[Senate Report 105-299]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                                SENATE

 2d Session                                                     105-299
_______________________________________________________________________


 
                   MANDATES INFORMATION ACT OF 1998

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                             MINORITY VIEWS

                              to accompany

                                 S. 389

   TO IMPROVE CONGRESSIONAL DELIBERATION ON PROPOSED FEDERAL PRIVATE 
                SECTOR MANDATES, AND FOR OTHER PURPOSES





 September 2 (legislative day, August 31), 1998.--Ordered to be printed



                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, JR., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma                MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
             Hannah S. Sistare, Staff Director and Counsel
             Kristine I. Simmons, Professional Staff Member
                 Leonard Weiss, Minority Staff Director
         Sebastian O'Kelly, Minority Professional Staff Member
                       Lynn L. Baker, Chief Clerk



                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Summary and Purpose..............................................1
 II. Background.......................................................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................8
  V. Estimated Cost of Legislation...................................10
 VI. Evaluation of Regulatory Impact.................................11
VII. Minority Views of Senator Glenn.................................12
VIII.Minority Views of Senator Levin.................................16

 IX. Minority Views of Senators Durbin and Akaka.....................18
  X. Changes in Existing Law.........................................21



105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-299
_______________________________________________________________________


                  THE MANDATES INFORMATION ACT OF 1998

                                _______
                                

 September 2 (legislative day, August 31), 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 389]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 389) to improve congressional 
deliberation on proposed Federal private sector mandates, and 
for other purposes, having considered the same, report 
favorably on the bill and recommend that the bill do pass.

                         I. Summary and Purpose

    The purposes of S. 389, the Mandates Information Act, are 
(1) to improve the quality of Congress'' deliberation with 
respect to proposed mandates on the private sector by providing 
Congress with more complete information about the effects of 
such mandates and ensuring that Congress acts on such mandates 
only after focused deliberation on their effects, and (2) to 
provide Congress better information on the impact of private 
sector mandates on consumers, workers and small businesses.
    S. 389 amends the Unfunded Mandates Reform Act of 1995 
(UMRA) (P.L. 104-4) by extending UMRA's key protections for 
State and local governments to the private sector. Under both 
UMRA and S. 389, ``private sector'' is defined as ``all persons 
or entities in the United States,'' including individuals, 
partnerships, associations, corporations, and educational and 
nonprofit institutions, but not State, local or tribal 
governments.
    Specifically, the bill--
          (1) requires that a Congressional Budget Office cost 
        estimate for a bill prepared pursuant to the Unfunded 
        Mandates Reform Act include an estimate of the indirect 
        impact of any private sector mandates in the bill on 
        consumers, workers and small businesses (including the 
        effect on prices, wages, profitability, etc.); and
          (2) applies a point of order against any bill that 
        includes a mandate estimated to directly cost the 
        private sector $100 million or more in a fiscal year.
    Currently, the Unfunded Mandates Reform Act requires CBO 
cost estimates for private sector mandates exceeding $100 
million in direct cost and allows a point of order against a 
bill containing private sector mandates only if the committee 
has failed to publish that CBO cost estimate prior to the 
bill's consideration on the floor. S. 389 would expand UMRA's 
CBO cost estimate requirement to include the indirect impact of 
a mandate on ``consumers, workers and small businesses.'' This 
indirect impact would not, however, trigger a new point of 
order. Estimates of indirect impacts would be supplied solely 
for informational purposes.
    S. 389 would also extend UMRA's points of order against 
mandates on State and local governments to mandates on the 
private sector. The separate dollar thresholds for 
intergovernmental mandates ($50 million) and private sector 
mandates ($100 million) would be retained.
    If a point of order is raised against a bill (under UMRA or 
S. 389) in the Senate, either a simple majority will vote to 
waive the point of order or the Chair will rule on the point of 
order. If the point of order is sustained, it is necessary to 
appeal the ruling of the Chair successfully (by simple majority 
vote) in order to proceed with consideration of the bill. In 
the House, the question of whether to sustain a point of order 
is not subject to a ruling by the Chair; rather, the question 
is put to the whole House for a vote after 20 minutes of 
debate.

                             II. Background

    On March 22, 1995, President Clinton signed into law the 
Unfunded Mandates Reform Act of 1995 (UMRA), which amended 
Title IV of the Congressional Budget and Impoundment Act of 
1974. Title I of UMRA outlines specific reporting and 
estimating responsibilities for congressional committees and 
the Congressional Budget Office. It allows a point of order to 
be raised against the consideration of bills, joint 
resolutions, amendments, motions, and conference reports in the 
House and Senate if such legislation contains mandates 
estimated to cost States or localities $50 million in any one 
year, or if a committee, when reporting a bill or joint 
resolution, fails to include in either the committee report or 
the Congressional Record a statement from the Congressional 
Budget Office estimating the direct costs of any mandates 
(intergovernmental or private sector) contained in the 
legislation.
    In an assessment of the Unfunded Mandates Reform Act in 
1997, the CongressionalBudget Office gave its perspective on 
the effectiveness of the point of order in discouraging new 
intergovernmental mandates:

          Although not conclusive, last year's experience 
        suggests that UMRA was helpful in limiting the 
        imposition of unfunded mandates on state and local 
        governments. Besides floor actions to reduce the costs 
        of such mandates, a number of changes were made in 
        committee or before markups to eliminate or minimize 
        mandate costs after consultation with CBO.1

    \1\ Congressional Budget Office. ``An Assessment of the Unfunded 
Mandates Reform Act in 1997.'' February 1998. Page 6.

    While the point of order seems to be having the intended 
effect of discouraging new mandates on State and local 
governments, the absence of a point of order against private 
sector mandates is reflected in the number of bills proposed 
with private sector mandates. CBO notes, ``The track record for 
private sector mandates is different from that of 
intergovernmental mandates. In 1997, CBO identified more than 
twice as many private sector mandates above the threshold as 
intergovernmental mandates.'' 2
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    It should also be noted that congressional committees have 
not been vigilant in complying with UMRA's requirements to 
assess the costs and benefits of private sector mandates 
independently of the CBO estimate, and to report on the extent 
to which a mandate affects both the public and private sectors 
and how federal funding of the mandate's intergovernmental 
costs would affect the competitive balance between these two 
sectors. Of 24 committee submissions (including committee 
reports or parts of committee reports) from 1997 studied by the 
Congressional Research Service, only ten included substantive 
information on private sector mandates provided by the 
committee itself (in addition to whatever CBO material they 
published).3 This anemic compliance with UMRA's 
requirements supports the assertion that congressional 
consideration of private sector mandates and their costs needs 
to be enhanced.
---------------------------------------------------------------------------
    \3\ Congressional Research Service memorandum to the Senate 
Committee on Governmental Affairs, ``Mandates on the Private Sector: 
Committee Response in 1997 to Statutory Requirements for Reports on 
Legislation'', prepared by Richard S. Beth, Government Division. June 
1, 1998. Page 5.
---------------------------------------------------------------------------
    To improve congressional deliberation of proposed private 
sector mandates, Senator Abraham introduced S. 389, the 
Mandates Information Act, on March 3, 1997. When introducing 
the bill, Senator Abraham stated:

          These reforms are necessary in my view * * * because 
        the 1995 Act, while effective in its chosen sphere of 
        intergovernmental mandates, does not contain the 
        necessary mechanisms to force Congress to think 
        seriously about the wisdom of proposed mandates on the 
        private sector. This leaves our private sector faced 
        with the same dilemma once faced by our states and 
        localities: Congress does not give full consideration 
        to the costs its mandates impose. Focusing almost 
        exclusively on the benefits of unfunded mandates, 
        Congress pays little heed to, and sometimes seems 
        unaware of, the burden that unfunded mandates impose on 
        the very groups they are supposed to help.4
---------------------------------------------------------------------------
    \4\ Prepared floor statement of Senator Spencer Abraham (R-MI) on 
the introduction of ``The Mandates Information Act of 1997'', March 3, 
1997.

