradition of the House for the 
Chair to consult with the Chairman of the Budget Committee on 
cost estimates--estimates of dollar figures--it marks a drastic 
change to place the final determinations about the quality of 
legislative language with a committee chairman. Furthermore, 
what is the meaning of ``if available'' in relation to the 
advice of the Government Reform Committee chairman? Does it 
mean that he has to be on the House floor to present his 
arguments for his determination? Does he make a telephone call 
or send a letter to the Chair? We see absolutely no way the 
chair can be consistent or efficient in its ruling when it must 
be based on the advice of a partisan committee chairman, 
regardless of party affiliation.
    We believe that it is imperative that the House take more 
time to study the impact this legislation will have on the 
quality of life of the American people. We would much prefer 
sacrificing a little speed in the interest of enacting sound, 
well thought out legislation.

                                   Joe Moakley.
                                   Anthony C. Beilenson.
                                   Martin Frost.
                                   Tony P. Hall.