[Senate Report 104-2]
[From the U.S. Government Publishing Office]



   104th Congress 1st            SENATE                 Report
         Session
                                                        104-2
_______________________________________________________________________

                                     

                                                        Calendar No. 12
 
                 UNFUNDED MANDATE REFORM ACT OF 1995

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                                   on

                                  S. 1

                             together with

                     ADDITIONAL AND MINORITY VIEWS




 January 12 (legislative day, January 10), 1995.--Ordered to be printed
                        COMMITTEE ON THE BUDGET

  PETE V. DOMENICI, New Mexico, 
             Chairman
                                     CHARLES E. GRASSLEY, Iowa
                                     DON NICKLES, Oklahoma
                                     PHIL GRAMM, Texas
                                     CHRISTOPHER S. BOND, Missouri
                                     TRENT LOTT, Mississippi
                                     HANK BROWN, Colorado
                                     SLADE GORTON, Washington
                                     JUDD GREGG, New Hampshire
                                     OLYMPIA J. SNOWE, Maine
                                     SPENCER ABRAHAM, Michigan
J. JAMES EXON, Nebraska              BILL FRIST, Tennessee
ERNEST F. HOLLINGS, South Carolina
J. BENNETT JOHNSTON, Louisiana
FRANK R. LAUTENBERG, New Jersey
PAUL SIMON, Illinois
KENT CONRAD, North Dakota
CHRISTOPHER J. DODD, Connecticut
PAUL S. SARBANES, Maryland
BARBARA BOXER, California
PATTY MURRAY, Washington
    G. William Hoagland, Staff 
             Director
  William G. Dauster, Democratic 
 Chief of Staff and Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose..........................................................1
 II. Background.......................................................2
III. Legislative history..............................................5
 IV. Section-by-section analysis......................................6
  V. Regulatory impact statement.....................................17
 VI. CBO cost estimate...............................................18
VII. Rollcall votes in committee.....................................20
VIII.
     Views of members of the committee...............................23
 IX. Changes in existing law.........................................29
                                                        Calendar No. 12
104th Congress                                                   Report
                                 SENATE

 1st Session                                                      104-2
_______________________________________________________________________


                  UNFUNDED MANDATE REFORM ACT OF 1995

                                _______


 January 12 (legislative day, January 10), 1995.--Ordered to be printed

_______________________________________________________________________


 Mr. Domenici from the Committee on the Budget submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                               I. Purpose

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

                             II. Background

    The controversies that arise between the respective powers 
of the Federal government and the States date back to the 
country's origins. Concern about the cost and extent of Federal 
mandates on State, local governments, and Indian tribes as well 
as the private sector first reached its peak in the late 1970s.
    With respect to State and local mandates, the Senate Budget 
Committee acted in 1980 and again in 1981, culminating in the 
enactment of the State and Local Government Cost Estimate Act 
of 1981. This law required the Congressional Budget Office 
(CBO) to prepare State and local cost estimates, but did not 
provide for any legislative enforcement procedures.
    Since the enactment of the State and Local Government Cost 
Estimate Act, CBO has had 12 years of experience in preparing 
State and Local cost estimates. During this period, CBO has 
examined 6,690 pieces of legislation for the impact of Federal 
mandates. Twelve percent, or roughly 800 bills, contained some 
impact on State and local governments. A year-by-year summary 
of the number of estimates prepared by CBO is displayed in the 
following table.

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

    Although these past legislative efforts were designed to 
monitor and, presumably, to curtail the growth of Federal 
mandates, Federal mandates have grown while Federal resources 
to cover the costs of these mandates have shrunk.
    While it is difficult to produce precise estimates of the 
costs of mandates, there is little doubt that these costs have 
grown and represent a sizeable proportion of the economy. One 
of the purposes of S. 1 is to, in fact, create a mechanism for 
better and more current accounting of these costs. One study 
prepared for the GSA Regulatory Information Service Center in 
1992 found the cost of Federal mandates to State and local 
governments and the private sector was estimated to amount to 
$581 billion, or roughly 10 percent of GDP. According to the 
Vice President's report, The National Performance Review, the 
private sector alone spends $430 billion each year to comply 
with Federal regulations.
    During a joint hearing with the Senate Governmental Affairs 
Committee on January 5, 1995, the Budget Committee heard these 
concerns from State and local officials regarding the cost of 
the mandates and the damaging impact of these mandates to our 
system of government. According to the National League of 
Cities, over the past two decades, the Congress has enacted 185 
new laws imposing mandates on state and local governments.
    In that hearing, the Mayor of Philadelphia, Edward Rendell, 
on behalf of the U.S. Conference of Mayors, testified that 314 
cities will spend an estimated $54 billion over the next five 
years to comply with only 10 of these Federal mandates. His 
testimony included the following remarks on how Federal 
mandates severely diminish local government's ability to 
establish priorities:

