[Federal Register Volume 61, Number 30 (Tuesday, February 13, 1996)]
[Notices]
[Pages 5531-5533]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3113]



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DEPARTMENT OF COMMERCE

Office of the Secretary
[Docket No. 960129017-6017-01]
RIN 0690-XX01


Unfunded Mandates Reform Act; Intergovernmental Consultation

AGENCY: Department of Commerce.

ACTION: Notice of proposed statement of policy.

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SUMMARY: The Department of Commerce (DOC) is publishing its Proposed 
Statement of Policy on Intergovernmental Consultation under the 
Unfunded Mandates Reform Act of 1995 for public comment. DOC's proposed 
policy reflects the guidelines and instructions the Director of the 
Office of Management and Budget (OMB) provided to each agency to 
develop an intergovernmental consultation process with regard to 
significant intergovernmental mandates contained in a notice of 
proposed rulemaking with input from State, local, and tribal officials.

DATES: Comments on this proposed statement of policy are due on or 
before April 15, 1996.

ADDRESSES: Comments may be submitted to the Assistant General Counsel 
for Legislation and Regulation, U.S. Department of Commerce, HCHB Room 
5876, 14th and Constitution Avenue, N.W., Washington, D.C. 20230.

FOR FURTHER INFORMATION CONTACT: Daniel Cohen, Attorney Advisor, at 
(202) 482-4144.

SUPPLEMENTARY INFORMATION: The President signed the Unfunded Mandates 
Reform Act of 1995 (the Act) into law as Public Law 104-4 on March 22, 
1995. Section 204(a) of the Act requires each agency to develop, to the 
extent permitted by law, an effective process to permit timely input by 
elected officers (or their designees) of State, local, and tribal 
governments in the development of a regulatory proposal containing a 
proposed ``significant intergovernmental mandate'' that is not a 
requirement specifically set forth in law. 2 U.S.C. 1531, 1534(a). A 
``significant intergovernmental mandate'' under the Act is any 
provision in a Federal agency regulation that: (1) would impose an 
enforceable duty upon State, local, or tribal governments (except as a 
condition of Federal assistance); and (2) may result in the expenditure 
by State, local, and tribal governments, in the aggregate, of $100 
million (adjusted annually for inflation) in any one year. 

