[Senate Report 116-333]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 643
116th Congress          }                         {             Report
                                 SENATE
 2d Session             }                         {            116-333
_______________________________________________________________________

                                     

                                                       

 
         UNFUNDED MANDATES ACCOUNTABILITY AND TRANSPARENCY ACT

                              __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 4077

           TO AMEND THE UNFUNDED MANDATES REFORM ACT OF 1995
 TO PROVIDE FOR REGULATORY IMPACT ANALYSES FOR CERTAIN RULES, AND FOR 
                             OTHER PURPOSES

		
		[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
		


               December 16, 2020.--Ordered to be printed
               
               
               		      __________
               
                    U.S. GOVERNMENT PUBLISHING OFFICE
               
19-010 			    WASHINGTON : 2020               
               
     
     
     
     
     
     
     
     
     
     COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
                   Joseph C. Folio III, Chief Counsel
           Joshua P. McLeod, Senior Professional Staff Member
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
          Yogin J. Kothari, Minority Professional Staff Member
                     Laura W. Kilbride, Chief Clerk




                                                       Calendar No. 643
116th Congress       }                            {            Report
                                 SENATE
 2d Session          }                            {           116-333

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




         UNFUNDED MANDATES ACCOUNTABILITY AND TRANSPARENCY ACT

                                _______
                                

               December 16, 2020.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 4077]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 4077) to amend the 
Unfunded Mandates Reform Act of 1995 to provide for regulatory 
impact analysis for certain rules, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................6
 VI. Congressional Budget Office Cost Estimate........................6
VII. Changes in Existing Law Made by the Bill, as Reported............6

                         I. Purpose and Summary

    S. 4077, the Unfunded Mandates Accountability and 
Transparency Act, updates and expands the Unfunded Mandates 
Reform Act (UMRA) by requiring Federal agencies to assess the 
impact of new major rules on jobs, consider market-based, 
nongovernmental regulatory alternatives, and maximize benefits 
instead of selecting the least costly, most cost effective 
regulatory alternative as required by UMRA. The bill also 
extends UMRA to independent agencies; expands the rules that 
trigger UMRA's requirements to those that have an annual effect 
on the economy of $100 million or more; permits cost 
consideration and meaningful judicial review; increases 
stakeholder consultation; and expands the budget point of order 
for intergovernmental mandates to private sector mandates.

