[Senate Report 106-225]
[From the U.S. Government Publishing Office]
Calendar No. 424
106th Congress Report
SENATE
1st Session 106-225
_______________________________________________________________________
CONGRESSIONAL ACCOUNTABILITY FOR
REGULATORY INFORMATION ACT OF 1999
__________
R E P O R T
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1198
TO AMEND CHAPTER 8 OF TITLE 5, UNITED STATES CODE, TO PROVIDE FOR A
REPORT BY THE GENERAL ACCOUNTING OFFICE TO CONGRESS ON AGENCY
REGULATORY ACTIONS, AND FOR OTHER PURPOSES
December 7, 1999.--Ordered to be printed
Filed, under authority of the order of the Senate of November 19, 1999
__________
U.S. GOVERNMENT PRINTING OFFICE
9-010 WASHINGTON : 1999
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
GEORGE VOINOVICH, Ohio RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
Hannah S. Sistare, Staff Director and Counsel
Paul R. Noe, Senior Counsel
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Lawrence B. Novey, Minority Counsel
Susan E. Propper, Minority Counsel
Darla D. Cassell, Administrative Clerk
C O N T E N T S
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Page
I. Purpose and Summary..............................................1
II. Background and Need for Legislation..............................2
III. Legislative History and Committee Consideration..................4
IV. Administration Views.............................................6
V. Section-by-Section Analysis......................................7
VI. Regulatory Impact Statement......................................8
VII. CBO Cost Estimate................................................8
VIII.Changes in Existing Law..........................................9
Calendar No. 424
106th Congress Report
SENATE
1st Session 106-225
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CONGRESSIONAL ACCOUNTABILITY FOR REGULATORY INFORMATION ACT OF 1999
_______
December 7, 1999.--Ordered to be printed
Filed, under authority of the order of the Senate of November 19, 1999
_______
Mr. Thompson, from the Committee on Governmental Affairs, submitted the
following
R E P O R T
[To accompany S. 1198]
S. 1198, the Congressional Accountability for Regulatory
Information Act of 1999, is a bill introduced by Senator
Richard Shelby. The Committee on Governmental Affairs, having
considered S. 1198 on November 3, 1999, reports the bill
favorably with a substitute amendment and an amendment to the
title and recommends by voice vote with no nays that the bill
do pass as amended (including an amendment to the short title
to read as follows: the ``Truth in Regulating Act of 1999'').
I. purpose and summary
S. 1198, the ``Truth in Regulating Act,'' \1\ is a
bipartisan effort to promote effective Congressional oversight
of important regulatory decisions. Under the ``Truth in
Regulating Act,'' a committee of either House of Congress may
request the Comptroller General to review any proposed or final
economically significant rule and to submit a report which
includes an evaluation of the agency's regulatory analyses. The
legislation also would increase the transparency of important
regulatory decisions and increase the accountability of
Congress and the agencies to the people they serve. Upon
introduction of the ``Truth in Regulating Act,'' Senator
Thompson stated:
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\1\ For purposes of this report, the Committee shall refer to the
official short title of S. 1198 as the ``Truth in Regulating Act of
1999,'' which was adopted by the Committee at markup in the substitute
amendment to S. 1198.
The foundation of the ``Truth in Regulating Act'' is
the right of Congress and the people we serve to know
about important regulatory decisions. Through the
General Accounting Office, which serves as Congress'
eyes and ears, this legislation will help us get access
to the important information that federal agencies use
to make regulatory decisions. * * * This will make the
regulatory process more transparent, more accountable,
and more democratic. \2\
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\2\145 Cong. Rec. S7268 (daily ed. June 18, 1999).
In brief, S. 1198 establishes a 3-year pilot project which
allows a committee of either House of Congress to request that
the Comptroller General conduct an independent evaluation of
the agency analyses for any proposed or final economically
significant rule. The Comptroller General should submit a
report detailing the results of the independent evaluation. The
report should include the following elements: an evaluation of
the agency's analysis of the potential benefits of the rule,
including those benefits that cannot be quantified in monetary
terms and the identification of the persons or entities likely
to receive the benefits; an evaluation of the agency's analysis
of the potential costs of the rule, including any adverse
effects that cannot be quantified in monetary terms and the
identification of the persons or entities likely to bear the
costs; an evaluation of the agency's analysis of alternative
approaches, regulatory impact analysis, federalism assessment,
or other analysis or assessment prepared by the agency or
required for the economically significant rule; and a summary
of the results of the evaluation of the Comptroller General and
the implications of those results. The independent evaluation
must be a substantive evaluation of the agency's data,
methodology, and assumptions used in developing the rule,
including an explanation of how any strengths or weaknesses in
those data, methodology, and assumptions support or detract
from conclusions reached by the agency.
