[House Report 106-5]
[From the U.S. Government Publishing Office]





106th Congress                                                   Report
  1st Session           HOUSE OF REPRESENTATIVES                  106-5

=======================================================================


 
                    MANDATES INFORMATION ACT OF 1999

                                _______
                                

February 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


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

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 350]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Rules, to whom was referred the bill (H.R. 
350) to improve congressional deliberation on proposed Federal 
private sector mandates, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Mandates Information Act of 1999''.

SEC. 2. FINDINGS.

  The Congress finds the following:
          (1) Before acting on proposed private sector mandates, the 
        Congress should carefully consider the effects on consumers, 
        workers, and small businesses.
          (2) The Congress has often acted without adequate information 
        concerning the costs of private sector mandates, instead 
        focusing only on the benefits.
          (3) The implementation of the Unfunded Mandates Reform Act of 
        1995 has resulted in increased awareness of intergovernmental 
        mandates without impacting existing environmental, public 
        health, or safety laws or regulations.
          (4) The implementation of this Act will enhance the awareness 
        of prospective mandates on the private sector without adversely 
        affecting existing environmental, public health, or safety laws 
        or regulations.
          (5) The costs of private sector mandates are often borne in 
        part by consumers, in the form of higher prices and reduced 
        availability of goods and services.
          (6) The costs of private sector mandates are often borne in 
        part by workers, in the form of lower wages, reduced benefits, 
        and fewer job opportunities.
          (7) The costs of private sector mandates are often borne in 
        part by small businesses, in the form of hiring disincentives 
        and stunted growth.

SEC. 3. PURPOSES.

  The purposes of this Act are the following:
          (1) To improve the quality of the Congress' deliberation with 
        respect to proposed mandates on the private sector, by--
                  (A) providing the Congress with more complete 
                information about the effects of such mandates; and
                  (B) ensuring that the Congress acts on such mandates 
                only after focused deliberation on the effects.
          (2) To enhance the ability of the Congress to distinguish 
        between private sector mandates that harm consumers, workers, 
        and small businesses, and mandates that help those groups.

SEC. 4. FEDERAL PRIVATE SECTOR MANDATES.

  (a) In General.--
          (1) Estimates.--Section 424(b)(2) of the Congressional Budget 
        Act of 1974 (2 U.S.C. 658c(b)(2)) is amended--
                  (A) in subparagraph (A) by striking ``and'' after the 
                semicolon; and
                  (B) by redesignating subparagraph (B) as subparagraph 
                (C), and inserting after subparagraph (A) the 
                following:
                  ``(B) when applicable, 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 mandates in 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 mandates in the bill or 
                        joint resolution on the hiring practices, 
                        expansion, and profitability of businesses with 
                        100 or fewer employees; and''.
          (2) Point of order.--Section 424(b)(3) of the Congressional 
        Budget Act of 1974 (2 U.S.C. 658c(b)(3)) is amended by adding 
        after the period the following: ``If such 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.''.
          (3) Threshold amounts.--Section 425(a) of the Congressional 
        Budget Act of 1974 (2 U.S.C. 658d(a)) is amended by--
                  (A) striking ``and'' after the semicolon at the end 
                of paragraph (1) and redesignating paragraph (2) as 
                paragraph (3); and
                  (B) inserting after paragraph (1) the following new 
                paragraph:
          ``(2) any bill, joint resolution, amendment, motion, or 
        conference report that would increase the direct costs of 
        Federal private sector mandates (excluding any direct costs 
        that are attributable to revenue resulting from tax or tariff 
        provisions of any such measure if it does not raise net tax and 
        tariff revenues over the 5-fiscal-year period beginning with 
        the first fiscal year such measure affects such revenues) by an 
        amount that causes the thresholds specified in section 
        424(b)(1) to be exceeded; and''.
          (4) Application relating to appropriations committees.--(A) 
        Section 425(c)(1)(A) of the Congressional Budget Act of 1974 (2 
        U.S.C. 658d(c)(1)(A)) is amended by striking ``except''.
          (B) Section 425(c)(1)(B) of the Congressional Budget Act of 
        1974 (2 U.S.C. 658d(c)(1)(B)) is amended--
                  (i) in clause (i) by striking ``intergovernmental'';
                  (ii) in clause (ii) by striking 
                ``intergovernmental'';
                  (iii) in clause (iii) by striking 
                ``intergovernmental''; and
                  (iv) in clause (iv) by striking 
                ``intergovernmental''.
          (5) Threshold burden.--(A) Section 426(b)(2) of the 
        Congressional Budget Act of 1974 (2 U.S.C. 658e(b)(2)) is 
        amended by inserting ``legislative'' before ``language''.
          (B) Section 426(b)(2) of the Congressional Budget Act of 1974 
        (2 U.S.C. 658e(b)(2)) is amended by striking ``section 425 or 
        subsection (a) of this section'' and inserting ``part B''.
          (6) Question of consideration.--(A) Section 426(b)(3) of the 
        Congressional Budget Act of 1974 (2 U.S.C. 658e(b)(3)) is 
        amended by striking ``section 425 or subsection (a) of this 
        section'' and inserting ``part B''.
          (B) Section 426(b)(3) of the Congressional Budget Act of 1974 
        (2 U.S.C. 658e(b)(3)) is amended by inserting ``, except that 
        not more than one point of order shall be recognized by the 
        Chair under section 425(a)(1) or (a)(2)'' before the period.
          (7) Application relating to congressional budget office.--
        Section 427 of the Congressional Budget Act of 1974 (2 U.S.C. 
        658f) is amended by striking ``intergovernmental''.
  (b) Rules of the House of Representatives.--Clause 11(b) of rule 
XVIII of the Rules of the House of Representatives is amended by 
striking ``intergovernmental'' and by striking ``section 424(a)(1)'' 
and inserting ``section 424 (a)(1) or (b)(1)''.
  (c) Exercise of Rulemaking Powers.--This section is enacted by 
Congress--
          (1) as an exercise of the rulemaking power of the Senate and 
        the House of Representatives, respectively, and as such it 
        shall be considered as part of the rules of such House, 
        respectively, and shall supersede other rules only to the 
        extent that they are inconsistent therewith; and
          (2) with full recognition of the constitutional right of 
        either House to change such rules (so far as relating to such 
        House) at any time, in the same manner, and to the same extent 
        as in the case of any other rule of each House.