          The problem with unfunded Federal mandates is that 
        the Federal government has turned State and local 
        officials into Federal tax collectors. We collect the 
        taxes to implement Federal priorities and as a result 
        we are not able to establish and fund local priorities.
          * * * In my city when I became mayor, we had 19 tax 
        increases in 11 years prior to my becoming mayor, and 
        we still had a quarter of a billion dollar deficit, and 
        we had driven 30 percent of our tax base out of the 
        city.
          So as a practical matter, I could not raise taxes to 
        meet the new demands and mandates.

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

                        III. Legislative History

    Senator Kempthorne introduced S. 1, the Unfunded Mandate 
Reform Act of 1995, on January 4, 1995.
    S. 1 is based on similar legislation the Senate 
Governmental Affairs Committee reported last Congress. Senator 
Kempthorne introduced S. 993 on May 20, 1993 and this 
legislation was reported by the Governmental Affairs Committee 
on August 10, 1994. The Senate considered S. 993 on October 6, 
1994, but no final action was taken on the bill during the 
103rd Congress.
    S. 993 as reported by the Governmental Committee proposed a 
number of changes in matters that are within the jurisdiction 
of the Senate Budget Committee. Pursuant to section 306 of the 
Budget Act, any legislation that affects any matter within the 
jurisdiction of the Budget Committee is subject to a point of 
order unless it is reported by the Budget Committee. This point 
of order can only be waived by an affirmative vote of 60 
Senators.
    On November 29, 1994, Senators Domenici and Exon wrote 
Senators Roth and Glenn regarding the consideration of unfunded 
mandates legislation and the Budget Committee's jurisdiction 
over this legislation (a copy of the letter follows).

                                       U.S. Senate,
                                   Committee on the Budget,
                                 Washington, DC, November 29, 1994.
Hon. William V. Roth, Jr.,
Hon. John Glenn,
Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Bill and John: We expect the Senate to consider 
legislation early in the session regarding Federal mandates on 
State and local governments and the private sector. We may 
initiate such legislation in the Budget Committee and we want 
to work with you to assure that any state, local, or private 
sector mandate legislation moves quickly and is a constructive 
improvement to the congressional budget process.
    Such legislation raises budget and economic issues that the 
Budget Committee must confront in writing a federal budget each 
year. Moreover, most versions of this legislation contain a 
significant expansion in the Congressional Budget Office's 
responsibilities. In the past, our committees have worked 
jointly on such legislation. In 1981, our two committees both 
reported legislation that led to the enactment of the State and 
Local Government Cost Estimate Act.
    Some versions of this legislation may be referred to the 
Budget Committee under the standing order governing referral of 
budget-related legislation. If the Budget Committee does not 
report such legislation and it includes provisions affecting 
the Congressional Budget Office or the congressional budget 
process, such legislation could be in jeopardy under section 
306 of the Budget Act.
    We want to work with you to assure such legislation is 
considered expeditiously. Should you have any questions, please 
do not hesitate to contact us or our staff (Bill Hoagland at 4-
0539 and Bill Dauster at 4-3961).
            Sincerely,
                                   J. James Exon.
                                   Pete V. Domenici.
    During December, the Budget Committee worked with the 
Governmental Affairs Committee and Senator Kempthorne to 
develop the legislation that was introduced as S. 1. The Senate 
Budget Committee worked to make the following three 
modifications to S. 993, which are now reflected in S. 1:
          1. Strengthened the point of order in the bill so 
        that it would apply to all legislation (bill, joint 
        resolution, amendment, motion or conference reports) 
        and not just reported bills;
          2. Reduced the costs to the Congressional Budget 
        Office (CBO) for its new duties required by the bill by 
        50 percent (from $8-10 million down to $4.5 million); 
        and,
          3. Strengthened the bill by incorporating this new 
        mandate control process into the Congressional Budget 
        Act and the Congressional budget process.
    On January 5, the Budget Committee held a joint hearing 
with the Governmental Affairs Committee. On January 9, the 
Governmental Affairs Committee voted 9-4 to report the bill, S. 
1, with three amendments. On the same day, after the 
Governmental Affairs action, the Budget Committee also voted by 
a vote of 21-0 to report S. 1 with four amendments.

