CBO’S ACTMTIES UNDER · 2019-09-26 · Preface This Congressional Budget Office (CBO) paper...

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CBO’S ACTMTIES UNDERTHE UNFUNDED MANDATES REFORM ACT,

1996-2000,

The Congress of the United StatesCongressional Budget Offke

Preface

This Congressional Budget Office (CBO) paper summarizes the provisions of theUnfunded Mandates Reform Act and reviews CBO’ s activities under title I of that lawduring its first five years (1996-2000). The paper reviews the extent to which legis-

lation before the Congress during that period would have imposed federal mandates on otherlevels of government or the private sector. Besides tracking five-year trends in federalmandates, it also presents information for 2000, updating CBO’s four previous annual reportson the Unfunded Mandates Reform Act (available at www.cbo.gov).

The paper was written by Theresa Gullo, Chief of CBO’s State and Local GovernmentCost Estimates Unit, under the supervision of Robert Sunshine, and by Patrice Gordon,coordinator of private-sector mandates for CBO’s Microeconomic and Pinancial StudiesDivision, under the supervision of Roger Hitchner.

Christian Spoor edited the paper, and Christine Bognsz proofread it. Rae Wiseman pre-pared the paper for publication, and Lenny Skutnik produced the printed copies. AnnetteKalicki prepared the electronic versions for CBO’s Web site (www.cbo.gov).

Dan L. CrippenDirector

May 2001

Contents

SuMMAFtY vii

ONE THEFUNDAMENTALSOFTHE UNFUNDED MANDATESREFORM ACT 1

What is the Unfunded Mandates Reform Act? 1When did UMRA become law? 1Why was UMRA enacted? 1What information did CBO provide before UMRA was enacted? 1

Requirements and Responsibilities 2What are the basic requirements of UMRA? 2What are CBO’s responsibilities under UMFW? 2What thresholds does UMRA set for CBO to provide estimates

of mandate costs? 3

b What are the responsibilities of Congressional committeesunder UMRA? 3

How are the provisions of title I enforced?Has CBO ever prepared a mandate statement for an appropriation bill?

45

DefinitionsHow does UMRA define “mandate”?What is the special definition for “mandates” in large entitlement

55

grant programs?Are preemptions of state and local government authority considered

mandates under UMRA?Are taxes considered mandates?How does UMRA define “direct costs”?What hinds of costs are not included in that definition?How does UMRA define “state, local, and tribal governments”?Who is the “private sector”?Is any legislation excluded from consideration under UMRA?How broadly or narrowly does CBO apply the exclusions?

Proposals to Change UMRAHas UMRA ever been amended?What other proposals have there been to change UMRA?

888

vi CBO’S ACTIVITIES UNDER UMRA. 1996-2000 Mw 2001

TWO CBO’S ACTIVITIES UNDER UMRA, 1996-2000 9

How many bills has CBO reviewed for mandates since UMRAwas enacted? 9

How many of those bills contained mandates and how many had costsexceeding the thresholds? 9

How many separate mandates considered by the Congress iu the pastfive years had costs over the thresholds? 9

How often was CBO unable to estimate whether the thresholds wouldbeexceeded?

How many mandates with costs above the thresholds havebecome law?

How many significant mandates were amended before enactmentto bring their costs below the thresholds?

What about bills with “other” costs that are not the result ofintergovernmental mandates?

APPENDIXES

A AN ASSESSMENT OF UMR4 IN 2000

B PRIMARY CONTRIBUTORS TO CBO’S ANALYSESOF MANDATES

TABLES

S-l.

1 .

2 .

3 .

A-l.

A-2.

A-3.

A-4.

Total Number of CBO Mandate Statements for Bills, ProposedAmendments, and Conference Reports, 1996-2000

Number of CBO Mandate Statements for Bills, Proposed Amendments,and Conference Reports, by Year, 1996-2000

Status of Intergovernmental Mandates That Exceed the StatutoryThresholds, 1996-2000

Status of Private-Sector Mandates That Exceed the StatutoryThresholds, 1996-2000

Number of CBO Mandate Statements for Bills, Proposed Amendments,and Conference Reports in 2000

Bills Reviewed by the Congressional Budget Offke in 2000 ThatContained Intergovernmental Mandates

Bills Reviewed by the Congressional Budget Office in 2000 ThatContained Private-Sector Mandates

Laws Enacted in 2000 That Contained Intergovernmental Mandates

‘\

1 0

1 1

1 2

1 3

2 1

34 1

ix

1 0

1 4

1 6

2 2

2 3

2 9

3 7

Summary

TheUnfundedMandates ReformAct(UMRA)-passed in 1995 in one of the fust actions of the104th Congress-is intended to focus more at-

tention on the costs of mandates that the federal gov-ernment imposes on other levels of government or theprivate sector. UMRA’s supporters had many goalsfor the legislation, including ensuring that the Con-gress had informat& about the costs of mandates be-fore it decided whether to impose them, and encourag-ing the federal government to provide funding to coverthe costs of intergovernmental mandates. To accom-plish those goals, title I of UMRA established require-ments for reporting on federal mandates and new legis-lative procedures designed to increase both the supplyof information about the costs of mandates and Con-gressional demand for such information.

In the five years since UMRA took effect, boththe amount of information about mandate costs andinterest in that information have increased dramati-cally. In addition, numerous pieces of legislation thatoriginally contained significant unfunded mandateswere amended to either eliminate the mandates orlower their costs. In many of those cases, informationabout mandate costs provided by the CongressionalBudget Office (CBO) clearly played a role in the Con-gressional decisions; In those respects, title I ofUMIW has proved to be effective.

Trends in Federal MandatesSince 1996Title I of UMR4 requires CBO to estimate the costsof federal mandates in bills that are considered by au:thorizing committees. CBO must provide a detailedcost estimate for each bii that contains mandateswhose costs would total $50 million or more per yearto the public sector (state, local, or tribal govem-ments) or $100 million or more per year to the privatesector. (Those thresholds are in 1996 dollars and areadjusted each year for inflation. In 2000, they were$55 million for intergovernmental mandates aud $109million for private-sector mandates.)

Since UMRA took effect in 1996, CBO has pro-vided mandate cost statements for nearly all of thebills reported by authorizing committees. It has alsogiven information to Members of Congress and Con-gressional staff about mandates at other stages in thelegislative process-before bills are introduced, whenamendments are considered on the floor of the Houseor Senate, and when conference committees developtheir reports.

vi i i CBO’S ACTIVITIES ~ERTHE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Over the past half decade, several patterns aboutfederal mandates and their costs have become clear.’

. Most of the legislation that the Congress consid-ered in the past five years did not contain fed-eral mandates as UMRA defines them. Of themore than 3,000 bills and other legislative pro-posals that CBO reviewed between 1996 and2000, 12 percent contained intergovernmentalmandates and 14 percent contained private-sector mandates.

. Most of those mandates would not have im-posed costs greater than the thresholds set byUMRA. Only about 9 percent (32) of the billswith intergovernmental mandates-or 1 percentof the bills that CBO reviewed-had annualcosts of $50 million or more, by CBO’s esti-mate. (About half of the intergovernmental man-dates that CBO identified were explicit preemp-tions of state or local authority. In most ofthose cases, the costs to comply with the pre-emptions were not significant.) Less than 24percent (100) of the bills with private-sectormandates-or about 3 percent of the bills thatCBO reviewed-had costs of more than $100million a year (see Summary Table 1). Few ofthe bills with either kind of mandate, however,contained federal funding to offset the costs ofthe mandates.

. Although the percentage of bills containing afederal mandate stayed fairly constant over thepast five years, the percentage of bills withmandates over the statutory thresholds declinedsteadily. Bills with intergovernmental mandatesabove the threshold decreased from 1.5 percent(11) in 1996 to less than 0.5 percent (3) in

1. Because CBO’s experiences each year with UMRA havebeen so similar, these observations closely mirror the con-clusions presented iu CBo’s four previous annual reportson the subject: An Assessment of the Unfunded MatufatesReform Act in 1999 (March 2000), An Assessment of theUnfuna’e~ Mandates Reform Act in 1998 (February 1999),An Assessment of the Unfunded Mandates Reform Act in1997 (February 1998), and 27~ Erperience of the Congres-sional Budget Ofice During the First Year of the UnfunddMandates Reform Act (January 1997).

2000, and bills with private-sector mandatesabove the threshold dropped from 5.6 percent(38) in 1996 to less than 1 percent (6) in 2000.

. Few mandates with costs over the UMRAthresholds were enacted in the past five years.Only two intergovernmental mandates with an-nual costs of at least $50 million became law-an increase in the minimum wage (in 1996) anda reduction in federal funding to administer theFood Stamp program (in 1997). Those enactedmandates represent less than 1 percent of theintergovernmental mandates that the Congresshas considered since UMRA took effect.

A slightly larger percentage of private-sector mandates before the Congress becamelaw and imposed significant costs. Sixteen ofthe private-sector mandates identified by CBOas costing more than the $100 million thresholdwere enacted. Of those, eight involved taxes,three concerned health insur~ce (requiring por-tability of insurance coverage, minimum mater-nity stays, and changes in Medicare coverage),two dealt with regulation of industries (telecom-munications reform and changes in milk pric-ing), two affected workers’ take-home pay (m-creases in the minimum wage and in federal em-ployees’ contributions for retirement), and oneimposed new requirements on sponsors of immi-grants.

. In some cases, lawmakers have altered legisla-tive proposals to reduce the costs of federalmandates before enacting them. Four intergov-ernmental and five private-sector mandates thatCBO identified as having costs above thethresholds when they were approved by autho-rizing committees were amended before enact-ment to bring their costs below the thresholds.For many of those mandates-such as a require-ment that driver’s licenses show Social Securitynumbers, a moratorium on certain taxes on In-ternet services, .preemptions of state securitiesfees, and provisions in the farm bill about thecontents of milk-it was clear that informationprovided by CBO played a role in the Con-gress’s decision to lower the costs.

SUMMARY ix

Summary Table 1.Total Number of CBO Mandate Statements for Bills, Proposed Amendments, and Conference Reports,1996-2000

Intergovernmental Private-SectorMandates Mandates

Total Number of Statements Transmitted 3,059 2,949

Number of Statements That Identified Mandates 3 5 5 4 2 2Mandate costs would exceed thresholda 3 2 100Mandate costs could not be estimated 2 1 3 6

SOURCE: Congressional Budget Clfftce.

NOTE: The numbersin this table represent official mandate statements transmitted to the Congress byCB0. CBO prepared moreintergovemmen-tal mandate statements than private-sector mandate statements because in some cases it was asked to review a specific bill. amendment, orconference report solely for intergovernmental mandates. In those cases, no private-sector analysis was transmitted to the requestingMember or committee. CBO also completed a number of preliminary reviews and informal estlmates for other legislative proposalsthat arenot included in this table. Mandate statements may cover more than one mandate provision, and occasionally, more than one format CBOstatement is issued for each mandate topic.

a. The thresholds, which are adjusted annually for inflation, were $50 million for intergovernmental mandates and $100 million for private-sectormandates in 1996. They rose to $55 million and $109 million, respectively, in 2000.

The Narmw Scope of UMRAThe numbers presented in this report should be viewedin light of the fact that UMRA defines federal man-dates narrowly. According to the law, the conditions.attached to most forms of federal assistance (includingmost entitlement grant programs) are not mandates. Insome cases, complying with such conditions of aid canbe costly. Between 1996 and 2000, CBO identifiedmore than 450 bills that would impose those types ofnonmandate costs on state, local, or tribal govem-ments. In most cases, however, CBO estimated thatsuch costs would not be significant. During that pe-riod, CBO also identified numerous bills that wouldbenefit state, local, or tribal governments.

In addition, UMRA focuses on the direct coststhat entities affected by mandates would bear. Butfederal mandates also impose indirect costs, includingthe effects on prices and wages when the costs of amandate imposed on one party are passed along toother parties, such as customers or employees. Thoseeffects of federal legislation on other levels of govem-

ment and the private sector are not subject to the re-quirements of UMR4. Nevertheless, CBO includesinformation about significant indirect effects in someof its cost statements for mandates over the threshold.When sufficient time and data are available, it alsoprovides quantitative estimates of the size of those ef-fects. For example, CBO analyzed the indirect effects.of proposed mental health parity requirements, includ-ing possible reductions in workers’ take-home pay,health insurance coverage, and fringe benefits. Simi-larly, CBO’s analysis of proposed increases in theminimum wage included the possible impact on em-ployment of low-wage workers.

