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



104th Congress                                              Rept. 104-1
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 2
_______________________________________________________________________


 
                  UNFUNDED MANDATE REFORM ACT OF 1995

                                _______


                January 13, 1995.--Ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany H.R. 5]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform and Oversight, 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 (states in terms of the page and line 
numbers of the introduced bill) are as follows:
    Page 3, line 25, after the semicolon strike ``and''.
    Page 4, strike the period at line 4 and insert ``; and'', 
and insert after line 4 the following:
          (8) to begin consideration of methods to relieve 
        States, local governments, and tribal governments of 
        unfunded mandates imposed by Federal court 
        interpretations of Federal statutes and regulations.
    Page 5, line 11, strike ``or''.
    Page 5, line 14, strike ``.'' and insert ``; or
    Page 11, line 2, strike ``shall'' and insert ``may''.
    Page 11, line 23, after ``paid at'' insert ``a level not to 
exceed''.
    Page 15, line 11, after ``statute or regulation'' insert 
``or any Federal court ruling''.
    Page 21, after line 6, insert the following:

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

    Not later than 4 months after the date of enactment of this 
Act, and no later than March 15 of each year thereafter, the 
Advisory Commission on Intergovernmental Relations shall submit 
to the Congress, including each of the Committee on Government 
Reform and Oversight of the House of Representatives and the 
Committee on Governmental Affairs of the Senate, and to the 
President a report describing Federal court rulings in the 
proceeding calendar year which imposed an enforceable duty on 1 
or more States, local governments, or tribal governments.
    Page 28, line 21, after the semicolon strike ``or''.
    Page 28, line 24, strike the period and insert ``; or''.
    Page 28, after line 24, add the following:
          ``(7) pertains to Social Security.
    Page 30, strike line 10 and insert the following: ``the 
private sector.''.

                            I. Brief Summary

                               a. purpose

    The purpose of H.R. 5, the Unfunded Mandate Reform Act of 
1995, is to strengthen the partnership between the Federal 
Government and the State, local and tribal governments by 
ensuring that Congress and the Executive Branch know and 
consider the impact of legislative and regulatory proposals 
before acting on those proposals. H.R. 5 is designed to end the 
imposition of Federal mandates on State, local and tribal 
governments in the absence of full and deliberate consideration 
by Congress. The legislation is further intended to provide 
information on the cost of mandates on the private sector, to 
assist Congress and the Executive Branch in considering 
legislative and regulatory proposals impacting the private 
sector.

                               b. summary

    H.R. 5 defines a ``federal intergovernmental mandate'' as 
(1) an enforceable duty on State, local or tribal governments, 
or a reduction in the authorization of appropriations for 
federal financial assistance provided to those governments for 
compliance with such duty, or (2) a provision which compels 
state and local spending for participation in an entitlement 
program under which at least $500 million is provided to States 
and localities annually (e.g., Medicaid).
    A ``federal private sector mandate'' is defined as an 
enforceable duty on the private sector, or a reduction in the 
authorization of appropriations for Federal financial 
assistance provided to the private sector for compliance with 
such duty.
    H.R. 5 does not apply to statutes, legislation or 
regulations enforcing civil and constitutional rights, 
requiring auditing or accounting procedures with respect to 
Federal grants or assistance, providing for national 
emergencies, providing for the national security or the 
implementation of international treaty obligations, or 
pertaining to Social Security. Accordingly, H.R. 5 is not 
intended to apply to the Americans with Disabilities Act, for 
example.

Title I

    Title I of H.R. 5 establishes a Commission on Unfunded 
Federal Mandates to review existing mandates and make 
recommendations to Congress and the President regarding the 
value of existing mandates and whether some or all should be 
eliminated or changed. The Commission terminates 90 days after 
submitting its final report and recommendations.

Title II

    Under the provisions of Title II, federal agencies must 
assess the effects of their regulations on State, local and 
tribal governments and the private sector and seek to minimize 
those burdens where possible. Federal agencies also are 
required to consult with state and local elected officials in 
the development of significant regulatory proposals.
    Before promulgating any final rule or general notice of 
proposed rulemaking that may result in the expenditure by 
State, local or tribal governments, in the aggregate, or the 
private sector, of $100 million or more, federal agencies must 
prepare written statements assessing the costs, benefits and 
effects of those regulations.

Title III

    Title III of H.R. 5 amends the Congressional Budget Act of 
1974 to establish procedures for considering legislation 
containing Federal mandates in the Executive Branch.
    When reporting a bill with a Federal mandate, a committee 
must request a Congressional Budget Office (CBO) cost estimate. 
CBO must provide a detailed cost estimate for each bill 
containing mandates reported by an authorizing committee that 
has an annual aggregate impact of $50 million or greater on the 
public sector (i.e., state and local government) or $100 
million on the private sector.
    A committee must publish this CBO estimate in the committee 
report or in the Congressional Record prior to the 
legislation's consideration on the House floor. Committee 
reports also must include (1) an assessment of the costs and 
benefits of the mandate; (2) a statement of the degree to which 
the Federal funding of an intergovernmental mandate would 
disadvantage the private sector; (3) a statement of the amount 
of assistance authorized to pay for the mandate; (4) a 
statement of whether the committee intends that the mandate be 
unfunded; and (5) a statement as to whether the legislation 
intends to preempt state and local law.
    The bill authorizes $4.5 million per year in new funding 
for CBO for FY 1996-2002.
    A point of order would lie on the floor against 
consideration of a bill or joint resolution reported by a 
committee containing intergovernmental or private sector 
mandates unless the committee has published a CBO estimate.
    A point of order would lie on the floor against 
consideration of a bill, joint resolution, amendment, motion or 
conference report that imposes intergovernmental mandates over 
$50 million on state and local governments unless the 
legislation:
          Funds the mandates through new budget authority or 
        new entitlement authority;
          Funds the mandates through increases in receipts and 
        new budget authority or new entitlement authority; or
          Provides that any mandates will not take effect 
        unless their direct costs are funded through an 
        appropriations Act, and that any mandates that do take 
        effect will be repealed effective on October 1st of the 
        first fiscal year in which they are not funded. 
        Alternatively, the legislation could direct agencies to 
        reduce the costs of mandates so that direct costs do 
        not exceed the amount of funding provided to pay those 
        costs.
    No points of order may lie against appropriations bills or 
an amendment thereto.
    H.R. 5 is prospective only; according, it is intended to 
apply to reauthorizations only to the extent that they increase 
state and local costs by an amount that exceeds $50 million.

                             II. Background

    Over the past two decades, and particularly since 1978, 
federal regulation of state and local governments has shifted 
from an incentive-based system of grants-in-aid designed to 
encourage state and local compliance with national policy 
objectives to a command-system which requires state and local 
compliance and often imposes penalties for failure to do so. As 
the federal deficit mounted, the federal Government relied 
heavily on these ``unfunded mandates'' as a way to achieve 
national policy objectives without paying the state and local 
costs of meeting those goals.