SEC. 5. FEDERAL INTERGOVERNMENTAL MANDATE.

  Section 421(5)(B) of the Congressional Budget Act of 1974 (2 U.S.C. 
658(5)(B)) is amended--
          (1) by striking ``the provision'' after ``if'';
          (2) in clause (i)(I) by inserting ``the provision'' before 
        ``would'';
          (3) in clause (i)(II) by inserting ``the provision'' before 
        ``would''; and
          (4) in clause (ii)--
                  (A) by inserting ``that legislation, statute, or 
                regulation does not provide'' before ``the State''; and
                  (B) by striking ``lack'' and inserting ``new or 
                expanded''.

                       Purpose of the Legislation

    The purpose of H.R. 350, the Mandates Information Act of 
1999, is to: (1) improve the quality of the Congress' 
deliberation with respect to proposed mandates on the private 
sector by providing the Congress with more complete information 
about the effects of such mandates, and ensuring that the 
Congress acts on such mandates only after focused deliberation 
on the effects; and (2) enhance the ability of the Congress to 
distinguish between private sector mandates that harm 
consumers, workers, and small businesses, and mandates that 
help those groups.

                       Summary of the Legislation

    H.R. 350 amends the Congressional Budget Act of 1974 to 
require a congressional committee report on any bill or joint 
resolution that includes a federal private sector mandate to 
include a statement from CBO estimating the impact of such 
mandates on consumers, workers, and small businesses, including 
any disproportionate impact in particular regions or industries 
(CBO is currently required to estimate only the direct costs of 
all federal private sector mandates that exceed $100 million 
and the amount of federal financial assistance, if any, 
provided by the legislation to assist with compliance costs). 
It subjects the consideration of such legislation to a point of 
order if it is not feasible for CBO to prepare such an estimate 
(currently under UMRA, a point of order may apply only if it is 
not feasible for CBO to prepare an intergovernmental mandates 
estimate).
    H.R. 350 prohibits consideration of any bill, joint 
resolution, amendment, motion or conference report containing 
private sector mandates whose direct costs exceed $100 million 
(the current unfunded mandate point of order applies only to 
unfunded intergovernmental mandates, the direct cost of which 
exceeds $50 million, unless it is paid for with new federal 
financial assistance).
    H.R. 350 prohibits the Chair from recognizing Members for 
more than one point of order for a committee's failure to 
comply with the CBO report requirements with respect to private 
sector mandates, or for private sector mandates contained in 
any bill, joint resolution, amendment, motion or conference 
report.
    H.R. 350 amends clause 11(b) of House Rule XVIII to 
preserve the availability in the Committee of the Whole of a 
motion to strike an unfunded federal mandate (intergovernmental 
and private sector), unless the rule is specifically waived by 
the Rules Committee.

