[Federal Register Volume 60, Number 129 (Thursday, July 6, 1995)]
[Notices]
[Pages 35220-35223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16547]



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ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS


Criteria for Review of Federal Mandates by the Advisory 
Commission on Intergovernmental Relations

ACTION: Notice of criteria for review of federal mandates.

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SUMMARY: The Advisory Commission on Intergovernmental Relations (ACIR) 
is issuing criteria for investigating and reviewing existing federal 
mandates and formulating recommendations to modify, suspend, or 
terminate specific mandates on State, local, or tribal governments. 
These criteria were approved by the Commission on June 28, 1995.

FOR FURTHER INFORMATION CONTACT: Philip M. Dearborn, Director, 
Government Finance Research, ACIR, 800 K Street, NW, Suite 450 South, 
Washington, DC 20575, phone (202) 653-5538, FAX (202) 653-5429.

SUPPLEMENTARY INFORMATION: The Advisory Commission on Intergovernmental 
Relations (42 U.S.C. 4271) is charged in Section 302 of the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48) with 
investigating and reviewing the role of Federal mandates in 
intergovernmental relations [Sec. 302(a)(1)] and with making 
recommendations for improving the operation of mandates [Sec. 
302(a)(3)]. The law defines ``Federal mandate'' very broadly for the 
purposes of the ACIR review as ``any provision in statute or regulation 
or any Federal court ruling that imposes an enforceable duty on State, 
local, or tribal governments including a condition of Federal 
assistance or a duty arising from participation in a voluntary Federal 
program.''
    For purposes of reviewing the role of Federal mandates under Sec. 
302(a)(1), ACIR will take into account the positive attributes of 
mandates and the rationale for their adoption, as well as the 
characteristics of mandates that present problems. For purposes of 
making the recommendations required under Section 302(a)(3), ACIR will 
select for review only Federal mandates that are generally recognized 
as creating significant concerns within the intergovernmental system. 
In accordance with Public Law 104-4, ACIR will give review priority to 
mandates that are subject to judicial proceedings in Federal courts.
    Prior to making recommendations under Sec. 302(a)(3), the 
Commission is required to issue criteria. The following criteria will 
fulfill that requirement. They were approved by the Commission on June 
28, 1995, following public comment on proposed criteria published in 60 
FR 27324 on May 23, 1995.
    The Commission will make the final decisions about which mandates 
it will review and what recommendations it will make. The Commission's 
decisions will be based on two types of criteria:
    (1) Those that provide a basis for identifying mandates of 
significant concern; and
    (2) Those that provide a basis for formulating recommendations to 
retain, modify, suspend, or terminate specific mandates that are 
concern.
    These criteria are intended solely to help the Commission make its 
recommendation.

Criteria for Identifying Mandates of Significant Concern

    In general, Federal mandates will be selected for intensive review 
if they have one or more of the following characteristics:

1. The Mandate Requires State, Local, or Tribal Governments to Expend 
Substantial Amounts of Their Own Resources in a Manner That 
Significantly Distorts Their Spending Priorities

    This addresses mandates that require more than incidental amounts 
of spending.
    It will not include all Federal mandates that require governments 
to spend money.

2. The Mandate Establishes Terms or Conditions for Federal Assistance 
in a Program or Activity in Which State, Local, or Tribal Governments 
Have Little Discretion Over Whether or Not to Participate

    This will include mandates in entitlements and discretionary 
programs. It will exclude conditions of grants in small categorical 
programs that are distributed on the basis of annual or periodic 
applications and that are received only by a limited number of 
governments unless the conditions effectively limit access to such 
programs by small governments.

3. The Mandate Abridges Historic Powers of State, Local, or Tribal 
Governments, the Exercise of Which Would Not Adversely Affect Other 
Jurisdictions

    This will include mandates that have an impact on internal State, 
local, and tribal government affairs related to issues not widely 
acknowledged as being of national concern and for which the absence of 
the mandate would not create adverse spillover effects. This also will 
include mandates that abridge the powers of State, local, or tribal 
governments to impose taxes within the limits of the U.S. Constitution 
and that provide particular tax treatment to particular classes of 
taxpayers.