               federal aid to state and local governments

    State and local governments became less able to absorb the 
costs of mandates as their own budget problems grew during the 
mid-1980s. Direct Federal aid to State and local governments 
dropped from $47 billion in 1980 to $19.8 billion in 1990. On 
the spending side, the cost of almost all categories of 
programs was increasing, For example, state health care 
spending grew at an average annual rate of 7.6% from 1985-1991. 
Nationwide, state health care expenditures comprised, on 
average, 21% of general expenditures in 1991.
    Census Bureau data on sources of State and local government 
revenue shows a decrease in Federal funding to state and local 
governments. In 1979, the Federal Government's contribution to 
State and local government revenues reach 18.6 percent. By 
1989, the Federal share had dipped to 13.2 percent before 
climbing back to 14.3 percent in 1991. When adjusted for 
inflation, federal discretionary grants-in-aid programs for 
states and localities dropped 28 percent during the 1980s, a 
3.1 percent real decline on an annual average basis.
    A number of significant Federal aid programs to state and 
local governments were reduced or eliminated during the 1980s. 
In 1986, the Administration and Congress agreed to terminate 
the general revenue sharing program that provided approximately 
$4.5 billion annually to state and local governments with few 
strings attached. Since its inception in 1972, the revenue 
sharing program had provided about $83 billion to state and 
local governments. Funding for the Urban Development Action 
Grants was also terminated during this period.
    Between 1981 and 1990, funding for a number of Federal 
grant programs to states and localities was reduced as well. 
These include Economic Development Assistance (47.5 percent 
decrease in nominal dollars), Community Development Block 
Grants (21.1 percent), Mass Transit (30.2 percent), Refugee 
Assistance (38.4 percent), and Low Income Home Energy 
Assistance (17.6 percent). These cuts were partially offset by 
increases in funding in other areas--primarily in housing and 
health and human services programs.
    The early 1990s saw a resurgence in funding for Federal-
State-local discretionary aid programs. Funding rose form $51.6 
billion in 1990 or $67.4 billion in 1993, a nominal increase of 
30.6 percent and an inflation-adjusted average annual gain of 
5.6 percent. This growth was driven primarily by expansions in 
funding for Head Start, Highway Funding, and Compensatory 
Education. Still, even with this recent growth, between 1980 
and 1993 discretionary funding declined 18.3 percent in real 
dollars--an average annual real decrease of 1.4 percent.

      the cost of federal mandates to state and local governments

    As State and local governments continue to devote a growing 
share of their budgets to compliance with federal mandates, 
less funding is available for other state and local priorities. 
In some cases, non-Federal governments have found it necessary 
to raise new revenues and to cut services. State and municipal 
leaders increasingly resent this federal practice, calling 
unfunded mandates ``secret taxes'' and the practice ``coercive 
federalism.''
    According to a July 1993 report from the Advisory 
Commission on Intergovernmental Relations (ACIR), 27 new laws 
or major amendments to existing states were enacted in the 
1980s, compared with 22 major pieces of intergovernmental 
regulation in the 1970s. Some of these provisions were costly, 
while others were noted more for their intrusiveness than their 
expense. This increase in mandating activity is more 
significant in light of the overall decline in substantive 
legislative activity. While approximately 10 percent of all 
legislation passed in the mid-1970s was commemorative in 
nature, that proportion grew to nearly 50 percent in the mid-
1980s. Thus, the 27 intergovernmental mandates adopted in the 
1980s comprised a larger share of the substantive legislation 
passed in the 1980s as compared with the 22 pieces of 
intergovernmental regulation in the 1970s.


    The 1980s also witnessed the enactment of several 
regulatory relief measures, including the creation of a series 
of new block grants. Overall, however, these deregulation 
initiatives were more than counterbalanced by the accumulation 
of new requirements. Congress also attached costly new 
conditions to existing grant programs, including a series of 
new conditions added to the Medicaid program and legislation 
increasing local government costs for federal water projects. 
(These conditions are not included in the inventory of 27 new 
regulatory statutes discussed previously.)
    An ACIR review of 18 intergovernmental programs, shown in 
Chart 2, between 1981 and 1986 also noted a total of 140 
regulatory changes, which added an estimated net total of 5,943 
requirements in the 18 policy areas. These included a net 4,702 
additions to program standards and a net 1,241 changes in 
administrative procedures.

                                Chart 2

     summary of changes in mandating on state and local governments

                      [For 18 programs, 1981-1986]

Mandate burden increased (11):
    1. Clean Air Act
    2. Endangered Species Act
    3. Fair Labor Standards Act (FLSA)
    4. Handicapped Education (1975)
    5. Historic Preservation Act
    6. Ocean Dumping
    7. Occupational Safety and Health Act (OSHA)
    8. Pesticides (FIFRA)
    9. Rehabilitation Act of 1973 (Section 504)
    10. Safe Drinking Water Act
    11. Wholesome Meat Act
Mandate burden stable (2):
    1. Hatch Act
    2. Title VI Civil Rights
Mandate burden reduced (5):
    1. Age Discrimination in Employment Act
    2. Davis-Bacon Act
    3. Flood Disaster Protection Act
    4. National Environmental Policy Act (NEPA)
    5. Uniform Relocation Act

    Source: U.S. General Accounting Office unpublished case 
studies.

    ACIR's July 1993 report, ``Federal Regulation of State and 
Local Governments: The Mixed Record of the 1980s,'' states:

          The Commission finds that unfunded federal mandates *  
        *  * have reached such proportions as to constitute an 
        overextension of the constitutionally delegated powers 
        of the Congress and the Executive, an abridgement of 
        the authority of citizens in their state and local 
        communities to govern their own affairs, and an 
        impairment of the ability of citizens to hold their 
        elected federal officials accountable for the public 
        costs of their decisions.

    The Commission includes in the report a recommendation that 
State and local governments identify those bills pending in the 
Congress and regulation to be prepared within the Executive 
Branch and call for fiscal notes on those provisions which may 
have an effect on State and local governments.
    The Administration's National Performance Review (NPR) 
reported that as of December 1992, there were at least 172 
separate pieces of legislation in force that imposed 
requirements on state and local governments, many of which are 
wholly or partially unfunded. That list has grown with the 
subsequent passage of the National Voter Registration Act, the 
Family and Medical Leave Act, and the Brady law--all mandates 
on state and local governments as defined in H.R. 5.
    Most state and local officials recognize the potential 
value of mandates--a cleaner environment, for example--but many 
argue that the costs of implementing mandates are considerable 
for state and local governments and have initiated studies to 
prove their point. For example, Michigan estimated that its 
spending would rise from $39.6 million to $136.9 million--a 
245% increase--over the six-year period from 1990-1995 due to 
federal Medicaid mandates. A 1991 Columbus, Ohio study reported 
that the city would spend $1.1 billion on federal and state 
environmental mandates over the next ten years, consuming 
nearly 25% of the city's budget by 1996. The State of 
California will spend $7.7 billion to comply with unfunded and 
underfunded mandates in the current fiscal year 1994-95.
    An October 1993 Price Waterhouse survey commissioned by the 
National Association of Counties estimated the cost of just 
twelve Federal intergovernmental mandates on counties for 1993 
at $4.8 billion. Estimated costs for the five years 1994 
through 1998 total $33.7 billion. Counties reported that 
unfunded Federal mandate costs consume an average of 12.3 
percent of their locally raised revenues.

                                Chart 3

                            ESTIMATED COSTS OF UNFUNDED FEDERAL MANDATES TO COUNTIES                            
                                         [Costs in thousands of dollars]                                        
----------------------------------------------------------------------------------------------------------------
                                                                 Fiscal year 1993                  Fiscal years 
                                                 ------------------------------------------------    1994-1998  
                    Mandates                           Total                                     ---------------
                                                     operating     Total capital    Total costs      Projected  
                                                       costs           costs                        total costs 
----------------------------------------------------------------------------------------------------------------
I. Underground Storage Tanks....................          91,012          84,694         175,706         641,244
II. Clean Water Act/Wetlands....................         441,498         744,493       1,185,991       6,480,183
III. Clean Air Act (CAA)........................          68,469         233,252         301,721       2,682,570
IV. Subtitle D/RCRA.............................         271,800         374,335         646,135       4,550,856
V. Safe Drinking Water Act......................          41,562         122,748         164,310         870,365
VI. Endangered Species Act......................          57,493          62,768         120,261         601,835
VII. Superfund Amendments.......................          37,233           5,815          43,048         242,743
VIII. Americans with Disabilities Act (ADA).....         127,448         166,202         293,650       2,809,840
IX. Fair Labor Standards Act....................         262,075              77         262,152       1,345,482
X. Davis-Bacon Act..............................          10,979               0          10,979         104,069
XI. Arbitrage...................................          70,874           6,885          77,759         238,481
XII. Immigration Act............................       1,534,188           1,471       1,535,659      13,134,358
      Total.....................................       3,104,631       1,802,740       4,817,371      33,702,026
----------------------------------------------------------------------------------------------------------------

    Some state and local government officials are challenging 
the constitutionality of mandates in court. On December 21, 
1994, Governor Wilson of California filed suit in federal court 
seeking to bar the Clinton Administration from enforcing the 
National Voter Registration Act. Twelve other states have 
joined California in resisting the ``Motor Voter'' law. 
Governor Wilson argues that the law is a violation of the 10th 
Amendment, which reserves to the States or the people those 
powers not delegated to the Federal Government. The Brady Law 
has been challenged in court by local officials who charge that 
it allows the Federal Government to ``commandeer'' their 
budgets.
    The contention over federal mandates has contributed to a 
deterioration in the already-complicated Federal-State-local 
relationship. Local officials resent State mandates as well as 
those imposed by the Federal Government, while the States argue 
in many cases that they are merely passing along federal 
dictates. The Federal Government will defend its actions by 
maintaining that mandates are a direct result of State and 
local government failure to meet their share of 
responsibilities. State and localities will assail the 
burdensome and inflexible regulations promulgated by federal 
agencies, but agencies claim they are only fulfilling the will 
of Congress in implementing statutes. Confusion and frustration 
characterize much of the intergovernmental relationship and 
make it difficult for all levels of government to work together 
constructively to provide the best possible services to the 
American people as efficiently and effectively as possible.