                        Committee Consideration

    On January 19, 1999, Representatives Gary Condit and Rob 
Portman introduced H.R. 350, the Mandates Information Act of 
1999, which was referred to the Committee on Rules. On February 
2, 1999, the Subcommittee on Rules and Organization of the 
House and the Subcommittee on Legislative and Budget Process 
held a joint hearing to review H.R. 350 and its implementation 
under the Unfunded Mandates Reform Act (UMRA). The Committee on 
Rules received testimony from the Hon. Gary Condit (D-CA); the 
Hon. Rob Portman (R-OH); the Hon. Sherwood Boehlert (R-NY); Mr. 
Jim Blum, Acting Director of the Congressional Budget Office; 
Mr. Ryan Null, Owner of Tristate Electronic Manufacturing; Ms. 
Angela Antonelli, Heritage Foundation Director for Economic 
Policy Studies; and Ms. Maura Kealey, Deputy Director, Public 
Citizen's Congress Watch.
    On Tuesday, February 2, 1999, the Committee met to mark-up 
H.R. 350. The Committee favorably reported H.R. 350, as 
amended, by voice vote a quorum being present. During the mark-
up, one amendment in the nature of a substitute offered by Mr. 
Linder was agreed to by voice vote. H.R. 350, as amended by 
this substitute, is essentially the same as legislation (H.R. 
3534) that passed the House last year by a vote of 279 to 132.

                     Background on the Legislation

    On March 22, 1995, President Clinton signed into law the 
Unfunded Mandates Reform Act, which amended title IV of the 
Congressional Budget Act of 1974. A key component of the 
Republican ``Contract With America,'' UMRA was one of the first 
bills enacted by the 104th Congress.
    Among other things, the purposes of UMRA are to: strengthen 
the partnership between the federal government and state and 
local governments; end the imposition of unfunded federal 
mandates on state and local governments without full 
information on the costs and effects of such mandates; promote 
informed and deliberate decisions by Congress on the 
appropriateness of all federal mandates affecting state and 
local governments and the private sector; and establish new 
points of order in the House and Senate for failure to comply 
with certain requirements under the act.
    A federal mandate is defined as a provision that imposes an 
enforceable duty upon state, local or tribal governments, or 
the private sector. An unfunded federal mandate is defined as a 
mandate whose direct costs exceed $50 million for state and 
local governments, and $100 million for the private sector. 
Direct costs are defined as the aggregate amount that all 
levels of government or the private sector are required to 
spend in order to comply with the mandate or prohibited from 
raising in revenue.
    There are three major components to UMRA. One addresses 
agency regulatory responsibilities. A second directs the 
Advisory Council on Intergovernmental Relations (ACIR) to 
undertake certain studies with respect to existing mandates 
(ACIR was de-funded by Congress in fiscal year 1997). Thethird 
contains congressional procedures for the consideration of legislation 
containing federal mandates.

Procedures in the House and Senate

    UMRA's congressional procedures are found in sections 423 
through 426 of Part B of title IV of the Congressional Budget 
and Impoundment Act of 1974. Sections 423 and 424 outline 
specific reporting and estimating responsibilities for 
congressional committees and the Congressional Budget Office 
(CBO). Section 425 prohibits the consideration of bills, joint 
resolutions, motions, amendments and conference reports in the 
House and Senate if such legislation contains unfunded 
intergovernmental federal mandates, 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 CBO estimating the direct costs of any mandates 
(intergovernmental or private sector) contained in the 
legislation.