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4. The Mandate Imposes Compliance Requirements That Make it Difficult 
or Impossible for State, Local, and Tribal Governments to Implement

    Implementation delays, issuance of court orders, or assessment of 
finds may be indicative of mandate requirements that go beyond State, 
local, or tribal fiscal resources, or administrative or technological 
capacity, after reasonable efforts at compliance have been made.

5. The Mandate has Been the Subject of Widespread Objections and 
Complaints by State, Local and Tribal Governments and Their 
Representatives

    This will include mandates that are based on problems of national 
scope, but are not Federally funded.

Criteria for Formulating Recommendations

    ACIR will investigate the specific characteristics of each Federal 
mandate causing significant concern in order to formulate specific 
recommendations, ACIR also will consider the beneficial and non-
beneficial effects of mandates. For purposes of formulating such 
recommendations, ACIR will focus on specific provisions in laws, 
regulations, or court orders.
    When a mandate affects a State, local, or tribal program that 
directly competes with a comparable private sector activity, ACIR will 
consider the effects of the mandate and the Commission recommendation 
on both the government and private sector. ACIR also will consider (1) 
impacts of mandates on working men and women and (2) mandates for 
utilization of metric systems.
    ACIR will investigate each mandate selected for intensive review to 
determine whether or not they have one or more of the following 
characteristics that should be considered by ACIR in making its 
recommendations:

1. Federal Intrusion

     Requirements are not based on demonstrated national needs.
     Requirements are related to issues not widely recognized 
as national concerns or as being within the appropriate scope of 
Federal activities.
     Requirements are based on problems of national scope, but 
which State, local, or tribal governments have demonstrated ability or 
willingness to solve effectively, either independently or through 
voluntary cooperation.
     Requirements are based on problems of national scope, but 
are not Federally funded.
    These mandates should be terminated, retained, funded, or modified 
to express non-binding national guidelines.

2. Unnecessarily Rigid

     Provisions do not permit adjustments to the circumstances 
or needs of individual jurisdictions.
     Provisions restrict flexibility to use less costly or less 
onerous alternative procedures to achieve the goal of the mandate.
     Provisions do not allow governments to set implementation 
or compliance priorities and schedules, taking into account risk 
analysis, greatest benefit, local capacity, or other factors.
    These mandates should be modified to provide options, waivers, or 
exemptions, or be terminated.

3. Unnecessarily Complex or Prescriptive

     Requirements are unnecessarily detailed and difficult to 
understand.
     Provisions are too process-specific rather than results-
oriented.
    These mandates should be simplifed, clarified, or otherwise revised 
to facilitate understanding and implementation, or be terminated.

4. Unclear Goals or Standards

     Goals or standards are too vague, confusing, or poorly 
written to permit clear or consistent implementation of requirements or 
measurement of results.
    These goals or standards should be rewritten or the mandate should 
be terminated.

5. Contradictory or Inconsistent

     Provisions in one mandate may make it difficult or 
impossible to comply with other provisions in the same or other 
Federal, State, local, or tribal laws.
     Requirements use conflicting and confusing definitions and 
standards.
    These mandates should be modified to bring conflicting requirements 
into conformance. In some instances, it may be appropriate to terminate 
one or all of the requirements. Where possible, common definitions and 
standards should be used, especially in planning and reporting 
requirements.

6. Duplicative

     Provisions in two or more Federal mandates may have the 
same general goals but require different actions for compliance.
    These mandates could be terminated, consolidated, or modified to 
facilitate compliance.