[[Page 5532]]
See 2 U.S.C. 658(5)(A)(i), 1532(a). DOC does not believe it has 
regulations to which the Act applies, nor does it anticipate that the 
legal authorities under which it promulgates regulations make future 
unfunded mandates, as defined in the Act, likely. Nonetheless, DOC 
publishes this notice and invites comments from State, local, and 
tribal governments, to conform fully with the spirit, intent and letter 
of the Act, and to have in place a process for any unfunded mandate 
which could affect the operations of the Department in the future.
    Section 204(b) of the Act excepts intergovernmental communications 
in certain circumstances from the requirements of the Federal Advisory 
Committee Act, 5 U.S.C. App. Those circumstances involve meetings: (1) 
exclusively between Federal officials and State, local elected 
officials or their designees; and (2) solely for the purposes of 
exchanging views, information, or advice relating to Federal programs 
established pursuant to a statute that explicitly or inherently 
provides for sharing intergovernmental responsibilities or 
administration. 2 U.S.C. 1534(b).
    Section 204(c) of the Act requires the President to issue 
guidelines and instructions for implementing sections 204 (a) and (b). 
2 U.S.C. 1534(c). This authority was delegated to the Director of OMB 
who published the guidelines and instructions on September 29, 1995 (60 
FR 50651).
    Paragraph I of the OMB guidelines and instructions provides that 
each agency develop, in consultation with State, local, and tribal 
governments, the intergovernmental consultation process required by 
section 204(a) of the Act. Paragraph I also calls for agencies to 
develop the process by making a proposal for comments by State, local 
and tribal governments. Accordingly, DOC is sending copies of today's 
proposed statement of policy to a list of elected State and local 
officials and of associations representing State and local governments 
compiled by the Deputy Assistant Secretary for Intergovernmental 
Affairs. To ensure that all such officials have the opportunity to 
participate and because there may be wider interest in DOC's process 
for intergovernmental consultation under the Act, DOC is also 
publishing this notice for public comment.
    Section 203 of the Act supplements section 204(a). 2 U.S.C. 1533. 
It requires that, prior to establishing regulatory requirements that 
might significantly or uniquely affect small governments, the agency 
shall have developed a plan that, among other things, provides for 
notice to potentially affected small governments, if any, and for a 
meaningful and timely opportunity to provide input in the development 
of regulatory proposals. The Act defines ``small government'' to mean 
any small governmental jurisdiction defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601(5), and any tribal government. 2 U.S.C. 
658(11).
    Both the Act and the OMB guidelines and instructions imply that 
agencies must make affirmative efforts to notify State, local, and 
tribal officials in addition to publishing a notice of proposed 
rulemaking in the Federal Register. Today's proposed statement of 
policy describes the extent and content of the pre-proposal notice and 
opportunity to consult.
    The proposed policy differentiates between State elected officials 
(or their designees) on the one hand and local elected officials (or 
their designees) on the other. DOC will attempt to send notices to the 
former, but the latter are so numerous that DOC proposes to give notice 
through appropriate associations who represent local governments, and 
through the Federal Register.
    The Act requires agencies to estimate the dollar impact of 
prospective Federal mandates to determine whether they exceed the $100 
million annual threshold, and therefore are ``significant,'' as defined 
in the Act. The Act requires adjustment of the $100 million figure for 
inflation in years after 1995, but it is silent on: (1) how to adjust 
for inflation; and (2) whether and how to adjust estimated future 
expenditures for the time value of money. Under the proposed policy, 
DOC would adjust for inflation using the figures provided in the Annual 
Report of the President's Council of Economic Advisers, and discount to 
present value using OMB Circular A-94 which currently provides for 7 
percent as a discount rate for government-wide use.

    Dated: January 30, 1996
Jane Bobbitt,
Assistant Secretary for Legislative and Intergovernmental Affairs.

    Based of the foregoing, DOC proposes this Statement of Policy:

Statement of Policy on the Process for Intergovernmental Consultation 
Under the Unfunded Mandates Reform Act of 1995

I. Purpose

    This Statement of Policy implements sections 203 and 204 of the 
Unfunded Mandates Reform Act of 1995 (Act), 2 U.S.C. 1533, 1534, 
consistent with the guidelines and instructions of the Director of the 
Office of Management and Budget (OMB).

II. Applicability

    This Statement of Policy applies to the development of any 
regulation (other than a regulation for a financial assistance program) 
containing a significant intergovernmental mandate under the Act. A 
significant intergovernmental mandate is a mandate that: (1) would 
impose an enforceable duty upon State, local, or tribal governments 
(except as a condition of Federal assistance); and (2) may result in 
the expenditure by State, local, and tribal governments, in the 
aggregate, of $100 million (adjusted annually for inflation) in any one 
year. DOC officials may apply this Statement of Policy selectively if 
there is a need for immediate agency action that would warrant waiver 
of prior notice and opportunity for public comment under the 
Administrative Procedure Act, 5 U.S.C. 553.