Disposition of points of order in the House of Representatives

    Section 426 prohibits the consideration of any order of 
business resolution in the House of Representatives that waives 
points of order against the application of Section 425. It also 
contains procedures for the disposition of points of order in 
the House of Representatives. Specifically, the chair will not 
rule on the point of order. Rather, the chair will put to the 
House or the Committee of the Whole, whichever the case may be, 
the ``question of consideration with respect to the proposition 
that is the subject of the point of order.'' The question of 
consideration with respect to each point of order is subject to 
20 minutes of debate--10 minutes by the Member initiating the 
point of order and 10 minutes by an opponent. Following debate 
on the question of consideration, the Members will vote on 
whether to proceed with consideration of the bill, joint 
resolution, amendment, motion or conference report.
    UMRA also amended clause 11 of House Rule XVIII (which was 
further modified by H.Res. 5 at the beginning of the 105th 
Congress). Clause 11 of House Rule XVIII preserves the 
availability in the Committee of the Whole of a motion to 
strike an unfunded intergovernmental mandate. Neither a rule 
restricting amendments nor one waiving all points of order is 
sufficient to preclude a motion to strike an unfunded 
intergovernmental mandate unless the rule specifically waives 
clause 11 of House Rule XVIII.
    In the 105th Congress, the Committee on Rules held original 
jurisdiction hearings on October 30, 1997, and March 27, 1998, 
on two similar private sector mandates bills and reported H.R. 
3534 as amended under an open rule on May 6, 1998. The House 
passed H.R. 3534 by a vote of 279-132 on May 19, 1998. The 
Senate Committee on Government Affairs held hearings and 
reported similar private mandates legislation, S. 389, but the 
Senate did not take further action.
    In the 106th Congress, on January 19, 1999, Representatives 
Gary Condit and Rob Portman introduced H.R. 350, the Mandates 
Information Act of 1999. This legislation attempts to improve 
congressional deliberation and public awareness of private 
sector mandates similar to the procedures that were enacted in 
the UMRA in 1995 with regard to intergovernmental mandates.

               Analysis of the Legislation (as Reported)

    The Rules Committee approved an amendment in the nature of 
a substitute which makes a number of technical and conforming 
changes to H.R. 350 as introduced.
    Sec. 1 of the committee substitute establishes the short 
title as the ``Mandates Information Act of 1999''.
    Sec. 2 of the committee substitute establishes a number of 
congressional findings with respect to the need for additional 
information on the costs of Federal private sector mandates 
contained in proposed legislation.
    Sec. 3 of the committee substitute outlines the purposes of 
the bill which are to: (1) improve the quality of the 
congressional deliberation with respect to proposed mandates on 
the private sector, by providing the Congress with more 
complete information about the effects of such mandates, and 
ensuring that the Congress acts on such mandates only after 
focused deliberation on the effects; and (2) enhance the 
ability of the Congress to distinguish between private sector 
mandates that harm consumers, workers, and small businesses, 
and mandates that help those groups.
    Sec. 4(a)(1) of the committee substitute amends Sec. 
424(b)(2) of the Congressional Budget Act of 1974 to further 
require CBO to estimate, when applicable, the aggregate impact 
of proposed Federal private sector mandates on consumers, 
workers and small businesses, including any disproportionate 
impact in particular regions or industries. The estimate shall 
also include an analysis of the effect of proposed Federal 
private sector mandates on: consumer prices and the actual 
supply of goods and services in consumer markets; worker wages, 
worker benefits, and employment opportunities; and the hiring 
practices, expansion, and profitability of businesses with 100 
or fewer employees.
    The phrase ``when applicable'' in Sec. 4(a)(1) qualifies 
the requirement that CBO provide estimates under Sec. 
424(b)(2)(B) of the Congressional Budget Act of 1974 in two 
ways. The phrase is not intended to grant CBO broad discretion 
to forgo preparing an estimate with respect to consumers, 
workers and small businesses. It is, however, intended to 
permit CBO to forgo an estimate of the impact of a Federal 
private sector mandate on consumers, workers and small 
businesses if CBO determines that the private sector mandate 
has no impact on that group or whose impact on that group could 
not be identified. Therefore, ifCBO determined there was no 
impact on workers, CBO would not be required to estimate the impact on 
workers, or the specific areas related to workers. The qualification is 