            III. Legislative History/Committee Consideration

    The Human Resources and Intergovernmental Relations 
Subcommittee held three hearings in the 103rd Congress on 
unfunded mandates, including field hearings in Pennsylvania and 
Florida. The subcommittee also held a hearing on ``America's 
Urban Crisis'' in May 1993, at which New York City Mayor David 
Dinkins presented a report ``Save Our Cities, Save our 
Children, Save Our Future: A Comprehensive Urban Program 
Proposal.'' On mandates, Mayor Dinkins' report states that:

        Cities are being consumed by well-meaning but 
        extraordinarily irresponsible actions of the Federal 
        Government. Not only do mandates preclude allowances 
        for local priorities, they have grown so large that 
        they threaten the ability of local governments to meet 
        their other obligations.

    An October, 1993 hearing in Harrisburg, Pennsylvania heard 
testimony from a number of State and local elected officials 
and representatives of the private sector. Douglas Hill, the 
Executive Director of the Pennsylvania Association of County 
Commissioners, testified that all mandates imposed on 
localities must be funded by the local property tax, the only 
tax base available to Pennsylvania county government. Peter 
Marshall, the Borough Manager of State College, noted that this 
favors the rich and hurts the poor, as the property tax is a 
flat tax and does not consider ability to pay.
    All the county commissioners who testified provided 
compelling examples of the burdens caused by compliance with 
costly mandates. As Larry Kephart, the County Commissioner of 
Clinton County, testified:

        * * * in the State of Pennsylvania we rely on a real 
        estate tax to operate all of these services. In our 
        county, which has a high elderly population, it is 
        extremely hard to continue to raise taxes to perform 
        services that are mandated and under-funded.

    The County Commissioners of Jefferson and Adams Counties 
highlighted the frustrations of local elected officials, who 
have ``no say'' in the mandated program.
    The subcommittee also head testimony from Ken Mease, 
president of Ken-Tex Corporation, on the burdens of mandates 
placed on the private sector. He noted that 80 percent of all 
new jobs are created by small, independent entrepreneurs. Mr. 
Mease testified that ``solutions are more readily found within 
the market, without government intervention.'' He cited the 
Clean Air Act as an example of the ``legislative overkill that 
is helping to bankrupt businesses and drive others to move 
their operations off-shore.''
    In February, 1994, the subcommittee traveled to Sanford, 
Florida to hear further evidence of the burdens caused by 
unfunded mandates. The subcommittee took testimony from state 
and local officials, including Mayor Glenda Hood of Orlando. 
Mayor Hood offered one example of the difficulty federal 
regulations pose for localities: the federal Environmental 
Protection Agency ordered the City of Orlando to get rid of a 
herbicide the city was using because it had been declared 
carcinogenic. The city asked the Florida Department of 
Environmental Regulation where it could dispose of it, and was 
told a company named City Chemical was permitted to handle the 
herbicide. However, City Chemical failed to properly dispose of 
the herbicide and thousands of other gallons of toxic waste. 
The EPA ordered a clean-up of City Chemical and determined that 
the city's share of that clean-up would be $6 million--$8 
million--even though they only shipped 37 gallons of the 
herbicide to City Chemical. Those 37 gallons were fifty-five 
thousandths of one percent of the total amount of chemicals at 
the site. Thousands of dollars in legal fees later, the city 
was able to convince the EPA that its share of the clean-up 
should be significantly less.
    Another expensive mandate discussed at the Florida hearing 
is the National Voter Registration Act. Dorothy Joyce, Director 
of the Division of Elections for the Florida Department of 
State, testified that:

          While welcoming the valuable contributions of the 
        National Voter Registration Act, we firmly believe that 
        we cannot properly do our job as required by the Act 
        without adequate funding to cover the additional 
        burdens Congress has place upon our State.

    She estimated the annual cost of the ``Motor Voter'' 
legislation to be $615,000 for the state division of elections 
alone, with significant additional costs to be borne by the 
Department of Health and Rehabilitative Services ($1.6 million) 
and the Department of Highway Safety and Motor Vehicles 
($350,000).
    A third subcommittee hearing in May 1994 heard testimony 
from Members of Congress on various bills designed to provide 
relief from federal mandates. Reps. Clinger (R-PA), Condit (D-
CA), Moran (D-VA), Roberts (R-KS) and Shays (R-CT) testified 
regarding the need for adequate cost information and a process 
to curb future mandating activity by the Congress. Mr. Clinger 
and Mr. Roberts pointed out the critical need for evaluation of 
existing mandates and an assessment of their value.
    In June 1994, the Senate Committee on Governmental Affairs 
marked up and reported S. 993, the ``Federal Mandate 
Accountability and Reform Act of 1994.'' This measure was 
introduced in the House as H.R. 4771, sponsored by Human 
Resources and Intergovernmental Relations Subcommittee Chairman 
Edolphus Towns (D-NY), House Government Operations Committee 
Chairman John Conyers, Jr. (D-MI), and Reps. Moran, Barrett (D-
WI) and Payne (D-NJ). H.R. 4771 embodied at least part of the 
solution to the problems of unfunded mandates as expressed by 
witnesses in the subcommittee's four hearings.
    In the Subcommittee mark-up, Rep. Rob Portman (R-OH) 
offered a number of amendments to ensure that the legislation 
would be effective in the House in light of House rules and the 
House Rules Committee. These amendments were defeated and H.R. 
4771 was passed by the subcommittee on a voice vote without 
amendment.
    Subsequent negotiations between the majority and minority 
led to the introduction on September 29, 1994 of H.R. 5128, the 
Federal Mandate Relief for State and Local Governments Act. 
This legislation was introduced by Full Committee Chairman 
Conyers, Ranking Minority Member Clinger, and Reps Towns and 
Shays. H.R. 5128 was based on H.R. 4771, but included the 
Portman amendments, a provision to require the Director of the 
Congressional Budget Office to estimate the costs of selected 
mandates on the private sector, and a process by which the 
Advisory Commission on Intergovernmental Relations would review 
existing mandates and make recommendations to the President and 
the Congress. On October 5, 1994, H.R. 5128 was marked up and 
ordered reported favorably by the Government Operations 
Committee by a vote of 35 to 4, with one Member voting 
``present''. The House adjourned without further consideration 
of H.R. 5128.
    In the 104th Congress, Committee on Government Reform and 
Oversight Chairman Clinger joined with Reps. Portman, Condit 
and Thomas Davis (R-VA) to introduce H.R. 5, the Unfunded 
Mandate Reform Act of 1995, on January 4, 1995. The bill was 
referred to the Committee on Government Reform and Oversight, 
with secondary referrals given to the Committees on Rules, 
Budget and Judiciary. On January 10th, the Committee voted to 
report H.R. 5 by a voice vote after a mark up in which 18 
amendments were offered and 4 were adopted. Of those amendments 
adopted, three were offered by Rep. Horn (R-CA) and one was 
offered by Rep. Kanjorski (D-PA).
    H.R. 5 is rooted heavily in H.R. 5128. The major 
differences are the addition of private sector cost impact 
statements for legislation expected to cost the private sector 
in excess of $100 million, and the provision forcing a majority 
of the House to waive a point of order against the 
consideration of new intergovernmental mandates costing at 
least $50 million if they are not federally funded.
    The Committee did not consider sections 201, 202, or Title 
III of the bill based on consultations with the Parliamentarian 
that those provisions were not in the Committee's jurisdiction.

