Unfunded Mandates Reform Act: History, Impact, and Issues
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Unfunded Mandates Reform Act:
History, Impact, and Issues
Updated February 23, 2021
Congressional Research Service
https://crsreports.congress.gov
R40957
Unfunded Mandates Reform Act: History, Impact, and Issues
Summary
The Unfunded Mandates Reform Act of 1995 (UMRA) culminated years of effort by state and
local government officials and business interests to control, if not eliminate, the imposition of
unfunded intergovernmental and private-sector federal mandates. Advocates argued the statute
was needed to forestall federal legislation and regulations that imposed obligations on state and
local governments or businesses that resulted in higher costs and inefficiencies. Opponents argued
that federal mandates may be necessary to achieve national objectives in areas where voluntary
action by state and local governments and business failed to achieve desired results.
UMRA provides a framework for the Congressional Budget Office (CBO) to estimate the direct
costs of mandates in legislative proposals to state and local governments and to the private sector,
and for issuing agencies to estimate the direct costs of mandates in proposed regulations to
regulated entities. Aside from these informational requirements, UMRA controls the imposition
of mandates only through a procedural mechanism allowing Congress to decline to consider
unfunded intergovernmental mandates in proposed legislation if they are estimated to cost more
than specified threshold amounts. UMRA applies to any provision in legislation, statute, or
regulation that would impose an enforceable duty upon state and local governments or the private
sector. It does not apply to duties stemming from participation in voluntary federal programs;
rules issued by independent regulatory agencies; rules issued without a general notice of proposed
rulemaking; and rules and legislative provisions that cover individual constitutional rights,
discrimination, emergency assistance, grant accounting and auditing procedures, national security,
treaty obligations, and certain elements of Social Security. In most instances, UMRA also does
not apply to conditions of federal assistance.
Congress has made several legislative attempts to broaden UMRA’s coverage. For example, H.R.
701, the Unfunded Mandates Information and Transparency Act of 2021, and S. 170, its Senate
companion bill, would broaden UMRA’s coverage to include both direct and “reasonably
foreseeable” indirect costs, such revenues lost due to a major rule; make private-sector mandates
subject to a substantive point of order; and remove UMRA’s exemption for rules issued by most
independent agencies. Similar legislation has been introduced in the House and Senate in recent
Congresses, and the House passed similar legislation during the 112th, 113th, 114th, and 115th
Congresses.
This report examines debates over what constitutes an unfunded federal mandate and UMRA’s
implementation. It focuses on UMRA’s requirement that CBO issue written cost estimate
statements for federal mandates in legislation, its procedures for raising points of order in the
House and Senate concerning unfunded federal mandates in legislation, and its requirement that
federal agencies prepare written cost estimate statements for federal mandates in rules. It also
assesses UMRA’s impact on federal mandates and arguments concerning UMRA’s future,
focusing on UMRA’s definitions, exclusions, and exceptions that currently exempt many federal
actions with potentially significant financial impacts on nonfederal entities. An examination of
the rise of unfunded federal mandates as a national issue and a summary of UMRA’s legislative
history are provided in Appendix A. Citations to UMRA points of order raised in the House and
Senate are provided in Appendix B.
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Contents
An Overview of UMRA, Its Origins, and Provisions...................................................................... 1
Overview ................................................................................................................................... 1
Origin ........................................................................................................................................ 1
Summary of UMRA’s Provisions ............................................................................................. 2
What Is an Unfunded Federal Mandate? ......................................................................................... 4
Competing Definitions .............................................................................................................. 5
Statutory Direct Orders ....................................................................................................... 7
Total and Partial Statutory Preemptions.............................................................................. 8
Grant-in-Aid Conditions ..................................................................................................... 8
Federal Tax Provisions ........................................................................................................ 9
Federal Court Decisions; Administrative Rules Issued by Federal Agencies; and
Regulatory Delays and Nonenforcement ....................................................................... 10
UMRA’s Definition of an Unfunded Federal Mandate........................................................... 10
Exemptions and Exclusions ............................................................................................... 11
UMRA and Congressional Procedure (Title I) .............................................................................. 13
UMRA’s Procedures ............................................................................................................... 13
CBO Cost Estimate Statements ............................................................................................... 14
Points of Order for Initial Consideration................................................................................. 16
Impact on the Enactment of Statutory Intergovernmental and Private-Sector
Mandates .............................................................................................................................. 19
Congressional Issues for Title I ............................................................................................... 23
Exemptions and Exclusions .............................................................................................. 23