              II. Background and the Need for Legislation

    Prior to the 1970s, the Federal Government traditionally 
relied on voluntary grant-in-aid funding to encourage state and 
local government participation in Federal activities or 
services.\1\ However, in the 1970s and 1980s, there was an 
apparent shift in how the Federal Government interacted with 
states and localities,\2\ increasingly relying on ``new, more 
intrusive, and more compulsory'' programs and regulations to 
require compliance under the threat of legal penalties.\3\ 
State and local government advocates viewed these intrusive 
methods as ``unfunded mandates'' on states, and that such 
mandates were an infringement on American federalism.\4\
---------------------------------------------------------------------------
    \1\Robert Dilger, Cong. Research Serv., R40957, Unfunded Mandates 
Reform Act: History, Impact, and Issues 1 (2020), https://fas.org/sgp/
crs/misc/R40957.pdf.
    \2\Id. at 1-2.
    \3\Id. at 2.
    \4\Id.
---------------------------------------------------------------------------
    The state and local government advocates argued that a 
Federal statute was needed to prevent legislation and 
regulations that imposed higher costs and inefficiencies on 
state and local governments.\5\ These efforts resulted in 
President Clinton signing UMRA into law.\6\
---------------------------------------------------------------------------
    \5\Id.
    \6\Unfunded Mandates Reform Act of 1995, Pub. L. No. 104-4, Sec. 1, 
109 Stat. 48 (1995), https://www.congress.gov/104/plaws/publ4/PLAW-
104publ4.pdf.
---------------------------------------------------------------------------
    UMRA requires the Congressional Budget Office (CBO) to 
assess the cost of mandates that would apply to state, local, 
and tribal governments, or to the private sector.\7\ The 
purpose of UMRA is to ensure that Congress receives information 
about the potential effects of mandates of legislation under 
congressional consideration.\8\ UMRA refers to obligations from 
legislation or regulations as mandates to intergovernmental or 
private sector entities.\9\
---------------------------------------------------------------------------
    \7\CBO's Activities Under the Unfunded Mandates Reform Act, Cong. 
Budget Off., https://www.cbo.gov/publication/51335 (last visited July 
31, 2020).
    \8\Id.
    \9\Dilger, supra note 1, at 1.
---------------------------------------------------------------------------
    As part of its review, CBO is required to ``determine 
whether the aggregate direct costs of the mandates would be 
greater than the statutory thresholds established in UMRA in 
any of the first five fiscal years in which the mandates are 
effective.''\10\ In 1996, the statutory thresholds established 
by UMRA were $50 million for intergovernmental mandates and 
$100 million for private-sector mandates.\11\ The statutory 
thresholds are annually adjusted for inflation, and by 2019, 
the thresholds had increased to $82 million for 
intergovernmental mandates and $164 million for private-sector 
mandates.\12\
---------------------------------------------------------------------------
    \10\Cong. Budget Off., supra note 7.
    \11\Id.
    \12\Id.
---------------------------------------------------------------------------
    Under UMRA, when a mandate results in a restriction on the 
ability of a private sector entity to generate revenue, ``CBO 
measures the cost of that mandate as the direct loss of 
income.''\13\ CBO has interpreted that UMRA's definition of 
mandate includes prohibitions that result in lost income.\14\ 
Accordingly, CBO measures the net income foregone in cases 
where legislation would ban the production or sale of a 
good.\15\
---------------------------------------------------------------------------
    \13\Id.
    \14\Id.
    \15\Id.
---------------------------------------------------------------------------
    UMRA prohibits the consideration of a reported bill unless 
CBO has provided the committee with a published statement about 
the costs of intergovernmental and private-sector mandates.\16\ 
UMRA also prohibits consideration of reported legislation if 
the unfunded intergovernmental mandates in the proposed 
legislation are estimated by CBO to have direct costs above the 
statutory threshold unless the bill provides direct spending 
authority or authorizes sufficient appropriations to cover 
those costs.\17\
---------------------------------------------------------------------------
    \16\Id.
    \17\Id.
---------------------------------------------------------------------------
    UMRA also requires Federal agencies to consider regulatory 
alternatives and select the ``least costly, most cost-effective 
or least burdensome alternative.''\18\ Under UMRA, Federal 
agencies are required to prepare written statements that 
identify costs and benefits of a Federal mandate that would 
result in an annual expenditure of $100 million or more to 
state, local and tribal governments, or the private sector, 
prior to promulgating a notice of proposed rulemaking.\19\ As 
the Congressional Research Service (CRS) has noted, most of 
these requirements were included in President Clinton's 
Executive Order 12866.\20\ UMRA does not apply to participation 
in voluntary Federal programs and rules issued by most 
independent regulatory agencies.\21\
---------------------------------------------------------------------------
    \18\Cong. Budget Off., supra note 7.
    \19\Id.
    \20\Id.
    \21\Dilger, supra note 1, at 4.
---------------------------------------------------------------------------
    According to CRS, CBO has submitted 14,035 estimates of 
private-sector mandate costs imposed from a specific bill, 
amendment or conference report between January 1, 1996 and June 
30, 2020.\22\ Of those 14,035 cost estimates, about 15.3 
percent had costs imposed on the private sector and 3.2 percent 
had costs that exceeded UMRA's threshold.\23\ Additionally, CRS 
has found that most of the mandates identified in regulations 
are directed at the private sector.\24\ Of the 297 major rules 
that ``met UMRA's definition of a mandate on the public or 
private sector'' between 1995 and 2019, 277 were private-sector 
mandates only.\25\
---------------------------------------------------------------------------
    \22\Id. at 15.
    \23\Id. at 16.
    \24\Id. at 28.
    \25\Id.
---------------------------------------------------------------------------
    In the years since UMRA was enacted, there have been a 
number of efforts to update the law. One effort to update the 
law was the Unfunded Mandates Information and Transparency Act 
of 2019 (UMITA). UMITA would broaden UMRA to include both 
direct and indirect costs and apply UMRA to independent 
agencies.\26\ According to CRS, similar legislation to UMITA 
was passed by the House during the 112th, 113th, 114th, and 
115th Congresses.\27\
---------------------------------------------------------------------------
    \26\Id. at 34-35.
    \27\Id. at 34 n.133.
---------------------------------------------------------------------------
    UMATA updates and expands UMRA by requiring agencies to 
assess regulations' effect on jobs, and to consider market-
based, flexible, and non-governmental alternatives to agency 
rules. UMATA would require agencies to receive public input 
earlier in the rulemaking process as the agency develops 
alternatives. The bill would extend analytical requirements of 
UMRA to independent agencies and allow judicial review of 
compliance with UMRA. Finally, UMATA extends UMRA's budget 
point of order for intergovernmental unfunded mandates to 
unfunded mandates on the private sector.