The scope of UMRA is further narrowed by thefact that the law does not apply to legislative provi-sions that deal with constitutional rights, discrimina-tion, emergency aid, accounting and auditing proce-dures for grants, national security, treaty ratification,and title II of Social Security (Old-Age, Survivors,and Disability Insurance benefits). Roughly 5 percentof the bills that CBO reviewed in the past five yearscontained provisions that fit within those exclusions.Many of them addressed constitutional rights or na-tional security issues.

Challenges to CBO inImplementing UMRADetermining what constitutes a mandate under UMRAcan be complicated. For example, the law defines amandate as “an enforceable duty except . . . a dutyarising from participation in a voluntary federal pro-gram.” Although. an activity (such as sponsoring animmigrant’s entry into the United States) may be vol-untary, the federal program affecting that activity (im-migration laws) is not. In that case, a bill imposingnew requirements on the sponsors of immigrantswould constitute a mandate under UMRA. In con-trast, other federal programs that are truly voluntaryin nature may impose requirements on their partici-pants that, by UMRA’s definition, are not mandates.Those distinctions between what is voluntary and whatis mandatory are not always clear.

Even when CBO determines that a legislativeproposal contains a federal mandate, the agency facesnumerous challenges in estimating the costs of themandate. In some cases, accurately determining howmany state and local governments or entities in theprivate sector would be affected by a mandate is im-possible. Iu other cases, the entities that would besubject to a mandate are diverse and would not be af-fected uniformly, makiug it difficult to total the incre-mental costs of compliance for all parties that wouldbe affected. In other instances, it may be impossibleto estimate the costs of a mandate at the legislativestage, before regulations to implement it have beendeveloped. Even the mandated parties may not be ableto estimate costs reliably without knowing what theregulations to carry out the mandate will entail.

Fortunately, UMRA requires CBO to determiuewhether the costs of complying with mandates would

exceed specific thresholds and to provide cost esti-mates only for mandates that would do so. If UMRArequired CBO to provide more-detailed estimates foreach mandate, the agency’s job would be considerablymore difficult and time consuming.

Proposals to Expand UMRASince-UMRA was enacted, lawmakers have proposedexpanding title I in several ways. one proposal wouldbuild on UMFW’s perceived success in focusing Con-gressional attention on unfunded intergovernmentalmandates by expanding the law’s procedural require-ments for private-sector mandates (particularly theprovision that allows Members of Congress to raise apoint of order, or procedural objection, against a billthat contains an intergovernmental mandate with costsabove the threshold). Other proposals would expandUMRA’ s definition of a mandate as it relates to largefederal entitlement programs admiktered by state orlocal governments. Both of those proposals were in-cluded in the Mandates Information Act, which wasconsidered by the Congress in 1998 and 1999 butnever enacted.

To date, lawmakers have made only one, rela-tively minor, change to UMRA. The State FlexibilityClarification Act of 1999 (Public Law 106-141) re-quires authorizing committees aud CBO to providemore information in committee reports and mandatestatements for legislation that would “place caps upon,or otherwise decrease, the federal government’s re-sponsibility to provide funding to state, local, or tribalgovernments” under some large entitlement grant pro-grams. In general, that requirement for additional in-formation applies to few bills, and no legislation re-ported by authorizing committees since the require-ment was enacted has been affected by it.

Chapter One

The Fundamentals of theUnfunded Mandates Reform Act

what is the UnfundedMandates Reform Act?

When did UMR&become law?

Wby was UMR4 enacted?

i

What information did CBOprovide before UMRA wasenacted?

The Unfunded Mandates Reform Act of 1995 (UMRA) seeks to discourage thefederal government from imposing mandates on state, local, and tribal govem-ments or the private sector without paying the costs of those mandates. Througha variety of mechanisms, the law increases the amount of information availableto the Congress and executive branch agencies about the impact of federalmandates. It also encourages policymakers to take that information into accountwhen developing laws and regulations.

UMRA was enacted on March 22,1995, as Public Law (P.L.) 1044 Its provi-sions became effective on January 1,1996.

The Congress and President Clinton enacted UMRA to respond to growingconcerns that the federal government, through legislation and administrativeactions, was imposing enforceable duties on other levels of government and theprivate sector without adequately considering the nonfederal costs that wouldresult from complying with those duties.

The Congressional Budget Office (CBO) has been‘proviclmg estimates of theimpact of federal legislation on state and local governments since 1982. TheState and Local Government Cost Estimate Act of 1981 (P.L. 97-108) requiredCBO to estimate the costs that state and local governments would incur over fiveyears in carrying out or complying with “any significant bill or resolution.”During the 1982-1995 period, CBO provided the Congress with more than 7,000such estimates, mostly for bills approved by authorizing committees.

UMRA repealed the State and Local Government Cost Estimate Act and nar-rowed the types of intergovernmental impacts that CBO is required to identify.It also lowered the cost that triggers the need for an intergovernmental estimatefrom $200 million a year to $50 million (adjusted annually for inflation). Inpractice, CBO continues to providethe Congress, when feasible, with estimatesof all budgetary, effects on state and local governments, regardless of their costor whether they result from mandates as defined by UMRA.

2 CBO’S ACTIVITIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Requirements and ResponsibilitiesWhat are the basicrequirements of UMRA?

UMRA contains four titles that address how various parts of the federal govem-ment should handle proposed and existing mandates on state, local, and tribalgovernments and the private sector.

. Title Z, Legislative Accountability and Reform, requires CBO andauthorizing committees in the Congress to develop and report informationabout the existence and costs of mandates in proposed legislation. It alsoestablishes a mechanism to bring that information to the attention of theCongress before legislation is considered on the floor of the House orSenate.

. Title ZZ, Regulatory Accountability and Reform, applies to actions of fed-eral agencies in implementing federal law. It requires most federal agenciesin the executive branch (except some independent regulatory agencies) toassess the effects of their regulatory actions on state, local, and tribalgovernments and the private sector. It also requires that statements aboutsuch effects accompany certain significant regulations, that agencies seekinput from other levels of government when developing regulations, andthat agencies consider alternatives that would ease the financial burden ofregulations. Q

. Title ZZZ, Review of Federal Mandates, required the Advisory Commissionon Intergovernmental Relations (ACIR) to prepare three reports: a baselinestudy of the costs and benefitsof federal mandates to state, local, and tribalgovernments; a review of the impact of unfunded federal mandates on thosegovernments, along with recommendations for easing, consolidating, or ter-minating mandates; and an annual report identifying federal court rulingsthat required state, local, or tribal governments to undertake additionalresponsibilities and activities.’

. Title N, Judicial Review, allows for limited judicial review of certainagency actions and rules developed under title Il of UMRA.

This report focuses on the provisions of title I.

What are CBO’s The law requires CBO to give any authorizing committee that reports a bill aresponsibilities under UMRA? statement about the direct costs of mandates found in the bill. If the total direct

costs of all mandates in the bill are above a specific threshold in any of the firstfive fiscal years in which a mandate would be in effect, CBO must provide anestimate of those costs (if feasible) as well as the basis of its estimate.

1 . ACIR completed and released the report on judicial mandates in July 1995 (Federal Court Rulings Znvolving State, Local, and TribalGovernments, Calendar Year 1994: A Report Prepared Under Section 304, UnfundedMandates Reform Act of 1995). The commissionalso published a preliminary report in January 1996 on the impact of federal mandates on state and local governments (The Role ofFederal Mandates in Zntergovemmental Relations: A Preliminary ACZR Reportfor Public Review and Comment). ACID received itslast Congressional appropriation in fiscal year 1996 and was terminated at the end of that year.

WAFTER ONE THEFUNDAMENTALS OFTHEUNFUNDED MANDATES REFORM ACT 3

What thresholds does UMRAset for CBO to provideestimates of mandate costs?

6,

What are the responsibilitiesof Congressional committeesunder UMRA?

The CBO mandate statement must also include an assessment of whether the billauthorizes or otherwise provides funding to cover the costs of any new federalmandate. In the case of intergovernmental mandates, the cost statement must,under certain circumstances, estimate the appropriations needed to fund suchauthorizations for up to 10 years after the mandate takes effect. ECBO cannotestimate the cost of a mandate, its statement must assert that such an estimate isnot feasible and explain why.

Conference committees must “to the greatest extent practicable” ensure that CBOprepares statements for conference agreements or amended bills if those measurescontain mandates that were not previously considered by either House or if theyimpose greater direct costs than the version considered earlier. At the request ofasenator, CBO must estimate the costs of intergovernmental mandates containedin an amendment the Senator wishes to offer.

The Congress may also call on CBO to prepare analyses at other stages of thelegislative process. If asked by the Chairman or Ranking Minority Member ofa committee, CBO will help committees analyze the impact of proposed legis-lation, conduct special studies of legislative proposals, or compare a federalagency’s estimate of the costs of proposed regulations implementing a federalmandate with CBO’s estimate of those costs made when the mandate wasconsidered by the Congress.

UMRA set the cost threshold for intergovernmental mandates at $50 million in1996, adjusted annually for inflation. CBO estimates that for fiscal year 2000,the threshold was $55 million. For private-sector mandates, the annual thresholdwas $100 million in 1996 and $109 million in 2000.

In general, when an authorizing committee reports a bill or joint resolution thatcontains a federal mandate, the report must identify and describe that mandateand include a statement from the Director of CBO on its estimated costs. If thatstatement cannot be published with the report, the committee is responsible forensuring that it is published in the Congressional Record before the bill orresolution is considered on the floor of the House or Senate. The committee isresponsible for promptly providingCB0 with a copy of the bill aud for identify-ing mandates contained in it. (In practice, CBO reviews each bill approved bya committee to identify mandates and estimate their costs.)

In addition, the report must contain a qualitative-and, if practical, a quantitative-assessment of the costs and benefits expected to result from the mandates(including the effects on health, safety,-and the protection of the natural environ-ment). The committee must also state the degree to which a federal mandateaffects both the public and private sectors and the impact on the competitivebalance between those sectors if federal payments are made to compensate forcosts imposed on the public sector.

If the bill would impose an intergovernmental mandate, the committee reportmust contain a statement of how that mandate will be funded by the federal gov-ernment, whether the committee intends for the mandate to be partially or fullyfunded, how the funding mechanism relates to the expected direct costs to the

4 CBO’S ACTIVlTIES UNDER THE UNFUNJXD MANDATES REFORM ACT, 1996-2000 May 2001

respective levels of government, and any existing source of funds besides thosealready identified that would help governments meet the direct costs of themandate.

For amended bills, joint resolutions, and conference reports, the committee ofconference must ensure, to the greatest extent possible, that the Director of CBOprepares a mandate cost estimate if the amended measure contains a federalmandate not previously considered by either House or contains provisions thatwould increase the direct costs of a previously considered mandate.

If a bill or joint resolution would cap or reduce federal spending for a large en-titlement program, the authorizing committee must specifically say how it intendsfor the states to implement the change and to what extent the legislation providesadditional flexibility, if any, to offset states’ costs.

Finally, authorizing committees are required, in their annual views and estimatesreports to the budget committees, to identify issues they plan to consider that willhave costs for state, local, or tribal governments or the private sector.

How are the provisions oftitle I enforced?

Section 425 of the Congressional Budget and Impoundment Control Act, asamended by UMRA, sets out rules for both the House and Senate that enforce therequirements of title I of UMRA. Subsection (a)( 1) prohibiq the considerationof a reported bill unless the committee has published a CBO statement about thecosts of any mandates.*

Subsection (a)(2) prohibits the consideration of any bill, amendment, motion, orconference report that would increase the direct costs of intergovernmental man-dates by more than the statutory threshold, unless the legislation provides directspending authority or authorizes appropriations sufficient to cover the costs. Ifthe bill authorizes the appropriation of funds to pay for an intergovernmentalmandate, it must also provide a way to terminate or scale back the mandate if theappropriated funds are not large enough to cover those costs. In such cases,authorizations of appropriations would have to be specified for each year (up to10 years) after the effective date of the mandate; in the Senate, they would alsohave to be consistent with the estimated costs of the mandate as determined by theSenate Budget Committee. That provision applies to bills that impose new man-dates as well as ones that increase the cost of existing mandates.

Finally, although UMRA does not specifically require CBO to analyze the costof mandates in appropriation bills, subsection (c) of section 425 of the Congres-sional Budget Act prohibits the consideration of legislative provisions in appro-priation bills (or amendments to them) that increase the direct costs of intergov-ernmental mandates, unless an appropriate CBO statement is provided.