UMRA and Federal Rulemaking (Title II) .................................................................................... 25
Title II’s Exemptions and Exclusions ..................................................................................... 26
Federal Agency Cost Estimate Statements in Major Federal Rules ........................................ 27
Impact on the Rulemaking Process ......................................................................................... 32
Congressional Issues for Title II ............................................................................................. 34
Exemptions and Exclusions .............................................................................................. 34
Federal Agency Consultation Requirements ..................................................................... 36
Concluding Observations .............................................................................................................. 37
Tables
Table 1. CBO Estimates of Costs of Intergovernmental Mandates, 104th-116th Congresses ......... 14
Table 2. CBO Estimate of Costs of Private-Sector Mandates, 104th-116th Congresses ................. 15
Table 3. UMRA Points of Order in the House and Senate, by Congress ...................................... 18
Table 4. UMRA Written Mandate Cost Estimate Statements Issued by Federal Agencies
in Final Rules, 1995-2019 .......................................................................................................... 28
Appendixes
Appendix A. The Rise of Unfunded Mandates as a National Issue and UMRA’s
Legislative History ..................................................................................................................... 40
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Appendix B. UMRA Points of Order ............................................................................................ 48
Contacts
Author Information........................................................................................................................ 53
Acknowledgments ......................................................................................................................... 53
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Unfunded Mandates Reform Act: History, Impact, and Issues
An Overview of UMRA, Its Origins, and Provisions
Overview
The Unfunded Mandates Reform Act of 1995 (UMRA) established requirements for enacting
certain legislation and issuing certain regulations that would impose enforceable duties on state,
local, or tribal governments or on the private sector.1 UMRA refers to obligations imposed by
such legislation and regulations as “mandates” (either “intergovernmental” or “private sector,”
depending on the entities affected). The direct cost to affected entities of meeting these
obligations are referred to as “mandate costs,” and when the federal government does not provide
funding to cover these costs, the mandate is termed “unfunded.”
UMRA incorporates numerous definitions, exclusions, and exceptions that specify what forms
and types of mandates are subject to its requirements, termed “covered mandates.” Covered
mandates do not include many federal actions with potentially significant financial impacts on
nonfederal entities. This report’s primary purpose is to describe the kinds of legislative and
regulatory provisions that are subject to UMRA’s requirements, and, on this basis, to assess
UMRA’s impact on federal mandates. The report also examines debates that occurred, both
before and since UMRA’s enactment, concerning what kinds of provisions UMRA ought to
cover, and considers the implications of experience under UMRA for possible future revisions of
its scope of coverage.
This report also describes the requirements UMRA imposes on congressional and agency actions
to establish covered mandates. For most legislation and regulations covered by UMRA, these
requirements are only informational. For reported legislation that would impose covered
mandates on the intergovernmental or private sectors, UMRA requires the Congressional Budget
Office (CBO) to provide an estimate of mandate costs. Similarly, for regulations that would
impose covered mandates on the intergovernmental or private sectors, UMRA requires that the
issuing agency provide an estimate of mandate costs (although the specifics of the estimates
required for legislation and for regulations differ somewhat). Also, solely for legislation that
would impose covered intergovernmental mandates, UMRA establishes a point of order in each
house of Congress through which the chamber can decline to consider the legislation. This report
examines UMRA’s implementation, focusing on the respective requirements for mandate cost
estimates on legislation and regulations, and on the point of order procedure for legislation
proposing unfunded intergovernmental mandates.
Origin
The concept of unfunded mandates rose to national prominence during the 1970s and 1980s
primarily through the response of state and local government officials to changes in the nature of
federal intergovernmental grant-in-aid programs and to regulations affecting state and local
governments. Before then, the federal government had traditionally relied on the provision of
voluntary grant-in-aid funding to encourage state and local governments to perform particular
activities or provide particular services that were deemed to be in the national interest. These
arrangements were viewed as reflecting, at least in part, the constitutional protections afforded
state and local governments as separate, sovereign entities. During the 1970s and 1980s, however,
state and local government advocates argued that a “dramatic shift” occurred in the way the
1 P.L. 104-4; 109 Stat. 48 et seq.; and 2 U.S.C. §§602, 632, 653, 658-658(g), 1501-1504, 1511-1516, 1531-1538, 1551-
1556, and 1571.
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federal government dealt with states and localities. Instead of relying on the technique of
subsidization to achieve its goals, the federal government was increasingly relying on “new, more
intrusive, and more compulsory” programs and regulations that required compliance under the
threat of civil or criminal penalties, imposed federal fiscal sanctions for failure to comply with the
programs’ requirements, or preempted state and local government authority to act in the area.2
These new, more intrusive and compulsory programs and regulations came to be referred to as
“unfunded mandates” on states and localities.