also intended to permit CBO to forgo an analysis of any of the specific 
information noted for consumers, workers and small businesses when CBO 
determines that the impacts on that group do not include that specific 
area. Therefore, if CBO determined that there was an impact on 
consumers, but the impact would not affect the supply of goods and 
services in consumer markets, CBO would not be required to provide an 
analysis of such affects.
    Sec. 4(a)(2) of the committee substitute amends Sec. 
424(b)(3) of the Congressional Budget Act of 1974 to permit a 
point of order against consideration of any bill or joint 
resolution that is reported by a committee if it is not 
feasible for CBO to prepare a Federal private sector mandates 
estimate for publication before consideration of the bill or 
joint resolution.
    Sec. 4(a)(3) of the committee substitute amends Sec. 
425(a)(2) of the Congressional Budget Act of 1974 to prohibit 
the consideration of any bill, joint resolution, amendment, 
motion, or conference report that would increase the direct 
costs of Federal private sector mandates by $100 million or 
more (adjusted annually for inflation) in the fiscal year in 
which any of the Federal private sector mandate would be 
effective or in any of the 4 fiscal years following such fiscal 
year. In the case of a bill, joint resolution, amendment, 
motion or conference report that provides a net reduction in 
tax or tariff revenue, the measure's tax and tariff provisions 
would not be considered in determining the direct costs of 
Federal private sector mandates only for purposes of a point of 
order under Sec. 425(a)(2) of the Congressional Budget Act of 
1974.
    For purposes of illustration, consideration of a bill 
reported by the Committee on Ways and Means that contains tax 
or tariff provisions which cause the $100 million threshold for 
private sector mandates to be exceeded, but result in an 
overall net reduction of tax or tariff revenue over a five-year 
period, would not be subject to a Sec. 425(a)(2) point of 
order, provided that the bill does not include other non-
revenue related Federal private sector mandates that exceed the 
$100 million threshold. In contrast, if a bill contains tax or 
tariff provisions which result in a net increase in revenues, a 
Sec. 425(a)(2) point of order may apply.
    Sec. 4(a)(4) of the committee substitute amends Sec. 425(c) 
of the Congressional Budget Act of 1974 to permit a point of 
order against legislative provisions in appropriations bills 
that increase the direct costs of a Federal private sector 
mandate by an amount that causes the $100 million threshold to 
be exceeded.
    Sec. 4(a)(5) of the committee substitute makes two 
technical changes to Sec. 426(b)(2) of the Congressional Budget 
Act of 1974 to conform with established practices by: (1) 
striking the term ``section 425 or subsection (a) of this 
section'' and inserting ``part B''; and (2) inserting the word 
``legislative'' before the word ``language''.
    Sec. 4(a)(6) of the committee substitute makes a technical 
change to Sec. 426(b)(3) of the Congressional Budget Act to 
conform with established practice by striking the term 
``section 425 or subsection (a) of this section''. Sec. 4(a)(6) 
further prohibits the Chair from recognizing Members for more 
than one point of order with respect to the consideration of: 
(1) any reported bill or joint resolution in which the 
reporting committee fails to publish a statement for the 
Director of the CBO on the direct costs of Federal private 
sector mandates; or (2) any bill, joint resolution, amendment, 
motion, or conference report that would increase the direct 
costs of a Federal private sector mandate by an amount that 
causes the $100 million threshold to be exceeded.
    Sec. 4(a)(7) of the committee substitute amends Sec. 427 of 
the Congressional Budget Act of 1974 to require the Director of 
the CBO, at the written request of a Senator and to the extent 
practical, to prepare an estimate of the direct costs of a 
Federal private Sector mandate contained in an amendment of 
such Senator.
    Sec. 4(b) of the committee substitute amends clause 11(b) 
of House Rule XVIII to preserve the availability in the 
Committee of the Whole of a motion to strike private sector 
mandates unless such mandates are expressly prohibited by the 
terms of a special order.
    Sec. 4(c) of the committee substitute expresses the 
constitutional authority of Congress to make the rules changes 
in Sec. 4 and exercise its rulemaking power in both the Senate 
and the House to change such rules at any time.
    Sec. 5 of the committee substitute amends Sec. 421(5)(B) of 
the Congressional Budget Act of 1974 to ensure that Federal 
entitlement programs such as Medicaid, child nutrition, and 
foster care are considered unfunded intergovernmental mandates 
if Congress imposes new conditions, places caps on funding, or 
cuts funding without giving the States authority to adjust 
those changes.