Those rules are not self-enforcing; a Member must raise a point of order toenforce them. In the House, if a Member raises a point of order against a bill, the

2 . If CBO provides a statement for intergovernmental mandates but determines that a cost estimate is not feasible, then the bill is notin order, as if no Cl30 statement had been provided.

CHAF’TER ONE THEFUNDAMENTALSOFTHEUNFUNDEDMANDATESREFORMACT S

full House votes on whether to consider the bill regardless of whether there is aviolation. In the Senate, if a point of order is raised, the bii may not be con-sidered unless either the Senate waives the point of order or it is overturned bythe chair or the full Senate?

Has CBO ever prepared amandate statement for anappropriation bill?

As noted above, UMRA does not expressly require CBO to prepare mandatestatements for appropriation bills, and CBO has never done so. Jn general,UMFU’ s points of order do not apply to the provisions of bills or resolutionsreported by the appropriations committees (except legislative provisions) even ifthey would increase the direct costs of an intergovernmental mandate withoutproviding funding and do not have a mandate statement.

Because in many cases it is difficult and controversial to determine what con-stitutes a legislative provision in au appropriation bill; CBO will prepare mandatestatements for those bills only when requested. On an informal basis, however,CBO reviews all appropriation bills as they move through the legislative processand alerts the appropriations clerks to any intergovernmental mandates that itidentifies.

DefinitionsHow does UMRA define“mandate”~ .

t

What is the special definitionfor “mandates” in large@itlement grant programs?

The law defines a mandate as any provision in legislation, statute, or regulationthat would impose an enforceubZe duty on state, local, or tribal governments orthe private sector or that would reduce or eliminate the amount of funding autho-rized to cover the costs of existing mandates. Duties that arise as a condition offederal assistance or from participating in a voluntary federal program are notmandates.

Conditions attached to federal grant programs are not generally consideredmandates under UMRA. In the case of some large entitlement programs, how-ever, a new grant condition or a reduction in federal financial assistance can bea mandate if states lack the flexibility to off set the new costs or the loss of federalfunding with reductions elsewhere in the program. UMRAdefmes large entitle-ment programs as a “then-existing federal program under which $500 million ormore is provided annually to state, local, or tribal governments under entitlementauthority.” Today, those programs include Medicaid; Temporary Assistance forNeedy Families (TANF); child nutrition programs; Food Stamps; the Social Ser-vices Block Grant; Vocational Rehabilitation State Grants; grants for foster care,adoption assistance, and independent living; family support payments for the JobOpportunities and Basic Skills program; and Child Support Enforcement. Thespecial definition would also apply to any new entitlement programs that theCongress created that provided $500 million or more annually to state, local, ortribal governments.

3 . For more information about points of order, see House Committee on Rules, The Urg%nded Mandate Point of Or&r: A Parliamenta~Outreach Program New&tier, vol. 106, no. 11 (June l&1999), or the committee’s Web si& (www.house.govlrulesI).

6 CBO’S ACTIVITIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 Mav 2001

Are preemptions of state andlocal government authorityconsidered mandates underUMRA?

CBO assumes that a mandate can be a positive or negative duty. Thus, if alegislative proposal expressly limits or prohibits state or local regulatory activi-ties, CBO considers such a limitation to be an enforceable duty on those levelsof government. Consequently, it considers preemptions to be mandates as definedby UMRA:

Are taxes consideredmandates?

When the federal government assesses a tax, it uses its sovereign power to imposean enforceable duty on those affected by the tax. As such, taxes are consideredmandates.

The Congressional Budget Act requires the Joint Committee on Taxation (JCT)to produce revenue estimates for all tax legislation considered by either the Houseor the Senate. Jn addition, the JCTexamines legislative provisions that affect thetax code for federal mandates and estimates their costs. Such information isincorporated into CBO’ s mandate statements.

How does UMRA define“direct costs”?

The term “direct costs” means the total estimated amount that the private sectoror state, local, and tribal governments would be required to spend to comply withthe mandate. Such costs are limited to spending that results directly from theenforceable duty imposed by the legislation rather than from the legislation’sbroad effects on the economy. The direct costs of a mandate also include anyamounts that state and local governments are prohibited fro+sing in revenuesto comply with the mandate. Under UMRA, direct costs must be measured ona net incremental basis-that is, the. costs above those required to carry outapplicable laws, regulations, or professional standards in effect when the federalmandate is adopted, minus any direct savings related to the mandate that resultfrom the proposed legislation.

What kinds of costs are notincluded in that definition?

Because the term“mandate” is defined narrowly, not all of the budgetary impactson other governments or the private sector are the result of -mandates as definedby UMRA. For example, as noted earlier, any costs associated with complyingwith grant conditions for most new or existing programs are not consideredmandate costs under UMRA. Most of the “other” costs that CBO identities whenreviewing bills deal with conditions for receiving federal aid or participating involuntary federal programs.

Determining what constitutes a mandate under UMRA can be complicated.Although an activity (such as sponsoring an immigrant’s entry into the UnitedStates) may be voluntary, the federal program affecting that activity (iigrationlaws) is not. Jn that case, a bill imposing new requirements on sponsors ofimmigrants would constitute a mandate under UMRA. III contrast, other federalprograms that are truly voluntary in nature may impose requirements on theirparticipants that, by UMRA’s definition, are not mandates. Those distinctionsbetween what is voluntary and what is mandatory are not always clear.

4 . For moreinformation about federal preemptions of state and local government authority, see Congressional Budget Office, Preemptionsin Federal Legislation During the 106th Congress (forthcoming).

CJ3AF’TER ONE TIE FUNDAMENTALS OF THE UNFUNDED MANDATES REFORM ACT 7

How does UMRA define“state, local, and tribalgovernments”?

Who is the “private sector”?

Is any legislation excludedfrom consideration underUMRA?

c

How broadly or narrowly doesCBO apply the exclusions?

Because such other costs to state, local, or tribal governments can be significant,however, CBO identifies them whenever possible.

Section 421(12) of the Congressional Budget Act defines “state” to mean a stateof the United States, the District of Columbia, a territory or possession of theUnited States, or an agency, instrumentality, or fiscal agent of a state. Accordingto section 421(S), “local government” is defined as a unit of general local gov-ernment, a school district, or other special district established under state law.

Section 42 1(13) defines “tribal government” as an Indian tribe, band, nation, orother organized group or community that is recognized as eligible for specialprograms and services provided by the United States to Indians because of theirspecial status as Indians. The term also includes Alaska native villages andregional or village corporations as established in the Alaska Native ClaimsSettlement Act.

UMRA defines the “private sector” to mean all people or entities in the UnitedStates, including individuals, partnerships, associations, corporations, and educa-tional and nonprofit institutions, but not including state, local, and tribal govem-ments.

Section 4 of the law excludes bills or provisions fiomconsiderationunder UMRAif they:

Enforce the constitutional rights of individuals;

Establish or enforce statutory rights that prohibit discrimination;

Require compliance with certain accounting and auditing procedures;

Provide emergency assistance at the request of state, local, or tribal :governments;

/Are necessary for national security or the ratification or implementation ofinternational treaty obligations;

Are emergencies as designated by the President and the Congress; or

Relate to certain programs of the Social Security Act.

The question of how broadly to interpret those exclusions is one that CBO hasgrappled with many times over the past five years. According to sections 2(3)(A)and 2(4) of UMRA, two of the basic purposes of the law are to provide “for thedevelopment of information about the nature and size of mandates in proposedlegislation” and “to promote informed and deliberate decisions by Congress onthe appropriateness of federal mandates in any particular instance.” Applyingthe exclusions broadly would limit the information provided to the Congress andcould defeat those purposes. For those reasons-and on the basis of discussionswith Congressional staff involved in the development and passage of UMRA-

8 CBO’S ACHVITIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

CBO applies the exclusions narrowly to ensure that lawmakers receive as muchinformation as possible about potential mandates5

Proposals to Change UMRAHas UMRA ever beenamended?

The Congress has made only one change to UMRA in the five years since the lawtook effect. The State Flexibility Clarification Act of 1999 (P.L. 106-141)requires authorizing committees and CBO to provide more information in com-mittee reports and mandate statements for legislation that would “place capsupon, or otherwise decrease, the federal government’s responsibility to providefunding to state, local, or tribal governments” under various large entitlementgrant programs (such as Medicaid, TANF, or Food Stamps). Under that law, ifa bill or joint resolution would limit or reduce federal spending for such a pro-gram, the authorizing committee must state specifically how it intends for thestates to implement the change and to what extent the legislation provides addi-tional flexibility, if any, to offset states’ costs.

The new information that CBO must provide depends on whether the bill wouldprovide flexibility to states. If it caps or reduces federal spending for a largeentitlement grant program but does not provide additional flexibility to states tooffset that reduction, CBO must describe whether and how &es can offset thereduction under existing law. If the legislation would provide additional flexi-bility, CBO must estimate whether the resulting savings would offset the re-ductions included in the bill, assuming that states took full advantage of theflexibility. To date, no bills that are covered by those requirements have beenreported by authorizing committees.

What other proposals havethere been to change UMRA?

UMRA imposes a point of order against a bill that contains intergovernmentalmandates with costs over the specified threshold. Some Members have proposedexpanding the law’s provisions to include a similar point of order for private-sector mandates. In addition, despite the enactment of the State Flexibility Chui-fication Act, state and local governments remain concerned that future legislationcould impose new requirements or reduce federal spending for large entitlementprograms, possibly leaving them to make up the difference. Their concern hasresulted in efforts to amend UMRA’ s definition of a mandate as it relates to suchprograms.

In 1998 and again in 1999, the Congress considered legislation that wouldaddress both of those issues. The Mandates Information Act (MIA) would haveestablished new procedural hurdles for private-sector mandates, directedCB0 tofurnish additional types of cost information about them, and changed the defmi-tion of intergovernmental mandates in the context of large entitlement programs.Companion legislation was introduced in the Senate. The MIA passed the Housein both 1998 and 1999 but was never considered on the floor of the Senate.

5 . For a more complete explanation of the national security exclusion, see Congressional Budget Office, An Assessment of the Un@mdedMandates Reform Act in 1999 (March 2000).

Chader Two

CBO’s Activities Under UMRA,1 9 9 6 - 2 0 0 0

How many bills has CBOreviewed for mandates sinceUMRA was enacted?

How many of those billscontained mandates and howmany had costsyding thet h r e s h o l d s ? -

How many sepafate mandatesconsidered by the Congress inthe past five years had costsover the thresholds?

Between 1996 and 2000, CBO analyzed and provided mandate statements formost of the bills reported by authorizing committees, as well as for some otherproposed bills and amendments. In all, CBO prepared more than 3,000 mandatestatements.

About 12 percent (or 355) of the bills that CBO reviewed contained intergov-ernmental mandates (see Table 1). About 1 percent of all the bills (or 32) hadmandates whose costs would exceed the annual threshold ($50 million in 1996,adjusted annually for inflation). Those 32 bills with costs over the threshold rep-resented 9 percent of the bills containing intergovernmental mandates. Another1 percent (or 21) had costs that could not be determined.

CBO identified private-sector mandates in about 14 percent (or 422) of the billsand amendments that it examined in the past five years. More than 3 percent ofthose bills (or 100) contained mandates whose costs exceeded their tbreshold($lOOmillionin 1996, annually adjusted forinflation). Another 1 percent (or36)had private-sector costs that could not be determined.

The proportion of bills containing a mandate has remained relatively constantsince 1996 (ranging between 10 percent and 14 percent for intergovernmentalmandates and 12 percent and 19 percent for private-sector mandates). But theproportion of bills with mandates over the relevant thresholds has declined in eachof the past five years. Bills with intergovernmental mandates above the thresholdfell from 1.5 percent in 1996 to less than 0.5 percent in 2000, and bills withprivate-sector mandates over the threshold dropped from 5.6 percent in 1996 toless than 1 percent in 2000.