                    IV. Section-by-Section Analysis

                              short title

    Section 1 is the short title for the Act, the ``Unfunded 
Mandate Reform Act of 1995''.

                                purposes

    Section 2 describes the purposes of the Act: to bolster 
intergovernmental partnership, to end the imposition of 
unfunded federal mandates without full consideration by 
Congress, to inform Congress of proposed legislation containing 
unfunded mandates and require a point-of-order vote on such 
legislation, to help Federal agencies in their consideration 
and adoption of regulations, and to ensure that the Federal 
government will not impose any unfunded mandates on State, 
local, and tribal governments without also providing adequate 
funding for compliance.

                              definitions

    Section 3 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.

                       limitation on application

    Section 4 provides that this Act shall not apply to Federal 
statutes or regulations that: enforce individual Constitutional 
rights; enforce 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; 
are necessary for national security or ratification or 
implementation of international treaties; or pertain to Social 
Security. This section excluding laws based upon disability 
status is intended to include the Americans with Disabilities 
Act.

              title I--review of unfunded federal mandates

Establishment

    Section 101 establishes the ``Commission on Unfunded 
Federal Mandates''.

Report on unfunded Federal mandates by the Commission

            Section 102
    Requires the Commission to study existing mandates and to 
make recommendations to Congress and the President on: allowing 
flexibility in compliance; reconciling contradictory or 
inconsistent requirements to facilitate compliance; terminating 
duplicative, impractical, or obsolete mandates; suspending 
mandates not vital to health and safety; and, establishing 
common standards for State and local governments to ease 
compliance.
    Requires the Commission to establish criteria toward making 
the above recommendations and to make them available for public 
comment before finalization. Also requires the Commission to 
hold public hearings and to submit a preliminary report 9 
months after its inception. A final report is to be published 3 
months later and submitted to the Committees on Government 
Reform and Oversight and Governmental Affairs and the 
President.

Membership

            Section 103
    The Commission will have 9 members: 3 appointed by the 
Speaker in consultation with the minority leader; 3 appointed 
by the Senate majority leader in consultation with the minority 
leader; and 3 appointed by the President. The President will 
select the Chair at the time of his/her appointment.

Director and Staff of Commission; experts and consultants

            Section 104
    The Commission will appoint a Director. This section also 
allows the Director to hire sufficient staff and authorizes the 
Commission to use temporary consultants and Federal agency 
staff as necessary.

Powers of commission

            Section 105
    Allows the Commission to hold hearings, obtain necessary 
official data, use the mail system, and secure administrative 
support and contract services.

Termination

            Section 106
    The Commission will dissolve 90 days after filing its last 
report.

Authorization of appropriations

            Section 107
    $1,000,000 is authorized to fund the Commission.

Definition

            Section 108
    For this title, the term ``federal mandate'' means any 
provision in statute, regulation or court ruling that imposes 
an enforceable duty upon States, localities, or tribal 
governments, including a condition of Federal assistance or a 
duty arising from participation in a voluntary Federal program.

Effective Date

            Section 109
    This takes effect 60 days after the date of enactment of 
this Act.

             title II--regulatory accountability and reform

Regulatory process

            Section 201
    Directs agencies to assess the effect of their regulations 
on State, local, and tribal governments and the private sector 
and to find ways to minimize any regulatory burdens.
    Agencies are to develop a process that permits elected 
officials (or their designated representatives) input into the 
development of regulations that contain significant 
intergovernmental mandates. Additionally, agencies are to 
develop plans to inform small governments of potentially 
significant regulations and to advise them on compliance. 
Finally, agencies are required to estimate the effect of 
Federal private sector mandates on the national economy.

Statements to accompany significant regulatory actions

            Section 202
    Before a Federal agency promulgates any final rule or 
notice of proposed rulemaking that includes any Federal mandate 
estimated to result in expenditures of over 100 million for 
State, local, or tribal government, in the aggregate, or for 
the private sector, in any one year, that agency must complete 
a written statement addressing the following:
          Anticipated costs of compliance to State, local, and 
        tribal governments, including the availability of 
        Federal funds to pay these costs;
          The future cost of the Federal mandate and any 
        disproportionate budgetary effects upon particular 
        States, regions, communities, or the private sector;
          Qualitative and, if possible, quantitative cost-
        benefit analysis of the Federal mandates;
          The effect of Federal private sector mandates on the 
        national economy;
          Summaries of the agency's prior consultation with 
        elected representatives and of concerns that were 
        presented by States, local or tribal governments, and 
        the private sector.
          The agency's position supporting the need to issue 
        the regulation containing the federal mandates.

Assistance to the Congressional Budget Office

            Section 203
    Charges the Director of the Office of Management and Budget 
to collect the reports required by section 202 and forward 
copies of them to the Congressional Budget Office.

Pilot program on small government flexibility

            Section 204
    Directs the OMB director to, in consultation with federal 
agencies, establish pilot programs at least 2 agencies to test 
new regulatory approaches that reduce reporting and compliance 
burdens on small governments while meeting all statutory 
objectives.

Annual report to Congress regarding Federal Court rulings

            Section 205
    No later than 4 months after the date of enactment of this 
Act, and no later than March 15th annually thereafter, the 
Advisory Commission on Intergovernmental Relations shall report 
to the Government Reform and Oversight Committee in the House 
and the Governmental Affairs Committee in the Senate, and the 
President, a report describing Federal court rulings in the 
preceding calendar year which imposed an enforceable duty on 
one or more State, local or tribal governments

             TITLE 3--LEGISLATIVE ACCOUNTABILITY AND REFORM

Legislative mandate accountability and reform

            Section 301
    Title IV of the Congressional Budget Act of 1974 is amended 
by adding a new part:

                        Part B--Federal Mandates

Definitions

            Section 421
          ``Agency'': excludes the independent regulatory 
        agencies from the definition of a federal agency.
          ``Director'': means the 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 as a condition of Federal 
        assistance or as 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. This term is intended to apply only to new 
        costs on state and local governments or the private 
        sector as a result of the 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 the 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 the 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 
        is not a ``reasonable step.''
          ``Local Government'': a unit of general local 
        government, a school district, or other special 
        district under State law.
          ``Private Sector'': means individuals, partnerships, 
        associations, corporations, business trusts, or legal 
        representatives, organized groups of individuals, and 
        educational or 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 rule of 
        general applicability governing Federal grants to State 
        and local governments for which the agency provides an 
        opportunity for notice and public comment.

Limitation on application

            Section 422
    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 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 emergency relief at the request of a 
        State, local or tribal government, or any official of 
        such a government;
          5. is necessary for the national security or the 
        ratification or implementation of international treaty 
        obligations;
          6. the President designates as emergency legislation 
        and that the Congress so designates in statute; or
          7. pertains to Social Security.

Duties of congressional committees

            Section 423
    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 intends 
to preempt 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.

Duties of the Director

            Section 424
    (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 budget 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 of 
private sector costs 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 
possible, 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.

Point of Order

            Section 425
    (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
          The measure 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 appropriation 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 by the Committee 
on Government Reform and Oversight in the House or the 
Committee on Governmental Affairs in the Senate, as applicable.

Enforcement in the House of Representatives

            Section 426
    It shall not be in order in the House to consider a rule or 
order that waives the application of Section 425(a).

Enforcement in the House of Representatives

            Section 302
    (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.

Exercise of rulemaking powers

            Section 303
    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.

Conforming amendment to Table of Contents

            Section 304
    Provides for change in the table of contents of the 
Congressional Budget and Impoundment Control Act of 1974.

Technical amendment

            Section 305
    Repeals the State and Local Government Cost Estimate Act of 
1981 (P.L. 97-109).

Effective date

            Section 306
    Title III shall take effect on October 1, 1995.

                     V. Committee Impact Statement

    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.