    While the goals of most private sector mandates are 
laudable, too often Congress fails to consider the economic 
consequences, which may be passed on to consumers in the way of 
higher prices, and to workers through reduced wages and 
benefits. S. 389 is intended to ensure that Congress has 
adequate information about these impacts. S. 389 does not 
prevent Congress from passing bills that a majority of Members 
want to pass, but it would impose a hurdle for Congress to 
clear during deliberations on bills that contain private sector 
mandates and would increase the demand for additional cost 
information.

                        III. Legislative History

    The Committee held a hearing on S. 389 on June 3, 
1998.5 Senator Brownback (chairing on behalf of 
Senator Thompson), Senator Durbin and Senator Cleland attended. 
Witnesses at the hearing were Senator Spencer Abraham (R-MI), 
the sponsor of S. 389; Representative Rob Portman (R-OH), the 
House sponsor of H.R. 3534, the House companion bill; James L. 
Blum, deputy director of the Congressional Budget Office; R. 
Bruce Josten, executive vice president of government affairs, 
U.S. Chamber of Commerce; Mary Ann Cricchio, owner of Da Mimmo 
Italian Restaurant in Baltimore, Maryland on behalf of the 
National Restaurant Association; and, Sharon Buccino, 
legislative counsel at the Natural Resources Defense Council.
---------------------------------------------------------------------------
    \5\ The Senate Budget Committee held a hearing on S. 389 on 
February 12, 1998, and the Senate Small Business Committee held a 
hearing on S. 389 and other proposals on June 4, 1997.
---------------------------------------------------------------------------
    Senator Abraham began his testimony by noting the broad 
support for this bill among his Senate colleagues and many 
interest groups representing millions of American small 
businesses, workers, and consumers. He noted that the costs of 
private sector mandates are passed on in the form of higher 
prices for consumers, lower wages and benefits for workers, and 
fewer employment opportunities for those in the market for a 
new job. ``The Mandates Information Act would address this 
problem by making Members of Congress aware of the costs they 
are imposing on the American people,'' he stated.6
---------------------------------------------------------------------------
    \6\ Oral testimony of Senator Spencer Abraham (R-MI) before the 
Senate Committee on Governmental Affairs. Hearing on S. 389, the 
Mandates Information Act, June 3, 1998. Committee hearing transcript, 
p. 6.
---------------------------------------------------------------------------
    Senator Abraham noted that some questions had been raised 
as to whether indirect costs would be included in calculating 
the $100 million cost threshold. He stated that it was not his 
intent to include indirect costs in the point of order, and 
that he would support a technical amendment to clarify this 
distinction.7
---------------------------------------------------------------------------
    \7\ Id., p. 6-7.
---------------------------------------------------------------------------
    In discussing the impact of the point of order, Senator 
Abraham stated:

          As to the point of order itself, a simple majority of 
        members could waive it. Therefore, as a result, the 
        point of order will not keep Congress from enacting 
        needed legislation. But that point of order will force 
        members to recognize the mandate's costs as well as its 
        benefits before implementing it.8
---------------------------------------------------------------------------
    \8\ Id., p. 7.

    S. 389 amends the Unfunded Mandates Reform Act (UMRA), 
which allows points of order to be raised against legislation 
that would cost state, local or tribal governments in excess of 
$50 million in one year. Senator Abraham testified that UMRA 
has been ``an unmitigated success,'' saving taxpayers dollars 
without creating undue delays in House and Senate floor 
proceedings, and that S. 389 would build on UMRA's 
success.9
---------------------------------------------------------------------------
    \9\ Id., p. 9.
---------------------------------------------------------------------------
    Representative Portman echoed many of Senator Abraham's 
points in favor of the Mandates Information Act, and noted that 
it had passed the House in May by a vote of 279-132. Rep. 
Portman pointed out that UMRA has given State and local 
governments leverage to get committees to deal with potential 
mandates before they come to the floor, while being flexible 
enough to permit Congress to pass legislation that imposes an 
unfunded mandate when the merits outweigh any negative 
effects.10 S. 389 would extend UMRA's coverage, and 
its benefits, to private sector mandates.
---------------------------------------------------------------------------
    \10\ Oral testimony of Representative Rob Portman (R-OH) before the 
Senate Committee on Governmental Affairs. Hearing on S. 389, the 
Mandates Information Act, June 3, 1998. Committee hearing transcript, 
p. 13.
---------------------------------------------------------------------------
    Senators Durbin and Cleland each expressed reservations 
about S. 389. Senator Durbin stated that it would be difficult 
for CBO to estimate the indirect impacts of private sector 
mandates, and indicated that while he did not object to raising 
all of the elements, including cost issues, as part of the 
debate, he questioned whether a point of order and separate 
vote on the impact was necessary. Senator Cleland echoed these 
sentiments and added that a point of order on private sector 
mandates ``could bring Congress to a screeching halt.'' Rep. 
Portman responded that, based on Congress' experience with 
UMRA, the point of order has not stopped legislation but has 
resulted in more thoughtful consideration of bills at the 
committee level and better bills coming to the floor. Since 
January 1996, when UMRA took effect, the point of order has 
never been raised in the Senate. It has been raised five times 
in the House, but has never successfully stopped consideration 
of a bill.11
---------------------------------------------------------------------------
    \11\ Id., p. 26.
---------------------------------------------------------------------------
    Members were particularly interested in the testimony of 
the Congressional Budget Office and whether CBO would be able 
to comply with the requirements in S. 389. James Blum, deputy 
director of CBO, assured Committee members that CBO was well 
prepared for the responsibilities assigned to it by the 
Mandates Information Act. Mr. Blum began his testimony by 
acknowledging the effectiveness of UMRA. He stated:

          Although not conclusive, the experience so far 
        suggests that UMRA has been effective in helping to 
        curb the practice of imposing unfunded mandates on 
        State and local governments. There have been floor 
        actions to reduce the costs of intergovernmental 
        mandates and the changes have been made in Committee to 
        eliminate or minimize the costs after consultation with 
        CBO.\12\
---------------------------------------------------------------------------
    \12\ Oral testimony of James Blum before the Senate Committee on 
Governmental Affairs. Hearing on S. 389, the Mandates Information Act, 
June 3, 1998. Committee hearing transcript, p. 36.