                        III. Legislative History

    Senator Rob Portman (R-OH) introduced S. 4077, the Unfunded 
Mandates Accountability and Transparency Act, on June 25, 2020, 
with Senators Deb Fischer (R-NE) and James Lankford (R-OK). 
Senator Rick Scott (R-FL) later joined as a cosponsor.
    The bill was referred to the Committee. The Committee 
considered S. 4077 at a July 22, 2020 business meeting.
    The Committee ordered S. 4077 reported favorably on July 
22, 2020, by a roll call vote of 8 yeas to 5 nays. Senators 
voting in the affirmative were Johnson, Portman, Paul, 
Lankford, Romney, Scott, Enzi, and Hawley. Senators voting in 
the negative were Peters, Carper, Hassan, Harris, Rosen. For 
the record only, Senator Sinema voted nay by proxy. Consistent 
with Committee rules, the Committee reports the bill with a 
technical amendment by agreement of the Chairman and Ranking 
Member.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section sets forth that the bill may be referred to as 
the ``Unfunded Mandates Accountability and Transparency Act''.

Section 2. Findings

    This section describes congressional findings that 
regulations provide the public with benefits at particular 
costs to all levels of government and that the public has the 
right to be aware of both costs and benefits.

Section 3. Regulatory impact analyses for certain rules

    This section amends UMRA by capitalizing Tribal throughout 
the Act and defining a major rule as any rule which creates an 
annual economic impact of $100 million or more; results in a 
significant cost increase for consumers, private businesses or 
any level of government; or adversely affects the trade 
competitiveness of U.S. businesses against foreign businesses. 
Two subsections are added to section 202 to define cost and to 
require a preliminary and final regulatory impact analysis to 
be published in the Federal Register for any proposed major 
rule. The preliminary analysis must be subject to public 
comment and should be attached to the published Federal 
Register notice; the final analysis must attach to the final 
published version of the rule. Each analysis must include the 
costs and benefits of the proposed rule along with costs and 
benefits of potential alternatives, including options that 
provide the public with information to make choices, require no 
action by the federal government, or allow for regulatory 
flexibility. Analysis must also incorporate state, local, and 
Tribal government costs including an evaluation of how much 
cannot be offset via Federal assistance; available Federal 
resources; an explanation of section 205 compliance; rule 
impacts on the budgets of particular levels of government, 
types of private businesses, or geographic regions and on 
employment; the extent of discussion with government officials 
at all levels; and an agency evaluation of public comments. 
Summaries of this analysis must be included in the final 
proposed rule or any other statement.

Section 4. Enhanced stakeholder consultation

    This section amends section 204 of UMRA to incorporate 
private entities within the section's provisions. Agencies 
should consult with private entities and all levels of 
government before and throughout the rulemaking process, 
including discussions of cost-benefit analyses, potential 
risks, overall impact, and possible alternatives. Electronic 
feedback may be utilized but may not be the exclusive method of 
seeking input.

Section 5. Maximize net benefits or provide explanation

    This section replaces the former section 205 of UMRA with a 
new section 205, which defines ``cost'' for the purposes of 
this bill and requires a consideration of potential rules and 
alternatives followed by the pursuit of the option that 
provides the most benefit under a cost-benefit analysis within 
the statutory rulemaking scope. Exceptions to this requirement 
may be allowed upon permission granted by the Administrator of 
the Office of Information and Regulatory Affairs (OIRA) and 
agency showing and explanation of other factors outside the 
statutory cost-benefit scope or of the potential for lowered 
costs or increased benefits.

Section 6. New authorities and responsibilities for Office of 
        Information and Regulatory Affairs

    This section amends UMRA, section 208, to make the 
Administrator of OIRA responsible for oversight of agency major 
rules requiring an impact analysis in order to avoid conflict 
with rules of other federal agencies and to ensure compliance 
with other provisions of this bill and other law. Any areas of 
concern based on agency, bill, or law conflict should be 
identified, reported to the rulemaking agency, and monitored 
for future compliance. The Administrator will submit an annual 
report to Congress describing agency compliance with the terms 
of this bill and compliance efforts by the administrator.

Section 7. Initiation of rulemaking

    This section renames the former section 209 to section 210, 
and adds a new section 209, which details the procedure for 
agency introduction of a major rule. Agencies proposing major 
rules must provide an electronic docket for the rule to be 
potentially accompanied by a physical component and, at least 
90 days before the rule's publication, must publish an initial 
Federal Register notice describing the problem addressed by the 
rule, the rule and its implications, the agency's authority to 
institute the rule, and the method by which public commenters 
may submit thoughts on or suggested alternatives to the rule.

Section 8. Inclusion of application to independent regulatory agencies

    This section provides an exemption for monetary rules 
proposed by the Federal Open Market Committee or the Federal 
Reserve System Board of Governors and amends 2 U.S.C. 
Sec. 658(1) to include independent agencies within the scope of 
the Congressional Budget Act of 1974 with an exception for 
rules that concern monetary policy.

Section 9. Judicial review

    This section delineates the availability and scope of 
judicial review available to individuals affected by enacted 
agency rules under UMRA, as well as court jurisdiction and form 
of relief.