Multiple bills or proposals sometimes contain the same or similar mandates.Consequently, CBO’ s mandate statements for different bills sometimes identifythe same mandate. In the past five years, the 32 bills with intergovernmentalmandates above the threshold contained 17 separate mandates. The 100 bills


Table 1.Number of CBO Mandate Statements for Bills, Proposed Amendments, and Conference Reports,by Year, 1996-2000

Five-Year1996 1997 1998 1999 2000 Total

Intergovernmental Mandates

Total Number of Statements Transmitted 7 1 8 5 2 1 5 4 1 573 708 3,059

Number of Statements That Identified Mandates 69 84 6 4 8 1 7 7 3 5 5Mandate costs would exceed thresholda 11 8 6 4 3 32Mandate costs could not be estimated 8 7 7 0 1 2 1

Private-Sector Mandates

Total Number of Statements Transmitted 673 4 9 8

Number of Statements That Identified Mandates 9 1 6 5Mandate costs would exceed thresholda 3 8 1 8Mandate costs could not be estimated 2 5

525 5 5 8 8 9 7 2,949

7 5 105 86 4 2 218. 20 6 100

9 1 3 7 3 6

SOURCE: Congressional Budget Cftice.

NOTE: The numbersinthistable representofficial mandate statements transmitted to the Congress byCB0. CBO prepared more intergovernmentalmandate statements than private-sector mandate statements because in some cases it was asked to review a specific bill, amendment, orconference reportsolelyforintergovemmental mandates. In those cases, no private-sector analysis was transmitted to the requesting Memberorcommittee. CBOalsocompletedanumberof preliminaryreviewsandinformalestimatesforotherlegislativeproposalsthatarenotincludedin this table. Mandate statements may cover more than one mandate provision, and occasionally, more than one formal CBO statement isissued for each mandate topic.


How often was CBO unableto estimate whether thethresholds would be exceeded?

with private-sector mandates over the threshold contained 42 separate mandates.(See Tables 2 and 3, beginning on page 14, for more detail on those mandates.)

For fewer than 10 percent of the mandates it identified over the past five years(21 intergovernmental mandates and 36 private-sector mandates), Cl30 could notdetermine whether their costs would exceed the statutory thresholds. The reasonsvaried.

. Uncertainty about whomthebiis provisions would affect sometimes madeit impossible to estimate compliance costs.

. Even when CBO could identify the affected parties, it could not alwaysobtain reliable information about those parties to use in preparing a costestimate.

. In some cases, it was impossible to estimate the costs of a mandate at thelegislative stage, before regulations to implement the mandate had beendeveloped.

CHApTERTWO CEO’S ACTIVITIES UNDER UMR4,1996-2ooO 11

. Language in UMRA about how to treat extensions of existing mandates isambiguous, so CBO was sometimes uncertain whether to measure the costsof extending a mandate from the current level of costs or from the level(usually zero) that would exist if the mandate was allowed to expire.

UMRA is also unclear about how to measure the costs of mandates fromwhich states and localities can opt out, so CBO had trouble determiningwhether the threshold would be exceeded in those cases. Unlike most vol-untary federal programs, in which states and localities incur costs only ifthey choose to participate (or opt in), opt-out provisions would impose amandate unless those governments took some other action to avoid thecosts. Depending on how politically controversial the issue is, opting outmay be difficult; it is unclear whether CBO should count the costs of failingto opt out against the threshold.

How many mandates withcosts above the thresholdshave become law?

Only two of the 17 intergovernmental mandates that CBO identified with costsover the threshold have been enacted into law since 1996:

6

that the law would impose an intergovernmental mandate with costs exceed-ing the threshold because it would require all employers-including state,local, and tribal governments-to pay higher minimum wages than theywould have to otherwise. CBO estimated that over five years, that mandatewould cost those governments a total of more than $1 billion.

. The Agricultural Research, Extension, and Education Reform Act of 1998(P-L. 105-185) contained a provision liiting the federal government’sresponsibility to provide funding to the states for the administrative costsof the Food Stamp program. UMRA defines cuts in federal funding forentitlement grant programs such as Food Stamps as mandates if the gov-ernments that participate in the program cannot change their financial orprogrammatic responsibilities to offset those cuts. Because states havelimited authority to alter their responsibilities under the Food Stamp pro-gram, CBO determined that the funding cuts in that law constituted amandate, with costs estimated to total between $200 million and $300million a year.

. The Minimum Wage Increase Act, enacted in 1996 as P.L. 104-l 88, raisedthe minimum wage to $5.15 in two 90 cent increments. CBO determined

Sixteen (or 38 percent) of the 42 private-sector mandates that CBO identified ascosting more than the statutory threshold became law.

. Seven of those 16 mandates were enacted in the 104th Congress. Theyincluded a tax measure in the welfare reform bill; two health insurancechanges (requirements for insurance portability and minimum maternitystays); and four economic or social policy measures (immigration reform,an increase in the minimum wage, welfare reform, and telecommum ‘cationsreform). See Table 3 on page 16 for more details about those mandates.

12 CBO’S ACTIVm UNDER THE UNFUNDED MANDAW REFORM Am, 1996-2000 May 2001

. Another seven private-sector mandates with costs over the threshold wereenacted by the 105th Congress. Five of them involved taxes: a reinstate-ment of the airline ticket tax, a reinstatement of excise taxes related tofederal surface transportation programs, revenue provisions in budgetreconciliation bills, and revenue provisions in both the Taxpayer Relief Actof 1998 and the Internal Revenue Service Restructuring and Reform Act of1998 (used to offset reductions iu revenues elsewhere in those acts). Theother two mandates-an increase in federal workers’ required contributionsto retirement programs and new Medicare requirements for private healthinsurers-were contained in budget reconciliation bills.

. In the 106th Congress, only two mandates reviewed by CBO with estimatedcosts above the threshold were enacted. One was the revenue-raisingprovisions in the Taxpayer Relief and Tax Extenders Act, and the otherchanged the method by which minimum prices for milk are set in variousregions of the country (enacted in the Fiscal Year 2000 ConsolidatedAppropriations Act, P.L. 106-l 13).

How many significant man-dates were amended beforeenactment to bring their costsbelow the thresholds?

Four intergovernmental and five private-sector mandates that CBO identified ascosting more than the thresholds when they were approved by authorizing com-mittees were amended before enactment to reduce their costs below the threshold.In many of those cases, it was clear that information provided+y CBO played arole in the Congress’s decision to lower costs.

For example, beginning in 1997, CBO reviewed a number of bills, all called theInternet Tax Freedom Act, that dealt with taxes related to the Internet. The billswould have prohibited the collection of some state and local taxes for a specificperiod, and CBO determined that all of them would have imposed an intergov-ernmental mandate as defined by UMRA. Because the different versions of thetax moratorium varied in terms of scope and approach, CBO’s estimates of therevenue losses to states and localities also varied.

For one early version of the proposal (H.R. 1054, as approved by the Subcom-mittee on Telecommunications, Trade, and Consumer Protection of the HouseCommittee on Commerce on October 9,1997), CBO estimated that the directcosts of the bill’s mandate would have exceeded the threshold for intergovem-mental mandates. H.R. 1054 would have prohibited certain taxes that states andlocalities were levying on Internet-related communications, transactions, andservices. It was clear that at least one significant source of state revenues-taxeson Internet access services and on-line services-would have been affected, andseveral others might have been affected. For that reason, CBO estimated that theprohibition would have caused revenue losses exceeding the statutory thresholdat some point during its first five years.

The version of the Internet Tax Freedom Act that was finally enacted (on October19,1998, as part of the Omnibus Appropriation Act, P.L. 105-277) was nar-rower in scope and allowed states that were currently collecting a sales tax onInternet access to continue doing so. Thus, CBO estimated that the law wouldnot cause revenue losses exceeding the threshold.

CHAP’IERTWO CBO’S ACTMTIBS UNDER UMRA. 1996-2000 13

In the private-sector arena, the House version of the 1996 farm bill containedprovisions that would have required milk sold for fluid uses to contain greateramounts of nonfat solids than required under law at that time and would havelocked in higher fluid-milk prices under the Milk Marketing Order System C B Ofound the costs of such restrictions to be well over the annual threshold forprivate-sector mandates. The final version of the farm bill (the Federal Agri-culture Improvement and Reform Act of 1996, P.L. 104-127) was amended toremove the provisions imposing the higher fluid-milk standards.

In another private-sector case, the financial services reform bill (as reported bythe House Banking Committee in 1998) contained a mandate that would haverestricted the investment activities of Federal Home Loan Banks. CBO estimatedthat the restriction would have cost those institutions more than $100 millionannually by its third year. The provisions restricting such investments were takenout of the bill in all later versions considered by the Congress, including the oneeventually enacted in the Gramm-Leach-Bliley Act of 1999 (P.L. 106-102).

Tables 2 and 3 provide additional information about the mandates consideredduring the 1996-2ooO period that were amended before enactment to bring theircosts below the thresholds.

What about bills with “other”costs that are not the result ofintergovernmental mandates?

Roughly 10 percent of the bills that CBO reviewed in the past five yearscontained provisions that would have produced additional costs for state, local,or tribal governments that were not the result of mandates as defined by UMRA.In CBO’s estimation, the majority of the bills-primarily those dealing with

aconditions for receiving federal aid or participating in a voluntary federal pro-gram-would not have had a significant net effect on the budgets of thosegovernments. When such an effect is expected to be significant, CBO providesinformation about it in the cost estimate accompanying the bill.

14 CBO’S ACTlVlTlES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Table 2.Status of Intergovernmental Mandates That Exceed the Statutory Thresholds, 1996-2000

Was a Did the

Topic Mandate

VersionEnacted

into Law?

EnactedVersion Exceedthe Threshold?a

Health Insurance Reform

Immigration Reform

Minimum Wage

Occupational Safety and Health

Securities Regulatory Reform

Agricultural Research

Airport Runway Safety Requires upgrades to runway safety equipment

Internet Gambling Prohibits gambling over the Internet, includingsome forms of state lotteries

Internet Tax Freedom

Minimum Wage

National Tobacco Policy

Nuclear Waste Policy

Health Information Confidentiality

Internet Gambling

Internet Tax Moratorium

104th Congress, Second Session (1996)

Requires mental health parity in insuranceplans

Requires Social Security numbers on driver’slicenses ,

Increases the minimum wage paid byemployers covered under the Fair LaborStandards Act

Applies OSHA requirements to state and localworkplaces

Preempts state securities fees

105th Congress (1997-l 996)

Caps federal contribution for Food Stampadministration

Prohibits certain Internet-related taxes

Increases the minimum wage paid byemployers covered under the Fair LaborStandards Act

Imposes requirement on states regardingtobacco settlements

Accelerates payment of fees owed by the stateof New York

106th Congress (1999-2000)

Preempts health privacy laws and imposes newrequirements on entities handling patients’health records

Prohibits gambling over the Internet, includingcertain tribal casino games

Extends and expands prohibitions on certainInternet-related taxes

Yes

Ves

Yes

No

Yes

Ves

No

No

Yes

No

No

No

No

No

No

Nob

NoC

Yes(P.L. 104-188)

n.a.

NodP

Yes(P.L. 105-185)

n.a.

n.a.

No”

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

-------------------------------------------------------------------------------------------------------(Continued)

CHAPTERTWO CBO’S ACTIVITIBS UNDER UMRA, 1996-2000 15

Table 2.Continued

Was a

Topic Mandate

Version EnactedEnacted Version Exceed

into Law? the Threshold?a

106th Congress (1999-2000), Continued

Minimum Wage increases the minimum wage paid byemployers covered under the Fair LaborStandards Act

No n.a.

Social Security Protections Restricts the use of Social Security numbers No n.a.

SOURCE: Congressional Budget Cffice.

NOTES: Mandates in this table are those identified by the Congressional Budget Office when a bill was reported by an authorizing or conferencecommittee or when CBO was asked to do a formal review. Because more than one bill can contain the same mandate, the 32 bills withintergovernmental mandates above the threshold contained 17 separate mandates.

P.L. = public law; OSHA = Occupational Safety and Health Administration; n.a. = not applicable.


b. Theoriginalversion required parityforall aspects of mental health care coverage, including limitson lifetime and annual expendiires, copayments,deductibles, and restrictionsonthe numberof visits to health care providers. The enacted version delayed implementation until January 1,1996,and required parity only for lifetime and annual expenditures.

C. The original versto n required drivers licenses to include Social Security numbers by October 1,1997, and would have resulted in a large influxofpeople seeking early renewals. The enacted version allows states to implement the new requirementsoveran extended period of time,therebyeliminating the influx of renewals and significantly reducing the costs.

d. The original version preempted state requirements for registering securities, including the collection of certain fees. The enacted version limitedthe scope of that preemption, allowing states to continue to collect certain fees for three years or until they change their securities laws.

e. Earlyversions prohibited salestaxeson Internet access services. The enacted version allowed states that were currently collecting asalestaxonInternet access to continue doing so.