    Mr. Blum then laid to rest concerns that CBO would not be 
able to fulfill its new responsibilities under S. 389. UMRA 
already requires CBO to estimate the impact of newly proposed 
federal mandates, and when time and data permit, CBO also 
provides information about significant indirect or secondary 
---------------------------------------------------------------------------
effects in their mandate cost statements. Mr. Blum continued:

          Thus, for that reason, we do not believe that we 
        would have a problem with fulfilling the informational 
        requirements of S. 389 or H.R. 3534. Both bills would 
        require our analysts to spend some more time in 
        determining whether the private sector mandates exceed 
        the $100 million threshold and in analyzing any 
        possible effects on consumers, workers and small 
        businesses. Nevertheless, we do not anticipate that 
        these increased efforts would necessarily require 
        additional resources or further diversion of resources 
        from our budget work. * * * \13\
---------------------------------------------------------------------------
    \13\ Id., p. 37.

He added that the new information requirements apply only to 
bills with private sector mandates exceeding the $100 million 
direct cost threshold, and only 20 to 30 such bills are 
reported each year. Further, the new information requirements 
give CBO sufficient flexibility to provide the information 
within the time that is available, although at times the 
information will be qualitative in nature rather than a 
specific dollar amount.
    Senator Brownback asked Mr. Blum whether he thought UMRA 
had been more effective in helping to curb the practice of 
imposing unfunded mandates on State and local governments, but 
less effective in discouraging new private sector mandates, 
because there is a point of order against mandates on States 
and localities but not on private sector mandates. Mr. Blum 
responded:

          I think it is * * * the absence of that point of 
        order that makes that the case * * * When we are 
        working with committees (on) legislation that has 
        mandates involved, particularly on the private sector 
        side * * * when we just point out that, in fact, there 
        is no point of order that would lie, then they lose 
        interest and they do not care * * *
          Now, with a point of order applying, then I think, in 
        fact, they would care and we would have more extensive 
        discussions, and I think our experience would indicate 
        that in some instances * * * they would go out of their 
        way to avoid the possibility of a point of order being 
        raised by minimizing the costs to get below the 
        threshold or perhaps even eliminating the mandate.\14\
---------------------------------------------------------------------------
    \14\ Oral testimony of James Blum before the Senate Committee on 
Governmental Affairs. Hearing on S. 389, the Mandates Information Act, 
June 3, 1998. Committee hearing transcript, p. 39-40.

    Senator Durbin questioned Mr. Blum on the propriety of 
obtaining information from industry to assist CBO in estimating 
the impact of private sector mandates on that industry. Mr. 
Blum replied that in addition to information obtained from 
industry, CBO would turn to other sources of information to 
verify its accuracy.
    The Committee also heard testimony from R. Bruce Josten, 
Executive Vice President of government affairs for the U.S. 
Chamber of Commerce, and Mary Ann Cricchio, owner of Da Mimmo 
Italian Restaurant in Baltimore, Maryland on behalf of the 
National Restaurant Association, in support of S. 389. Sharon 
Buccino, legislative counsel at the Natural Resources Defense 
Counsel, testified in opposition to the bill.
    Mr. Josten testified that the U.S. Chamber of Commerce, and 
a host of business groups, endorsed S. 389 because it would 
``help Congress identify and eliminate unnecessary proposed 
costs and red tape on small businesses'' and ``facilitate 
better informed and effective public policy.'' \15\ Ms. 
Cricchio shared her personal experience as a small business 
owner and explained why she felt the Mandates Information Act 
is needed:
---------------------------------------------------------------------------
    \15\ Oral testimony of R. Bruce Josten before the Senate Committee 
on Governmental Affairs. Hearing on S. 389, the Mandates Information 
Act, June 3, 1998. Committee hearing transcript, p. 47.

          I support positive * * * social policy that ensures a 
        healthy, compassionate America and I want to do my 
        part. It is in my heart as the mother of a 6-year-old 
        son and as a resident along the Chesapeake Bay and in 
        my best interests as a restaurant owner, whose 
        livelihood depends on accommodating employees and 
        customers. But Congress has to realize that small 
        businesses shoulder a disproportionate share of costs 
        for mandates. When Congress fails to take into account 
        who ultimately pays for unfunded mandates and how these 
        costs could be reduced, these laws end up hurting the 
        people they were meant to help.\16\
---------------------------------------------------------------------------
    \16\ Oral tesimony of Mary Ann Cricchio before the Senate Committee 
on Governmental Affairs. Hearing on S. 389, the Mandates Information 
Act, June 3, 1998. Committee hearing transcript, p. 53.
---------------------------------------------------------------------------
          By contrast, Ms. Buccino noted that the Natural 
        Resources Defense Council was one of several 
        environmental and labor groups opposing S. 389 over 
        concerns that the bill would be an impediment to 
        mandates that protect the environment and public 
        health, and that the bill's emphasis on costs over 
        benefits is inappropriate.\17\
---------------------------------------------------------------------------
    \17\ Oral testimony of Sharon Buccino before the Senate Committee 
on Governmental Affairs. Hearing on S. 389, the Mandates Information 
Act, June 3, 1998. Committee hearing transcript, p. 58.

    The Committee held a business meeting to consider S. 389 on 
June 17, 1998. Senator Thompson offered a set of perfecting 
amendments en bloc which addressed some of the concerns raised 
at the hearing. The Thompson amendments clarified that the 
requirement for CBO estimates of the indirect impact of 
mandates on consumers, workers and small businesses is not 
subject to the point of order, exempted funded private sector 
mandates from the point of order, and made various technical 
corrections. In addition, one of the Thompson amendments added 
a new section to S. 389 which clarified the Unfunded Mandates 
Reform Act and how Congress expects the Congressional Budget 
Office to interpret UMRA as it applies to large entitlement 
programs.\18\ These amendments passed en bloc by voice vote.
---------------------------------------------------------------------------
    \18\ The language of this amendment was introduced as a 
freestanding bill (S. 2068) in the Senate by Senator Thompson, along 
with Senator Glenn, on May 12, 1998. The Committee heard testimony in 
support of this legislation on February 24, 1998 from Governor George 
Voinovich (R-OH), president of the National Governors' Association, and 
Governor Ben Nelson (D-NE), vice president of the National Governors' 
Association, during the Committee's hearing on regulatory reform. The 
legislation is necessary because the Congressional Budget Office is 
misinterpreting the definition of ``Federal intergovernmental mandate'' 
as provided in the law, making Title I of the Unfunded Mandates Reform 
Act inoperative for two-thirds of all federal aid to all governments 
for all purposes.
---------------------------------------------------------------------------
    Senator Durbin offered an amendment to S. 389 to extend the 
point of order requirements to legislation that would 
``eliminate, prevent the imposition of, prohibit the use of 
appropriated funds to implement, or make less stringent any 
Federal private sector mandate * * * that protects human 
health, safety or the environment.'' Senator Durbin argued that 
if Congress is going to require a separate vote to impose a 
mandate, then Congress should require a separate vote to remove 
a safeguard when it has an impact on health, safety or the 
environment. Senator Collins stated that she was sensitive to 
Senator Durbin's concern that S. 389 not be used to override 
environmental laws, but felt his amendment as drafted would 
allow a point of order to be raised against legislation even 
when the impact on the environment is insignificant because the 
point of order is not tied to any dollar threshold. Senator 
Thompson expressed similar reservations about Senator Durbin's 
amendment, and added that he thought the point of order 
established under the amendment was unnecessary because the 
impact of legislation on the environment and human health and 
safety already receives adequate attention and debate, and a 
point of order would only serve to delay the consideration of 
legislation. The amendment was defeated by a vote of six yeas 
to eight nays.
    The Committee deferred further action on S. 389 until its 
next business meeting on July 15, 1998 in order to afford more 
Senators an opportunity to be heard on the bill. At that 
meeting, Senator Levin voiced his concern that the bill 
emphasizes costs over benefits, and would allow a point of 
order to be raised even if CBO is unable to estimate the impact 
of a private sector mandate. Senator Stevens expressed 
reservations about the scope of the bill and its application to 
appropriations bills. Senator Nickles, Senator Domenici and 
Senator Thompson reiterated their support for the bill and its 
focus on providing Congress with more complete information 
about the effects of private sector mandates. After some 
discussion, S. 389 as amended by the Thompson amendments was 
ordered reported favorably by a vote of six yeas to four nays.