             Matters Required Under the Rules of the House

Committee vote

    Clause 3(b) of House rule XIII requires the results of each 
record vote on an amendment or motion to report, together with 
the names of those voting for and against, to be printed in the 
committee report. No record votes were requested during the 
consideration of H.R. 350.

Committee cost estimate

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

Congressional Budget Office estimates

    Clause 3(c)(3) of rule XIII requires the report of any 
committee on a measure which has been approved by the committee 
to include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the CBO cost estimate as 
required:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, February 2, 1999.
Hon. David Dreier,
Chairman, Committee on Rules,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 350, the Mandates 
Information Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mary 
Maginniss.
            Sincerely,
                                             James L. Blum,
                                                   Acting Director.
    Enclosure.

               Congressional Budget Office Cost Estimate

H.R. 350--Mandates Information Act of 1999

    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. H.R. 350 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.
    H.R. 350 would amend the Congressional Budget Act to expand 
the duties of CBO under UMRA. In particular, the bill would 
require CBO to provide additional information when it 
determines that a bill or joint resolution contains a private-
sector mandate with costs exceeding the threshold established 
in UMRA ($100 million, in 1996 dollars, in any one year). 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).
    H.R. 350 also would make legislation subject to a point of 
order if it includes private-sector mandates with costs 
exceeding the threshold. Such costs would exclude amounts 
attributable to tax or tariff provisions, if such provisions, 
in aggregate, do not raise net revenues over the first five 
fiscal years they were in effect.
    Finally, the legislation would amend UMRA's definition of 
intergovernmental mandate as it relates to certain large 
entitlement grant programs (such as Medicare). Under this 
amendment, changes to those programs would be considered 
mandates unless the same bill that makes the change also gives 
state and local governments new flexibility within the program 
to offset any 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 H.R. 350. The number of bills 
containing private-sector mandates with costs exceeding the 
threshold is small--less than 20 instances in each of the last 
two years--and the additional workload would not be 
substantial. Furthermore, the proposed change in UMRA's 
definition of intergovernmental mandates would not affect many 
of the bills that CBO reviews each year. 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 to the Congress.
    The CBO staff contacts are Mary Maginniss (for federal) 
costs, Theresa Gullo (for intergovernmental mandates), and 
Roger Hitchner (for private-sector mandates). This estimate was 
approved by Robert A. Sunshine, Deputy Assistant Director for 
Budget Analysis.

Constitutional authority

    Clause 3(d)(1) of rule XIII requires each committee report 
on a bill or joint resolution of a public character to include 
a statement citing the specific powers granted to the Congress 
in the Constitution to enact the law proposed by the bill or 
joint resolution. The Committee cites Article 1, Section 5 of 
the United States Constitution, which grants each House of 
Congress the authority to determine the rules of its 
proceedings, as its authority for reporting this bill.

Federal mandates

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution that includes any Federal mandate to include 
specific information about such mandates. The Committee states 
that H.R. 350 does not include any Federal mandate.

Preemption clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 350 is not 
intended to preempt any state or local law.

Oversight findings

    Clause 3(c)(1) of rule XIII requires each committee report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(1) of rule X. The Committee has 
oversight responsibility for Part B of the Congressional Budget 
Act of 1974 and finds that, although the Unfunded Mandates 
Reform Act is working as intended, Congress can benefit from 
having more complete information about the effects of proposed 
Federal private sector mandates. The Committee recommends the 
passage of H.R. 350 as a means to improve the effectiveness of 
UMRA.

Oversight findings and recommendations of the Committee on Government 
        Reform and Oversight

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

         Changes in Existing Law Made by the Bill, as Reported

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

CONGRESSIONAL BUDGET ACT OF 1974

           *       *       *       *       *       *       *


TITLE IV--ADDITIONAL PROVISIONS TO IMPROVE FISCAL PROCEDURES

           *       *       *       *       *       *       *


                        Part B--Federal Mandates

SEC. 421. DEFINITIONS.

  For purposes of this part:
          (1) * * *

           *       *       *       *       *       *       *

          (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 of 
                        assistance 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 are affected by the legislation, 
                        statute, or regulation.

           *       *       *       *       *       *       *


SEC. 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) Estimates.--Estimates required under paragraph 
        (1) shall include estimates (and a brief explanation of 
        the basis of the estimates) of--
                  (A) the total amount of direct costs of 
                complying with the Federal private sector 
                mandates in the bill or joint resolution; [and]
                  (B) when applicable, 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 mandates in 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 mandates in 
                        the bill or joint resolution on the 
                        hiring practices, expansion, and 
                        profitability of businesses with 100 or 
                        fewer employees; and
                  [(B)] (C) 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.
          (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 
        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.

           *       *       *       *       *       *       *


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) 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 section 423(f) 
        before such consideration, except this paragraph shall 
        not apply to any supplemental statement prepared by the 
        Director under section 424(d); [and]
          (2) any bill, joint resolution, amendment, motion, or 
        conference report that would increase the direct costs 
        of Federal private sector mandates (excluding any 
        direct costs that are attributable to revenue resulting 
        from tax or tariff provisions of any such measure if it 
        does not raise net tax and tariff revenues over the 5-
        fiscal-year period beginning with the first fiscal year 
        such measure affects such revenues) by an amount that 
        causes the thresholds specified in section 424(b)(1) to 
        be exceeded; and
          [(2)] (3) 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) to be exceeded, unless--
                  (A) the bill, joint resolution, amendment, 
                motion, or conference report provides new 
                budget authority or new entitlement authority 
                in the House of Representatives or direct 
                spending authority in the Senate for each 
                fiscal year for such mandates included in the 
                bill, joint resolution, amendment, motion, or 
                conference report in an amount equal to or 
                exceeding the direct costs of such mandate; or
                  (B) the bill, joint resolution, amendment, 
                motion, or conference report includes an 
                authorization for appropriations in an amount 
                equal to or exceeding the direct costs of such 
                mandate, and--
                          (i) * * *

           *       *       *       *       *       *       *

  (c) Committee on Appropriations.--
          (1) Application.--The provisions of subsection (a)--
                  (A) shall not apply to any bill or resolution 
                reported by the Committee on Appropriations of 
                the Senate or the House of Representatives; 
                [except]
                  (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.

