Unfunded Mandate Reform Act:
A Brief Summary

Sandra S. Osbourn
Specialist in American National Government
Government Division

March 17, 1995

95-246 GOV

The Unfunded Mandate Reform Act of 1995 (S. 1; H.R. 5) responds to the concerns of many State and local officials with regard to costs placed upon them by "unfunded mandates." Generally, unfunded mandates are responsibilities or duties placed on one level of government by another without paying the costs of carrying out such responsibilities or duties.

The Unfunded Mandate Reform Act addresses this issue by requiring the production of new information to be used in the legislative process and of new procedures intended to slow down if not halt the creation of new unfunded mandates. In addition, it calls for certain executive branch procedures relating to the development of new regulations that might lead to new mandates and requires a study of existing mandates.

Supporters of the legislation see it as one step in returning greater power to State and local governments, freeing up their resources to be used for locally determined purposes. Opponents view it as a potential obstacle in national responses to environmental, health, and safety issues.

The Senate adopted the Conference Report (H. Rept. 104-76) Wednesday, March 15 by a 91- 9 vote. The House adopted it Thursday, March 16; the vote was 394 - 28. The bill was part of the House Republicans' Contract with America, and was supported by the Clinton Administration.

The Unfunded Mandate Reform Act consists of three components: revising congressional procedures regarding future mandates; adding new procedures for Federal agency regulatory actions; and studying existing mandates to evaluate their current usefulness. The President is expected to sign the Act, which will:

• Require the Congressional Budget Office to estimate the costs to State, local, and tribal governments and the private sector of unfunded intergovernmental mandates that exceed a $50 million threshold and private sector mandates where the costs exceed $200 million. Require that the cost information be printed and available before a vote is taken. If the information is not available or if the bill does not provide funding for the mandate, a point of order may be raised against further consideration of the bill. An affirmative vote by a majority of those present is necessary to override the point of order. These requirements would not apply to provisions that are a condition of Federal assistance or a duty arising from voluntary participation in a Federal program (except that certain large entitlement programs are subject to the special procedures). In addition, provisions affecting constitutional rights of individuals, statutory rights that prohibit discrimination, accounting and auditing requirements attached to Federal assistance, emergency assistance, national security, or emergency legislation are exempt from the requirements. This becomes effective January 1, 1996 or 90 days after an appropriation ($4.5 million annually through fiscal year 2002) for CBO authorized by the bill becomes available.

• Require Federal agencies to develop a process to allow input by elected officials into the development of regulations, to prepare a written analysis of any mandate expected to cost State, local, or tribal governments or the private sector at least $100 million, to provide that information to the Congressional Budget Office, and to establish plans to involve small governments in the development of regulations affecting them and pilot programs on small government flexibility. This provision becomes effective 60 days after the date of enactment.

• Require the U. S. Advisory Commission on Intergovernmental Relations to study existing unfunded mandates and make recommendations regarding flexibility in compliance, reconciling conflicting mandates, terminating duplicative, obsolete, or impractical mandates, suspending certain mandates not vital to public health and safety, consolidating and simplifying reporting and planning requirements, and establishing common Federal definitions and standards. The Commission is to report its findings within 18 months; $500,000 is authorized for each of fiscal years 1995 and 1996 to carry out this study.

(For further information, see CRS Checklist 95-148 L, Unfunded Mandates: A Checklist of CRS Products.)