             VI. Congressional Budget Office Cost Estimates

    The following is the Congressional Budget Office cost 
estimate as required by clause 2(l)(3)(C) of rule XI:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 13, 1995.
Hon. William F. Clinger,
Chairman, Committee on Government Reform and Oversight, 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,
                                                     James L. Blum,
                                  (For 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 Government Reform and Oversight on January 11, 195.
    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 mandates.
    Mandates are defined to include provisions that impose 
duties on states, localities, or Indian tribes 
(``intergovernmental mandates'') or on the private sector 
(``private sector mandates''). Mandates also would include 
provisions that reduce or eliminate any authorization of 
appropriations to assist state, local, and tribal governments 
or the private sector in complying with federal requirements, 
unless the requirements are correspondingly reduced. In 
addition, intergovernmental mandates would include changes in 
the conditions governing certain types of entitlement program 
(for example, Medicaid). Conditions of federal assistance and 
duties arising from participation in most voluntary federal 
programs would not be considered mandates.
    Committee reports would have to provide information on the 
amount of federal financial assistance that would be available 
to carry out any intergovernmental mandates in the legislation. 
In addition, committees would have to note whether the 
legislation preempts any state or local laws. The requirements 
of the bill would not apply to provisions that enforce the 
constitutional rights of individuals, that are necessary for 
national security, that pertain to Social 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 state, local, and tribal concerns 
are fully considered in the process of promulgating 
regulations. These actions would include the preparation of 
estimates of the anticipated costs of regulations to state, 
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 appropriations...........  .........        4.5        4.5        4.5        4.5        4.5
    Estimated outlays.........................  .........        4.0        4.4        4.4        4.4        4.4
Commission on Unfunded Federal Mandates:                                                                        
    Authorization of appropriations...........        1.0  .........  .........  .........  .........  .........
    Estimated outlays.........................        0.4        0.6  .........  .........  .........  .........
Bill total:                                                                                                     
    Authorization of appropriations...........        1.0        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 the Senate 
Committees on Governmental Affairs and on the Budget.
    On January 12, 1995, CBO transmitted to the House Committee 
on the Rules a cost estimate for H.R. 5, the Unfunded Mandate 
Reform Act of 1995, as ordered reported by that committee on 
January 12, 1995. The estimated cost of all versions of the 
Unfunded Mandate Reform Act of 1995 is the same.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Mary Maginniss.
    12. Estimate approved by: Paul Van de Water, Assistant 
Director for Budget Analysis.

                   VII. Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the House of 
Representatives, the Committee estimates that H.R. 5 will have 
no significant inflationary impact on prices and costs in the 
national economy.

                        VIII. Oversight Findings

    Findings and recommendations by the Committee on Government 
Reform and Oversight pursuant to clause 2(l)(3)(D) of rule XI 
are incorporated into the descriptive portions of this report.

                          IX. Roll Call Votes

    In compliance with clause 2(l)(2)(B) of rule XI, the record 
of roll call votes taken with respect to H.R. 5 is appended in 
this report.

         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;
          (6) the President designates as emergency legislation 
        and that the Congress so designates in statute; or
          (7) pertains to Social Security.

SEC. 423. DUTIES OF CONGRESSIONAL COMMITTEES.

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

SEC. 424. DUTIES OF THE DIRECTOR.

  (a) Statements on Bills and Joint Resolutions Other Than 
Appropriations Bills and Joint Resolutions.--
          (1) Federal intergovernmental mandates in reported 
        bills and resolutions.--For each bill or joint 
        resolution of a public character reported by any 
        committee of authorization of the House of 
        Representatives or the Senate, the Director shall 
        prepare and submit to the committee a statement as 
        follows:
                  (A) If the Director estimates that the direct 
                cost of all Federal intergovernmental mandates 
                in the bill or joint resolution will equal or 
                exceed $50,000,000 (adjusted annually for 
                inflation) in the fiscal year in which such a 
                Federal intergovernmental mandate (or in any 
                necessary implementing regulation) would first 
                be effective or in any of the 4 fiscal years 
                following such year, the Director shall so 
                state, specify the estimate, and briefly 
                explain the basis of the estimate.
                  (B) The estimate required by subparagraph (A) 
                shall include estimates (and brief explanations 
                of the basis of the estimates) of--
                          (i) the total amount of direct cost 
                        of complying with the Federal 
                        intergovernmental mandates in the bill 
                        or joint resolution; and
                          (ii) the amount, if any, of increase 
                        in authorization of appropriations or 
                        budget authority or entitlement 
                        authority under existing Federal 
                        financial assistance programs, or of 
                        authorization of appropriations for new 
                        Federal financial assistance, provided 
                        by the bill or joint resolution and 
                        usable by States, local governments, or 
                        tribal governments for activities 
                        subject to the Federal 
                        intergovernmental mandates.
          (2) Federal private sector mandates in reported bills 
        and joint resolutions.--For each bill or joint 
        resolution of a public character reported by any 
        committee of authorization of the House of 
        Representatives or the Senate, the Director shall 
        prepare and submit to the committee a statement as 
        follows:
                  (A) If the Director estimates that the direct 
                cost of all Federal private sector mandates in 
                the bill or joint resolution will equal or 
                exceed $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 and Estimates of Committees.--Any committee of the 
House of Representatives or the Senate that anticipates that it 
will consider any proposed legislation establishing, amending, 
or reauthorizing any Federal program likely to have a 
significant budgetary impact on any State, local, or tribal 
government, 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 include that information 
in its views and estimates on that proposal to the Committee on 
the Budget of the applicable House pursuant to section 301(d).
  (d) 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.
  (e) Authorization of Appropriations.--There is authorized to 
be appropriated to the Congressional Budget Office to carry out 
this part $4,500,000 for each of fiscal years 1996 through 
2002.

SEC. 425. POINT OF ORDER.

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

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) to a bill or joint resolution reported by a committee of 
authorization.
          * * * * * * *
                              ----------                              


          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.]






































                             MINORITY VIEWS

    The Committee on Government Reform and Oversight met on 
Tuesday, January 10, for the purpose of organizing and marking 
up the H.R. 5, the Unfunded Mandate Reform Act of 1995. The 
Committee Report reflects the fact that the bill was reported 
by a voice vote.
    However, the Report does not reflect many of the procedural 
and substantive problems that caused the bill to get only a 
cursory review in the Committee.
    Many Democrats favor the concept of treading carefully in 
placing additional responsibilities on states and localities 
without providing full funding. In fact, in the 103rd Congress, 
the Committee on Government Operations reported a bill on 
unfunded mandates by a vote of 35-4. It was developed in a 
bipartisan fashion with the support of both the Chairman and 
Ranking Member of that committee, and every major organization 
representing state and local government.
    The process by which the bill was considered in this 
Congress was the antithesis of last year's efforts. As will be 
discussed below, there were no public hearings on the bill. The 
bill was drafted in secret with no consultation with the 
minority. It was introduced on Wednesday, January 4, and 
available in print on Friday, January 6. The markup was held 
four days later.
    The haste in which this bill was considered left a number 
of substantive issues unaddressed, which even the authors 
conceded at markup that they would like to address on the 
Floor.
    Most importantly, a ruling from the Chairman in the middle 
of the markup prohibited Members from offering amendments to 
the operative sections of Title II and III, which are the heart 
of the bill. Those titles establish a point of order for bills 
containing an unfunded mandate, define what is an unfunded 
mandate, include provisions that would require agencies to 
reduce or eliminate enforcement of unfunded mandates without 
full Congressional appropriation of funds (``no money, no 
mandate''), establish the effective date of the statute, and 
place responsibilities upon agencies to identify regulatory 
costs.
    In effect, all that the Committee on Government Reform and 
Oversight voted on was the establishment of a million dollar 
commission to study the costs of unfunded mandates. The 
remainder of the bill was left to the committees receiving a 
brief sequential referral: Rules, Budget, and Judiciary.
    Before detailing the procedural and substantive issues 
raised at the markup, we want to establish a few points about 
unfunded mandates. First, we are keenly sensitive to the issue 
of unfunded mandates. Governors and mayors are rightfully 
concerned that efforts such as a balanced budget amendment and 
other more immediate efforts to reduce government spending not 
be a disguised effort to shift the costs of government programs 
to states and localities. We concur.
    At the same time, we do not necessarily agree that many 
previously enacted laws that may be characterized as unfunded 
mandates are necessarily wrong. Indeed, the authors of the bill 
insist their legislation is intended to be prospective only 
(although we have concerns that the objective has not been 
achieved by the statutory language).
    Many previously enacted statutes that do impose costs on 
states and localities were passed only after years of 
consideration with the broad support of those governmental 
bodies. Support was based on several concepts. First, many 
states wanted to do their share, but needed the Federal 
Government to insure that their neighbors did theirs. 
Environmental laws dealing with air, water, and sewage, for 
example, were designed to protect states from potential damage 
caused by their neighbors.
    Second, states were often prepared to assist in solving 
problems such as developing national databases of child 
molesters or doing background checks on child care center 
operators. The benefits from these programs far outweighed any 
burdens.
    Third, in return for certain unfunded mandates, states also 
received large financial benefits. Cleanups of harbors, 
construction of bridges, roads, and sewage treatment facilities 
were largely funded with Federal dollars and greatly improved 
the lives of American citizens.
    Fourth, many of the unfunded mandates placed on localities 
and the private sector were enacted by state governments. 
Localities have also imposed unfunded mandates on the private 
sector. Like Congress, both states and localities have found 
mandates a convenient way to achieve important goals with 
limited funds. Thus, resolution of the unfunded mandated 
dilemma can only be achieved with the cooperation of state and 
local governments.
    While Congress should carefully scrutinize any unfunded 
mandate, and must be required to evaluate both the costs and 
benefits of such laws, we must not totally hamstring our 
ability to pass laws that need to be passed. Unfortunately, the 
bill as drafted may do just that.
    The remainder of these views will discuss the unprecedented 
procedural abuses we encountered in the consideration of this 
bill and the substantive concerns which remain unaddressed.