           *       *       *       *       *       *       *


SEC. 426. PROVISIONS RELATING TO THE HOUSE OF REPRESENTATIVES.

  (a) * * *
  (b) Disposition of Points of Order.--
          (1) Application to the house of representatives.--
        This subsection shall apply only to the House of 
        Representatives.
          (2) Threshold burden.--In order to be cognizable by 
        the Chair, a point of order under [section 425 or 
        subsection (a) of this section] part B must specify the 
        precise legislative language on which it is premised.
          (3) Question of consideration.--As disposition of 
        points of order under [section 425 or subsection (a) of 
        this section] part B, the Chair shall put the question 
        of consideration with respect to the proposition that 
        is the subject of the points of order, except that not 
        more than one point of order shall be recognized by the 
        Chair under section 425(a)(1) or (a)(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.

           *       *       *       *       *       *       *

                              ----------                              


                           comparative print

  Clause 3(g) of rule XIII requires that, whenever the 
Committee on Rules reports a resolution amending or repealing 
the Rules of the House of Representatives, the accompanying 
report must contain a comparative print showing the changes in 
existing rules proposed to be made by the resolution.
  Changes in existing Rules of the House of Representatives 
made by the bill, as reported, are shown as follows (existing 
rules proposed to be omitted are enclosed in black brackets, 
new matter is printed in italic, existing rules in which no 
change is proposed are shown in roman):

       CLAUSE 11(b) OF RULE XVIII OF THE HOUSE OF REPRESENTATIVES

RULE XVIII.

           *       *       *       *       *       *       *


Unfunded mandates

  11. (a) * * *
  (b) In this clause the term ``unfunded mandate'' means a 
Federal [intergovernmental] mandate the direct costs of which 
exceed the threshold otherwise specified for a reported bill or 
joint resolution in section [424(a)(1)] 424(a)(1) or (b)(1) of 
the Congressional Budget Act of 1974.