Section 10. Applying substantive point of order to private sector 
        mandates

    This section expands section 658d(a)(2) the Congressional 
Budget Act of 1974 to include all federal mandates, not just 
intergovernmental mandates.

Section 11. Effective date

    This section establishes that amendments to existing law 
made by sections 3-5 and 7 take effect 120 days after this bill 
is enacted.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in UMRA 
and would impose no costs on state, local, or tribal 
governments.

             VI. Congressional Budget Office Cost Estimate

    CBO failed to provide the Committee with a cost estimate in 
time for the final reporting deadline of the 116th Congress.

       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 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman:

UNFUNDED MANDATES REFORM ACT OF 1995

           *       *       *       *       *       *       *


SEC. 2. PURPOSES.

    The purposes of this chapter are--
          (1) to strengthen the partnership between the Federal 
        Government and State, local, and [tribal] Tribal 
        governments;
          (2) to end the imposition, in the absence of full 
        consideration by Congress, of Federal mandates on 
        State, local, and [tribal] Tribal governments without 
        adequate Federal funding, in a manner that may displace 
        other essential State, local, and [tribal] Tribal 
        governmental priorities;
          (3) to assist Congress in its consideration of 
        proposed legislation establishing or revising Federal 
        programs containing Federal mandates affecting State, 
        local, and [tribal] Tribal governments, and the private 
        sector by--
                  (A) providing for the development of 
                information about the nature and size of 
                mandates in proposed legislation; and
                  (B) establishing a mechanism to bring such 
                information to the attention of the Senate and 
                the House of Representatives before the Senate 
                and the House of Representatives vote on 
                proposed legislation;
          (4) * * *
          (5) to require that Congress consider whether to 
        provide funding to assist State, local, and [tribal] 
        Tribal governments in complying with Federal mandates, 
        to require analyses of the impact of private sector 
        mandates, and through the dissemination of that 
        information provide informed and deliberate decisions 
        by Congress and Federal agencies and retain competitive 
        balance between the public and private sectors;
          (6) * * *
          (7) to assist Federal agencies in their consideration 
        of proposed regulations affecting State, local, and 
        [tribal] Tribal governments, by--
                  (A) requiring that Federal agencies develop a 
                process to enable the elected and other 
                officials of State, local, and [tribal] Tribal 
                governments to provide input when Federal 
                agencies are developing regulations; and
                  (B) requiring that Federal agencies prepare 
                and consider estimates of the budgetary impact 
                of regulations containing Federal mandates upon 
                State, local, and [tribal] Tribal governments 
                and the private sector before adopting such 
                regulations, and ensuring that small 
                governments are given special consideration in 
                that process; and
          (8) to begin consideration of the effect of 
        previously imposed Federal mandates, including the 
        impact on State, local, and [tribal] Tribal governments 
        of Federal court interpretations of Federal statutes 
        and regulations that impose Federal intergovernmental 
        mandates.

SEC. 3. DEFINITIONS.

    For purposes of this chapter--
          (1) except as provided in section 1555 of this title, 
        the terms defined under section 658 of this title shall 
        have the meanings as so defined; [and]
          (2) the term ``Director'' means the Director of the 
        Congressional Budget Office[.] and
          (3) the term ``major rule'' means a rule, as defined 
        in section 551 of title 5, United States Code, that the 
        Administrator of the Office of Information and 
        Regulatory Affairs determines is likely to cause--
                  (A) an annual effect on the economy of 
                $100,000,000 or more, adjusted once every 5 
                years to reflect increases in the Consumer 
                Price Index for All Urban Consumers, as 
                published by the Bureau of Labor Statistics of 
                the Department of Labor;
                  (B) a major increase in costs or prices for 
                consumers, individual industries, Federal, 
                State, local, or Tribal government agencies, or 
                geographic regions; or
                  (C) significant adverse effects on 
                competition, employment, investment, 
                productivity, innovation, public health and 
                safety, or the ability of United States-based 
                enterprises to compete with foreign-based 
                enterprises in domestic and export markets.

           *       *       *       *       *       *       *


SEC. 6. EXEMPTION FOR MONETARY POLICY.

    Nothing in title II, III, or IV shall apply to rules that 
concern monetary policy proposed or implemented by the Board of 
Governors of the Federal Reserve System or the Federal Open 
Market Committee.

           *       *       *       *       *       *       *


             TITLE II--REGULATORY ACCOUNTABILITY AND REFORM

SEC. 201. * * *

SEC. 202. [STATEMENTS TO ACCOMPANY SIGNIFICANT REGULATORY ACTIONS] 
                    REGULATORY IMPACT ANALYSES FOR CERTAIN RULES.