II. background and need for legislation
The Constitution places all legislative powers with the
Congress. \3\ While Congress may not delegate its essential
legislative functions, \4\ it routinely transfers authority to
implement laws and issue regulations to the President and
Executive Branch agencies. Consistent with Congress' broad
delegations to the Executive Branch, numerous Supreme Court
decisions have inferred a broad and encompassing power in the
Congress to engage in oversight to enable it to carry out its
legislative function. \5\
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\3\ U.S. Const. art. I, 1 (``All legislative Powers herein granted
shall be vested in a Congress of the United States, which shall consist
of a Senate and a House of Representatives.''); see also U.S. Const.
art. I, 8 (enumerating powers of Congress).
\4\ Panama Refining v. Ryan, 293 U.S. 388, 430 (1935); Schechter
Poultry v. United States, 295 U.S. 495, 542 (1935).
\5\ See generally, Congressional Research Service, ``Investigative
Oversight: An Introduction to the Law, Practice and Procedure of
Congressional Inquiry'' 2 (Apr. 7, 1995); see also, Congressional
Research Service, ``Congressional Oversight Manual'' 5 (Feb. 1995).
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Congress has become increasingly concerned about its
obligation to oversee the administrative process. This is not
without reason. By any measure, federal agencies are engaged in
an enormous volume of regulatory activity. In a 1997 report to
Congress, OMB reported that there are over 130,000 pages of
federal regulations, ``with about 60 federal agencies issuing
regulations at a rate of about 4,000 per year. * * * Federal
regulations now affect virtually all individuals, businesses,
State, local and tribal governments, and other organizations in
virtually every aspect of their lives or operations.'' \6\ In
recent reports, GAO noted that the November 1998 edition of the
Unified Agenda of Federal Regulations contained 4,560 entries
describing planned or ongoing federal regulatory actions, \7\
and that federal agencies issued more than 11,000 final rules
between April 1996 and December 1998. \8\
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\6\ Office of Management and Budget, Office of Information and
Regulatory Affairs, ``Report to Congress on the Costs and Benefits of
Federal Regulations'' (Sept. 30, 1997).
\7\ U.S. General Accounting Office, ``Regulatory Flexibility Act:
Agencies' Interpretations of Review Requirements Vary,'' GAO/GGD-99-55,
at 19, April 2, 1999.
\8\ Statement for the Record of L. Nye Stevens, Director, Federal
Management and Workforce Issues, General Government Division, GAO,
before the Senate Governmental Affairs Committee, ``Federalism:
Implementation of Executive Order 12612 in the Rulemaking Process,''
GAO/T-GGD-99-93, May 5, 1999.
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Over the years, Congress and the White House have required
a variety of regulatory analyses to provide more openness,
thoughtfulness, and accountability to the regulatory process.
When performed well, regulatory analysis can help reduce
unnecessary burdens and increase the benefits of regulation. As
OMB has stated:
[R]egulations (like other instruments of government
policy) have enormous potential for both good and harm.
Well-chosen and carefully crafted regulations can
protect consumers from dangerous products and ensure
they have information to make informed choices. Such
regulations can limit pollution, increase worker
safety, discourage unfair business practices, and
contribute in many other ways to a safer, healthier,
more productive, and more equitable society. Excessive
or poorly designed regulations, by contrast, can cause
confusion and delay, give rise to unreasonable
compliance costs in the form of capital investments,
labor and on-going paperwork, retard innovation, reduce
productivity, and accidentally distort private
incentives.\9\
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\9\ Office of Management and Budget, Office of Information and
Regulatory Affairs, ``Report to Congress on the Costs and Benefits of
Federal Regulations'' (Sept. 30, 1997), at 10.
In recent years, various statutes and executive orders have
mandated that Federal agencies conduct extensive and complex
regulatory analyses for important rules, especially
economically significant rules. In some circumstances, agencies
also conduct such analyses on their own initiative, without a
specific mandate. Regulatory analyses may cover a host of
concerns, including, for example, a cost-benefit analysis
assessing the costs and benefits associated with a rule, a risk
assessment analyzing the risks that would be reduced or avoided
by a rule, and more targeted analyses of how a rule may, for
example, reduce or avoid harm to sensitive populations (such as
children) or inequitable impacts of environmental pollution
within the population, or how the rule may affect States or
local governments or small businesses. These various regulatory
analyses may be important to understanding the need for a rule,
whether it fulfills its goals, and what the costs and any other
unintended consequences may be, and, depending on the
circumstances, they can affect the agency's ultimate regulatory
decision.