 procedural abuses in the consideration of this legislation prevented 
                          fair and open debate

No hearings on the bill

    On Tuesday, January 3, one day before the opening of the 
104th Congress, the minority staff was informed by the majority 
staff that the unfunded mandates legislation would be 
considered on Tuesday, January 10, on the same day as the 
organizational meeting of the Committee.
    The following day, January 4, Ranking Member Cardiss 
Collins met with Chairman Clinger and gave him a letter 
requesting public hearings and sufficient time to review the 
legislation. The letter read:

                          House of Representatives,
              Committee on Government Reform and Oversight,
                                   Washington, DC, January 3, 1995.
Hon. William F. Clinger, Jr.,
Rayburn House Building,
Washington, DC.
    Dear Mr. Chairman-Elect: Today your staff informed my staff 
that it was your intention to mark up a bill on unfunded 
mandates on Tuesday, January 10, at the conclusion of the 
Committee's organizational meeting. I must strongly object to 
this highly unusual procedure, and urge you to consider a 
procedure that will permit thoughtful consideration by all 
Members of the Committee.
    There is a clear opportunity for bipartisan cooperation on 
this legislation, as there was in the previous Congress, but 
not under the timetable that has been proposed. Legislation of 
significance should receive appropriate hearings, at which the 
minority can exercise its rights to invite witnesses. 
Regardless of actions in the 103rd Congress, there have never 
been hearings on the legislation being proposed in this 
Congress. More importantly, over half of the Members of the 
Committee did not serve on the Committee in the last Congress, 
and they will have a very limited understanding of the bill.
    Scheduling a mark up on a bill that neither I, nor other 
minority members, have had an opportunity to review appears to 
be sending all the wrong signals about how the minority will be 
treated. The bill has not even been introduced, referred to the 
Committee, nor referred to the appropriate subcommittee. When I 
met with you, I pledged to work cooperatively. In order to do 
so, minority members deserve the right to review legislation 
and propose constructive changes. There is nothing about this 
bill that would justify these expedited procedures.
    I look forward to working with you during this Congress, 
and I strongly urge you to follow regular procedures that 
recognize the rights of all the Members of the Committee to 
review legislation.
            Sincerely,
                                           Cardiss Collins,
                                      Ranking Minority Member-Elect

    On Friday, January 6, Chairman Clinger wrote to the Ranking 
Member to deny the request for hearings:

                          House of Representatives,
              Committee on Government Reform and Oversight,
                                   Washington, DC, January 6, 1995.
Hon. Cardiss Collins,
Ranking Minority Member, Committee on Government Reform and Oversight, 
        Washington, DC.
    Dear Ranking Member Cardiss Collins: I want to respond to 
your letter of January 3, 1995 in which you express concerns 
about my intention to mark-up H.R. 5 ``The Unfunded Mandate 
Reform Act of 1995'' on January 10, 1995.
    As discussed in our previous meetings, this bill is on an 
expedited schedule due to commitments made by our members and 
leadership to the American public. The unfunded mandates bill 
is included as part of the ``Contract With America'' in which 
our leadership committed that such legislation would be 
considered by the House no later than 100 days after the 
beginning of the 104th Congress. In order to achieve this goal, 
and with the timing of the floor schedule, the Committee on 
Government Reform and Oversight has been asked to move this 
bill as quickly as possible.
    The bill was introduced on January 4, and your staff was 
provided a copy prior to formal introduction. Frankly, it was 
my original intent to hold both the organizational meeting and 
mark-up on January 5; however, after our earlier discussion I 
moved the meeting to January 10.
    I should note that the Committee held several hearings on 
this issue as well as on a similar bill last session. In 
addition, a similar bill passed out of this Committee during 
the waning days of the session but due to a series of delays by 
the majority party, it was not allowed to reach the floor for 
consideration before the close of the session. The majority of 
Democrat members of the new Committee did serve on the previous 
Committee, and participated in these hearings and mark-ups.
    I look forward to working with you and your members 
cooperatively. I can assure you that I will make every attempt 
to provide as much notice as I can in the future for the review 
of legislation, and that it is my intention to schedule 
hearings prior to mark-ups of future legislation.
            Sincerely,
                                           William F. Clinger, Jr.,
                                                              Chairman.
    The fact that two hearings were held on the subject of 
unfunded mandates in the last Congress is irrelevant. The bill 
that was introduced on January 4, 1995 is a new bill. It is 
different from any bill considered in the previous Congress.
    Moreover, a majority of the Members of the Committee on 
Government Reform and Oversight did not serve on the Committee 
on Government Operations in the previous Congress. On the 
Republican side, there are 16 freshman members, along with four 
members who transferred from other committees. On the 
Democratic side, 11 Members did not serve on the Committee last 
Congress. In short, 31 out of 51 members are new to the 
Committee.
    The request for public hearings is not a matter of 
procedure alone. Key groups that are affected by mandates had 
no chance to be heard in the debate. These include ordinary 
citizens who may benefit from clean water and air, who have 
children receiving special education or immunizations, or who 
have parents receiving social security benefits. They include 
workers who receive the benefits of workplace protections, and 
minimum wage laws. They include private companies that are 
concerned by the competitive disadvantage that they would face 
if publicly owned competitors were not required to comply with 
the same laws with which they comply. They also include 
government agency officials.
    Ironically, the Chairman ultimately did hold a de facto 
hearing at the mark up in violation of Rule XI, as we will 
discuss below.