16 CBO’ S AC&T@ t@ER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Table 3.Status of Private-Sector Mandates That Exceed the Statutory Thresholds, 1996-2000

Topic Mandate

Was aVersionEnacted

into Law?

Did theEnacted

Version Exceedthe Threshold?*

Farm Bill

Health Insurance Reform(Maternity stay)

Health Insurance Reform(Portability)

Immigration Reform

Minimum Wage


Small Business Job Protection

Sports Franchises

Telecommunications Reform

Welfare Reform

Airport and Airway Trust Fund

Bankruptcy Reform

Biomedical Research

Budget Reconciliation(Medicare)

Budget Reconciliation(Federal employee retirement)

Budget Reconciliation(Revenue)

104th Congress, Second Session (1996)

Imposes fees and other requirements on dairy farmers

Requires certain health plans to provide for minimum-length maternity stays

Yes

Yes

Requires health insurers to improve portability andcontinuity of health insurance coverage

Imposes requirements on sponsors of immigrants

Yes

Yes

Increases the minimum wage paid by employerscovered under the Fair Labor Standards Act

Accelerates the payment of certain fees by privatenuclear utilities

Yes

No

Imposes miscellaneous tax provisions Yes

Imposes requirements on franchise owners andleagues

No

Requires carriers to provide interconnection anduniversal service and to block certain programs

Revises provisions for the earned income tax crediiand imposes requirements on sponsors of immigrants

Yes

Yes

105th Congress (1997-1996)

Reinstates airline ticket tax Yes

Changes procedures for administering bankruptcyestates

No

Prohibits manufacture of certain drugs

Imposes requirements on private health insuranceproviders

No

Yes

Increases required contributions for retirement Yes

Establishes several revenue-raising provisions Yes

iJOb

Yes(P.L. 104-204)

Yes(P.L. 104-191)

Yes(P.L. 104-208)

Yes(P-L. 104188)

a .n.a.. ‘-

(P.L. Z-188)

n.a.

Yes(P.L. 104-104)

Yes(P.L. 104-l 93)

Yes(P.L. 105-2)

n.a.

n.a.

Yes(P.L. 105-33)

Yes(P.L. 10533)

Yes(P.L. 10534)

--------------------------------------------------------------------------------------------------.-----(Contnued)

f

CHAPTERTWO CBO’S ACTIVITIES UNDER UMRA, 1996-2000 17

Table 3.Continued

Topic .Mandate

Was aVersionEnactedinto Law?

Did theEnacted

Version Exceedthe Threshold?a

Campaign Finance Reform

Caribbean Trade Changes deduction for accrued severance pay (taxprovision)

China’s Normal TradeRelations

Increases tariff rates on importers of Chinese goods

Encryption Establishes controls on decryption technology

Financial Services Reform Restricts investment activities of Federal Home LoanBanks

Internal Revenue Service -Restructuring and Reform

Internet Gambling

Minimum Wage c

National Tobacco Policy


Patient Protection/Patients’ Bill of Rights

Reauthorization of FederalSurface TransportationPrograms

Taxpayer Relief

Bankruptcy Reform

Caribbean Trade

China’s Normal TradeRelations

105th Congress (1997-l 998), Continued

Changes procedures for collection and use ofcampaign contributions

Changes deduction for accrued vacation pay andseveral other revenue-raising provisions

Prohibits gambling over the Internet and otherinteractive computer systems

Increases minimum wage paid by employers coveredunder the Fair Labor Standards Act

Sets fees and other requirements on tobaccomanufacturers, distributors, retailers, and importers

Accelerates the payment of certain fees

Imposes new requirements on managed health careand other forms of health insurance

Establishes excise tax provisions

Establishes revenue-raising provisions

108th Congress (1999-2000)

Changes procedures for administering bankruptcyestates

Limits prefunding of certain employee benefits

Increases tariff rates on importers of Chinese goods

No

No

No

No

Yes=

Yes

No

No

No

No

Oned

n.a.

n.a.

n.a.

n.a.

No

Yes(P.L. 105-206)

n.a.

n.a.

n.a.

n.a.

N o

Yes

Onceprovision

No’

No

No

Yes(P.L. 105-178)

Yes(P.L. 105-277)

n.a.

n.a.

n.a.

.-----______---_---------------------------------------------------------------------------------------(Continued)


Table 3.Continued

Topic Mandate

Was aVersionEnactedinto Law?

Did theEnacted

Version Exceedthe Threshold?”

Health InformationConfidentiality

Milk Price Structure

Minimum Wage

Patients’ Bill of Rights

Relief for Technology Workers

Small Business Mergers

Social Security Privacy

Steel Imports

Taxpayer Relief and TaxExtenders

Work Incentives Improvement

106th Congress (1999-2000), Continued

Imposes new requirements on the use and disclosureof personal health information

No

Changes the method by which minimum prices areestablished for fluid milk in different regions of thecountry

Yes

Increases the minimum wage paid by employerscovered under the Fair Labor Standards Act

No

Imposes new requirements on group- and employer-sponsored health plans and on health insuranceissuers

No

Imposes minimum wage and additional requirementson employers of H-l B workers

Ye@

Raises the threshold and fees for firms that file formergers

No

Prohibits certain commercial uses of Social Securitynumbers

No

Limits the volume of imported steel products No

Changes or imposestaxes to raise revenues to offsetcosts imposed by other provisions in a bill

Changes or imposes taxes to raise revenues to offsetcosts imposed by other provisions in a bill

Yes’

n.a.

Yes(P.L. 106-l 13)

n.a.

n.a.

3 No

n.a.

n.a.

n.a.

Yes(P.L. 106-170)

No

SOURCE: Congressional Budget Office.

NOTES: Mandates in this table are those identified by the Congressional Budget Cffice when a bill was reported by an authorizing or conferencecommittee or when CBO was asked to do a formal review. Because more than one bill can contain the same mandate, the 100 bills withprivate-sectormandatesabovethethresholdcontained 42 separate mandates. In some cases, morethan one formal CBOstatementwasissued for each mandate topic.

P.L. = public law; n.a. = not applicable; H-l B workers are skilled foreigners admitted temporarily to the United States to work for U.S.employers.


b. The mandatewould have required milksold for fluid uses to contain greateramountsof nonfat solids than are now required. Such a mandate wouldh a v e l o c k e d i n imposing costs on dairy processorsand manufacturers. The enactedversion of the farm bill did not containthe higher fluid-milk standards.

C. Several provisions of the financial services legislation that passed wereenacted in the Gramm-Leach-Bliley Act of 1999. The mandate on FederalHome Loan Banks was not enacted.

““““““““““------------------------------------------------------------------------------.-----(Contnued)

CHAPTERTWO CBO’S ACTIVITIES UNDER UMRA. 1996-2000 19

Table 3.Continued

d.

e.

f.

h.

i.

The Omnibus Consolidated and Emergency Supplemental Appropriations Act (P.L. 105-277) contains a provision requiring some health plansto pay for reconstructive surgery following mastectomies.

TheOmnibusConsolidatedandEmergencySupplementalAppropriationsAct(P.L. 105-277) containsaprovisionthatchangesthetaxtreatmentof distributions from regulated investment companies and real estate investment trusts.

The Congress passed H.R. 2415, the Bankruptcy Reform Act of 2000, in December 2000. The President withheld his approval of the act, theCongress adjourned sine die, and the bill was =pocket” vetoed.

Separate legislation to increase a fee paid by employers who petition forthe employment of H-i B workers from $500 to$l ,000 (PL. 105-311) wasenacted in 2000. The requirement to pay H-19 workers a minimum wage did not pass.

TentaxprovisionsthatweremandatesinotherbillspassedintheTickettoWorkandWorklncentives ImprovementActofl999. Thethreelargestof those mandates repeal the installment method for mosttaxpayers using the accrual basis, change the treatment of income and servkres providedbytaxable subsidiaries of real estate investmenttrusts, and preventtheconversionof ordinary incomeorshort-term capital gatnsintoincome eligiblefor long-term capital gains tax rates.

Portions of the bill passed in the Ticket to Work and Work Incentives Improvement Act of 1999 but not the tax mandates.

b

Amendix A

An Assessment of UMRAin 2000

This appendix summarizes the CongressionalBudget Office’s activities under title I of theUnfunded Mandates Reform Act during 2000-

its fifth year of providing information about federalmandates to the Congress. The information updatesCBO’s four previous annual reports on UMRA.’

In all, CBO reviewed more than 700 bills andother legislative proposals in 200 to determine whetherthey included federal mandates (see Table A- 1). About11 percent of tho9e bills (or 77) had intergovernmentalmandates, and less than 0.5 percent (three bills) hadsuch mandates with costs that would exceed thethresh-old ($55 million a year in 2000 dollars). CBO alsofound private-sector mandates in about 12 percent ofthe bills and amendments that it examined; almost1 percent (six bills) had costs over the $109 millionannual threshold (m 2000 dollars) for such mandates.(Tables A-2 and A-3 list all of the bills examined byCBO in 2000 that contained mandates.)

No intergovernmental mandates, and only twoprivate-sector mandates, with costs above the thresholdwere enacted into law in 2000. One of the private-sector mandates comprised the revenue-raising pro-visions in the Taxpayer Relief and Tax Extenders Act

1. CongnSonal Budget Office, An Assessment of the Un-funded Mandates Reform Act in 1999 (March 2000), AnAssessment of the Unfunded Mandates Reform Act in 1998(February 1999), An Assessment of the Unfunded MandatesReform Act in 1997 (February 1998), and The Experience ofthe Congressional Budget OJice During the First Year of theUnjkded Mandates Reform Act (January 1997).

(P-L. 106-170). That law adjusts certain taxes to raiserevenues in order to offset costs imposed by otherprovisions of the law. The second mandate alters themethod by which minimum prices are set for fluid milkin various regions of the country. It was enacted in theFiscal Year 2000 Consolidated Appropriations Act(P.L. 106-l 13).

Iu addition, CBO identified about 75 bills lastyear containing provisions that would have resulted inother costs to state, local, or tribal governments--coststhat were not the result of mandates as defined byUMRA. As in previous years, most of those provisionsdealt with conditions for receiving federal aid orparticipating in a voluntary federal program. In suchcases, state, local, aud tribal governments are subject tothe conditions imposed by the federal government onlyif they choose to participate in the program or acceptfederal funds.

Bills with some of the most significant of thoseother costs involved the Medicaid program. For ex-ample, CBO reviewed a provision in H.R. 4577, theMedicare Outpatient Drug Act of 2000, that wouldestablish a voluntary outpatient prescription drngbene-fit for Medicare beneficiaries (some of whose benefitsare paid by Medicaid) beginning in 2003. CBO esti-mated that because states share the costs of Medicaid,state spending for that program would increase byabout $1 billion over a five-year period. Such costswould result from additional administrative expenses,higher drug costs, and, in particular, higher enrollmentrates among low-income beneficiaries.


Table A-l.Number of CBO Mandate Statements for Bills, Proposed Amendments, and Conference Reports in 2000

IntergovernmentalMandates

Private-SectorMandates

Total Number of Statements Transmitted 7 0 6 697

Number of Statements That Identified Mandates 7 7 6 6Mandate costs would exceed threshold” 3 6Mandate costs could not be estimated 1 7


NOTE: The numbers in this table represent official mandate statements transmitted tothecongress byCB0. CBO prepared more intergovernmentalmandate statements than private-sector mandate statements because in some cases it was asked to review a specific bill, amendment, orconference reportsolelyforintergovemmental mandates. In thosecases, no private-sectoranalysiswastransmitted to the requesting Memberor committee. CBO also completed anumber of preliminary reviews and informal estimates for other legislative proposals that are not includedin this table. Mandate statements may cover more than one mandate provision, and occasionally, more than one formal CBO statement isissued for each mandate topic.

a. The thresholds, which are adjusted annually for inflation, were $55 million for intergovernmental mandates and $109 million for private-sectormandates In 2000.

Of the 410 public laws enacted in 2000, about 7percent (30 laws) contained an intergovernmental man-date as UMRA defines it (see Table A-4). By CBO’sestimate, none of those mandates will impose annualcosts on state, local, or tribal governments that exceed

the thresholds. Ten of the laws enacted in 2000 con-tained intergovernmental mandates that CBO had notreviewed at some point during the legislative process.In none of those cases, however, does CBO estimatethat the costs of the mandates will be significant.