                    IV. Section-by-Section Analysis

                         SECTION 1. SHORT TITLE

    This Act may be cited as the ``Mandates Information Act of 
1998''.

                            SEC. 2. FINDINGS

    Congress finds that Congress should consider the effects of 
proposed mandates on consumers, workers and small businesses, 
and that Congress has often acted on mandates while knowing 
their benefits but not their costs, which are borne by 
consumers, workers and small businesses.

                            SEC. 3. PURPOSES

    The purposes of this Act are to improve the quality of 
Congress' deliberation on proposed private sector mandates by 
providing Congress with more complete information and ensuring 
that Congress acts on such mandates only after focused 
deliberation on their effects, and to enhance the ability of 
Congress to distinguish between helpful and harmful private 
sector mandates.

                SEC. 4. FEDERAL PRIVATE SECTOR MANDATES

    (a) In General.--
    (1) Estimates.--This paragraph amends Section 424(b) of the 
CongressionalBudget and Impoundment Control Act of 1974 (2 
U.S.C. 658c(b)) by adding at the end a new paragraph (4) which 
directs the Congressional Budget Office, if feasible, to 
estimate the impact of private sector mandates in a bill or 
joint resolution on consumers, workers, and small businesses, 
including the impact on--
          consumer prices and the supply of goods and services;
          worker wages, benefits, and employment opportunities; 
        and
          the hiring practices, expansion and profitability of 
        businesses with 100 or fewer employees.
    The estimate prepared under this paragraph shall not be 
considered in determining whether the direct costs of all 
Federal private sector mandates in the bill or joint resolution 
exceed the $100 million threshold.
    (2) Point of Order.--This paragraph amends Section 
424(b)(3) of the Congressional Budget and Impoundment Control 
Act of 1974 to provide that if the Congressional Budget Office 
is unable to estimate the cost of private sector mandates in a 
bill or joint resolution, a point of order will lie against 
consideration of that bill or joint resolution as if the 
committee of jurisdiction had not published a CBO cost 
estimate.
    (3) Threshold Amounts.--This paragraph amends Section 
425(a)(2) of the Congressional Budget and Impoundment Control 
Act of 1974 (2 U.S.C. 658d(a)(2)) to exempt funded private 
sector mandates from a point of order.
    (4) Application Relating to Appropriations Committees.--
This paragraph amends Section 425(c)(1)(B) of the Congressional 
Budget and Impoundment Control Act of 1974 (2 U.S.C. 
658d(c)(1)(B)) to extend the point of order to any legislative 
provision (if it includes a Federal private sector mandate) 
contained in an appropriations bill or conference report, or 
contained in an amendment to an appropriations bill or 
amendments in disagreement between the two Houses to an 
appropriations bill.
    (5) Application Relating to Congressional Budget Office.--
This paragraph amends Section 427 of the Congressional Budget 
and Impoundment Control Act of 1974 (2 U.S.C. 658f) by 
requiring the Congressional Budget Office, when practicable, to 
estimate the direct costs of a Federal private sector mandate 
contained in an amendment at the request of any Senator.
    (b) Exercise of Rulemaking Powers.--This paragraph states 
that this section is enacted as an exercise of the rulemaking 
power of the Senate and House of Representatives with 
recognition of the constitutional right of either House to 
change such rules at any time.

               SEC. 5. FEDERAL INTERGOVERNMENTAL MANDATE.

    This section makes a technical correction to Section 
421(5)(B) of the Congressional Budget and Impoundment Control 
Act of 1974 (2 U.S.C. 658(5)(B)) to clarify that new or 
expanded flexibility for State or local governments to reduce 
their costs is required to offset any new federally-imposed 
direct costs over $50 million annually that States or 
localities will incur under large entitlement programs.

                    V. Estimated Cost of Legislation

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 20, 1998.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 389, the Mandates 
Information Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mary 
Maginniss and Elliot Schwartz.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

               congressional budget office cost estimate

S. 389--Mandates Information Act of 1998

    The Congressional Budget Office (CBO) estimates that 
enacting this legislation would result in no significant costs 
to the federal government. The bill would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply. S. 389 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA) and would have no impact on the budgets of state, local, 
or tribal governments.
    S. 389 would amend the Congressional Budget Act to change 
certain duties of CBO under UMRA. Specifically, the bill would 
require CBO to provide additional information when it 
determines that a bill contains a private-sector mandate with 
costs exceeding the threshold established in UMRA ($100 million 
in 1996, adjusted for inflation). That information would 
include the impact of private-sector mandates on consumers, 
workers, and small businesses (including any disproportionate 
impact on particular regions or industries). Further, the bill 
would make legislation subject to a point of order if it 
included private-sector mandates with costs exceeding the 
threshold. Finally, S. 389 would amend UMRA to require that any 
new federal requirement or reduction in funding for certain 
large entitlement grant programs (such as Medicaid) would 
constitute an intergovernmental mandate unless the legislation 
that creates the mandate also provides new flexibility for 
state and local governments to offset these additional costs.
    Based on the experiences of CBO and the Joint Committee on 
Taxation (which provides CBO with revenue estimates) in 
carrying out the provisions of UMRA, CBO estimates that neither 
agency would incur significant additional costs to implement 
the changes that would be made by S. 389. The number of bills 
containing private-sector mandates with costs exceeding the 
threshold and those affecting large entitlement grant programs 
is small. The additional workload thus would not be 
substantial. (Any increase in costs would be subject to the 
availability of appropriated funds for CBO and the Joint 
Committee on Taxation.) In addition, CBO estimates that changes 
to Congressional procedures would not result in additional 
costs.
    On May 7, 1998, CBO transmitted a cost estimate for H.R. 
3534, the Mandates Information Act of 1998, as ordered reported 
by the House Committee on Rules on May 6, 1998. The bills are 
similar, and CBO's estimates are identical.
    The CBO staff contacts are Mary Maginniss and Elliot 
Schwartz. This estimate was approved by Paul N. Van de Water, 
Assistant Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirement of paragraph 11(b) of Rule XXVI 
of the Standing Rules of the Senate, the Committee has 
considered the regulatory and paperwork impact of S. 389. The 
legislation would allow a point of order to be raised against 
legislation containing a proposed Federal private sector 
mandate which would cost the private sector at least $100 
million in any one of the succeeding five years. It is intended 
to help Congress identify these mandates and work to make them 
less burdensome on the private sector, or to cause Congress to 
seek to achieve the same policy objectives without the use of 
private sector mandates. Further, S. 389 requires the 
Congressional Budget Office to estimate the indirect impact of 
private sector mandates wherever possible. CBO has testified 
that they can fulfill their new responsibilities within 
existing resources. This legislation would impose no additional 
regulatory burdens and will reduce future burdens on 
individuals, businesses, not-for-profit organizations and other 
non-governmental entities.