State and local government advocates viewed these unfunded federal intergovernmental mandates
as inconsistent with the traditional view of American federalism, which was based on
cooperation, not compulsion. They argued that a federal statute was needed to forestall federal
legislation and regulations that imposed obligations on state and local governments that resulted
in higher costs and inefficiencies. UMRA’s enactment in 1995 culminated years of effort by state
and local government officials to control, if not eliminate, the imposition of unfunded federal
mandates.
Advocates of regulatory reform adapted the concept of unfunded mandates to their view that
federal regulations often impose financial burdens on private enterprise. Critics of government
regulation of business argued that these regulations impose unfunded mandates on the private
sector, just as federal programs and regulations impose fiscal obligations on state and local
governments. As a result, various business organizations subject to increased federal regulation
came to support state and local government efforts to enact federal legislation to control unfunded
federal intergovernmental mandates. Private-sector advocates argued that they, too, should be
provided relief from what they viewed as burdensome federal regulations that hinder economic
growth.3 Subsequently, proposals to control unfunded mandates that were developed in the early
1990s contained provisions addressing not only federal intergovernmental mandates, but federal
private-sector mandates as well.
During floor debate on legislation that became UMRA, sponsors of the measure emphasized its
role in bringing “our system of federalism back into balance, by serving as a check against the
easy imposition of unfunded mandates.”4 Opponents argued that federal mandates may be
necessary to achieve national objectives in areas where voluntary action by state and local
governments or business failed to achieve desired results. See Appendix A for a more detailed
examination of the rise of unfunded federal mandates as a national issue and of UMRA’s
legislative history.5
Summary of UMRA’s Provisions
The congressional commitment to reshaping intergovernmental relations through UMRA is
reflected in its eight statutory purposes:
2 U.S. Advisory Commission on Intergovernmental Relations (ACIR), Regulatory Federalism: Policy, Process, Impact,
and Reform, A-95 (Washington, DC: ACIR, 1984), pp. 1-18.
3 Mary McElvenn, “The Federal Impact on Business,” Nation’s Business, vol. 79, no. 1 (January 1991), pp. 23-26;
David Warner, “Regulations’ Staggering Costs,” Nation’s Business, vol. 80, no. 6 (June 1992), pp. 50-53; Michael
Barrier, “Taxing the Man Behind the Tree,” Nation’s Business, vol. 81, no. 9 (September 1993), pp. 31, 32; and
Michael Barrier, “Mandates Foes Smell a Victory,” Nation’s Business, vol. 82, no. 9 (September 1994), p. 50.
4 Senator Dirk Kempthorne, “Unfunded Mandate Reform Act,” remarks in the Senate, Congressional Record, vol. 141,
part 1 (January 12, 1995), p. 1166.
5 Senator Frank Lautenberg, “Unfunded Mandate Reform Act,” remarks in the Senate, Congressional Record, vol. 141,
part 1 (January 12, 1995), p. 1193.
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(1) to strengthen the partnership between the Federal Government and State, local, and
tribal governments;
(2) to end the imposition, in the absence of full consideration by Congress, of Federal
mandates on State, local, and tribal governments without adequate Federal funding, in a
manner that may displace other essential State, local, and tribal governmental priorities;
(3) to assist Congress in its consideration of proposed legislation establishing or revising
Federal programs containing Federal mandates affecting State, local, and tribal
governments, and the private sector by—(A) providing for the development of information
about the nature and size of mandates in proposed legislation; and (B) establishing a
mechanism to bring such information to the attention of the Senate and the House of
Representatives before the Senate and the House of Representatives vote on proposed
legislation;
(4) to promote informed and deliberate decisions by Congress on the appropriateness of
Federal mandates in any particular instance;
(5) to require that Congress consider whether to provide funding to assist State, local, and
tribal governments in complying with Federal mandates, to require analyses of the impact
of private sector mandates, and through the dissemination of that information provide
informed and deliberate decisions by Congress and Federal agencies and retain competitive
balance between the public and private sectors;
(6) to establish a point-of-order vote on the consideration in the Senate and House of
Representatives of legislation containing significant Federal intergovernmental mandates
without providing adequate funding to comply with such mandates;
(7) to assist Federal agencies in their consideration of proposed regulations affecting State,
local, and tribal governments, by—(A) requiring that Federal agencies develop a process
to enable the elected and other officials of State, local, and tribal governments to provide
input when Federal agencies are developing regulations; and (B) requiring that Federal
agencies prepare and consider estimates of the budgetary impact of regulations containing
Federal mandates upon State, local, and tribal governments and the private sector before
adopting such regulations, and ensuring that small governments are given special
consideration in that process; and
(8) to begin consideration of the effect of previously imposed Federal mandates, including
the impact on State, local, and tribal governments of Federal court interpretations of
Federal statutes and regulations that impose Federal intergovernmental mandates. 6
To achieve its purposes, UMRA’s Title I established a procedural framework to shape
congressional deliberations concerning covered unfunded intergovernmental and private-sector
mandates. This framework requires CBO to estimate the direct mandate costs of
intergovernmental mandates exceeding $50 million and of private-sector mandates exceeding
$100 million (in any fiscal year) proposed in any measure reported from committee. It also
establishes a point of order against consideration of legislation that contained intergovernmental
mandates with mandate costs estimated to exceed the threshold amount. In addition, Title II
requires federal administrative agencies, unless otherwise prohibited by law, to assess the effects
on state and local governments and the private sector of proposed and final federal rules and to
prepare a written statement of estimated costs and benefits for any mandate requiring an
expenditure exceeding $100 million in any given year. All threshold amounts under these
provisions are adjusted annually for inflation.7 In 2021, the threshold amounts are $85 million for
intergovernmental mandates and $170 million for private-sector mandates.