When conducting oversight of agencies' regulatory
activities or when attempting to exercise regulatory review
authority under the Small Business Regulatory Enforcement
Fairness Act,\10\ many in Congress would find it helpful to
have the benefit of specialized expertise and manpower to
evaluate these regulatory analyses. Many regulatory analyses
are extensive, highly complex, and technical, and may be at the
forefront of economic, technological, and scientific theory.
Others may involve in-depth analyses of circumstances involving
particular industries, specific regions or populations of the
country, or specialized concerns such as those involving
impacts on States and local governments.
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\10\ 5 U.S.C. Sec. 801 et seq.
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This bill establishes a framework under which Congress can
seek assistance from the General Accounting Office to evaluate
regulatory analyses for economically significant regulations
and to advise Congress about the implications of any strengths
or weaknesses that GAO finds in the agencies' work. The results
of GAO's evaluation not only will inform and assist Congress in
fulfilling its oversight obligations and inform and assist the
agencies and the President in executing the law, but they also
will enable the public to gain greater understanding of the
analytic underpinnings of agency decisions.
In short, the ``Truth in Regulating Act'' will provide
Congress and the public with more information about important
regulatory decisions, information which the public has a right
to know. It will help Congress oversee whether the agency is
appropriately implementing the law. It will provide an
opportunity for a thorough look at important regulatory
proposals by a credible reviewer of government, the General
Accounting Office.
iii. legislative history and committee consideration
A. Background
Congress' engagement on legislation to strengthen its
ability to conduct regulatory oversight began when
Representative Sue Kelly introduced the Congressional Office of
Regulatory Analysis Act (``CORA''), H.R. 1704, in the House on
May 22, 1997, and Senator Richard Shelby introduced the
companion bill in the Senate, S. 1675, on February 25, 1998.
CORA would have established a professional office within the
legislative branch to evaluate the effects of all new major
regulations. Non-major rules would have been evaluated at the
request of committees or individual Members of Congress. In
addition to providing information on costs and benefits,
analyses under CORA also would have explored possible
alternative approaches to achieving the same goals as the
proposed legislation at a lower cost. Finally, the office would
have issued an annual report on the total cost of Federal
regulations to the United States economy.
Based on discussions about S. 1675 and the Governmental
Affairs Committee's consideration of the issue, Chairman
Thompson and Senator Shelby took a revised approach to
Congressional regulatory oversight legislation. In June 1999,
Senator Shelby introduced S. 1198 as the ``Congressional
Accountability for Regulatory Information Act of 1999.'' The
bill was referred to the Governmental Affairs Committee.
Chairman Fred Thompson introduced S. 1244, the ``Truth in
Regulating Act,'' with a bipartisan group of cosponsors,
including Senators Blanche Lincoln, George Voinovich, Bob
Kerrey, and John Breaux. S. 1244 was likewise referred to the
Committee. Both bills were written to achieve the same goals.
Both were intended to strengthen Congress' ability to conduct
oversight on economically significant regulations. Both also
established procedures by which committees could request GAO to
review and report on the economic, scientific, and policy
analysis underlying economically significant regulations. The
supporters of the legislation reported by the Committee include
all those who supported the preceding bills--Senators Thompson,
Shelby, Lincoln, Lott, Kerrey, Voinovich, Bond, Breaux,
Stevens, Landrieu, Inhofe, Robb, Bennett, Roth, and Hagel.
Before the Committee's August markup, which included S.
1244 on its agenda, Senator Lieberman, the Ranking Democrat on
the Committee, expressed several concerns about the bill. His
concerns were reflected in four proposed amendments to S. 1244.
In response to these concerns, Senators Thompson and Lieberman
collaborated to develop a modified draft of S. 1244 to offer as
an amendment in the nature of a substitute to S. 1198 at the
Committee's November markup. S. 1198, with the Thompson-
Lieberman amendment in the nature of a substitute, passed the
Committee by voice vote, with no nays.
The changes reflected in the substitute amendment ensure
the following:
(1) GAO may examine the regulation when it is
published in proposed form. S. 1244, as introduced, had
also provided for GAO to examine a rule during its
development prior to publication.