    [(a) In General.--Unless otherwise prohibited by law, 
before promulgating any general notice of proposed rulemaking 
that is likely to result in promulgation of any rule that 
includes any Federal mandate that may result in the expenditure 
by State, local, and tribal governments, in the aggregate, or 
by the private sector, of $100,000,000 or more (adjusted 
annually for inflation) in any 1 year, and before promulgating 
any final rule for which a general notice of proposed 
rulemaking was published, the agency shall prepare a written 
statement containing--
          (1) an identification of the provision of Federal law 
        under which the rule is being promulgated;
          (2) a qualitative and quantitative assessment of the 
        anticipated costs and benefits of the Federal mandate, 
        including the costs and benefits to State, local, and 
        tribal governments or the private sector, as well as 
        the effect of the Federal mandate on health, safety, 
        and the natural environment and such an assessment 
        shall include--
                  (A) an analysis of the extent to which such 
                costs to State, local, and tribal governments 
                may be paid with Federal financial assistance 
                (or otherwise paid for by the Federal 
                Government); and
                  (B) the extent to which there are available 
                Federal resources to carry out the 
                intergovernmental mandate;
          (3) estimates by the agency, if and to the extent 
        that the agency determines that accurate estimates are 
        reasonably feasible, of--
                  (A) the future compliance costs of the 
                Federal mandate; and
                  (B) any disproportionate budgetary effects of 
                the Federal mandate upon any particular regions 
                of the nation or particular State, local, or 
                tribal governments, urban or rural or other 
                types of communities, or particular segments of 
                the private sector;
          (4) estimates by the agency of the effect on the 
        national economy, such as the effect on productivity, 
        economic growth, full employment, creation of 
        productive jobs, and international competitiveness of 
        United States goods and services, if and to the extent 
        that the agency in its sole discretion determines that 
        accurate estimates are reasonably feasible and that 
        such effect is relevant and material; and
          (5)
                  (A) a description of the extent of the 
                agency's prior consultation with elected 
                representatives (under section 1534 of this 
                title) of the affected State, local, and tribal 
                governments;
                  (B) a summary of the comments and concerns 
                that were presented by State, local, or tribal 
                governments either orally or in writing to the 
                agency; and
                  (C) a summary of the agency's evaluation of 
                those comments and concerns.]
    (a) Definition of Cost.--In this section, the term ``cost'' 
means the cost of compliance and any reasonably foreseeable 
indirect costs, including revenues lost, as a result of a major 
rule of an agency that is subject to this section.
    (b) Regulatory Impact Analyses.--
          (1) Requirement.--Before promulgating any proposed or 
        final major rule, the agency promulgating the major 
        rule shall prepare and publish in the Federal Register 
        an initial and final regulatory impact analysis with 
        respect to the major rule.
          (2) Initial Regulatory Impact Analysis.--An initial 
        regulatory impact analysis required under paragraph (1) 
        shall--
                  (A) accompany the notice of proposed 
                rulemaking with respect to the major rule that 
                is the subject of the analysis; and
                  (B) be open to public comment.
          (3) Final regulatory impact analysis.--A final 
        regulatory impact analysis required under paragraph (1) 
        shall accompany the final major rule that is the 
        subject of the analysis.
    (c) Content.--Each initial and final regulatory impact 
analysis prepared and published under subsection (b) shall 
include, with respect to the major rule that is the subject of 
the analysis--
          (1)
                  (A) an analysis of the anticipated benefits 
                and costs of the major rule, which shall be 
                quantified to the extent feasible;
                  (B) an analysis of the benefits and costs of 
                a reasonable number of regulatory alternatives 
                within the range of the discretion of the 
                agency under the statute authorizing the major 
                rule, including alternatives that--
                          (i) require no action by the Federal 
                        Government; and
                          (ii)
                                  (I) use incentives and 
                                market-based means to encourage 
                                the desired behavior;
                                  (II) provide information 
                                based upon which the public can 
                                make choices; or
                                  (III) employ other flexible 
                                regulatory options that permit 
                                the greatest flexibility in 
                                achieving the objectives of the 
                                statute authorizing the major 
                                rule; and
                  (C) an explanation of how the major rule 
                complies with the requirements of section 205;
          (2) an assessment of the extent to which--
                  (A) the costs to State, local, and Tribal 
                governments may be paid with Federal financial 
                assistance (or otherwise paid for by the 
                Federal Government); and
                  (B) Federal resources are available to carry 
                out the major rule;
          (3) estimates of--
                  (A) any disproportionate budgetary effects of 
                the major rule upon any particular--
                          (i) regions of the United States;
                          (ii) State, local, or Tribal 
                        governments;
                          (iii) types of communities, including 
                        urban or rural communities; or
                          (iv) segments of the private sector; 
                        and
                  (B) the effect of the major rule on job 
                creation or job loss, which shall be quantified 
                to the extent feasible; and
          (4)
                  (A) a description of the extent of the prior 
                consultation of the agency under section 204 
                with elected representatives of each affected 
                State, local, or Tribal government;
                  (B) a summary of the comments and concerns 
                that were presented to the agency orally or in 
                writing by State, local, or Tribal governments; 
                and
                  (C) a summary of the evaluation by the agency 
                of the comments and concerns described in 
                subparagraph (B).
    [b] (d) Promulgation.--In promulgating a general notice of 
proposed rulemaking or a final rule for which [a statement 
under subsection (a) is required, the agency shall include in 
the promulgation a summary of the information contained in the 
statement] an analysis under subsection (b) is required, the 
agency promulgating the major rule shall include in the 
promulgation a summary of the information contained in the 
analysis.
    [c] (e) Preparation in Conjunction With Other Statement.--
Any agency may prepare [any statement required under subsection 
(a) in conjunction with or as a part of any other statement or 
analysis, provided that the statement or analysis satisfies the 
provisions of subsection (a)] any analysis required under 
subsection (b) in conjunction with, or as a part of, any other 
statement or analysis if the other statement or analysis 
satisfies the requirements of subsections (b) and (c).