6 2 U.S.C. §1501.
7 2 U.S.C. §658; and 2 U.S.C. §1532.
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In general, the requirements of Titles I and II apply to any provision in legislation, statute, or
regulation that would impose an enforceable duty upon state and local governments or the private
sector. However, UMRA does not apply to duties stemming from participation in voluntary
federal programs, rules issued by independent regulatory agencies, or rules issued without a
general notice of proposed rulemaking. Exceptions also exist for rules and legislative provisions
that cover individual constitutional rights, discrimination, emergency assistance, grant accounting
and auditing procedures, national security, treaty obligations, and certain elements of Social
Security legislation. In most instances, UMRA also does not apply to conditions of federal
assistance.8
UMRA’s Title III also called for a review of federal intergovernmental mandates to be completed
by the now-defunct U.S. Advisory Commission on Intergovernmental Relations (ACIR) within
18 months of enactment.9 ACIR completed a preliminary report on federal intergovernmental
mandates in January 1996, but the final report was not released.10 Finally, UMRA’s Title IV
authorizes judicial review of federal agency compliance with Title II provisions.11
What Is an Unfunded Federal Mandate?
One of the first issues Congress faced when considering unfunded federal mandate legislation
was how to define the concept. For example, during a November 3, 1993, congressional hearing
on unfunded mandate legislation, Senator Judd Gregg argued,
Any bill reported out this committee [Governmental Affairs] should precisely define what
constitutes an unfunded federal mandate.... An appropriate definition is crucial because it
will drive almost everything else that occurs. Without a precise definition, endless litigation
would likely ensue over what is and what is not an unfunded federal mandate. A true
solution to the problem cannot allow it to become more cost-effective to pay the bills than
to seek payment. Furthermore, the definition cannot be too restrictive. It would solve
nothing to cut off one particular type of unfunded mandate, only to prompt Congressional
use of another to accelerate.12
The difficulty Congress faced in defining the concept was the strong disagreements, among
academics, practitioners, and elected officials, over how to define it. These disagreements appear
motivated by concerns about which classes of costs incurred by state and local governments (or
the private sector) should be identified and controlled for in the legislative or regulatory process.
They have typically been conducted, however, as disputes about which classes of such costs are
properly considered as obligatory requirements on the affected entities. The resulting focus on
whether or not particular kinds of costs are “mandatory” has tended to obscure consideration of
8 2 U.S.C. §658(5)(A), (7)(A) and (10), and 2 U.S.C. §1503.
9 2 U.S.C. §§1551-1553.
10 ACIR funding was withdrawn following the release for public comment and a hearing on the draft report on federal
mandates. ACIR was required by UMRA to conduct the study and to make recommendations for mitigating the effect
mandates have on state and local governments. The draft report recommended the elimination of a number of federal
mandates which had strong support in Congress. ACIR’s commission members decided not to release the report in a
party-line vote. Most observers concluded that the draft report was a contributing factor in ACIR’s losing its funding.
See, John Kincaid, “Review of ‘The Politics of Unfunded Mandates: Whither Federalism?’ by Paul L. Posner,”
Political Science Quarterly, vol. 114, no. 2 (Summer 1999), pp. 322-323.
11 2 U.S.C. §1571.
12 U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandates on State and Local Governments,
103rd Cong., 1st sess., November 3, 1993, S.Hrg. 103-405 (Washington: GPO, 1994), p. 66.