Members Had an Inadequate Opportunity to Review the Bill

    The Ranking Member and the minority staff were given a 
xeroxed copy of the bill from the majority staff late in the 
afternoon on Wednesday, January 4. The minority xeroxed further 
copies which were distributed to most minority members on 
January 5. The actual printed version of H.R. 5 was not 
available until Friday, January 6. The markup was held two 
legislative days later on Tuesday, January 10.
    The limited time for reading the bill, receiving comments 
on the bill, and drafting amendments, seriously impinged upon 
the Members' ability to craft thoughtful amendments.
    Most importantly, the bill presents no issue that required 
such an urgent timetable. The bill could not be considered 
emergency legislation. In fact, the bill has an effective date 
of October 1, 1995, not date of enactment, which indicates that 
there was not an intention to pass the bill quickly so as to 
affect legislation immediately.
    The markup began with the acceptance of testimony by Rep. 
Rob Portman, not a Member of the Committee, constituting an 
illegal hearing under the Committee Rules and the House Rules.
    After an opening statement by the Chairman and Ranking 
Member, the Chairman recognized Representative Rob Portman, not 
a member of the Committee, who was seated at the clerk's table, 
to make a statement concerning the bill.
    Minority Members made points of order contending that the 
Chair had no right to recognize Members who were not Members of 
the Committee to make statements. A point of order was made 
that the acceptance of the Portman testimony constituted a 
hearing that violated both Committee Rules and the House Rules. 
A point of order was made that the decision to accept testimony 
from Representative Portman denied the minority their right 
under Rule XI, clause 2(j)(1) to call witnesses selected by the 
minority. Members also requested an opportunity to question 
Representative Portman, which was denied, despite Rule XI, 
clause 2(j)(2) which provides an opportunity to Members of the 
Committee to ask questions under the 5-minute rule.
    In each case, the Chair ruled against the points of order, 
with the justification that the Chair has the prerogative to 
recognize whomever he chooses.
    At the end of Representative Portman's testimony, he 
thanked the Chair for ``holding this hearing.''
    Members were denied a fair opportunity to debate and amend 
the Moran Amendment in the Nature of a Substitute.
    At the beginning of the markup, after the reading of 
section 1 of the bill, Representative Moran offered an 
amendment in the nature of a substitute. Discussion of the 
amendment began despite the fact that the amendment had not yet 
been read. This problem was brought to the attention of the 
Chair.
    After very limited debate, Representative Burton moved the 
previous question, and a point of order was raised by 
Representative Waxman, Representative Towns, and others that 
the amendment had not yet been read, and that, therefore there 
had been no opportunity to offer amendments to the Moran 
amendment. The point of order was denied. Subsequently, a point 
of order raised after the previous question had been ordered 
was denied because it came too late. The Chair appeared to rule 
that the fact that debate had begun on the Moran amendment 
prior to its reading, a point of order did not lie that the 
amendment had not been read. There is no precedent of which we 
are aware for such a decision.

The Kanjorski Substitute Was Incorrectly Ruled Out of Order

    After the amendment of Representative Moran was defeated, 
Representative Kanjorski was recognized. He stated that he had 
a substitute at the desk, and in response to questions from the 
Chair indicated that it was different from the Moran amendment.
    The Chair ruled that based upon discussions with the 
Parliamentarian, only one substitute could be offered during 
the consideration of section 1, and one substitute could be 
offered at the end of the bill. A point of order was made 
against the ruling, noting that under House Rules, unlimited 
substitutes could be offered, assuming previous substitutes 
were defeated. It was denied.
    We subsequently were advised by the Parliamentarian that 
multiple substitutes were in order.

The Chair Incorrectly Ruled that Amendments to Title II (Sections 201 
        and 202) and Title III would be Ruled Out of Order

    In the middle of the markup, the Chair ruled that based 
upon advice of the Parliamentarian, the Committee would not be 
allowed to offer amendments to sections 201 and 202, and 
sections 301, 302, and 303. The ruling was subsequently amended 
to include all of Title III, and then amended again to provide 
committee jurisdiction over the new section 424(e) of the 
Congressional Budget Act of 1974 as added by section 301 of 
H.R. 5.
    The ruling had the effect of permitting the Committee only 
to consider the one year study commission in title I, the 
bill's definitions, purposes, and exclusions. The main portions 
of the bill which define unfunded mandates and establish a 
point of order against bills that fail to provide various 
budget analyses and an ability for agencies to ignore 
enforcement of unfunded mandates, as well as the provisions 
relating to agency regulatory analyses were placed off limits. 
Under the Chair's ruling, the Committees on Budget, Rules, and 
Judiciary, which received only a very limited sequential 
referral would be responsible for considering these key 
provisions. Under the ruling, the Committee could not even 
consider changing the effective date contained in section 306.

Conclusion

    The Tuesday markup of H.R. 5 was the first markup of the 
104th Congress, and therefore the first markup conducted by the 
Chair. We do not wish that these procedural concerns be 
considered as a personal attack on the Chair. Indeed, we do not 
question the Chair's personal motives. However, all of these 
abuses were the direct result of the apparent orders to the 
Chair to move the bill out of the Committee at all costs. (As 
the letter from the Chairman quoted above states, because of 
the pledge to enact laws within 100 days, ``the Committee on 
Government Reform and Oversight has been asked to move this 
bill as quickly as possible.'') It is clear that the effort to 
bring the bill as quickly as possible was accomplished by 
trampling the rights of the minority under the House Rules.

questions remain unanswered about the scope of the bill and its impacts 
                        upon the American people

Will the Bill Permit a Majority Vote on Points of Order or Will the 
        Bill Allow a Single Member to Thwart Passage of a Bill Deemed 
        an Unfunded Mandate

    Section 2, Purposes, states that one of the purposes of the 
bill is:

          (5) To establish a point-of-order vote on the 
        consideration in the Senate and House of 
        Representatives of legislation containing significant 
        Federal mandates.

    During the course of Committee consideration, the Chair and 
many Members of the majority stated that the intent of the 
authors of the bill was not to ban unfunded mandates, but to 
force a special vote on the issue, so that Members would have 
to go on record as supporting a provision despite the cost 
estimates available that indicated that the mandate was 
unfunded.
    However, the bill does not appear to accomplish this 
purpose. To the contrary, there is no right to demand a vote on 
a point of order, and under the proposed new section 426 of the 
Budget Act of 1974, it would not be in order to consider a rule 
that waived points of order based upon a provision being an 
unfunded mandate.
    Some have contended that the Rules Committee could report a 
rule waiving the application of section 426 with respect to a 
second rule which waived the section 425(a) point of order. 
While this is theoretically possible, this would not establish 
a point-of-order vote. Unless the Rules Committee which has a 
two-to-one ratio of Republicans to Democrats agreed to this 
extraordinary procedure, the proponent of the provision could 
not get a vote on the point of order issue.
    We were encouraged that the Chair indicated that his intent 
was to provide for a Floor vote on points of order and would 
work with us to achieve that result. However, the ruling that 
amendments to title III were not in order precluded our right 
to ensure a point-of order vote.

Despite the Intentions of the Bill's Authors to Apply the Bill Only to 
   Prospective Laws, the Bill's Application to Existing Laws Remains 
                               Ambiguous

    During the course of the Committee debate, Members from 
both sides of the aisle expressed concern that the bill not 
affect existing laws and regulations that could be interpreted 
as unfunded mandates. Members expressed concerns that laws 
protecting health and safety and the environment not be 
repealed or rolled back. There are dozens of important laws 
that could fall under the broad definition of intergovernmental 
mandates in this law.
    The authors of the bill note that the procedural points of 
order only apply to bills after the effective date of the bill, 
which in the introduced version is October 1, 1995. However, 
there is considerable question about the effect of the bill on 
the reauthorization of existing laws. Amendments to the bill to 
clarify that the reauthorizations were excluded from the 
coverage of the bill were defeated.
    It was noted that the new section 421(7)(C) of the budget 
Act, ``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'' are excluded from the 
definition of direct costs.
    However, while this suggested that perhaps a simple 
reauthorization of an existing program might be excluded, 
questions remained. For example, suppose there was a time lapse 
between the expiration of the existing law, and the 
reauthorization. Would this constitute a new mandate?
    Other questions also persisted. Suppose, for example, that 
new regulations on sewage treatment were proposed based upon 
existing law. Would that be covered? Suppose the 
reauthorization included provisions altering the funding 
formula, but not necessarily the overall funds. Would that 
constitute a mandate. What happens if the reauthorization adds 
new requirements to prevent fraud and abuse?
    Representative Green properly questioned why the definition 
of ``Federal intergovernmental mandate'' in title III includes 
``any provision in legislation, statute, or regulation'' if the 
intent of the bill is to be prospective only. If that were the 
case, the definition would only consider legislation (which is 
a prospective law), not statutes or regulations (which by 
definition have already been passed). Due to the ruling of the 
Chair, this definition could not be amended.
    Although the Chair promised to work with the minority on 
this issue, we remain concerned that existing mandates with 
widespread support, from clean air to safe drinking water, from 
criminal justice reforms to education programs, could be 
jeopardized by the bill.