SEC. 203. * * *

SEC. 204. STATE, LOCAL, AND TRIBAL GOVERNMENT AND PRIVATE SECTOR INPUT.

    (a) In General.--Each agency shall, to the extent permitted 
in law, develop an effective process to permit elected officers 
of State, local, and [tribal] Tribal governments (or their 
designated employees with authority to act on their behalf), 
and impacted parties within the private sector (including small 
businesses) to provide meaningful and timely input in the 
development of regulatory proposals containing significant 
[Federal intergovernmental mandates] Federal mandates.
    (b) Meetings Between State, Local, [tribal] Tribal and 
Federal Officers.--The Federal Advisory Committee Act (5 U.S.C. 
App.) shall not apply to actions in support of 
intergovernmental communications where--
          (1) meetings are held exclusively between Federal 
        officials and elected officers of State, local, and 
        [tribal] Tribal governments (or their designated 
        employees with authority to act on their behalf) acting 
        in their official capacities; and
          (2) * * *
    [(c) Implementing Guidelines.--No later than 6 months after 
March 22, 1995, the President shall issue guidelines and 
instructions to Federal agencies for appropriate implementation 
of subsections (a) and (b) consistent with applicable laws and 
regulations.]
    (c) Guidelines.--For appropriate implementation of 
subsections (a) and (b) consistent with applicable laws and 
regulations, the following guidelines shall be followed:
          (1) Consultations shall take place as early as 
        possible, before issuance of a notice of proposed 
        rulemaking, continue through the final rule stage, and 
        be integrated explicitly into the rulemaking process.
          (2) Agencies shall consult with a wide variety of 
        State, local, and Tribal officials and impacted parties 
        within the private sector (including small businesses). 
        Geographic, political, and other factors that may 
        differentiate varying points of view should be 
        considered.
          (3) Agencies should estimate benefits and costs to 
        assist with these consultations. The scope of the 
        consultation should reflect the cost and significance 
        of the Federal mandate being considered.
          (4) Agencies shall, to the extent practicable--
                  (A) seek out the views of State, local, and 
                Tribal governments, and impacted parties within 
                the private sector (including small 
                businesses), on costs, benefits, and risks; and
                  (B) solicit ideas about alternative methods 
                of compliance and potential flexibilities, and 
                input on whether the Federal regulation will 
                harmonize with and not duplicate similar laws 
                in other levels of government.
          (5) Consultations shall address the cumulative impact 
        of regulations on the affected entities.
          (6) Agencies may accept electronic submissions of 
        comments by relevant parties but may not use those 
        comments as the sole method of satisfying the 
        guidelines in this subsection.

[SEC. 205. LEAST BURDENSOME OPTION OR EXPLANATION REQUIRED.] SEC. 205. 
                    MAXIMIZE NET BENEFITS.