                    IV. Section-by-Section Analysis

Section 1. Short title

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

Section 2. Purposes

    This section establishes the purpose of the Act.

Section 3. Definitions

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

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

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

Section 4. Exclusions

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

Section 5. Agency assistance

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

             TITLE I--LEGISLATIVE ACCOUNTABILITY AND REFORM

Section 101. Legislative mandate accountability and reform

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

Section 102. Enforcement in the House of Representatives

    This section specifies the procedures to be followed in the 
House of Representatives in enforcing the provisions of this 
Act.

Section 103. Assistance to committees and studies

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

Section 104. Authorization of appropriations

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

Section 105. Exercise of rulemaking powers

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

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

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

Section 107. Effective date

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

             title II--regulatory accountability and reform

Section 201. Regulatory process

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

Section 202. Statements to accompany significant regulatory actions

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

Section 203. Assistance to the Congressional Budget Office

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

Section 204. Pilot program on small government flexibility

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

Section 301. Baseline study of costs and benefits

    This section establishes a Commission on Unfunded Federal 
Mandates.

Section 302. Report on unfunded Federal mandates by the commission

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

Section 303. Membership

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

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

    This section provides for the appointment of the staff and 
Director of the Commission.

Section 305. Powers of commission

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

Section 306. Termination

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

Section 307. Authorization of appropriations

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

Section 308. Definition

    This section defines the term ``unfunded federal mandate'', 
as used in title III.

Section 309. Effective date

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

                       Title IV--Judicial Review

Section 401. Judicial review

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

                     V. Regulatory Impact Statement

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

                         VI. CBO Cost Estimate

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

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

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

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

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

                    VII. Rollcall Votes in Committee

    Pursuant to paragraph 7 of rule XXVI of the Standing Rules 
of the Senate, each committee is to announce the results of 
rollcall votes taken in any meeting of the committee on any 
measure or amendment. The Senate Budget Committee met on 
Monday, January 9, 1995, at 2 pm to mark up S. 1. The following 
rollcall votes occurred on S. 1 and amendments proposed 
thereto:
    (1) The Boxer amendment to sunset S. 1 on January 1, 1998. 
The amendment was not agreed to: 9 yeas, 12 nays.
        YEAS:                         NAYS:
Mr. Exon                            Mr. Domenici
Mr. Hollings \1\                    Mr. Grassley \1\
Mr. Lautenberg \1\                  Mr. Nickles \1\
Mr. Simon                           Mr. Gramm \1\
Mr. Conrad                          Mr. Bond \1\
Mr. Dodd                            Mr. Lott \1\
Mr. Sarbanes \1\                    Mr. Brown
Mrs. Boxer                          Mr. Gorton
Mrs. Murray                         Mr. Gregg
                                    Ms. Snowe
                                    Mr. Abraham
                                    Mr. Frist

    (2) The Boxer amendment to sunset S. 1 on January 1, 2000. 
The amendment was not agreed to 9 yeas, 12 nays.
        YEAS:                         NAYS:
Mr. Exon                            Mr. Domenici
Mr. Hollings \1\                    Mr. Grassley \1\
Mr. Lautenberg \1\                  Mr. Nickles \1\
Mr. Simon                           Mr. Gramm \1\
Mr. Conrad                          Mr. Bond \1\
Mr. Dodd                            Mr. Lott \1\
Mr. Sarbanes \1\                    Mr. Brown
Mrs. Boxer                          Mr. Gorton
Mrs. Murray                         Mr. Gregg
                                    Ms. Snowe
                                    Mr. Abraham
                                    Mr. Frist