7. Obsolete

     Provisions were enacted when conditions or needs were 
different or before existing technologies were available.
     Provisions have been superseded by later requirements.
    These mandates should be modified to reflect current conditions or 
existing technology. If a mandate is no longer necessary or has been 
superseded, it should be terminated.

8. Inadequate Scientific and Economic Basis

     Provisions were enacted based on inadequate or 
inconclusive scientific research or knowledge.
     Provisions are not based on current, peer-reviewed 
scientific research, when applicable.
     Provisions are not justified by appropriate risk 
assessment or cost-benefit studies.
    These mandates should be terminated or modified to reflect current 
science. In some cases, suspension of the mandate may be appropriate to 
provide time for additional research.

9. Lacking in Practical Value

     Requirements do not achieve the intended results.
     Requirements are perceived by citizens as unnecessary, 
insignificant, or ineffective, thereby producing credibility problems 
for governments.
     Requirements have high costs relative to the importance of 
the issue. These mandates should be evaluated to determine whether or 
not they are effective. If they cannot be shown to be effective and 
worthy of public support, they should be terminated. If they are 
effective, it still may be appropriate to suspend the mandates to allow 
time for public education and consensus building on their value.

10. Resource Demands Exceed Capacity

     Requirements for compliance exceed State, local, and 
tribal governments' fiscal, administrative, and/or technological 
capacity.
    These mandates should be terminated or modified to reduce 
compliance problems, or assistance could be provided to upgrade 
capacity. In some instances, compliance schedule extensions or 
exemptions may be appropriate.

11. Compounds Fiscal Difficulties

     Compliance with the requirements of any one mandate or 
with multiple mandates compounds fiscal difficulties of governmental 
jurisdictions that are experiencing fiscal stress.
    In these situations, certain of the mandates affecting the 
jurisdictions--exclusive of those that are vital to public health or 
safety--should be considered 

[[Page 35222]]
for partial or total suspension until the government experiencing 
fiscal stress is able to comply. The conditions triggering 
considerations of such suspensions should include:
    a. Governments faced with costs dramatically out of line with their 
revenue bases, as determined by comparisons with other similar 
governments that are complying. This may result from local and tribal 
governments experiencing fiscal stress due to depopulation, loss of tax 
base, or inability to raise matching funds from user fees due to low 
average household income or small population base; or
    b. Governments that are experiencing severe fiscal distress for 
reasons not immediately within their control. There should be some 
definitive evidence of severe problems, such as State receivership, 
State declaration of distress, Chapter 9 bankruptcy, or a debt rating 
below investment grade. This should not include annual budget balancing 
problems.
Responses to Comments Received