    [(a) In General.--Except as provided in subsection (b), 
before promulgating any rule for which a written statement is 
required under section 1532 of this title, the agency shall 
identify and consider a reasonable number of regulatory 
alternatives and from those alternatives select the least 
costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule, for--
          (1) State, local, and tribal governments, in the case 
        of a rule containing a Federal intergovernmental 
        mandate; and
          (2) the private sector, in the case of a rule 
        containing a Federal private sector mandate.
    (b) Exception.--The provisions of subsection (a) shall 
apply unless--
          (1) the head of the affected agency publishes with 
        the final rule an explanation of why the least costly, 
        most cost-effective or least burdensome method of 
        achieving the objectives of the rule was not adopted; 
        or
          (2) the provisions are inconsistent with law.
    (c) OMB Certification.--No later than 1 year after March 
22, 1995, the Director of the Office of Management and Budget 
shall certify to Congress, with a written explanation, agency 
compliance with this section and include in that certification 
agencies and rulemakings that fail to adequately comply with 
this section.]
    (a) Definition of Cost.--In this section, the term ``cost'' 
has the meaning given the term in section 202(a).
    (b) Requirement.--Before promulgating any proposed or final 
major rule for which a regulatory impact analysis is required 
under section 202, an agency shall from the alternatives 
identified and considered under section 202(c)(1)(B), select 
the alternative that maximizes net benefits, taking into 
consideration only the costs and benefits that arise within the 
scope of the statutory provision that authorizes the 
rulemaking.
    (c) Exceptions.--An agency may adopt an alternative other 
than as required under subsection (b) only if--
          (1) the Administrator of the Office of Information 
        and Regulatory Affairs approves the adoption by the 
        agency of the alternative; and
          (2) the alternative is adopted to--
                  (A) account for costs or benefits that cannot 
                be quantified, including costs or benefits 
                related to constitutional or civil rights, 
                provided that the agency identifies all such 
                costs and benefits and explains why those costs 
                and benefits justify the adoption of the 
                alternative; or
                  (B) achieve additional benefits or cost 
                reductions, provided that the agency--
                          (i) identifies--
                                  (I) all such additional 
                                benefits and the associated 
                                costs of those benefits; and
                                  (II) all such cost reductions 
                                and the associated benefits of 
                                those cost reductions; and
                          (ii) explains why--
                                  (I) the additional benefits 
                                justify the additional costs; 
                                or
                                  (II) the additional cost 
                                reductions justify any benefits 
                                foregone.

           *       *       *       *       *       *       *


SEC. 208. [ANNUAL STATEMENTS TO CONGRESS ON AGENCY COMPLIANCE.] OFFICE 
                    OF INFORMATION AND REGULATORY AFFAIRS 
                    RESPONSIBILITIES.

    [No later than 1 year after March 22, 1995, and annually 
thereafter, the Director of the Office of Management and Budget 
shall submit to the Congress, including the Committee on 
Governmental Affairs of the Senate and the Committee on 
Government Reform and Oversight of the House of 
Representatives, a written report detailing compliance by each 
agency during the preceding reporting period with the 
requirements of this subchapter.]
    (a) In General.--The Administrator of the Office of 
Information and Regulatory Affairs (in this section referred to 
as the ``Administrator'') shall provide meaningful guidance and 
oversight so that the major rules of an agency for which a 
regulatory impact analysis is required under section 202--
          (1) are consistent with the principles and 
        requirements of this title, as well as other applicable 
        laws; and
          (2) and do not conflict with the policies or actions 
        of another agency.
    (b) Notification.--If the Administrator determines that the 
major rules of an agency for which a regulatory impact analysis 
is required under section 202 do not comply with the principles 
and requirements of this title, are not consistent with other 
applicable laws, or conflict with the policies or actions of 
another agency, the Administrator shall--
          (1) identify areas of noncompliance;
          (2) notify the agency; and
          (3) request that the agency comply before the agency 
        finalizes the major rule concerned.
    (c) Annual Statements to Congress on Agency Compliance.--
The Administrator shall submit to Congress, including the 
Committee on Homeland Security and Governmental Affairs of the 
Senate and the Committee on Oversight and Reform of the House 
of Representatives, an annual written report that, for the 1-
year period preceding the report--
          (1) details compliance by each agency with the 
        requirements of this title that relate to major rules 
        for which a regulatory impact analysis is required by 
        section 202, including activities undertaken at the 
        request of the Administrator to improve compliance; and
          (2) contains an appendix detailing compliance by each 
        agency with section 204.

SEC. 209. INITIATION OF RULEMAKING FOR MAJOR RULES.

    When an agency determines to initiate a rulemaking that may 
result in a major rule, the agency shall--
          (1) establish an electronic docket for that 
        rulemaking, which may have a physical counterpart; and
          (2) publish a notice of initiation of rulemaking in 
        the Federal Register, which shall--
                  (A) briefly describe the subject and 
                objectives of, and the problem to be solved by, 
                the major rule;
                  (B) refer to the legal authority under which 
                the major rule would be proposed, including the 
                specific statutory provision that authorizes 
                the rulemaking;
                  (C) invite interested persons to propose 
                alternatives and other ideas regarding how best 
                to accomplish the objectives of the agency in 
                the most effective manner;
                  (D) indicate how interested persons may 
                submit written material for the docket; and
                  (E) appear in the Federal Register not later 
                than 90 days before the date on which the 
                agency publishes a notice of proposed 
                rulemaking for the major rule.