                  VII. Minority Views of Senator Glenn

    I strongly oppose S. 389--``The Mandates Information Act.''
    This legislation would expand the underlying points of 
order in the Unfunded Mandates Reform Act (UMRA)--legislation 
that I was proud to be the lead Democratic sponsor of here in 
the Senate--to cover legislation containing private sector 
mandates in excess of $100 million annually.
    UMRA already requires that CBO conduct cost estimates of 
private sector mandates in excess of $100 million. It is 
something that they have been doing since 1995 on legislation 
ranging from Welfare Reform, to the Farm Bill, to Immigration 
Reform (see attached tables from CBO's testimony before the 
Committee). However, under S. 389 a point of order would be 
established to require payment (absent a majority vote waiver) 
to the private sector for carrying out these mandates. That's a 
potential budget buster if you look at the cost of these bills. 
I don't think that's the proper approach.
    Here is a sample listing and cost of recent legislation (as 
scored by CBO) that would be, or would have been, subject to 
the private sector points of order established under S. 389.
    1. Telecommunications Reform--Greater than $7 billion.
    2. Airport and Airway Trust Fund--$2.7 billion.
    3. Nuclear Waste Policy--$2.3 billion.
    4. Welfare Reform--Up to $800 million.
    5. Budget Reconciliation: Federal Employee Retirement--$200 
million to $600 million.
    Let's look at the last example as it cuts close to home for 
the Governmental Affairs Committee. We are responsible for the 
law governing the Federal retirement and benefit system. From 
my long experience on the Committee, I am well aware that 
during the reconciliation process our Committee must inevitably 
make changes in law that affect and sometimes cost Federal 
employees and retirees (or at least some segment of the two). 
If S. 389 were to be enacted, then I would anticipate we would 
continually face points of order on Committee-reported 
reconciliation measures. It would only make more difficult a 
process that is already complicated. We already know what the 
costs are from existing law--S. 389 just creates an additional, 
unneeded procedural barrier.
    This same barrier will inevitably be raised during 
consideration of tax measures, even those that might provide a 
net tax cut. These proposals almost always have some revenue 
increase (i.e. ``mandate'') in them somewhere on some private 
sector entity or entities. That's usually to offset the 
reduction in revenues elsewhere (for example: raising corporate 
tax rates to offset an increase in the standard deduction for 
individuals).
    Proponents of S. 389 might argue that since under UMRA we 
are supposed to pay for mandates on State and local 
governments, we should do so also for the private sector. But I 
think that there is an important distinction. State and local 
governments serve the same taxpaying, voting public that elect 
us here in the Congress, while the private sector is primarily 
accountable to its shareholders, not the general public. Costs 
imposed on the private sector fall on private owners; costs 
imposed on the public sector fall on taxpayers.
    The Committee adopted the Chairman's amendment to correct a 
provision in the bill so that a point of order only lies 
against ``unfunded'' private sector mandates and does not cover 
``funded'' private sector mandates. His amendment also includes 
the Thompson-Glenn technical correction regarding CBO's 
interpretation of UMRA's application to entitlement programs. 
The Chairman and I introduced this correction as separate 
legislation (S. 2068) earlier this year. It has strong support 
from the Governors and State legislators. So I supported the 
Chairman's amendment, although ultimately it does not fix the 
flaws in the underlying bill. My preference would be to 
separate S. 2068 from the bill and see if it can be passed as a 
free-standing measure this year.
    My colleague from Illinois, Senator Durbin, offered an 
amendment in markup to subject legislation to a point of order 
that eases an existing private sector mandate that protects 
human health and the environment. His aim was try to make it 
more difficult for Congress to enact anti-environmental riders 
quietly slipped in as part of large catch-all appropriations, 
authorization or reconciliation bills. The Natural Resources 
Defense Council has noted that Congress has enacted 16 such 
riders in the last year alone, none of which went through the 
regular authorization process. My view is that if we are going 
to add private sector point of order protections in S. 389 to 
the public sector protections existing in UMRA, then out of 
fairness and equity we should consider similar protections for 
the environment and public health, especially since these 
riders have become such a problem in the last couple of years. 
So I was disappointed when the Durbin amendment was defeated on 
a party-line vote.
    Current law already provides information on the cost of 
mandates on the private sector. That is sufficient to inform us 
during debate on legislation without creating a new point of 
order process as envisioned under S. 389. For that and the 
above reasons, I oppose this bill and I urge my colleagues to 
do the same.
                                                        John Glenn.

            TABLE 3.--REPORTED BILLS WITH PRIVATE-SECTOR MANDATES THAT EXCEED THE STATUTORY THRESHOLD           
----------------------------------------------------------------------------------------------------------------
                                                                                                         Were   
                                                                                 Estimated annual      indirect 
             Topic                     Mandate             Bill Number(s)       costs (billions of     effects  
                                                                                     dollars)         considered
----------------------------------------------------------------------------------------------------------------
                                         104TH CONGRESS, SECOND SESSION                                         
                                                                                                                
