[House Report 105-143]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-143
_______________________________________________________________________


 
 TO REAUTHORIZE THE PROGRAM ESTABLISHED UNDER CHAPTER 44 OF TITLE 28, 
              UNITED STATES CODE, RELATING TO ARBITRATION
                                _______
                                

 June 23, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 1581]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 1581) to reauthorize the program established under 
chapter 44 of title 28, United States Code, relating to 
arbitration, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Vote of the Committee............................................     2
Committee Oversight Findings.....................................     2
Committee on Government Reform and Oversight Findings............     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Constitutional Authority Statement...............................     4
Section-by-Section Analysis and Discussion.......................     4
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    The purpose of H.R. 1581 is to reauthorize twenty 
arbitration programs currently operating in Federal district 
courts throughout the country. The arbitration programs were 
first authorized over twenty years ago and have been 
continuously reauthorized since. The success of these programs 
is unquestioned.
    Following are those Federal District Courts authorized to 
use arbitration pursuant to Chapter 44, Section 28 U.S.C. 
658(1): the Northern District of California, the Middle 
District of Florida, the Western District of Michigan, the 
Western District of Missouri, the District of New Jersey, the 
Eastern District of New York, the Middle District of North 
Carolina, the Western District of Oklahoma, the Eastern 
District of Pennsylvania, and the Western District of Texas. 
The following are those Federal District Courts approved for 
the use of arbitration voluntarily by the Judicial Conference 
pursuant to Chapter 44, Section 28 U.S.C. 658(2): the District 
of Arizona, the Middle District of Georgia, the District of 
Nevada, the Northern District of New York, the Western District 
of New York, the Western District of Pennsylvania, the Northern 
District of Ohio, the District of Utah, the Western District of 
Washington, and the Middle District of Tennessee.

                Background and Need for the Legislation

    H.R. 1581 was introduced on May 13, 1997, to reauthorize 
the federal court arbitration program established in chapter 44 
of title 28, U.S. Code, and was referred to the Subcommittee on 
Courts and Intellectual Property.
    The bill reauthorizes twenty pilot arbitration programs 
which have been in existence in U.S. District Courts around the 
country for twenty years. The current authorization expires on 
September 1st of this year.
    H.R. 1581 would permanently reauthorize arbitration 
programs currently existing in twenty federal district courts 
throughout the country. The programs have been operating for 
close to two decades. The arbitration programs have been 
overwhelmingly successful and have been routinely reauthorized 
over the last twenty years. H.R. 1581 would make the 
authorization of the existing programs permanent without 
extending it to other districts.

                                Hearings

    Due to the familiarity of Members with the existing 
arbitration programs, no hearings were conducted on H.R. 1581.

                        Committee Consideration

    On June 10, 1997, the Subcommittee on Courts and 
Intellectual Property met in open session and reported 
favorably H.R. 1581 to the full Committee. On June 18, 1997, 
the Committee on the Judiciary met in open session and reported 
favorably H.R. 1581 to the House.

                         Vote of the Committee

    The Subcommittee reported favorably by voice vote, a quorum 
being present. The Committee reported favorably by voice vote, 
a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    The Congressional Budget Office submitted the following 
cost estimate on H.R. 1581.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 23, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1581, a bill to 
reauthorize the program established under chapter 44 of Title 
28, United States Code, relating to arbitration.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kristen 
Layman (for federal costs), and Leo Lex (for the state and 
local impact).
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

H.R. 1581--A bill to reauthorize the program established under chapter 
        44 of Title 28, United States Code, relating to arbitration

    Summary: H.R. 1581 would replace an expiring authorization 
with a permanent authorization of appropriations for the use of 
arbitration by certain district courts. Federal district courts 
may employ an arbitration process in some civil cases where 
damages are relatively limited. As is the case under the 
current, but expiring authorization, the permanent 
authorization would be for such sums as may be necessary to 
carry out the purposes of chapter 44, Title 28, U.S. Code, 
pertaining to the use of arbitration.
    Based on historical expenditures for the arbitration 
program, CBO estimates that enacting H.R. 1581 would result in 
additional discretionary spending of $2 million over the 1998-
2002 period, assuming the availability of appropriated funds. 
H.R. 1581 would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply. The 
legislation contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(UMRA).
    Estimated cost to the Federal Government: For the purposes 
of this estimate, CBO assumes (1) that the continuing 
authorization to conduct federal arbitration will require 
funding at roughly the same level as in 1997, allowing for 
small increases to keep pace with inflation, and (2) that all 
amounts estimated to be authorized will be appropriated by the 
start of each fiscal year. The estimated budgetary impact of 
H.R. 1581 is shown in the following table.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Arbitration spending under current law:                                                                         
    Budget Authority \1\............................       0.4         0         0         0         0         0
    Estimated outlays...............................       0.4   ( \2\ )         0         0         0         0
Proposed changes:                                                                                               
    Estimated authorization level...................         0       0.4       0.4       0.4       0.4       0.4
    Estimated outlays...............................         0       0.3       0.4       0.4       0.4       0.4
Arbitration spending under H.R. 1581:                                                                           
    Estimated authorization level \1\...............       0.4       0.4       0.4       0.4       0.4       0.4
    Estimated outlays...............................       0.4       0.4       0.4       0.4       0.4       0.4
----------------------------------------------------------------------------------------------------------------
\1\ The 1997 level is the amount appropriated for that year.                                                    
\2\ Less than $50,000.                                                                                          

    The costs of this legislation fell within budget function 
750 (administration of justice).
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 1581 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. To the extent that state, local, or tribal 
governments are parties to judicial actions that fall under 
federal arbitration, there may be some savings from lower legal 
costs.
    Estimate prepared by: Federal Costs: Kristen Layman; Impact 
on State and Local Governments: Leo Lex.
    Estimate approved by: Peter H. Fontaine (for Paul N. Van de 
Water, Assistant Director for Budget Analysis).

                        Constitutional Authority

    Pursuant to rule XI, clause 2(l)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article III, clause 2, section 1 of the 
Constitution.

                      Section-by-Section Analysis

    The bill amends section 905 of the Judicial Improvements 
and Access to Justice Act (28 U.S.C. 651 note; Public Law 100-
702) by striking the language relating to fiscal years 1994 
through 1997 and inserting for each fiscal year. This would 
permanently reauthorize the program established under chapter 
44 of title 28, United States Code, relating to arbitration. 
There are twenty such arbitration programs in Federal district 
courts throughout the country.

         Changes in Existing Law Made by the Bill, as Reported

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

   SECTION 905 OF THE JUDICIAL IMPROVEMENTS AND ACCESS TO JUSTICE ACT

SEC. 905. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated [for each of the 
fiscal years 1994 through 1997] for each fiscal year to the 
judicial branch such sums as may be necessary to carry out the 
purposes of chapter 44, as added by section 901 of this Act. 
Funds appropriated under this section shall be allocated by the 
Administrative Office of the United States Courts to Federal 
judicial districts and the Federal Judicial Center. The funds 
so appropriated are authorized to remain available until 
expended.