(2) GAO will not be required to do a new regulatory
analysis, but instead will do a substantive evaluation
of the agency's analysis. GAO will then report to
Congress on the strengths or weaknesses of the agency's
analysis and what the implications of those strengths
or weaknesses are for the rulemaking. S. 1198 and S.
1244, as introduced, mandated that GAO's evaluation
include an analysis of alternative approaches that
would be more cost-effective or provide greater net
benefits. The bill no longer contains this language.
The bill would not create another layer of rulemaking
and would not require GAO to go outside of its
traditional role as evaluator by, for example,
conducting its own regulatory analysis or making its
own determination of what the regulatory conclusion
should be.
(3) GAO will not have its authority either expanded or
limited by the bill.
(4) Requests must be made by committees with
legislative or oversight jurisdiction.
These changes reflected in the substitute amendment address and
resolve the concerns of Senator Lieberman while maintaining the
original purposes of increasing regulatory transparency,
promoting effective congressional oversight, and increasing
government accountability sought by Senator Thompson in the
original drafting of the ``Truth in Regulating Act.''
B. Committee hearings
On April 22, 1999, the Governmental Affairs Committee held
a hearing on Congressional Office of Regulatory Analysis
legislation. At the hearing, witnesses discussed S. 1675, the
Congressional Office of Regulatory Analysis Act from the 105th
Congress, which was Senator Shelby's predecessor to S. 1198.
Testifying at this hearing were: Mr. Don Arbuckle, Acting
Administrator, Office of Information and Regulatory Affairs,
Office of Management and Budget; The Honorable Steven Saland,
State Senator, New York; Mr. Arthur J. Dyer, President, Metal
Products Company, on behalf of the National Association of
Manufacturers; Dr. Robert Litan, AEI-Brookings Joint Center for
Regulatory Studies; Dr. Murray Weidenbaum, Chairman, Center for
the Study of American Business, Washington University;
Professor Sidney Shapiro, School of Policy and Environmental
Affairs, Indiana University; Dr. Gary Bass, Executive Director,
OMB Watch.
C. Committee action and amendments
On November 3, 1999, the Committee on Governmental Affairs
marked up and reported S. 1198 by voice vote with no nays.
Members present were Senators Collins, Cochran, Lieberman,
Levin, Akaka, Durbin, Cleland, Edwards and Thompson. The only
amendment offered was the Thompson-Lieberman substitute
amendment, and it was adopted by voice vote with no nays.
At the markup, Senator Levin expressed concern over whether
a Committee request for the review of a rule should be allowed
to be made before the proposed rule is published. He also noted
that the term ``Committee'' in the bill may not be sufficiently
explicit, leaving open the question whether a Chairman or
Ranking Member could make the request on behalf of the
Committee without formal Committee approval. Chairman Thompson
and Senator Lieberman agreed to work with Senator Levin on
these issues before Senate consideration of the bill.
IV. administration views
At the Committee's April 22 hearing, Donald R. Arbuckle,
the Acting Administrator of OMB's Office of Information and
Regulatory Affairs, testified on behalf of the Administration.
Mr. Arbuckle stated: As is the tradition, the administration
defers to Congress on matters of internal organization of the
Legislative Branch. However, we believe that it is important to
clarify that we believe that no Congressional office should be
involved in the Executive Branch's development of new
regulations prior to their formal publication.'' 11
This issue was addressed in the Thompson-Lieberman substitute
to S. 1198 offered at markup.
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\11\ Testimony of Donald R. Arbuckle, Acting Administrator, Office
of Information and Regulatory Affairs, OMB, before the Senate Committee
on Governmental Affairs, S. Hrg. 106-180 (Apr. 22, 1999).
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V. Section-by-section analysis
Section 1. Short title
The name of S. 1198 is the ``Truth in Regulating Act of
1999.''
Section 2. Purposes
Section 2 lays out three purposes of the legislation, as
follows: First, to increase the transparency of important
regulatory decisions; Second, to promote effective
congressional oversight to ensure that agency rules are
efficient, effective and fair; Third, to increase the
accountability of Congress and agencies to the people they
serve.
Section 3. Definitions
Section 3 defines several key terms in the bill. The term
``agency'' has the same meaning given such term under section
551(1) of title 5, United States Code.
The term ``economically significant rule'' means any
proposed or final rule, including an interim or direct final
rule, that may cost $100,000,000 or more or adversely affect in
a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health
or safety, or State, local, or tribal governments or
communities.
The term ``independent evaluation'' means a substantive
evaluation of the agency's data, methodology and assumptions
used in developing the economically significant rule, including
an explanation of how any strengths or weaknesses in the data,
methodology, and assumptions support or detract from
conclusions reached by the agency, and the implications, if
any, of those strengths or weaknesses for the rulemaking.