[SEC. 209.] SEC. 2010. EFFECTIVE DATE.

    This title and the amendments made by this title shall take 
effect on the date of the enactment of this Act.

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                       TITLE IV--JUDICIAL REVIEW

[SEC. 401. JUDICIAL REVIEW].

    [(a) Agency Statements on Significant Regulatory Actions.--
          (1) In general.--Compliance or noncompliance by any 
        agency with the provisions of sections 1532 and 
        1533(a)(1) and (2) of this title shall be subject to 
        judicial review only in accordance with this section.
          (2) Limited review of agency compliance or 
        noncompliance.--
                  (A) Agency compliance or noncompliance with 
                the provisions of sections 1532 and 1533(a)(1) 
                and (2) of this title shall be subject to 
                judicial review only under section 706(1) of 
                title 5, and only as provided under 
                subparagraph (B).
                  (B) If an agency fails to prepare the written 
                statement (including the preparation of the 
                estimates, analyses, statements, or 
                descriptions) under section 1532 of this title 
                or the written plan under section 1533(a)(1) 
                and (2) of this title, a court may compel the 
                agency to prepare such written statement.
          (3) Review of agency rules.--In any judicial review 
        under any other Federal law of an agency rule for which 
        a written statement or plan is required under sections 
        1532 and 1533(a)(1) and (2) of this title, the 
        inadequacy or failure to prepare such statement 
        (including the inadequacy or failure to prepare any 
        estimate, analysis, statement or description) or 
        written plan shall not be used as a basis for staying, 
        enjoining, invalidating or otherwise affecting such 
        agency rule.
          (4) Certain information as part of record.--Any 
        information generated under sections 1532 and 
        1533(a)(1) and (2) of this title that is part of the 
        rulemaking record for judicial review under the 
        provisions of any other Federal law may be considered 
        as part of the record for judicial review conducted 
        under such other provisions of Federal law.
          (5) Application of other Federal law.--For any 
        petition under paragraph (2) the provisions of such 
        other Federal law shall control all other matters, such 
        as exhaustion of administrative remedies, the time for 
        and manner of seeking review and venue, except that if 
        such other Federal law does not provide a limitation on 
        the time for filing a petition for judicial review that 
        is less than 180 days, such limitation shall be 180 
        days after a final rule is promulgated by the 
        appropriate agency.
          (6) Effective date.--This subsection shall take 
        effect on October 1, 1995, and shall apply only to any 
        agency rule for which a general notice of proposed 
        rulemaking is promulgated on or after such date.
    (b) Judicial Review and Rule of Construction.--Except as 
provided in subsection (a)--
          (1) any estimate, analysis, statement, description or 
        report prepared under this chapter, and any compliance 
        or noncompliance with the provisions of this chapter, 
        and any determination concerning the applicability of 
        the provisions of this chapter shall not be subject to 
        judicial review; and
          (2) no provision of this chapter shall be construed 
        to create any right or benefit, substantive or 
        procedural, enforceable by any person in any 
        administrative or judicial action.]

SEC. 401. JUDICIAL REVIEW.

    (a) In General.--A person that is aggrieved by final agency 
action in adopting a major rule that is subject to section 202 
is entitled to judicial review of whether the agency complied 
with section 202(b), 202(c)(1), or 205 with respect to the 
rule.
    (b) Scope of Review.--Chapter 7 of title 5, United States 
Code, shall govern the scope of judicial review under 
subsection (a).
    (c) Jurisdiction.--Each court that has jurisdiction to 
review a rule for compliance with section 553 of title 5, 
United States Code, or under any other provision of law, shall 
have jurisdiction to review a claim brought under subsection 
(a).
    (d) Relief Available.--In granting relief in an action 
under this section, a court shall order the agency that 
promulgated the major rule that is under review to take 
remedial action consistent with chapter 7 of title 5, United 
States Code.

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CONGRESSIONAL BUDGET ACT OF 1974

           *       *       *       *       *       *       *


SEC. 421. DEFINITIONS.

    For purposes of this part:
          (1) Agency.--The term ``agency'' has the same meaning 
        as defined in section 551(1) of title 5[, but does not 
        include independent regulatory agencies].

           *       *       *       *       *       *       *


SEC. 425. LEGISLATION SUBJECT TO POINT OF ORDER.

    (a) * * *
         (1) * * *
         (2) any bill, joint resolution, amendment, motion, or 
        conference report that would increase the direct costs 
        of [Federal intergovernmental mandates] Federal 
        mandates by an amount that causes the thresholds 
        specified in [section 424(a)(1)] subsection (a)(1) or 
        (b)(1) of section 424 of this title to be exceeded, 
        unless--

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