    (3) The Boxer amendment to sunset S. 1 on January 1, 2002. 
The amendment was not agreed to 9 yeas, 12 nays.
        YEAS:                         NAYS:
Mr. Exon                            Mr. Domenici
Mr. Hollings \1\                    Mr. Grassley \1\
Mr. Lautenberg \1\                  Mr. Nickles \1\
Mr. Simon                           Mr. Gramm \1\
Mr. Conrad                          Mr. Bond \1\
Mr. Dodd                            Mr. Lott \1\
Mr. Sarbanes \1\                    Mr. Brown
Mrs. Boxer                          Mr. Gorton
Mrs. Murray                         Mr. Gregg
                                    Ms. Snowe
                                    Mr. Abraham
                                    Mr. Frist

    (4) Motion to report S. 1, as amended. The motion was 
adopted: 21 yeas, 0 nays.
        YEAS:                         NAYS:
Mr. Domenici
Mr. Grassley \1\
Mr. Nickles \1\
Mr. Gramm \1\
Mr. Bond \1\
Mr. Lott \1\
Mr. Brown
Mr. Gorton
Mr. Gregg
Ms. Snowe
Mr. Abraham
Mr. Frist
Mr. Exon
Mr. Hollings \1\
Mr. Lautenberg \1\
Mr. Simon
Mr. Conrad
Mr. Dodd
Mr. Sarbanes \1\
Mrs. Boxer
Mrs. Murray

    (5) Motion that the Committee report S. 1 without filing a 
written report. The motion was agreed to: 12 yeas, 9 nays.
        YEAS:                         NAYS:
Mr. Domenici                        Mr. Exon
Mr. Grassley \1\                    Mr. Hollings \1\
Mr. Nickles \1\                     Mr. Lautenberg \1\
Mr. Gramm \1\                       Mr. Simon
Mr. Bond \1\                        Mr. Conrad \1\
Mr. Lott \1\                        Mr. Dodd
Mr. Brown                           Mr. Sarbanes \1\
Mr. Gorton                          Mrs. Boxer
Mr. Gregg                           Mrs. Murray
Ms. Snowe
Mr. Abraham
Mr. Frist

    \1\ Indicates a vote by proxy.
                VIII. Views of Members of the Committee

                              ----------                              


                   ADDITIONAL VIEWS OF SENATOR CONRAD

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

                                                       Kent Conrad.
                  ADDITIONAL VIEWS OF SENATOR JIM EXON

    I support S. 1, the unfunded mandates legislation of which 
I am an original co-sponsor. Unfunded mandates are not merely a 
thorn in the side of the nation's governors and state and local 
officials, they have burrowed deep into the nation's landscape 
and present a problem of the utmost gravity.

                               The Report

    Although I am an ardent supporter of this legislation I 
feel compelled to criticize the procedure under which it was 
taken up.
    The Senate Budget Committee met on January 9th to mark up 
this legislation. We adopted 8 amendments in the committee. At 
the end of the markup, I asked Chairman Domenici whether we 
would be filing a report on this important measure. Senator 
Domenici answered that the Republican leader had asked that the 
committee not file a report, so as to expedite the Senate's 
consideration of the bill by Wednesday morning, January 11th. 
Several members on our side of the table objected to this 
procedure.
    Senator Domenici then made a motion that the committee 
report the bill without a report. The committee adopted that 
motion on a straight party-line vote of 12-9. The following 
evening, January 10th, the majority asked us whether they could 
file a report on the following night, on the condition that 
there be no objection to shortening the normal 3 day period for 
the submission of minority views. Two Senators objected to that 
request. They wanted the full 3 days to do their minority views 
and review the report. The majority then filed a statement in 
the record in lieu of the report.
    This morning, January 12th, the majority extended us the 
opportunity to review the proposed report and add minority 
views until January 17th. Yet, this afternoon on the Senate 
floor they announced that they intended to file the report 
immediately. While the majority may have been prepared to file 
its report, the members of the committee in the minority did 
not have a straight story on when their views were due.
    For this reason, I objected to the unanimous consent 
agreement requested on the Senate floor because I was not sure 
that all the minority members had the opportunity to submit 
their views and I was concerned that members might still be 
working on their minority views. I believe that it is extremely 
important that anything purporting to be a report on this bill 
include such minority views.
    Unfortunately despite my objects, I have been informed that 
the report will be filed at 6 PM tonight, January 12th.
    And so we have discovered a means to evade both the 
Committee's requirement of 3 days for the preparation of 
minority views and the Senate Rules requirement for a report to 
be available for 48 hours before proceeding to a bill. You 
simply say that you are not going to file a report. Then you 
proceed to the bill, as early as the next day. Then you file a 
report. This procedure evades both the Committee and Senate 
rules, but apparently cannot be enforced in either forum. I 
find this practice very troubling and am extremely concerned 
about the precedent that it sets.