           *       *       *       *       *       *       *

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

                            Dissenting Views

    The Democratic Members of the Rules Committee have three 
major concerns about this bill.
    First, we are concerned about the ``point of order'' scheme 
developed in the original bill and continued in this one. It 
can be too easily abused to close off debate for partisan, 
political purposes. The ``point of order'' is not a ``point of 
order'' in the true sense. Rather it is automatically 
transformed into a question of consideration. That is, if any 
Member asserts the existence of an unfunded mandate in a 
measure, the House must, without any judgment by the Chair, 
debate for 20 minutes and, by a simple majority vote, determine 
whether to proceed to consider the measure. In fact, the very 
first time the unfunded mandate point of order was raised, in 
1996, the majority party used it to block consideration of a 
motion to recommit that, according to the Congressional Budget 
Office, did not contain an unfunded mandate. It was an 
offensive breach of fair play because the motion to recommit is 
the only procedural tool guaranteed to the minority in a House 
which is run and ruled by the majority.
    The first experience was, fortunately, not the norm. On the 
whole, we are encouraged that the unfunded mandate point of 
order has not been misused. Important information has been 
available about the impact of legislation on the public sector, 
and Members generally have used restraint against exploiting 
the parliamentary procedure for political purposes. We urge 
Members to continue to act in a responsible way but the 
potential for abuse remains and the majority has done nothing 
to fix this defect.
    Our second objection is about the effect of the measure on 
efforts to promote social justice. Some of the finest 
legislative efforts of this nation--providing food to the 
hungry, protecting public health and safety, cleaning up 
pollution, enforcing the civil rights of persecuted individuals 
or compelling parents to fulfill their financial obligations to 
their children--have, by necessity, imposed burdens on 
businesses and individuals. We fear that, without amendment, 
the bill tilts the playing field against such legislation. One 
witness at the hearing, Maura Kealey of Public Citizen's 
Congress Watch, said: ``[H.R. 350] will allow Members of 
Congress to hide behind a procedural vote to torpedo vital 
legislation with strong public support--food safety, clean air 
and water, minimum wage increase, patients' bill of rights--
rather than vote it up or down on its merits.'' Amendments such 
as the one offered by Representative Waxman during last year's 
debate would vastly improve the legislation.
    Our third objection to the bill is aimed at a provision 
which was added by the majority leadership at the last minute 
last year and is included again in the bill reported by the 
Committee. The language, as proposed by Mr. Dreier, excludes 
from the point of order those measures containing revenue 
increases that net out with tax cuts over a five year period. 
This provision is flawed in two ways: it moves us away from the 
goal of reviewing all private sector mandates and it injects 
the unfunded mandate process into the fundamentally political 
battleground of decisions on taxes and spending.
    We want to be perfectly clear. Tax cuts are not unfunded 
mandates under the definition of the law, nor do we believe 
they should be. Members who supported Mr. Dreier's exemption 
argued last year that the budget rules require tax cuts to be 
paid for by either spending cuts or tax increases. They contend 
that, without the Dreier language, the new unfunded mandates 
provisions will unfairly penalize efforts to pay for those cuts 
with tax increases. We would point out, in all fairness, that 
decisions to pay for tax cuts by decreasing spending would also 
be caught up in the point of order if it imposes direct costs 
on businesses or causes a loss of revenue to states, localities 
or tribal governments. If certain spending cuts can be subject 
to unfunded mandate points of order, there is no reason certain 
tax increases should not be. We should not favor one form of 
paying for a tax cut over another, or to limit the various ways 
of paying for tax cuts.
    We believe that the point of order should apply in all 
cases without bias as we debate policy options. One of the main 
objectives of the unfunded mandate laws is to encourage bill 
authors and committees to consider burdens as well as benefits 
at an early stage of development. Mr. Portman made the point in 
last year's floor debate that the point of order acts as a 
deterrent in committee as well as a final enforcement tool on 
the floor. He noted that public sector mandates were more often 
not stopped on the Floor but curtailed at the committee level 
because the committees were forced to come up with ways of 
getting things through Congress.
    Certainly, the unfunded mandate law should stimulate debate 
and new ways of thinking, but we believe the procedural tool 
should be neutral. It should not be weighted to influence or 
direct a particular type of policy solution. The exemption 
proposed in this legislation forces us to look at the way 
revenues are used before applying the unfunded mandate point of 
order, and presents a parliamentary bias toward tax hikes over 
spending reductions. For example, a tax increase on coal that 
is spent on black lung benefits or environmental clean-up would 
be subject to a point of order, but the same tax increase on 
coal that is spent for a tax break for ethanol would not be 
subject to a point of order.
    We also believe a tax is a mandate regardless of where it 
appears. The Dreier proposal to exempt certain tax hikes 
creates a loophole in the mandates bill, and erodes the basic 
intent to focus attention on the potential burden of any policy 
on individuals and businesses. In other words, the new language 
tells the small businesses in our districts that a tax hike 
facing them is not worth the consideration of the House as long 
as it is used to give a tax break to someone else.
    Finally, we would point out a certain inconsistency in the 
arguments of some Members against our concern about social 
justice and for the exemption of tax hikes which are used to 
offset tax cuts. These Members assure those of us who are 
concerned about losing important environmental protections or 
worker rights that the point of order scheme is intended to 
provide information and the time to make an informed decision; 
a majority vote will allow Members to take up the measure. In 
other words, the point of order is a speed bump not a red 
light. By that reasoning, Members who support the Dreier 
exemption should have nothing to fear from an informed debate 
about tax increases, no matter where they fall.
    We remain concerned over this bill for these reasons. While 
our experience with public sector mandates has been reasonably 
encouraging, we continue to be deeply concerned about the point 
of order scheme and will remain vigilant that it not be abused 
for any purpose.
    We also believe we need a procedure that is fair, even 
handed, and not tilted toward one policy outcome over another. 
The special exemption for certain tax increases should be 
dropped; we should not have to tell our constituents that a gas 
tax spent to repair bridges would be subject to debate, but the 
same tax used to give a tax break to a competing part of the 
transportation industry would not need separate debate. And 
H.R. 350 should not be used to erect procedural hurdles against 
legislation designed to promote social justice. Amendments 
should be adopted so that the bill does not so concentrate on 
the burdens to businesses that it ignores the benefits of 
feeding the hungry, cleaning the environment, protecting public 
health and safety, and enforcing civil rights.

                                   Joe Moakley.
                                   Martin Frost.
                                   Tony P. Hall.
                                   Louise McIntosh Slaughter.

                                
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