Section 4. Pilot project for report on rules
Under the 3-year pilot project established by this
legislation, a committee of either House of Congress may
request the Comptroller General to review an economically
significant rule. The requesting committee must have either
legislative or oversight jurisdiction over the rule. Because
the Governmental Affairs Committee has government-wide
oversight jurisdiction over agency rulemaking, it has broad
request authority. The Comptroller General may review the rule
when it is published in proposed or final form by the agency.
The Comptroller General shall conduct an independent evaluation
of the agency's regulatory analyses for the rule and submit to
the requesting committee a report detailing the results of the
evaluation no later than 180 calendar days after the request is
received.
The Comptroller General's independent evaluation of the
rule shall include the following: an evaluation of the agency's
analyses of the potential benefits of the rule, potential costs
of the rule, and alternative regulatory approaches; an
evaluation of any regulatory impact analysis, federalism
assessment, or other analysis or assessment prepared by the
agency or required for the rule; and a summary of the results
of the evaluation and the implications of those results for the
rulemaking. The Comptroller General has discretion to develop
the procedures for determining the priority of committee \12\
requests for which a report shall be submitted as required by
Section 4. The legislation is not intended to alter the
Comptroller's current policies regarding the treatment of
requests by Committee Chairs and Ranking Minority Members. For
example, GAO's existing policy assigns equal status to requests
from Ranking Minority Members and requests from Committee
Chairs.\13\ Nothing in this legislation is intended to either
expand or limit the authority of the Comptroller General with
regard to powers to access agency information or otherwise.
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\12\ At markup, Senator Levin raised the question about the meaning
of the term ``committee,'' and Chairman Thompson and Senator Lieberman
agreed to work with him on the issue before consideration of the
legislation by the Senate.
\13\ General Accounting Office, ``General Policies/Procedures and
Communications Manual,'' page 1.1.2 (March 1997).
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Section 5. Authorization of Appropriations
There are authorized to be appropriated to the General
Accounting Office to carry out this legislation $5,200,000 for
each of fiscal years 2000 through 2002.
Section 6. Effective date and duration of pilot project
This Act will take effect 90 days after enactment. Before
the conclusion of the 3-year period from the effective date of
this Act, the Comptroller General shall submit to Congress a
report reviewing the effectiveness of the pilot project and
recommending whether Congress should permanently authorize the
project. The pilot project under this Act shall continue for a
period of 3 years, if in each fiscal year, or portion thereof
included in that period, a specific annual appropriation not
less than $5,200,000 or the pro-rated equivalent thereof shall
have been made for that pilot project.
vi. regulatory impact statement
Pursuant to paragraph 11(b), rule XXVI of the Standing
Rules of the Senate, the Committee, after due consideration,
concludes that S. 1198 will not have a significant regulatory
impact.
vii. cbo cost estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 17, 1999.
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. 1198, the Truth in
Regulating 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,
Steven M. Lieberman
(For Dan L. Crippen, Director).
Enclosure.
S. 1198--Truth in Regulating Act of 1999
Summary: S. 1198 would establish a three-year pilot project
for the General Accounting Office (GAO) to review, at the
request of the committee of jurisdiction, proposed or final
agency rules that are economically significant. It would
authorize the appropriation of $5.2 million in each year over
the 2000-2002 period for GAO to prepare these independent
evaluations. Assuming appropriation of the amounts authorized,
CBO estimates that implementing S. 1198 would cost $15.6
million over the 2000-2003 period. The bill would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply. S. 1198 contains no
intergovernmental or private-sector mandates as defined in he
Unfunded Mandates Reform Act (UMRA) and would not affect the
budgets of state, local, or tribal governments.
Estimated cost to the Federal Government: For the purposes
of this estimate, CBO assumes that the amounts authorized to be
appropriated for each year will be provided near the beginning
of each fiscal year. Estimated spending is based on historical
rates of expenditures for GAO. The estimated cost of the bill
is shown in the following table. The costs of this legislation
fall within budget function 800 (general government).
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By fiscal year, in millions of dollars--
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2000 2001 2002 2003 2004 2005
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Changes in spending subject to appropriation:
Authorization Level......................................... 5 5 5 0 0 0
Estimated Outlays........................................... 2 5 6 3 0 0
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Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: S. 1198
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Maginniss.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
VIII. changes in existing law
S. 1198 does not make any changes to existing law.