                          The Sunset Provision

    Last years version of the Unfunded Mandates Bill, S. 993 
contained a sunset date. It was my understanding, and also that 
of many of the negotiators who hammered out this bi-partisan 
compromise, that we would have a sunset date. It is unclear why 
the provision was not included in the bill introduced to the 
Senate. Despite former assurances that a sunset provision would 
be included in the legislation or added during markup, a sunset 
provision was voted down 3 times during the Budget Committee 
markup in a straight 12-9 party line vote.
    I believe a sunset provision is crucial to the success of 
this bill. A sunset provision will help--not hurt--this 
important piece of legislation. Sunset provisions are a common 
sight on the legislative landscape. For example, the revenues 
used to fund the superfund program sunset this year. We have 
sunset provisions in everything from the crime bill to school 
to work to the 1990 farm bill.
    We are dealing with an entirely new concept. It is untried 
and untested. This bill needs a trial period so that any 
problems and bugs can be worked out. The Congressional budget 
office has expressed concern over the analyses that are 
required in the bill. In testimony before the Senate Committee 
on Governmental Affairs, Director Reischauer gave a candid 
assessment of the difficulty in completing these analyses on a 
timely basis, not to mention, culling reliable information for 
them.
    A sunset provision in 1998 would allow Congress to pause 
and examine the job that CBO has performed to date. We could 
then fine tune and if necessary retool the process to make this 
bill even more effective.
    A sunset provision is not going to kill the unfunded 
mandates program. The bill's time has come and there is no 
reason to believe that the bill would be scrapped four years 
from now. Currently the legislation has 57 co-sponsors. If the 
legislation lives up to its expectations, there should be no 
problem marshalling the same support in 1998.
    Lastly, the unfunded mandates bill does not operate in a 
vacuum. It must be viewed in the context of the budget act. The 
caps and other major provisions in the Budget Act--including 
the supermajority points of order--expire in 1998. Since we 
will have to revisit the entire budget act in 1998, it makes 
sense to be consistent and provide for a 1998 sunset provision 
in this piece of legislation as well.
                    MINORITY VIEWS OF SENATOR BOXER

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

    Paragraph 12 of rule XXVI of the Standing Rules of the 
Senate requires that Committee reports indicate the changes to 
existing law of the proposed legislation. 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.

      THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974

                              definitions

    Sec. 3. In General.--For purposes of this Act--
          (1) The terms ``budget outlays'' and ``outlays'' mean 
        * * *
          (2) The term ``budget authority'' means * * *
          * * * * * * *
    (11) 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 the 
        provision--
                  (i)(I) 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.
    (12) The term ``Federal private sector mandate'' means any 
provision in legislation, statute, or regulation that--
          (A) would impose an enforceable duty upon 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 purposes of ensuring compliance with such duty.
    (13) The term ``Federal mandate'' means a Federal 
intergovernmental mandate or a Federal private sector mandate, 
as defined in paragraphs (11) and (12).
    (14) The terms ``Federal mandate direct costs'' and 
``direct costs''--
          (A)(i) in the case of a Federal intergovernmental 
        mandate, mean the aggregate estimated amounts that all 
        States, local governments, and tribal governments would 
        be required to spend in order to comply with the 
        Federal intergovernmental mandate; or
          (ii) in the case of a provision referred to in 
        paragraph (11)(A)(ii), mean the amount of Federal 
        financial assistance eliminated or reduced;
          (B) in the case of a Federal private sector mandate, 
        mean the aggregate estimated amounts that the private 
        sector will be required to spend in order to comply 
        with the Federal private sector mandate;
          (C) shall 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 the 
                        Federal mandate for the same activity 
                        as if 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 
                        the Federal mandate for the same 
                        activity as is affected by that 
                        mandate; or
                  (ii) expenditures to the extent that such 
                expenditures will be offset by any direct 
                savings to the States, local governments, and 
                tribal governments, or by the private sector, 
                as a result of--
                          (I) 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; and
          (D) shall be determined on the assumption that State, 
        local, and tribal governments, and the private sector 
        will take all reasonable steps necessary to mitigate 
        the costs resulting from the Federal mandate, and will 
        comply with applicable standards of practice and 
        conduct established by recognized professional or trade 
        associations. Reasonable steps to mitigate the costs 
        shall not include increases in State, local, or tribal 
        taxes or fees.
    (15) The term ``private sector'' means all persons or 
entities in the United States, except for State, local, or 
tribal governments, including individuals, partnerships, 
associations, corporations, and educational and nonprofit 
institutions.
    (16) The term ``local government'' has the same meaning as 
in section 6501(6) of title 31, United States Code.
    (17) The term ``tribal government'' means any Indian tribe, 
band, nation, or other organized group or community, including 
any Alaska Native village or regional or village corporation as 
defined in or established pursuant to the Alaska Native Claims 
Settlement Act (83 Stat. 688; 43 U.S.C. 1601 et seq.) which is 
recognized as eligible for the special programs and services 
provided by the United States to Indians because of their 
special status as Indians.
    (18) The term ``small government'' means any small 
governmental jurisdictions defined in section 601(5) of title 
5, United States Code, and any tribal government.
    (19) The term ``State'' has the same meaning as in section 
6501(9) of title 31, United States Code.''
    (20) The term ``agency'' has the meaning as defined in 
section 551(1) of title 5, United States Code, but does not 
include independent regulatory agencies, as defined in section 
3502(10) of title 44, United States Code.
    (21) The term ``regulation'' or ``rule'' has the meaning of 
``rule'' as defined in section 601(2) of title 5, United States 
Code.
    (23) For the purposes of this Act, the definitions in 
paragraphs (15) through (22) shall only apply to section 408.

                          duties and functions

    Sec. 202. (a) Assistance to Budget Committees.--It shall be 
* * *
    (b) Assistance to Committees on Appropriations, Ways and 
Means, and Finance.--At the request * * *
    (c) Assistance to Other Committees and Members.--
          (1) At the request * * *
          (2) At the request of any committee of the Senate or 
        the House of Representatives, the Office 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] (3) At the request * * *
          * * * * * * *
    (h) Studies.--[The Director shall conduct continuing 
studies to enhance comparisons of budget outlays, credit 
authority, and tax expenditures.]
          (1) Continuing studies.--The Director of the 
        Congressional Budget Office shall conduct continuing 
        studies to enhance comparisons of budget outlays, 
        credit authority, and tax expenditures.
          (2) Federal mandate studies.--
                  (A) At the request of any Chairman or ranking 
                member of the minority of a Committee of the 
                Senate or the House of Representatives, the 
                Director shall, to the extent practicable, 
                conduct a study of a Federal mandate 
                legislative proposal.
                  (B) In conducting a study on 
                intergovernmental mandates under subparagraph 
                (A), the Director shall--
                          (i) solicit and consider information 
                        or comments from elected officials 
                        (including their designated 
                        representatives) of State, local, or 
                        tribal governments as may provide 
                        helpful information or comments;
                          (ii) consider establishing advisory 
                        panels of elected officials or their 
                        designated representatives, of State, 
                        local, or tribal governments if the 
                        Director determines that such advisory 
                        panels would be helpful in performing 
                        responsibilities of the Director under 
                        this section; and
                          (iii) if, and to the extent that the 
                        Director determines that accurate 
                        estimates are reasonably feasible, 
                        include estimates of--
                                  (I) the future direct cost of 
                                the Federal mandate to the 
                                extent that such costs 
                                significantly differ from or 
                                extend beyond the 5-year period 
                                after the mandate is first 
                                effective; and
                                  (II) any disproportionate 
                                budgetary effects of Federal 
                                mandates 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.