Amendments to Fair Labor        Increase federal       H.R. 940; H.R. 1227;   4.0..................  Yes.       
 Standards Act.                  minimum wage.          H.R. 3265; H.R.                                         
                                                        3448; S. 413.                                           
Health Insurance Reform.......  Health insurance       H.R. 3070; H.R. 3103;  0.3 to 0.5...........  Yes.       
                                 portability.           H.R. 3160; S. 1028.                                     
Health Insurance Reform.......  Mental health parity   H.R. 3103............  9.0 to 15.0..........  Yes.       
                                 in insurance plans.                                                            
Health Insurance Reform.......  Minimum-length         S. 969...............  0.2..................  Yes.       
                                 maternity stay.                                                                
Immigration Reform............  Requirements on        H.R. 2202; S. 269....  Up to 0.6............  No.        
                                 immigrants' sponsors.                                                          
Welfare Reform................  Earned income credit   H.R. 3507; H.R. 3734;  Up to 0.8............  No.        
                                 provisions and         S. 1795.                                                
                                 requirements on                                                                
                                 immigrants' sponsors.                                                          
Small Business Jobs Protection  Miscellaneous tax      H.R. 3448............  0.3 to 1.0...........  No.        
                                 provisions.                                                                    
Telecommunications Reform.....  Interconnection,       S. 652...............  Greater than 7.0 \1\.  Yes.       
                                 universal service,                                                             
                                 and blocking of                                                                
                                 certain programs.                                                              
Farm Bill.....................  Fees and dairy         H.R. 2854............  Greater than 0.8.....  Yes.       
                                 requirements.                                                                  
Professional Sports Franchises  Requirements on        H.R. 2740............  Greater than 0.1.....  No.        
                                 owners and leagues.                                                            
Nuclear Waste Policy..........  Fees and training      H.R. 1936............  Greater than 2.7.....  No.        
                                 requirements.                                                                  
Memorandum: Mandates with                                                                                       
 Uncertain Costs \2\                                                                                            
Intermodal Transportation.....  Certification of       H.R. 4040............  n.a..................  No.        
                                 freight containers.                                                            
Invasive Species..............  Requirements on        H.R. 3217............  n.a..................  No.        
                                 vessels.                                                                       
                                                                                                                
                                          105TH CONGRESS, FIRST SESSION                                         
                                                                                                                
Airport and Airway Trust Fund.  Reinstate ticket tax.  H.R. 668; S. 279.....  2.7..................  No.        
Biomedical Research...........  Prohibit manufacture   Draft bill...........  0.1 to 0.3...........  Yes.       
                                 of certain drugs.                                                              
Budget Reconciliation:          Requirements on        H.R. 2015; S. 947....  0.1 to 1.8...........  No.        
 Medicare.                       private health                                                                 
                                 insurance providers.                                                           
Budget Reconciliation: Federal  Increase required      H.R. 2015; S. 947....  0.2 to 0.6...........  No.        
 Employee Retirement.            contributions to                                                               
                                 retirement.                                                                    
Budget Reconciliation: Revenue  Several (tax related)  H.R. 2014; S. 949....  9.0 to 16.0..........  No.        
Caribbean Trade...............  Change deduction for   H.R. 2644............  0.1..................  No.        
                                 accrued severance                                                              
                                 pay.                                                                           
China MFN.....................  Increase tariff rates  H.J. Res. 79.........  Greater than 0.1.....  No.        
Education Savings Act and IRS   Change deduction for   H.R. 2646; H.R. 2676.  0.1 to 1.1...........  No.        
 Restructuring and Reform Act.   accrued vacation pay.                                                          
Encryption....................  Allow decryption.....  H.R. 695.............  0.2 to 2.0...........  Yes.       
Financial Services Reform.....  Restrict investment    H.R. 10..............  Greater than 0.1.....  Yes.       
                                 activity of Federal                                                            
                                 Home Loan Banks.                                                               
Nuclear Waste Policy..........  Shift payment of fees  H.R. 1270; S. 104....  Greater than 2.3.....  No.        
Memorandum: Mandates with                                                                                       
 Uncertain Costs \2\                                                                                            
21st Century Patent System      Extend surcharge,      H.R. 400.............  0.02 to 0.14.........  No.        
 Improvement.                    authorize fee                                                                  
                                 increase.                                                                      
Terrorism.....................  Prohibit financial     H.R. 748.............  n.a..................  No.        
                                 transactions.                                                                  
Worker Paycheck Fairness......  Require                H.R. 1625............  n.a..................  No.        
                                 authorizations and                                                             
                                 reports.                                                                       
Nuclear Regulatory Commission.  Extend authority to    H.R. 2015............  0 to 0.3.............  No.        
                                 collect fees.                                                                  
Children's Protection from      Blockable              S. 363...............  n.a..................  No.        
 Violent Programming.            programming, FCC                                                               
                                 regulations.                                                                   
----------------------------------------------------------------------------------------------------------------
Notes.--The mandates in this table are those identified by the Congressional Budget Office when a bill was      
  reported by an authorizing or conference committee. In many cases, more than one formal CBO statement was     
  issued for each mandate topic.                                                                                
\1\ Cumulative costs over five years for universal service.                                                     
\2\ Under S. 389, if CBO determined that an estimate of mandate costs could not be made, the point of order     
  under section 425(a)(1) of the Unfunded Mandates Reform Act would apply.                                      
                                                                                                                
n.a.=not applicable; MFN=most favored nation; IRS=Internal Revenue Service; FCC=Federal Communications          
  Commission.                                                                                                   
                                                                                                                
Source: Congressional Budget Office.                                                                            


                 VIII. Minority Views of Senator Levin

    I voted against S. 389, the Mandates Information Act, 
because I think it goes too far, sets up false expectations, 
and sends the wrong message.
    The Unfunded Mandates Act which we passed in 1995 
established two points of order--one, if the report on a bill 
or joint resolution reported by a committee does not include a 
statement of the Director of CBO on the direct costs of Federal 
mandates (including both intergovernmental and private sector 
mandates); and two, if any bill or joint resolution, amendment 
or motion would increase the direct costs of intergovernmental 
mandates by more than $50 million with no provision for the 
federal government to pay those costs. It also requires the CBO 
to estimate the direct costs of a proposed bill or joint 
resolution on the private sector.
    S. 389 would add the requirement that CBO also estimate the 
indirect costs of a proposed bill or joint resolution on the 
private sector and it would add two more points of order. 
First, it would add a point of order to a bill, joint 
resolution, amendment or motion that would increase the direct 
costs of a private sector mandate by more than $100 million 
unless the bill provides money for the increased costs. Second, 
the law currently allows CBO to state if it is not feasible to 
make a reasonable estimate of the direct costs of a private 
sector or intergovernmental mandate. S. 389 would make a bill 
or joint resolution where CBO could not reasonably estimate the 
direct cost also subject to a point of order.
    That means, that if CBO can't reasonably estimate the cost 
of a piece of legislation, consideration of that legislation is 
out of order.
    If we look at the way we often write laws, the problems 
with S. 389 become apparent. Take a statute licensing of deep 
ocean mining. It requires that each license for such mining 
contain terms and restrictions established by the agency ``to 
assure protection of the environment.'' It goes on to say, 
``The administrator shall require * * * the use of the best 
available technologies for the protection of safety, health, 
and the environment. * * *'' How is CBO going to be able to 
reasonably estimate the private sector costs of legislation 
like that when no one could know at that time what will be 
required of a licensee; and no one could know what the best 
available technology will be?
    Look at the legislation we passed licensing clinical 
laboratories. We said nobody can ``solicit or accept materials 
derived from the human body for laboratory examination or other 
procedure unless there is in effect for the laboratory a 
certificate issued by the Secretary (of HHS) that''--and then 
the bill lists a whole number of things that the certificate 
must require, including accreditation, agreement on 
inspections, certain ways of operating.
    It would be impossible for CBO to guess what HHS is going 
to require of clinical laboratories based on that legislation 
at the time it is passed. HHS couldn't even know at that time. 
Yet, S. 389 would make that legislation out of order because 
CBO is unable to reasonably estimate the costs. I don't think 
that makes sense.
    I'm also very concerned that this legislation ignores the 
benefits side of the equation. The bill demands CBO to estimate 
the costs of federal mandates, but it doesn't require a 
statement or estimate by CBO of the benefits. We regulate, 
hopefully, for a purpose--and a beneficial one. To evaluate the 
reasonableness of the costs, we need to understand the quantity 
and quality of the intended benefits. This legislation leaves 
out that important part of the equation.
    Finally, the legislation sends the wrong message. It says 
legislation our committees believe to be necessary and 
important are out of order if they don't provide for the 
payment out of taxpayer funds for costs to be imposed on the 
private sector. Many times those costs are incurred because the 
private sector is committing a harmful act. Take a statute that 
seeks to reduce pollution--pollution from a factory or a mine. 
This bill creates the presumption that the taxpayer should pay 
to have the individual or company stop polluting. I don't think 
the American public thinks that's fair or appropriate. Or look 
at clinical laboratories. If we require by law clinical 
laboratories to follow certain basic procedures to guarantee 
the accuracy of their laboratory tests, this bill suggests that 
the taxpayer should pay the laboratory to comply with those 
procedures. I don't agree.
    Estimating costs of legislation which is under 
consideration, where that is feasible and reasonable, makes 
sense. I also think it makes sense to require that we estimate 
the benefits of our legislation. It doesn't make sense to make 
good, meaningful, needed legislation ``out of order'' just 
because such legislation imposes a certain level of cost or 
because it CBO can't estimate the cost.