A P P E N D I X A

Table A-2.

AN ASSESSMENT OF UMRA IN 2000 23

Bills Reviewed by the Congressional Budget Off ice in 2000 That Contained hitergovernmental Mandates

Bill Number(Committee) Name Mandate

Proposal

HR. 3709

HR. 4857

Proposal

H.R. 940 Lackawanna Valley National Heritage Area Act(Senate) of 2000

HR. 1124 Fort Peck Reservation Rural Water System Actof 2000

H.R. 1293

H.R. 1304(As introduced)

H.R. 1304(Judiciary)

H.R. 1689

H.R. 1776

HR. 1954

H.R. 2130

H.R. 2166

H.R. 2260

lntygovernmental Mandates with Costs Exceeding the Statutory Threshold

Minimum wage proposal Requires public employers to pay higherminimum wage rates

Internet Nondiscrimination Act of 2000 Extends and expands moratorium on taxingInternet access

Social Security Number Privacy and Identity Prohibits use, display, and sale of SocialTheft Prevention Act of 2000 Security numbers

Intergovernmental Mandates with Costs Below the Statutory Threshold

Military-Retiree Access to ComprehensiveHealthcare Act

A bill to amend title 46, United States Code,

B,to provide equitable treatment with respect tostate and local income taxes for certainindividuals who perform duties on vessels

Qualii Health Care Coalition Act

Quality Health Care Coalition Act

A bill to prohibit states from imposingrestrictions on the operation of motor vehiclesproviding limousine service between a place ina state and a place in another state, and forother purposes

American Homeownership and EconomicOpportunity Act of 2000

Rental Fairness Act of 1999

Hillory J. Farias and Samantha ReidDate-Rape Drug Prohibition Act of 1999

Bear Protection Act of 1999

Pain Relief Promotion Act of 2000

Requires medigap coverage for military retirees

Requires a public authority to complete a planand implement a program

Requires a tribal government to complete aconservation plan

Prohibits taxing certain income from vesselworkers

Preempts state antitrust laws governingcollective bargaining by health professionals

Preempts state antitrust laws governingcollective bargaining by health professionals

Prohibits state and local governments fromrestricting some interstate limousine services

Preempts state authorities from settingstandards for manufactured housing

Preempts some state liability laws

Restricts the use of certain controlledsubstances by public hospitals

Prohibits state and local governments fromtrading in bear parts

Preempts Oregon law on assisted suicide--------------------------------------------------------------------------------------------------,-----

(Conhued)

24 CBO’SACTMTIES UNDER THE UNFUNDED MANDATES REFORM ACT. 1996-2000 May 2001

Table A-2.Continued


H.R. 2366

HR. 2592

HR.2764

HR. 2646

H.R. 2987

H.R. 3011

H.R. 3100

H.R. 3113

H.R. 3125

H.R. 3244

H.R. 3439

H.R. 3485

H.R. 3575

H.R. 3886

H.R. 3995(GovernmentReform)

Intergovernmental Mandates with Costs Below the Statutory Threshold (Continued)

Small Business Liability Reform Act of 2000

A bill to amend the Consumer Products SafetyAct to provide that low-speed electric bicyclesare consumer products subject to such act

America’s Private Investment Companies Act

Preempts some state liability laws

Preempts state laws regulating electric bikes thatare more stringent than federal laws

Preempts state bankruptcy laws

New Markets Initiative Act of 1999 Preempts state bankruptcy laws regardingownership of certain debentures

Methamphetamine and Club Drug Anti-Proliferation Act of 2000

Truth in Telephone Billing Act of 1999

Preempts a state’s ability to preclude thedistribution of certain drugs for detoxificationtreatment

Requires public telecommuni: ations carriers to\include information about ass ssments on their

bills

Know Your Caller Act of 2000 Preempts certain provisions of statetelemarketing laws

Unsolicited Commercial Electronic Mail Act Preempts some state and local laws regardingof 2000 “spam” e-mails and certain state liability laws

Internet Gambling Prohibition Act of 2000

Trafficking Victims Protection Act of 2000

Preempts state liability laws and prohibits somestate lottery activities

Preempts state forfeiture laws in cases,involvingvictims of trafficking

Radio Broadcasting Preservation Act of 2000 Invalidates some low-power FM radio licenses

Justice for Victims of Terrorism Act Preempts state limits on certain damage awards

Student Athlete Protection Act Prohibits states from allowing wagering onamateur sports

International Counter-Money Laundering andForeign Anticorruption Act of 2000

Imposes new requirements on state and localagencies regarding reporting and disclosure ofcertain financial information

District of Columbia ReceivershipAccountability Act of 2000

Requires court-administered departments in theDistrict of Columbia to adopt certain manage-ment practices

APPENDIX A AN ASSESSMENT OF UMRA IN 2000 25

Table A-2.Continued


HR. 3995(Senate Govem-mental Affairs)

District of Columbia ReceivershipAccountability Act of 2000

HR. 4030 Enhancement of Military Benefits Act

HR. 4040 Long-Term Care Security Act

HR. 4049 Privacy Commission Act

H.R. 4163 Taxpayer Bill of Rights 2000

H.R. 4205(Armed Services)

H.R. 4205 )_ Amendment to H.R. 4205, the National Requires insurers to issue medigap coverage to(Armed Services) Defense Authorization Act for Fiscal Year 2001 some Medicare enrollees

H.R. 4205 National Defense Authorization Act for Fiscal Requires insurers to issue medigap coverage toYear 2001 (Comparison of two proposals) some Medicare enrollees

H.R. 4227 Technology Worker Temporary Relief Act Imposes new requirements and fees on certainstate and local agencies that employ workersholding H-l B visas

intergovernmental Mandates with Costs Below the Statutory Threshold (Continued)

H.R. 4387

H.R. 4391

H.R. 4504

H.R. 4530

H.R. 4541(Agriculture)

Requires court-appointed receivers in the Districtof Columbia to adopt certain managementpractices

National Defense Authorization Act for FiscalYear 2001

Requires insurers to issue medigap coverage tosome Medicare enrollees

Preempts state insurance laws when the federalgovernment contracts for health care

Requires state and local governments to complywith subpoenas

Requires state contractors to comply withconfidentiality safeguards

Preempts state laws governing wills, requiresrecipients of equipment to demilitarize it, andrequires insurers to issue medigap coverage incertain cases

A bill to provide that the School GovernanceCharter Amendment Act of 2000 shall takeeffect upon the date such act is ratified by thevoters of the District of Columbia

Preempts the Charter of the District of Columbiato allow an amendment to take effectimmediately

Mobile Telecommunications Sourcing Act Preempts state and local authority to decidewhat jurisdiction can tax mobiletelecommunications services

Higher Education Technical Amendments of2000

New Markets Venture Capital Program Act of2000

Commodity Futures Modernization Act of 2000

Preempts state laws governing securedtransactions

Preempts state law regarding ownership ofcertain debentures

Preempts state commodities laws

.----__---_----_----------------------------------------------------------------------------- - - - - - - - -Icontinued)

26 CBO’S ACTJXTIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000

Table A-2.Continued

May 2001


HR. 4541(Banking andFinance)

HR. 4541(Commerce)

HR. 4807

HR. 5018

S. 613

S. 624

S. 876

S. 893

s. 1109

s. 1155

S. 1452

S. 1536

s. 1594(Small Business)

s. 1594(Small Business)

S. 1694




Ryan White CARE Act Amendments of 2000

Electronic Communications Privacy Act of Requires courts and law enforcement agencies2000 to monitor certain electronic communications

Indian Tribal Economic Development andContract Encouragement Act of 1999

Requires tribes to submit some contracts forfederal approval

aFort Peck Reservation Rural Water System Actof 2000

Requires a tribal government to complete aconservation plan

Children‘s Protection from ViolentProgramming Act

A bill to amend title 46, United States Code,to provide equitable treatment with respect tostate and local income taxes for certainindividuals who perform duties on vessels


National Uniformity for Food Act of 2000

Manufactured Housing Improvement Act

Older Americans Act Amendments of 2000

Community Development and Venture CapitalAct of 2000

Amendments to S. 1594, CommunityDevelopment and Venture Capital Act of 2000

Hawaii Water Resources Reclamation Actof 2000

Preempts state laws affecting certain bankruptcyproceedings

Preempts state privacy and commodities laws

Requires states to implement recommendationsby the Institute of Medicine for increasing routinetesting of pregnant women and newborns forHIV

Prohibits the broadcasting of certain.violentprogramming on public television stations

Prohibits taxing certain income from vesselworkers

Prohibits state and local governments fromtrading in bear parts

Preempts state labeling laws

,

Preempts state authority to set standards formanufactured housing

Requires states to provide certain legalassistance for the elderly

Preempts state laws limiting some ownershiprights

Preempts state laws limiting some ownershiprights

Requires state of Hawaii to share the cost of astudy

-------------------------------------------------------------------------------------------------------(Continued)

APPENDIX A AN ASSESSMENT OF UMRA IN 2ooO 27

Table A-2.Cotitinued


s. 1755

s. 1929

s. 2029

S. 2045

S. 2071

S. 2087

S. 2107

s. 2340

S. 2382

S. 2420

S. 2438

s. 2440

s. 2549


Small Business Reauthorization Act of 2000

Native Hawaiian Health Care Improvement ActReauthorization of 1999

Know Your Caller Act of 2000

American Competitiveness in the Twenty-FirstCentury Act of 2000

Electric Reliability 2000 Act

Military Health Care Improvements Act of 2000

Competitive Market Supervision Act

$ Amateur Sports Integrity Act

Technical Assistance, Trade Promotion, andAnti-Corruption Act of 2000

Long-Term Care Security Act and FederalErroneous Retirement Coverage CorrectionsAct

Pipeline Safety Improvement Act of 2000

Airport Security Improvement Act of 2000


Preempts state and local authority to decidewhat jurisdiction can tax mobiletelecommunications services

Requires state of Hawaii to consult with NativeHawaiian health organizations when makingpolicy or initiating new programs

Preempts certain provisions of statetelemarketing laws

Requires employers to pay a $500 fee to hireworkers holding Hl -B visas

Imposes requirements on public utilities

Requires insurers to issue medigap coverage tosome Medicare enrollees

Preempts state securities laws; imposes newfiling and fee requirements

Prohibits states from allowing wagering onamateur sports

Prohibits public entities from transacting certainbusiness with Serbia and the government ofYugoslavia

Preempts some state and local laws that governlong-term care coverage and benefits; requiresthe District of Columbia to correct certain errorsassociated with the enrollment of employees infederal retirement plans

Imposes new requirements and fees on publiclyowned natural gas pipelines

Requires airport owners and operators toimprove security

Requires insurers to issue medigap coverage incertain cases, preempts state law governingwills, requires schools to provide access tomilitary recruiters, and expands existingmandate governing access to criminal justiceinformation

-------------------------------------------------------------------------------------------------------(Continued)


Table A-2.Continued



S. 2666 A bill to amend chapter 36 of title 39, UnitedStates Code, to modify rates relating to re-duced rate mail matter, and for other purposes


Indian Gaming Regulatory Improvement Act of2000

Small Business Reauthorization Act of 2000

Requires public entities to pay higher postagerates for some mail

S. 2697

s. 2920

S. 3121

Preempts certain state commodity laws

Requires tribal governments to conductbackground checks of some tribal employees

Preempts state laws governing statutes oflimitation

Intergovernmental Mandates with Costs That Could Not Be Estimated

HR. 4660 Medicare Rx 2000 Act Preempts certain state regulations and taxes onpremiums

9

SOURCE: Congressional Budget Cffice.

NOTE: The threshold for intergovernmental mandates, which is adjusted annually for inflation, was $55 million in 2000.