III. Intergovernmental Consultation

    When to begin. As early as practicable in the development of a 
notice of proposed rulemaking (for other than a financial assistance 
program) that involves an enforceable duty on State, local, or tribal 
governments, the responsible Secretarial Officer, in consultation with 
the Office of the General Counsel, should estimate whether the 
aggregate compliance expenditures will be in the amount of $100 million 
or more in any one year. In making such an estimate, the Secretarial 
Officer should adjust the $100 million figure in years after 1995 using 
the rate of inflation in the Annual Report of the President's Council 
of Economic Advisers, and should discount estimated future expenditures 
to present value, using the discount rate under OMB Circular A-94.
    Content of notice. Upon determining that a proposed regulatory 
mandate on State, local, or tribal governments may be a significant 
intergovernmental mandate, the Secretarial Officer responsible for the 
rulemaking should provide adequate notice to pertinent government 
officials: (1) describing the nature and authority for the rulemaking; 
(2) explaining DOC's estimate of the resulting increase in their 
governmental expenditure level; (3) inviting them to participate in 
developing the notice of proposed rulemaking by participating in 
meetings with DOC or by presenting their views in writing on the likely 
effects of the regulatory requirement or legally available policy 
alternatives that DOC should take into account. If the 

[[Page 5533]]
authorizing statute for a rule requires publication of an advance 
notice of proposed rulemaking, then those content requirements may be 
addressed in that advance notice.
    How to notify State and tribal officials. With respect to State and 
tribal governments, Secretarial Officers should give notice by letter, 
making use of mailing lists maintained by the Deputy Assistant 
Secretary for Intergovernmental Affairs, that includes, among others, 
elected chief executives (or their designees), the National Governors 
Association, and the National Conference of State Legislatures. The 
Secretarial Officer should also publish a notice in the Federal 
Register.
    How to notify local officials. With respect to local governments, 
the Secretarial Officer should provide notice through the Federal 
Register and by letter to the following associations: the National 
League of Cities, the National Association of Counties, and the U.S. 
Conference of Mayors. If a significant intergovernmental mandate might 
affect local governments in a limited area of the United States, the 
Secretarial Officer, in consultation with the Deputy Assistant 
Secretary for Intergovernmental Affairs, should, if practicable, give 
notice by letter to appropriate local officials.
    Exemption from the Federal Advisory Committee Act. Secretarial 
Officers are encouraged to meet with elected officials (or their 
designees) to exchange views, information, and advice concerning the 
implementation of intergovernmental responsibilities or administration. 
Meetings for this purpose that do not include other members of the 
public are exempt from the Federal Advisory Committee Act. 2 U.S.C. 
1534(b).
    Small government consultation plan. If the proposed regulatory 
requirements might significantly or uniquely affect small governments, 
as defined in the Regulatory Flexibility Act, 5 U.S.C. Sec. 601(5), 
then the Secretarial Officer should summarize the agency's plan for 
intergovernmental consultation under section 203 of the Act in the 
Supplementary Information section of the notice of proposed rulemaking. 
Unless impracticable, the plan should provide for notice by letter to 
potentially affected small governments.
    Documenting compliance. The Supplementary Information section of 
any notice of proposed and final rulemaking involving a significant 
intergovernmental mandate should describe DOC's determinations and 
compliance activities under the Act. The Supplementary Information 
section of the notice of proposed rulemaking should describe the 
estimated impact of such a mandate, the assumptions underlying its 
calculation, and the resulting determination of whether the rulemaking 
involves a significant intergovernmental mandate. It should discuss, as 
appropriate, cost and benefit estimates and any reasonable suggestions 
received during prior intergovernmental consultations. Any substantive 
pre-notice written communications on the proposed rulemaking should be 
described in the Supplementary Information, and should be made 
available for inspection in the Central Reference and Records Facility, 
Room 6204, Herbert Clark Hoover Building, 14th and Constitution Avenue, 
N.W., Washington, D.C. 20230. The final rule should contain a response 
to significant comments received.
    Reporting. Pursuant to OMB guidelines and instructions, the DOC 
Office of the General Counsel, with assistance from the Secretarial 
Officers, will prepare the annual report to OMB on compliance with the 
intergovernmental consultation requirements of the Act (initially due 
on January 15, 1996, and annually on that date thereafter).

[FR Doc. 96-3113 Filed 2-12-96; 8:45 am]
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