         annual adoption of concurrent resolution on the budget

    Sec. 301. * * *
          * * * * * * *
      (d) Views and Estimates of Other Committees.--Within 6 
weeks after the President submits a budget under section 
1105(a) of title 31, United States Code, each committee of the 
House of Representatives having legislative jurisdiction shall 
submit to the Committee on the Budget of the House and each 
committee of the Senate having legislative jurisdiction shall 
submit to the Committee on the Budget of the Senate its views 
and estimates (as determined by the committee making such 
submission) with respect to all matters set forth in 
subsections (a) and (b) which relate to matters within the 
jurisdiction or functions of such committee. The Joint Economic 
Committee shall submit to the Committees on the Budget of both 
Houses its recommendations as to the fiscal policy appropriate 
to the goals of the Employment Act of 1946. Any other committee 
of the House of Representatives or the Senate may submit to the 
Committee on the Budget of its House, and any joint committee 
of the Congress may submit to the Committee on the Budget of 
both Houses, its views and estimates with respect to all 
matters set forth in subsections (a) and (b) which relate to 
matters within its jurisdiction or functions. Any committee of 
the House of Representatives or the Senate that anticipates 
that the committee 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 its 
views and estimates on that proposal to the Committee on the 
Budget of the applicable House.

                [analysis by congressional budget office

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

SEC. 408. LEGISLATIVE MANDATE ACCOUNTABILITY AND REFORM.