Why shouldn't the bill be made effective upon date of enactment

    The bill's effective date is October 1, 1995. Over the 
coming months, the Congress is likely to consider numerous 
bills which could drastically cut funds available to states and 
localities to pay for various Federal programs. These bills, 
which could likely be considered unfunded mandates, could have 
exactly the consequences that the bill's authors are attempting 
to avoid. We can find no explanation for the delay in the 
effective date.

Why did the sponsors exclude certain mandates, such as national 
        security, but not others

    Section 4 of the bill, and the new section 422 of the 
Budget Act of 1974 list certain mandates, such as those 
necessary for the national security, as excluded from the 
application from the bill. Yet during the course of 
consideration of the bill, only an amendment to exclude Social 
Security was adopted. Among the amendments that were not 
adopted were:
          An amendment by Representative Maloney to exclude 
        laws protecting the health of infants, children, 
        pregnant women, and the elderly;
          Amendments by Representative Kanjorski to exclude 
        laws relating to securities regulations, such as the 
        sale of derivatives, and laws establishing data bases 
        that identify child molesters, child abusers, persons 
        convicted of sex crimes, persons under restraining 
        orders, or persons who fail to pay child support;
          An amendment by Representative Taylor to exclude laws 
        relating to sewage treatment;
          An amendment by Representative Sanders on laws 
        relating to minimum standards for labor protections;
          An amendment by Ranking Member Collins of Illinois to 
        exclude laws relating to airport security;
          Amendments by Representative Spratt to exclude laws 
        relating to Medicare and nuclear regulation; and
          An amendment by Representative Barrett to exclude 
        sentencing guidelines.
    It is difficult to see the logic in excluding laws which 
would seek to transfer the burden for our national defense to 
the states from the application of the bill, but not exclude 
laws which are designed to protect all Americans such as those 
described above. During the course of debate, it was contended 
the law merely requires an affirmative vote for unfunded 
mandates, but as the discussion above indicates, unless the law 
is amended, protections of average Americans, children, 
seniors, pregnant mothers, and others could be jeopardized.

Extending the bill's provisions to laws of general applicability to the 
        private sector could lead to undesired consequences

    The definition of an intergovernmental mandate is so broad 
that many laws directed at the private sector could be thwarted 
because of their indirect effect upon the public sector. In 
addition, in cases where the private sector competes with the 
public sector in enterprises such as power generation, the 
private sector enterprises could be placed at a competitive 
disadvantage.
    Some examples of these laws were brought up at the hearing. 
An increase in the minimum wage law could be defeated by a 
point of order if funds were not provided to pay for the 
increased costs for state and local employees, unless the law 
exempted state and local employees.
    Laws designed to protect investors in derivatives could be 
thwarted if they were made applicable to municipal purchasers 
if it could be found to be an unfunded mandate.
    Laws which establish various protections for workplace 
safety would either have to fund state or local government 
costs of compliance or exempt those governments from 
compliance.
    These results seem directly contrary to two principles that 
have broad support in the Congress. First, the House approved 
H.R. 1, the Congressional Accountability Act to make a variety 
of private sector laws applicable to Congress. Why are we now 
passing a law that would provide one set of protections to 
private sector workers and fewer protections to public sector 
workers?
    Second, why are we giving public sector enterprises, such 
as power generators, natural gas pipelines, and waste treatment 
facilities a competitive advantage over private sector 
enterprises? If this unequal treatment is not resolved, it is 
foreseeable that private sector enterprises will over time be 
converted to public sector enterprises.

Mandates designed to protect states from harmful effects caused by 
        neighboring States should be excluded from this act.

    An amendment by Ranking Member Collins of Illinois was 
defeated that would exclude from the application of the bill 
laws that regulated the conduct of States, local governments, 
or tribal governments with respect to matters that 
significantly impact the health or safety of residents of other 
States, local governments, or tribal governments, respectively.
    Certain Federal laws that place costs on governments are 
designed to protect residents of neighboring states. For 
example, as Representative Taylor of Mississippi described 
during the markup, the people of his district located at the 
base of the Mississippi River are deeply affected by the ways 
in which states along the Mississippi treat their sewage. 
Unless the Federal government was willing to pay the polluting 
states for the cost of their waste treatment, the Federal 
government could not protect the victims of this pollution in 
neighboring states.

Why shouldn't the polluter pay? Why should this be the responsibility 
        of the victimized state's residents?

    This is not a hypothetical situation. All over the country, 
there is dumping of raw sewage and hospital wastes. 
Incinerators are blowing toxic smoke over state lines. Unless 
the Federal government can act to protect citizens from the 
pollution caused by their neighboring states, the health and 
safety of the American people will be jeopardized.

Why are appropriations acts excluded from the application of the bill

    One of the more likely examples of an unfunded mandate is 
an appropriations bill that fails to fully fund a Federal 
mandate. Yet the bill excludes appropriations acts from the 
applicability of the legislation. It is unclear why we would 
want to exempt this broad category of laws. To the contrary, 
Members should receive a full accounting from the 
Appropriations Committee and the Congressional Budget Office 
concerning the level to which the appropriations fail to 
adequately fund mandates on state and local governments.

Why should we create a new federal bureaucracy to study unfunded 
        mandates

    Title I of the bill establishes an entirely new Commission 
with funding of $1 million to study the costs of unfunded 
mandates. Americans have expressed an interest in less 
government, not more government, yet the first bill that our 
Committee reports establishes another new government body.
    After an amendment by Representative Meek to eliminate this 
new Commission was defeated, she offered a second amendment to 
transfer the functions to the already existing Advisory 
Committee on Intergovernmental Relations. At the request of 
Chairman Clinger, Representative Meek withdrew this amendment.
    The new Commission would also establish a troubling 
precedent. The bill calls for the Speaker and Senate Majority 
Leader to each appoint 3 members of the Commission, after 
consultation with the Minority Leaders. An amendment offered by 
Representative Waxman to have the Speaker and Senate Majority 
Leader each appoint 2 members, and the Minority Leaders to each 
appoint 1 member, as current laws operate, was defeated.

Summary

    As described above, many Democrats favor increased scrutiny 
of unfunded mandates. Particularly at a time when the Federal 
government is seeking to reduce its deficits, the lure of cost 
shifting to the states must be resisted.
    However, in fashioning a responsible bill on mandates, 
there are important details that have not been carefully 
addressed. It must be understood that Americans do not wish to 
see many programs that are designed to protect their health and 
safety dismantled because they have now been labelled an 
unfunded mandate.
    In the end the advisability of passing any law cannot be 
solely determined by a cost estimate by the Congressional 
Budget Office. Not only are such estimates difficult to make, 
as the Director of CBO has pointed out, but the other side of 
the equation must be addressed: namely, the benefits that the 
legislation will yield.
    We must legislate responsibly, particularly in this field. 
We, not the Director of CBO, must ultimately take 
responsibility for our actions. While we should require as much 
information as possible in making our decisions, legislation on 
this subject must be carefully drafted to avoid unanticipated 
consequences.
    One of the purposes of H.R. 5 is ``to promote informed and 
deliberate decisions by Congress on the appropriateness of 
Federal mandates in any particular instance.'' Unfortunately, 
in their haste to enact provisions of the ``Contract With 
America'', the majority has precluded the kind of informed and 
deliberate decisionmaking process it professes to promote.
                                   Cardiss Collins.
                                   Henry A. Waxman.
                                   Tom Lantos.
                                   Robert E. Wise.
                                   Major R. Owens.
                                   Edolphus Towns.
                                   John M. Spratt.
                                   Louise Slaughter.
                                   Carolyn B. Maloney.
                                   Thomas M. Barrett.
                                   Eleanor Holmes Norton.
                                   Gene Green.
                                   Carrie P. Meek.
                                   Frank Mascara.
                                   Chaka Fattah.