    In response to ACIR's notice of proposed criteria (60 FR 27324, May 
23, 1995), comments were received from 20 individuals or organizations. 
ACIR considered all of the comments and incorporated those suggestions 
it found would aid in carrying out the studies directed by the 
Congress.
    Several commentators misunderstood the purpose of the criteria, 
expressing concerns that they would be used to delay the approval of 
laws or regulations, or to provide a legal basis for challenging the 
implementation of mandates. The Commission added a statement to the 
introduction to make it clear that the criteria are solely designed to 
aid ACIR in this formulation of recommendations to the President and 
Congress. The criteria, as such, will not alter existing legislative or 
regulatory procedures.
    Several commentators found that the criteria focused only on 
problems caused by mandates and did not recognize their positive 
results. They suggested that the criteria should evaluate positive 
benefits that may offset negative effects. In response, the Commission 
has added a paragraph in the introduction to make it clear that for its 
Section 302(a)(1) investigation and review of the role of federal 
mandates in intergovernmental relations, it will take into account the 
beneficial effects as well as the problems created by mandates as they 
are currently formulated. The benefits of mandates will also be 
examined for feasibility of quantification under the baseline study 
required by Section 301(b).
    In addition, a statement was added to the introduction of the 
section on criteria for formulating recommendations that beneficial 
effects will be considered when making recommendations because of 
problems revealed by the criteria.
    Commentators also pointed out that in addition to modification, 
suspension, or termination, the Commission could recommend retention of 
a mandate. The list of possible recommendations in the introduction has 
been amended to add ``retain'' as an option.
    Several commentators were concerned that some terms in the criteria 
as not well defined and are subject to different interpretations. The 
final responsibility for determining the application and interpretation 
of the criteria in making recommendations will be left to the judgment 
of the Commission. The language in the fifth paragraph of the 
introduction has been amended to clarify that this is a Commission 
responsibility.
    A commentator was concerned that the effects of State mandates 
would be difficult to separate from the effects of Federal mandates, 
and some Federal mandates may be welcomed. While it may be difficult to 
make such separations, no change in the criteria seem necessary to 
address this problem.
    One commentator expressed concern that to exclude from review 
conditions of discretionary grants in small categorical programs could 
overlook the burdensome nature of grant requirements on small rural 
governments. To correct this concern, the criteria for selecting 
mandates of significant concern has been modified to include any 
mandates that would have the practical effect of limiting small 
governments' access to aid.
    One commentator suggested that the criterion identifying mandates 
that abridge historic powers should specifically include those that 
affect state and local tax powers that are otherwise Constitutional. 
This was added to the criterion.
    A suggestion was made to add ``tribal'' to state and local 
governments in the fifth criterion for identifying mandates. This 
omission has been corrected.
    Several commentators were concerned that under the criterion of 
federal intrusion the suggested actions included only making the 
mandates voluntary or terminating them. Wording was added to provide 
the alternative of retaining the mandate and providing federal funding 
of the mandate.
    Several commentators suggested that the criterion ``Inadequate 
Scientific Basis'' could be inimical to health by enabling the repeal 
or restriction of health or environmental reforms because it is so 
broad and subject to interpretation. There were also questions raised 
about its applicability in some situations. Finally, it was noted that 
the reference to cost-benefit studies is an economic concern, not a 
scientific one. Several changes were made as a result of these 
comments, including addition of ``economic'' to the title, addition of 
``when applicable'' after ``peer-reviewed scientific research''; and 
addition of ``appropriate'' before ``risk-assessment.'' The concerns 
that this criterion might delay or otherwise interfere with legislation 
or regulations was addressed earlier in the explanation that these 
criteria are only for use by ACIR in formulating its recommendations.
    A comment was received that Section 4 of the Act would exclude 
certain mandates from Commission review, even though they would 
otherwise qualify for review under the definition in Section 305. 
Section 4 exclusions apply only to mandates that are before the 
Congress or in a proposed or final federal regulation. Another 
commentator suggested that legislated mandates that had been confirmed 
by the U.S. Supreme Court should be beyond the scope of Commission 
review. Because of the clear intent of the law is to require ACIR to 
consider mandates established by statute or court orders, no change has 
been made in the criteria.
    One commentator suggested deleting all the criteria proposed for 
selecting mandates of significant concern, and relying on the criteria 
for making recommendations to determine which mandates are to be 
reviewed. The first set of criteria serve the purpose of avoiding a 
very detailed review of every existing grant and mandate, and they have 
been kept. The second set of criteria will then be applied only to 
those mandates selected for more detailed review.
    One commentator expressed concern that the criterion on compounding 
fiscal difficulties was not specific enough to encompass some 
situations being experienced by small rural governments and Indian 
tribes. Additional explanatory language was added to clarify situations 
in which the criterion might apply.
    A commentator suggested that in making its recommendations ACIR 
address the cumulative cost effects of multiple federal mandates, 
especially on small governments. Estimating cumulative cost effects 
will not be feasible in this study, but will be considered as a part of 
the 

[[Page 35223]]
Commission's Section 301 Baseline Study.

    Dated: June 28, 1995.
William E. Davis III,
Executive Director.
[FR Doc. 95-16547 Filed 7-5-95; 8:45 am]
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