                                                        Carl Levin.

            IX. Minority Views of Senators Durbin and Akaka

    We agree that it is important for Congress to think 
carefully about the mandates we impose, not only ones that will 
impact State and local governments but also those that could 
affect the private sector, both businesses and individuals. 
However, we have several reservations about the ramifications 
of the Mandates Information Act, as amended by the Committee, 
which prevent us from supporting it.
    The stated intent of S. 389 is to make Congress more 
conscientious about cost burdens we seek to place on the 
private sector. We do not believe that a point of order during 
Floor debate is necessary to force such an evaluation of costs. 
The Congressional Budget Office (CBO) is already required by 
law to identify private sector mandates. As we consider 
legislation in Committee, we have an opportunity to gain 
insights and input from experts on the effects of a proposal, 
allowing us to weigh the pros and cons of a measure and make 
judgments about whether the benefits to society outweigh the 
burdens it would impose.
    This bill would make Congressional consideration of certain 
private sector mandates out of order strictly based on the 
question of whether direct costs exceed $100 million.
    We fear that the practical impact of this proposal would be 
to routinely discourage and effectively preclude enactment of 
essential laws designed to ensure human health, public and 
workplace safety, and environmental protections. The public 
relies upon Congress to protect public health and safety and 
the environment by imposing fair and appropriate enforceable 
duties on the entities responsible for inflicting harm upon 
public health and safety.
    However, by allowing a point of order to be raised against 
any legislation that would impose costs estimated at $100 
million or more on the private sector, this bill creates an 
opportunity for opponents to impede new legislation solely on 
the basis of its likely fiscal burden, without regard for its 
public benefits--which may far outweigh the cost element. By 
invoking this procedural impediment, opponents can effectively 
subvert enactment of important health and safety protections--
without ever having to vote directly against such proposals.
    By focusing exclusively on estimated costs, the bill 
establishes an imbalanced appraisal of legislation. Benefits of 
proposals are not an element of the equation, and would be 
largely discounted, if not totally ignored. This could make 
enacting vital legislation designed to protect public health 
and safety considerably more difficult. Advancement of a bill 
could be halted simply because its estimated costs meet a 
statutory threshold, regardless of the potential public 
benefits, savings, or necessity.
    Furthermore, the cost projections may themselves may prove 
to be flawed or inflated. The CBO is frequently and necessarily 
forced to rely on data and input from the very industries 
likely to be affected by a proposed directive. It is often 
impossible to forecast how the private sector will actually 
respond to a new mandate.
    In several instances, it has been demonstrated that 
original estimates far exceeded the actual costs. For example, 
the Occupational Safety and Health Administration (OSHA) 
established a new rule in 1978 to protect workers from exposure 
to cotton dust which can cause serious respiratory problems. At 
the time, OSHA estimated that the requirement would cost 
businesses $700 million per year. But the industry developed 
new ways to capture cotton dust. Consequently, costs to 
industry were determined not to be $700 million--but $83 
million. That's 88% less than originally anticipated. 
Similarly, the Environmental Protection Agency promulgated a 
rule governing the release of benzene from chemical plants. The 
industry estimated that this rule would cost $350,000 per 
plant. However, soon after the rule was established, the 
industry developed new manufacturing processes that eliminated 
any need for benzene. As a result, the actual cost per plant 
turned out not to be the projected $350,000, but zero.
    Obviously, if the estimated costs are inflated or 
unreliable, legislation could be blocked that, in reality, 
would not impose the expected fiscal burden on the private 
sector or actually even exceed the triggering level under the 
mandates bill.
    We also share the concern that even if CBO is able to 
obtain independent validation of industry-supplied information, 
its assumptions and estimates would necessarily be based on 
broad statutes rather than implementing rules. Many statutes 
are drafted in general terms, and delegate significant 
authority to regulators to develop specific implementing rules, 
given their expertise and the importance of maintaining 
regulatory flexibility. In its February 1998 report assessing 
the 1997 impact of the Unfunded Mandates Reform Act of 1995, 
CBO cited ``unknowable future regulations'' and ``missing 
information'' as among the factors that prevent ascertaining 
whether costs exceed the threshold.
    CBO noted that, particularly for private sector mandates, 
estimates occasionally could not be made at all or made only on 
crude assumptions because costs would be affected by specific 
implementing rules developed after the proposed reform was 
enacted. For instance, as CBO Deputy Director James Blum 
explained to this Committee in June, because CBO could not 
determine what technical and functional regulatory requirements 
would be established for an encryption bill reported in the 
House, its cost estimate ranged from $200 million to $2 
billion. Similarly, CBO cited examples of its inability to 
obtain reliable data in preparing its estimates because 
information in some circumstances simply does not exist.
    In addition, we are concerned about the bill's requirement 
that if CBO cannot, despite its best efforts, reasonably 
estimate the costs of a mandate and explains its inability to 
derive a figure, a point of order will still lie against the 
bill to the same extent as if the reporting Committee failed to 
include the estimate. This would result even under 
circumstances in which costs cannot be estimated although they 
may not actually exceed the threshold $100 million procedural 
trigger.
    The bill requires CBO to specify the reasons why it could 
not make a reasonable cost estimate, yet those presumably sound 
and documented explanations would have no bearing on whether a 
point of order would lie--it would be as automatically 
available as if CBO did not perform any analysis at all. It is 
important to consider that in 1997, CBO was unable, due to one 
or more factors including ambiguous bill language, uncertainty 
about who is affected, an lack of information, to determine 
whether direct costs of a particular mandates exceeded the 
statutory threshold in 12 percent of the 64 intergovernmental 
mandates identified and 5 percent of the 65 private sector 
mandates identified.
    As noted, S. 389 seeks to provide industry with procedural 
protections to guard against the establishment of new 
requirements in the public interest. If enacted, it would 
likely subject a significant amount of potential legislation 
that addresses pressing environmental problems to a procedural 
barricade. At the same time, proposals that seek to remove or 
weaken existing requirements would not fall within the ambit of 
such a new private sector mandate point of order or be subject 
to the same procedural safeguards. For example, repealing the 
Clean Air Act program which reduces toxic air emissions, or 
eliminating the Clean Water Act requirements for wastewater 
treatment plants to treat water prior to discharge into lakes 
and rivers could occur without open and meaningful 
consideration and a separate independent vote.
    During committee consideration, Senator Durbin offered an 
amendment to inject some balance into the process and provide 
the public the same procedural protections as would be 
available under S. 389 for imposing new costs on the private 
sector. The Durbin proposal would extend the point of order in 
the bill to be available against any legislation that would 
eliminate, prevent the imposition of, prohibit the use of 
appropriated funds to implement, or make less stringent any 
Federal private sector mandate established in law or regulation 
that protects human health, safety, or the environment. It 
would not prohibit Congress from revising or repealing any 
environmental, human health, or public safety laws. It would 
simply ensure a meaningful, focused opportunity to more 
deliberatively consider provisions that eliminate or roll back 
existing Federal private sector mandates established in law or 
regulation that protect human health, safety, or the 
environment.
    For the foregoing reasons, we respectfully oppose the 
Mandates Information Act as advanced by this Committee. We do 
not question the intent of the sponsors to provide a more open 
and deliberative evaluation of the costs of Federal legislation 
and the impact upon those who will assume such fiscal burdens. 
However, to the extent that this bill establishes a potentially 
insurmountable barrier to enacting new or reauthorized 
requirements that preserve and protect the environment, human 
health, and public and workplace safety, it is unacceptable.
                                   Dick Durbin.
                                   Daniel K. Akaka.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 389, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
changes are proposed is shown in roman):

CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974

           *       *       *       *       *       *       *


TITLE IV--ADDITIONAL PROVISIONS TO IMPROVE FISCAL PROCEDURES

           *       *       *       *       *       *       *


                        PART B--FEDERAL MANDATES

SECTION 421. DEFINITIONS.

    (1) * * *
    (2) * * *
    (3) * * *
    (4) * * *
    (5) Federal Intergovernmental Mandate.--The term ``Federal 
intergovernmental mandate'' means--
          (A) * * *
          (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 State, local, and tribal governments under 
        entitlement authority, if [the provision]--
                  (i)(I) the provision would increase the 
                stringency of conditions ofassistance to State, 
                local, or tribal governments under the program; 
                or
                  (II) the provision would place caps upon, or 
                otherwise decrease, the Federal Government's 
                responsibility to provide funding to State, 
                local, or tribal governments under the program; 
                and
                  (ii) that legislation, statute, or regulation 
                does not provide the State, local, or tribal 
                governments that participate in the Federal 
                program [lack] new or expanded authority under 
                that program to amend their financial or 
                programmatic responsibilities to continue 
                providing required services that areaffected by 
                the legislation, statute, or regulation.

           *       *       *       *       *       *       *


SECTION 424. DUTIES OF THE DIRECTOR; STATEMENTS ON BILLS AND JOINT 
                    RESOLUTIONS OTHER THAN APPROPRIATIONS BILLS AND 
                    JOINT RESOLUTIONS.

    (a) * * *
    (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:
          (1) * * *
          (2) * * *
          (3) Estimate not feasible.--If the Director 
        determines that it is not feasible to make a reasonable 
        estimate that would be required under paragraphs (1) 
        and (2), 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. If such a 
        determination is made by the Director, a point of order 
        under this part shall lie only under section 425(a)(1) 
        and as if the requirement of section 425(a)(1) had not 
        been met.
          (4) Estimate of indirect impacts.--
                  (A) In general.--In preparing estimates under 
                paragraph (1), the Director shall also 
                estimate, if feasible, the impact (including 
                any disproportionate impact in particular 
                regions or industries) on consumers, workers, 
                and small businesses, of the Federal private 
                sector mandates in the bill or joint 
                resolution, including--
                          (i) an analysis of the effect of the 
                        Federal private sector mandatesin the 
                        bill or joint resolution on consumer 
                        prices and on the actual supply of 
                        goods and services in consumer markets;
                          (ii) an analysis of the effect of the 
                        Federal private sector mandates in the 
                        bill or joint resolution on worker 
                        wages, worker benefits, and employment 
                        opportunities; and,
                          (iii) an analysis of the effect of 
                        the Federal private sector mandatesin 
                        the bill or joint resolution on the 
                        hiring practices, expansion, and 
                        profitability of businesses with 100 or 
                        fewer employees.
                  (B) Estimate not considered in 
                determination.--The estimate prepared under 
                this paragraph shall not be considered in 
                determining whether the direct costs of all 
                Federal private sector mandates in the bill or 
                joint resolution will exceed the threshold 
                specified in paragraph (1).

           *       *       *       *       *       *       *


SEC. 425. LEGISLATION SUBJECT TO POINT OF ORDER.

    (a) In General.--It shall not be in order in the Senate or 
the House of Representatives to consider--
          (1) * * *
          (2) 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 section 
        424(a)(1)] Federal mandates by an amount that causes 
        the thresholds specified in section 424 (a)(1) or 
        (b)(1) to be exceeded, unless--
                  (A) * * *
                  (B) * * *
    (b) * * *
    (c) Committee on Appropriations.--
          (1) Application.--The provisions of subsection (a)--
                  (A) * * *
                  (B) shall apply to--
                          (i) any legislative provision 
                        increasing direct costs of a Federal 
                        [intergovernmental] mandate contained 
                        in any bill or resolution reported by 
                        the Committee on Appropriations of the 
                        Senate or House of Representatives;
                          (ii) any legislative provision 
                        increasing direct costs of a Federal 
                        [intergovernmental] mandate contained 
                        in any amendment offered to a bill or 
                        resolution reported by the Committee on 
                        Appropriations of the Senate or House 
                        of Representatives;
                          (iii) any legislative provision 
                        increasing direct costs of a Federal 
                        [intergovernmental] mandate in a 
                        conference report accompanying a bill 
                        or resolution reported by the Committee 
                        on Appropriations of the Senate or 
                        House of Representatives; and
                          (iv) any legislative provision 
                        increasing direct costs of a Federal 
                        [intergovernmental] mandate contained 
                        in any amendments in disagreement 
                        between the two Houses to any bill or 
                        resolution reported by the Committee on 
                        Appropriations of the Senate or House 
                        of Representatives.
          (2) * * *

           *       *       *       *       *       *       *


SEC. 427. REQUESTS TO THE CONGRESSIONAL BUDGET OFFICE FROM SENATORS.

    At the written request of a Senator, the Director shall, to 
the extent practicable, prepare an estimate of the direct costs 
of a Federal [intergovernmental] mandate contained in an 
amendment of such Senator.

                                