    (a) Duties of Congressional Committees.--
          (1) In general.--When a committee of authorization of 
        the Senate or the House of Representatives reports a 
        bill or joint resolution of public character that 
        includes any Federal mandate, the report of the 
        committee accompanying the bill or joint resolution 
        shall contain the information required by paragraphs 
        (3) and (4).
          (2) Submission of bills to the director.--When a 
        committee of authorization of the Senate or the House 
        of Representatives orders reported a bill or joint 
        resolution of a public character, the committee shall 
        promptly provide the bill or joint resolution to the 
        Director of the Congressional Budget Office and shall 
        identify to the Director any Federal mandates contained 
        in the bill or resolution.
          (3) Reports on federal mandates.--Each report 
        described under paragraph (1) shall contain--
                  (A) an identification and description of any 
                Federal mandates in the bill or joint 
                resolution, including the expected direct costs 
                to State, local, and tribal governments, and to 
                the private sector, required to comply with the 
                Federal mandates;
                  (B) a qualitative, and if practicable, a 
                quantitative assessment of costs and benefits 
                anticipated from the Federal mandates 
                (including the effects on health and safety and 
                the protection of the natural environment); and
                  (C) a statement of the degree to which a 
                Federal mandate affects both the public and 
                private sectors and the extent to which Federal 
                payment of public sector costs or the 
                modification or termination of the Federal 
                mandate as provided under subsection 
                (c)(1)(B)(iii)(IV) would affect the competitive 
                balance between State, local, or tribal 
                governments and privately owned businesses.
          (4) Intergovernmental mandates.--If any of the 
        Federal mandates in the bill or joint resolution are 
        Federal intergovernmental mandates, the report required 
        under 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 of authorization of 
                appropriations for new Federal financial 
                assistance, provided by the bill or joint 
                resolution to pay for the costs to State, 
                local, and tribal governments of the Federal 
                intergovernmental mandate; 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) any existing sources of Federal 
                assistance in addition to those identified in 
                subparagraph (A) that may assist state, local, 
                and tribal governments in meeting the direct 
                costs of the Federal intergovernmental 
                mandates.
          (5) Preemption clarification and information.--When a 
        committee of authorization of the Senate or the House 
        of Representatives reports a bill or joint resolution 
        of 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 the extent to which the bill or joint resolution 
        preempts any State, local, or tribal law, and, if so, 
        an explanation of the reasons for such preemption.
          (6) Publication of statement from the director.--
                  (A) Upon receiving a statement (including any 
                supplemental statement) from the Director under 
                subsection (b)(1), a committee of the Senate or 
                the House of Representatives shall publish the 
                statement in the committee report accompanying 
                the bill or joint resolution to which the 
                statement relates if the statement is available 
                at the time the report is printed.
                  (B) 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 Senate or the House of 
                Representatives 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.
    (b) Duties of the Director.--
          (1) Statements on bills and joint resolutions other 
        than appropriations bills and joint resolutions.--
                  (A) 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 Senate or the House of Representatives, the 
                Director of the Congressional Budget Office 
                shall prepare and submit to the committee a 
                statement as follows:
                          (i) 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 any Federal intergovernmental 
                        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.
                          (ii) The estimate required under 
                        clause (i) 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 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 State, 
                                local, or tribal governments 
                                for activities subject to the 
                                Federal intergovernmental 
                                mandates.
                  (B) 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 Senate or the House of Representatives, the 
                Director of the Congressional Budget Office 
                shall prepare and submit to the committee a 
                statement as follows:
                          (i) If the Director estimates that 
                        the direct cost of all Federal private 
                        sector mandates in the bill or joint 
                        resolution will equal or exceed 
                        $200,000,000 (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.
                          (ii) Estimates required under this 
                        subparagraph shall include estimates 
                        (and a brief explanation 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.
                          (iii) If the Director determines that 
                        it is not feasible to make a reasonable 
                        estimate that would be required under 
                        clauses (i) and (ii), 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.
                  (C) 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 thresholds specified in 
                paragraphs (A) and (B), the Director shall so 
                state and shall briefly explain the basis of 
                the estimate.
    (c) Legislation Subject to Point of Order in the Senate.--
         (1) In general.--It shall not be in order in the 
        Senate to consider--
                  (A) any bill or joint resolution that is 
                reported by a committee unless the committee 
                has published a statement of the Director on 
                the direct costs of Federal mandates in 
                accordance with subsection (a)(6) before such 
                consideration; and
                  (B) any bill, joint resolution, amendment, 
                motion, or conference report that would 
                increase the direct costs of Federal 
                intergovernmental mandates by an amount that 
                causes the thresholds specified in subsection 
                (b)(1)(A)(i) to be exceeded, unless--
                          (i) the bill, joint resolution, 
                        amendment, motion, or conference report 
                        provides 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 is equal to the estimated 
                        direct costs of such mandate;
                          (ii) the bill, joint resolution, 
                        amendment, motion, or conference report 
                        provides an increase in receipts and 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 equal to the estimated direct 
                        costs of such mandate; or
                          (iii) the bill, joint resolution, 
                        amendment, motion, or conference report 
                        includes an authorization of 
                        appropriations in an amount equal to 
                        the estimated direct costs of such 
                        mandate, and--
                                  (I) identifies a specific 
                                dollar amount estimate of the 
                                full direct costs of the 
                                mandate for each year or other 
                                period during which the mandate 
                                shall be in effect under the 
                                bill, joint resolution, 
                                amendment, motion or conference 
                                report, and such estimate is 
                                consistent with the estimate 
                                determined under paragraph (3) 
                                for each fiscal year;
                                  (II) identifies any 
                                appropriation bill that is 
                                expected to provide for Federal 
                                funding of the direct cost 
                                referred to under subclause 
                                (IV)(aa);
                                  (III) identifies the minimum 
                                amount that must be 
                                appropriated in each 
                                appropriations bill referred to 
                                in subclause (II), in order to 
                                provide for full Federal 
                                funding of the direct costs 
                                referred to in subclause (I); 
                                and
                                  (IV)(aa) designates a 
                                responsible Federal agency and 
                                establishes criteria and 
                                procedures under which such 
                                agency shall implement less 
                                costly programmatic and 
                                financial responsibilities of 
                                State, local, and tribal 
                                governments in meeting the 
                                objectives of the mandate, to 
                                the extent that an 
                                appropriation Act does not 
                                provide for the estimated 
                                direct costs of such mandate as 
                                set forth under subclause 
                                (III); or
                                  (bb) designates as 
                                responsible Federal agency and 
                                establishes criteria and 
                                procedures to direct that, if 
                                an appropriation Act does not 
                                provide for the estimated 
                                direct costs of such mandate as 
                                set forth under subclause 
                                (III), such agency shall 
                                declare such mandate to be 
                                ineffective as of October 1 of 
                                the fiscal year for which the 
                                appropriation is not at least 
                                equal to the direct costs of 
                                the mandate.
          (2) Rule of construction.--The provisions of 
        paragraph (1)(B)(iii)(IV)(aa) shall not be construed to 
        prohibit or otherwise restrict a State, local, or 
        tribal government from voluntarily electing to remain 
        subject to the original Federal intergovernmental 
        mandate, complying with the programmatic or financial 
        responsibilities of the original Federal 
        intergovernmental mandate and providing the funding 
        necessary consistent with the costs of Federal agency 
        assistance, monitoring, and enforcement.
          (3) Committee on appropriations.--Paragraph (1) shall 
        not apply to matters that are within the jurisdiction 
        of the Committee on Appropriations of the Senate or the 
        House of Representatives.
    (d) 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 subsection (c) to 
a bill or joint resolution reported by a committee of 
authorization.