Table A-3.Bills Reviewed by the Congressional Budget Office in 2000 That Contained Private-Sector Mandates


Proposal(House Budget)

H.J. Res. 103

HR. 984 Caribbean and Central America Relief andEconomic Stabilization Act

HR. 4194 Small Business Merger Filing and FeeElimination Act of 2000

HR. 4227 Technology Worker Temporary Relief Act

H.R. 4857

Proposal

H.R. 534

H.R. 940(Senate)

H.R. 1064

HR. 1102(Senate)

HR. 1161

Private-Sector Mandates with Costs Exceeding the Statutory Threshold

Minimum wage proposal letter to ChairmanKasich

Joint resolution disapproving the extension ofthe waiver authority contained in section402(c) of the Trade Act of 1974 with respect tothe People’s Republic of China

Social Security Number Privacy and ldentityTheft Prevention Act of 2000

s,

Requires private and public employers to payhigher minimum wage rates than they do undercurrent law

Increases tariff rates for importers of goods fromthe People’s Republic of China

Amends the Internal Revenue Code to limitprefunding of certain employee benefii

Increases fees for some businesses that wish tomerge with or acquire another business

Requires employers of H-l B visa holders to paynew fees and observe minimum salaryconditions for those workers

Prohibits the buying or selling of Social Securitynumbers and prohibits firms from refusing to dobusiness with someone who does not provide aSocial Security number

Private-Sector Mandates with Costs Below the Statutory Threshold

Military-Retiree Access to ComprehensiveHealthcare Act (MATCH Act)

Motor Vehicle Franchise Contract ArbitrationFairness Act of 2000

Lackawanna Valley National Heritage Area Actof 2000

Serbia Democratization Act of 2000

Retirement Security and Savings Act of 2000

Financial Contract Netting Improvement Actof 2000

Requires medigap coverage for military retirees

Prohibits certain arbitration conditions incontracts between car manufacturers and cardealers

Requires the Schuylkill River GreenwayAssociation to develop management plans forthe heritage areas

Prohibits certain transactions with people orentities associated with Serbia and thegovernment of Yugoslavia

Prohibits allocations of stock in an employeestock ownership plan of a subchapter Scorporation

Requires insured depository institutions-to keepmore detailed records for certain financialcontracts under banking and bankruptcyinsolvency laws

------------------------------------------------------------------------------------------------------(Continued)

30 CEO’S ACTMTIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Table A-3.Continued


Private-Sector Mandates with Costs Below the Statutory Threshold (Continued)

HR. 1283 Asbestos Compensation Act of 2000 Requires individuals filing new claims forcompensation for injuries caused by exposure toasbestos, all attorneys representing thoseindividuals, and businesses named asdefendants by such individuals to participate in anew process

HR. 1349

HR. 1851(Senate)

Federal Prisoner Health Care Copayment Actof 2000

Fisherman’s Protective Act Amendmentsof 1999

Requires federal prisoners to make copaymentsfor some health care visits

Prohibits operators of certain vessels that holdfederal boat permits from using aircraft to locate,catch, retain, or possess Atlantic bluefin tuna

HR. 2188 Bear Protection Act of 1999 Prohibits the importation, exportation, andinterstate trade of bear parts

H.R. 2260(Senate)

Pain Relief Promotion Act of 2000 Prohibits physicians register&i to prescdbe oradminister federally controlled substances fromusing such substances in physician-assistedsuicides

H.R. 2833 Yuma Crossing National Heritage Area Actof 2000

Requires the Yuma Crossing National HeritageArea Board of Directors to develop a manage-ment plan for the heritage area and conductpublic meetings

H.R. 2987

H.R. 3011

H.R. 3100

Methamphetamine and Club Drug Anti-Proliferation Act of 2000

Truth in Telephone Billing Act of 1999

Know Your Caller Act of 2000

Prohibits the selling or transportation of certainitems intended or designed for use in themanufacture of methamphetamines (such asspeed) or for the introduction of such drugs intothe human body

Requires telecommunications carriers to includecertain information about government assess-ments on consumers’ telephone bills; prohibitstelecommunication carriers from collectingexcess charges as government assessments

Requires commercial telephone solicitors totransmit specific information about the caller;prohibits such solicitors from using a person’sname and telephone number for marketingpurposes when requested

H.R. 3113 Unsolicited Commercial Electronic Mail Actof 2000

Requires all unsolicited commercial electronicmail to be identified as such, to explain how theconsumer could stop receiving such e-mail, andto contain accurate information about thesenders and how to contact them

.------------------------------------------------------------------------------------------------------(Continued)


Table A-3.Continued


HR. 3125 Internet Gambling Prohibition Act of 2000

HR. 3171 National Health Museum Site Selection Act

HR. 3244(Judiciary)

Trafficking Victims Protection Act of 2000

HR. 3439 Radio Broadcasting Preservation Act of 2000

H.R. 3489(Commerce)

Wireless Telecommunications Sourcing andPrivacy Act

H.R. 3489(Judiciary)

Wireless Telecommunications Privacy Actof 2000

H.R. 3535k

Shark Finning Prohibition Act

H.R. 3575 Student Athlete Protection Act

H.R. 3871(Resources)

Wildlife and Sport Fish Restoration ProgramsImprovement Act of 2000

H.R. 3676

H.R. 3886

Santa Rosa and San Jacinto MountainsNational Monument Act of 2000

International Counter-Money Laundering andForeign Anticonuption Act of 2000

H.R. 4030 Enhancement of Military Benefits Act

H.R. 4049 Privacy Commission Act


Prohibits certain gambling conducted over theInternet or an interactive computer service

Requires a nonprofit corporation to make annualreports to the GSA and the Congress

Prohibits some transactions involving foreignpeople identified as participants in humantrafficking

Invalidates certain low-power FM radio stationlicenses

Expands the FCC’s criteria for certifyingequipment before manufacturers, importers,sellers, and those who modify scanningreceivers can import or market it

Expands the FCC’s criteria for certifyingequipment before manufacturers, importers,sellers, and those who modify scanningreceivers can import or market it

Prohibits the practice of cutting off sharks’ finsand discarding the creatures in the ocean

Prohibits gambling on competitive gamesinvolving amateur athletes, specifically highschool, college, and Olympic athletes

Requires the International Association of Fishand Wildlife Agencies to prepare and submitpriority lists for projects to be funded by a newgrant program

Prohibits commercial air-tour operations over thenational monument

Imposes new recordkeeping requirementsregarding the identity, beneficial ownership, andtransaction record of accounts opened andmaintained by foreign financial institutions andpeople

Requires insurers to issue medigap policies tosome Medicare enrollees

Requires entities in the private sector, ifsubpoenaed, to provide testimony and evidencerelated to matters that the privacy commissioninvestigates

_------------------------------------------------------------------““““‘““““““““““----

(Contnued)

32 CBO’ S A(Il’IVl.TES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000

Table A-3.Continued

May 2001



Requires recipients of military equipment toensure that the equipment is demilitarized;requires insurers to issue medigap policies tosome Medicare enrollees

HR. 4205(Armed Services)


HR. 4205 Amendment to H.R. 4205, the National(Armed Services) Defense Authorization Act for Fiscal Year 2001

HR. 4205 National Defense Authorization Act for FiscalYear 2001 (Comparison of two proposals)

Congressional Oversight of Nuclear Transfersto North Korea Act of 2000



H.R. 4251 Places new restrictions on the export of certainnuclear-related items to North Korea

H.R. 4541(Banking andFinancial Services)

Commodity Futures Modernization andFinancial Contract Netting Improvement Actof 2000

Requires registered futures associations to adoptnew rules for their members; authorizes cus-tomer protection regulationsthat apply to salespractices relating to retail s&p transactions

H.R. 4640 DNA Analysis Backlog Elimination Act of 2000 Requires people who have been convicted ofcertain federal offenses to submit DNA samplesto federal authorities on demand

H.R. 4660 Medicare Rx 2000 Act Bars medigap insurers from providing coverageof prescription drug expenses for certainindividuals

H.R. 4717 Full and Fair Political Activity Disclosure Actof 2000

Requires some private, nonprofit organizationsto disclose their political expenditures andcontributions to the Internal Revenue Service

H.R. 4721 An act to provide for all right, title, and interestin and to certain property in WashingtonCounty, Utah, to be vested in the United States

Comprehensive Retirement Security andPension Reform Act of 2000

Requires the owner of certain property in theRed Cliffs Reserve to confer the property to thefederal government

Prohibits allocations of stock in an employeestock ownership plan of a subchapter Scorporation

Prohibits commercial activities involvingproducts that contain cat or dog fur and prohibitsimportation of certain foreign-made cigarettes

H.R. 4848

H.R. 4868(Senate Finance) -

Miscellaneous Trade and TechnicalCorrections Act of 2000

H.R. 4868(Ways and Means)

Miscellaneous Trade and TechnicalCorrections Act of 2000

Prohibits commercial activities involvingproducts that contain cat or dog fur

Prohibits exports of certain defense-related itemsto a unilaterally declared Palestinian state orrelated entity

H.R. 5272 Peace Through Negotiations Act of 2000

-------------------------------------------------------------------------------------------------------(Continued)

A P P E N D I X A

Table A-3.Continued

AN ASSESSMENT OF UMRA IN 2000 33



A bill to amend the Animal Welfare Act toremove the limitation that permits interstatemovement of live birds

Prohibits the interstate movement of live birdsfor the purpose of fighting

s. 353 Class Action Fairness Act of 2000

S. 783 James Guelff Body Armor Act of 2000

s. 1109

s. 1515

s. 1515(House Judiciary)

S. 1588 Q.

s. 1754

S. 1854

S. 1898

s. 1911

s. 1950

S. 1998


Radiation Exposure Compensation ActAmendments of 1999

Radiation Exposure Compensation ActAmendments of 1999

Indian Land Consolidation Act Amendmentsof 2000

Denying Safe Havens to International andWar Criminals Act of 1999

Hart-Scott-Rodino Antitrust Improvements Actof 2000

Interstate Transportation of DangerousCriminals Act of 2000

Atlantic Highly Migratory Species ConservationAct of 1999

Powder River Basin Resource DevelopmentAct of 2000

Yuma Crossing Nationalof 1999

Heritage Area Act

Requires class counsels to make notificationsand disclosures to the attorneys general of allstates in which a class member resides

Requires some felons to obtain writtencertification from their employer indicating thatbody armor is necessary to conduct lawfulbusiness activity

Prohibits the importation, exportation, andinterstate trade of bear parts

Reduces the limit on attorneys’ fees under theRadiation Exposure Compensation Act

Reduces the limit on attorneys’ fees under theRadiation Exposure Compensation Act

Implements new eligibility requirements for theinheritance of fractional interests in Indian trustand restricted lands

Expands the federal courts’ power to compeltestimony in connection with requests for legalassistance from foreign governments

Increases fees for some businesses that wish tomerge with or acquire another business

Imposes standards and conditions oncompanies that transport violent prisoners fromone state to another

Prohibits certain longline commercial fishing inparts of the Atlantic Ocean; imposes new feeson swordfish dealers and new requirements onlongline vessels

Requires certain resource developers toparticipate in a new dispute-resolution process

Requires the Yuma Crossing National HeritageArea Board of Directors to develop a management plan for the heritage area and to assistlocal governments and other organizations inactivities regarding the heritage area

--------------------------------------------------------------------------------------------------.-----(Contmued)

34 CBO’S ACTlVlTIES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

Table A-3.Continued



s. 2029 Know Your Caller Act of 2000

S. 2045 American Competitiveness in the Twenty-FirstCentury Act of 2000

S. 2046 Next Generation Internet 2000

S. 207 1 Electric Reliability 2000 Act

S. 2087 Military Health Care Improvements Act of 2000

S. 2107 Competitive Market Supervision Act

S. 2247 Wheeling National Heritage Area Act of 2000

s.2340 Amateur Sports Integrity Act

S. 2382 Technical Assistance, Trade Promotion, andAnti-Corruption Act of 2000

S. 2420 Long-Term Care Security Act and FederalErroneous Retirement Coverage CorrectionsAct

Requires commercial telephone solicitors totransmit specific information about the caller;prohibits such solicitors from using.a person’sname and telephone number for marketingpurposes when requested

Prohibits “H-l B-dependenr employers fromhiring H-l B visa holders within 90 days of firinganother employee from a similar position

Requires the National Academy of Sciences, anonprofit institution, to conduct a study of ruraland low-income Americans’ access to theInternet

Requires all users of the bulk power system toabide by standards set by the private electricreliability organization and dhcts that organi-zation and each regional affiliate to assess fees


Requires each national securities exchange andnational securities association to file monthlyestimates of certain fees with the Securities andExchange Commission

Requires the Wheeling National Heritage AreaCorporation to implement the currentmanagement plan for the area to assist localgovernments and other organizations andimposes specific prohibitions on the acquisitionof property

Prohibits any wagering on amateur sports andrequires colleges to compile and report gamblinginformation and policies

Increases the amount of the bond required ifcarriers wish to submit forms after the departureof international cargo and prohibits certaintransactions involving Serbia and thegovernment of Yugoslavia

Requires the government of the District ofColumbia and Gallaudet University to correcterrors associated with the enrollment ofemployees in federal retirement plans

L

---------------_---------------------------------------------------------------------------------------(Continued)


Table A-3.Continued



S. 2438 Pipeline Safety Improvement Act of 2000

s. 2440 Airport Security Improvement Act of 2000

s. 2549 National Defense Authorization Act for FiscalYear 2001

s. 2677 Zimbabwe Democracy Act of 2000

S. 2686 A bill to amend chapter 36 of title 39, UnitedStates Code, to modify rates relating to re-duced rate mail matter, and for other purposes

S. 2697 Commodity Futures Modernization Act of 200052

S. 2873 A bill to provide all right, title, and interest inand to certain property in Washington County,Utah, to be vested in the United States

s. 3001 Grain Standards and Warehouse ImprovementAct of 2000

Private-Sector Mandates with Costs That Could Not Be Estimated

HR. 1776 American Homeownership and EconomicOpportunity Act of 2000

HR. 4441 Motor Carrier Fuel Cost Equity Act of 2000

HR. 4444 An act to authorize the extension of nondis-crfminatory treatment (normal trade relationstreatment) to the People’s Republic of China

Imposes new requirements on operators ofnatural gas and hazardous-liquid pipelines

Imposes new hiring procedures and trainingstandards for airport security workers, acceler-ates FAA requirements, and requires the FAA totighten security procedures in specific airports

Requires insurers to issue medigap policies tosome Medicare enrollees; requires secondaryschools to provide military recruiters with accessto students and students’ information or to voteto deny such access

Prohibits certain defense-related exports toZimbabwe

Increases postage rates for some types of mail

Requires a registered futures association toadopt rules for specific people who recommenda purchase or sale of a futures on a security

Requires the owner of certain property in theRed Cliffs Reserve to confer the property to thefederal government

Extends fees on grain exporters for servicesprovided by the Federal Grain Inspection Service

Increases fees for builders of manufacturedhousing by expanding the activities covered bythose fees

Requires motor carriers, brokers, and freightforwarders to assess a surcharge or other fuelcost adjustment in any new contract or agree-ment with shippers and to pass on any fueladjustment to independent truckers whom theyhire to transport the freight and who areresponsible for purchasing the fuel

Broadens the conditions under which the U.S.government could impose trade restrictions onimports of Chinese goods that are found toseriously harm or threaten domestic productionof competing or similar goods

-------------------------------------------------------------------------------------------------------(Continued)

36 CBC’S ACTIWTIES UNDER THE UNFUNDED MANDATES F&FORM ACT, 1996-2000

Table A-3.Continued

May 2001


Private-Sector Mandates with Costs That Could Not Be Estimated (Continued)

H.R. 4541(Commerce)


H.R. 4585 Medical Financial Privacy Protection Act

S. 878 Children’s Protection from ViolentProgramming Act

S. 1452 Manufactured Housing Improvement Act

Imposes privacv reauirements on all people orentities subject to the jurisdiction of the Corn-.modity Futures Trading Commission; requiresregistered futures associations to also becomeregistered national securities associations

Requires financial institutions to obtainaffirmative consent from customers whoseindividually identifiable health information theyintend to share with an affiliate or a nonaffiliatedthird party; gives customers the tight to review,inspect, and correct such information held byfinancial institutions

Prohibits the transmission of certain violentprograms to the public during specific hoursunless the programs can be. lockedelectronically $

Increases fees for builders of manufacturedhousing by expanding the activities covered bythose fees


NOTES: The threshold for private-sector mandates, which is adjusted annually for inflation, was $109 million in 2000.

H-l B workers are skilled foreigners admitted temporariiy to the United States to work for U.S. employers; FCC = Federal CommunicationsCommission; FAA = Federal Aviation Administration; GSA = General Services Administration.

A P P E N D I X A

Table A-4.Laws Enacted in 2000 That Contained Intergovernmental Mandates

Does LawContain a DoMandate costs

Not Reviewed ExceedPublic Law Name Mandate by CBO? Threshold?a

106-179

106-l 60

106-161

106-l 97

106-210

106-224

106-226

106-229

106-244

Indian Tribal EconomicDevelopment and ContractEncouragement Act of 2000

Open-Market Reorganization forthe Bettemrent of InternationalTelecommunications Act

Wendell H. Ford AviationInvestment and Reform Act forthe 21 st Century

An act to exempt certain reportsfrom automatic elimination andsunset pursuant to the FederalReports Elimination and SunsetAct of 1995, and for otherpur&ses

Muhammad Ali Boxing Reform Requires state boxing commissions toAct establish certain procedures

Agricultural Risk Protection Actof 2000

Preempts state regulation, in foreign orinterstate commerce, of plant pests ornoxious weeds

An act to provide that theSchool Governance CharterAmendment Act of 2000 shalltake effect upon the date suchAct is ratified by the voters ofthe District of Columbia

Electronic Signatures in Globaland National Commerce Act

An act to amend title I of theEmployee Retirement IncomeSecurity Act of 1974 to providefor the preemption of State lawin certain cases relating tocertain church plans

Requires tribes to include a statementabout sovereign immunity in certaincontracts

No No

Preempts state laws regardingimmunity and privileges for Comsat

Yes No

Preempts state authority over providersof disaster counseling; preempts stateliability laws; limits authority of localgovernments to site municipal landfillswithin six miles of certain airports;limits authority over passenger faciliifees and revenues from other fees

Yes No

Requires states to report encryptioninformation to the Administrative Off iceof the U.S. Courts

No

No

Yes

Preempts the charter of the District ofColumbia to allow an amendment totake effect immediately uponratification by voters

No

No

No

No

N o

Preempts state laws regulatingsignature requirements

No No

Preempts state insurance laws relatingto some health plans provided bychurches

Y e s No

““““““““““------------------------------------------------------------------------------.-----

(Contnued)

38 CBO’S ACTIVlTIES UNDER THE UNFUNDED MANDATES REFORM ACJY, 1996-2000 Mav 2001

Table A-4.Continued



106-246

106-252

106-265

106-278

106-291

106-311

106582

106-384

An act making appropriationsfor military construction, familyhousing, and base realignmentand closure for the Departmentof Defense for the fiscal yearending September 30,2001,and for other purposes

‘Mobile TelecommunicationsSourcing Act

Long-Term Care Security Act

Lackawanna Valley NationalHeritage Area Act of 2000

An act making appropriationsfor the Department of theInterior and related agencies forthe fiscal year endingSeptember 30,2001, and forother purposes

An act to increase the amountof fees charged to employerswho are petitioners for theemployment of H-l B non-immigrant workers, and forother purposes

Requires states as employers to pay ahigher fee to hire workers with H-l Bvisas

Fort Peck Reservation Rural Requires public entities to prepare aWater System Act of 2000 water conservation plan

An act to amend chapter 36 oftitle 39, United States Code, tomodify rates relating to reducedrate mail matter, and for otherpurposes

Preempts local zoning laws in conflictwith construction activities

Yes No

Preempts state and local laws byprohibiting taxation of wirelesstelecommunications except asspecified by the law

No No

Preempts state contract laws when thefederal government contracts for healthcare; changes the way in which theDistrict of Columbia must correctcertain errors in retirement plans

No No

a

Requires the Lackawanna ValleyHeritage Authority to prepare amanagement plan and undertakecertain activities

No No

Restricts use of land held in trust for aNative American tribe

Yes No

No

No

N o

Increases postage rates for someagencies of state and localgovernments

No N o

N o

-------------------------------------------------------------------------------------------------------(Continued)


Table A-4.Continued



106-366

106-367

106-397

106-396

106446

106469

106469

Victims of Trafficking andViolence Protection Act of 2000

An act making appropriationsfor Agriculture, RuralDevelopment, Food and DrugAdministration, and RelatedAgencies programs for the fiscalyear ending September 30,2001, and for other purposes

District of Columbia Receiver-ship Accountability Act of 2000

An act to authorizeapproprfations for fiscal yearX&for military activities of theDepartment of Defense, formilitary construction, and fordefense activities of the Depart-ment of Energy, to prescribepersonnel strengths for suchfiscal year for the ArmedForces, and for other purposes

An act to amend title 10, UnitedStates Code, to facilitate theadoption of retired militaryworking dogs by law enforce-ment agencies, former handlersof these dogs, andbtherpersons capable of caring forthese dogs

Preempts state laws and requirescertain property to be forfeited to thefederal government; broadens existingmandates governing notificationrequirements when protective ordersare issued

No No

Limits how state and local govem-ments may finance sales of agriculturalcommodities to Cuba

Yes No

Requires court-appointed receivers inthe District of Columbia to adoptcertain managerial processes

No No

Preempts state laws governing wills;requires schools to allow access tomilitary recruiters; extends requirementthat insurers issue medigap coverageto some Medicare beneficiaries;requires names and Social Securitynumbers of felons to be submitted forcertain purposes

Yes No

Preempts state liability laws as theyrelate to certain lawsuits arising fromdog adoptions

Yes N o

Preempts state and local regulations Yes No._ contreltlng~s&s of-some petroleum.-x_ . , ,

40 CBC’S ACTIVITIBS UNDER THE UNFUNDED MANDATES REFORM ACT, 1 May 2001

Table A-4.Continued


Not Reviewed ExceedPublic Law Name Mandate by CBO? Threshold?*

106-505

106-522

Public Health Improvement Act

An act making appropriationsfor the government of theDistrict of Columbia, and otheractivities chargeable in whole orin part against the revenues ofsaid District for the fiscal yearending September 30,2001,and for other purposes

106-528 Airport Security ImprovementAct of 2000

106-554 An act making consolidatedappropriations for the fiscal yearending September 30,2001,and for other purposes

106-566 Hawaii Water Resources Act of Requires the state of Hawaii to pay half2000 of the cost of a study

106-569 American Homeownership Preempts states’ authority to setand Economic Opportunity Act standards for installing manufacturedof 2000 housing

Preempts some state liability laws No No

Imposes new reporting requirementson the Mayor and departments of theDistrict of Columbia

Yl?S No

Requires owners and operators ofpublic airports to improve airportsecurity

No No

Preempts state laws affecting certaintransactions conducted in marketsregulated by the Commodities FuturesTrading Commission and the Securitiesand Exchange Commission; limitsstates’ options for securing a creditor’sinterest in student loans; preemptscertain state liability laws regardingindependent contractors

Yes+ No

No No

No No


a. The threshold for intergovernmental mandates, which is adjusted annually for inflation, was $55 million in 2000.

Appendix B

Primary Contributors toCBO% Analyses of Mandates

The following Congressional Budget Office (CBO) analysts prepare the mandate cost statements that CBO pro-duces for bills and other legislative proposals:

Intewovernmental Mandates

Budget Analysis y

Theresa Gull0 Chief, state and local government cost estimates (2253220)Shelley Finlayson Administration of justice, commerceVictoria Heid Hall Environment, energy, transportationLeo Lex Health, social services, income securityMarjorie Miller Natural resources, agricultureSusan Sieg Tompkins Banking, housing, education, general governmentEmestine McNeil Secretarial support

Private-Sector Mandates

Microeconomic and Financial Studies Division

Patrice GordonLauren MarksPaige Piper/BachJean TalaricoRae Wiseman

Coordinator, natural resources and commerce (226-2940)Energy, natural resources, international affairsGovernmental affairs, justiceAgriculture, commerce, transportationSecretarial support

Health and Human Resources Division

Bruce VavrichekNabeel Alsalam

Coordinator, health and human resources (226-2676)Education, labor

42 CBO’S ACI’IVITJES UNDER THE UNFUNDED MANDATES REFORM ACT, 1996-2000 May 2001

James BaumgardnerJennifer BowmanStuart HagenKaruna Pate1Rekha RameshRalph SmithJudy WagnerRon Moore

National Security Division

Bill ThomasDebbie Clay-MendezSally Sagraves

Tax Analysis Division

Mark BoothErin Whitaker

Ofice of the General Counsel

Jennifer Smith

HealthHealthHealthLabor, healthHealthLabor, income securityHealthSecretarial support

Coordinator, national security (226-2900)Defense issuesVeterans’ health

Coordinator, tax analysis (226-2690)Revenues

Deputy General Counsel (226-2633)

This paper and other CBO publications areavailable at CBO’s Web site:

wwmcbo.gov

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