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the core policy question concerning what kinds of costs should be subjected to informational
requirements or procedural restrictions such as those that UMRA establishes.
Competing Definitions
In 1979, one set of federalism scholars defined unfunded federal intergovernmental mandates
broadly as including “any responsibility, action, procedure, or anything else that is imposed by
constitutional, administrative, executive, or judicial action as a direct order or that is required as a
condition of aid.”13 In 1984, ACIR offered a rationale for defining unfunded federal
intergovernmental mandates which excluded conditions of aid. ACIR argued that defining
unfunded federal intergovernmental mandates was difficult because federal grant-in-aid programs
typically include both incentives and mandates backed by sanctions or penalties:
Few federal programs affecting state and local governments are pure types.... Every grantin-aid program, including General Revenue Sharing, the least restrictive form of aid, comes
with federal “strings” attached. Here, as in other areas, there is no such thing as a free
lunch....
In the intergovernmental sphere, then, [mandates] and subsidy are less like different parts
of a dichotomy than opposing ends of a continuum. At one extreme is the general support
grant with just a few associated conditions or rules; at the other is the costly, but wholly
unfunded, national “mandate.” In between are many programs combining subsidy and
[mandate] approaches, in varying degrees and in various ways. 14
ACIR argued that because federal grant-in-aid programs typically combine subsidy and mandate
approaches, grant-in-aid programs should be classified according to their degree of compulsion. It
argued that conditions of grant aid should not be classified as a mandate because “one of the most
important features of the grant-in-aid is that its acceptance is still viewed legally as entirely
voluntary” and “although it is difficult for many jurisdictions to forego substantial financial
benefits, this option remains real.”15 ACIR also argued that most grant conditions affect only the
administration of those activities funded by the program, and “grants-in-aid generally provide
significant benefits to the recipient jurisdiction.”16
ACIR argued that federal grant-in-aid programs that “cannot be side-stepped, without incurring
some federal sanction, by the simple expedient of refusing to participate in a single federal
assistance program” should be considered mandates.17 ACIR provided four examples of federal
activities that, in the absence of sufficient compensatory funding, could be an unfunded
intergovernmental mandate: (1) direct legal orders that must be complied with under the threat of
civil or criminal penalties; (2) crosscutting or generally applicable requirements imposed on
grants across the board to further national social and economic policies; (3) programs that impose
13 Catherine H. Lovell, Max Neiman, Robert Kneisel, Adam Rose, and Charles Tobin, Federal and State Mandating on
Local Governments: Report to the National Science Foundation (Riverside, CA: University of California, June 1979),
p. 32.
14 ACIR, Regulatory Federalism: Policy, Process, Impact, and Reform, A-95 (Washington, DC: ACIR, 1984), p. 4.
15 ACIR, Regulatory Federalism: Policy, Process, Impact, and Reform, p. 4. The Supreme Court has emphasized the
voluntary nature of federal grant programs and the fact that states and private parties remain free to accept or reject the
offer of federal funds and thus avoid the attached conditions. “This Court has repeatedly upheld against constitutional
challenge the use of this technique to induce governments and private parties to cooperate voluntarily with federal
policy.” Fullilove v. Klutznick, 448 U.S. 448, 474 (1980) (Chief Justice Burger announcing judgment of the Court); see
also South Dakota v. Dole, 483 U.S. 203 (1987).
16 ACIR, Regulatory Federalism: Policy, Process, Impact, and Reform, p. 4.
17 ACIR, Regulatory Federalism: Policy, Process, Impact, and Reform, p. 7.
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federal fiscal sanctions in one program area or activity to influence state and local government
policy in another area; and (4) federal preemption of state and local government law.18
In 1994, several organizations representing state and local governments issued a set of unfunded
mandate principles which defined unfunded federal intergovernmental mandates as
any federal requirement that compels state or local activities resulting in
additional state or local expenditures;
any federal requirement that imposes additional conditions or increases the level
of state and local expenditures needed to maintain eligibility for existing federal
grants;
any reduction in the rate of federal matching for existing grants; and
any federal requirement that reduces the productivity of existing state or local
taxes and fees and/or that increases the cost of raising state and local revenue
(including the costs of borrowing).19
Also in 1994, ACIR introduced the term “federally induced costs” to replace what it described as
“the pejorative and definitional baggage associated with the term ‘mandates.’”20 ACIR identified
the following types of federal activities that expose states and localities to additional costs:
statutory direct orders;
total and partial statutory preemptions;
grant-in-aid conditions on spending and administration, including matching
requirements;
federal income tax provisions;
federal court decisions; and
administrative rules issued by federal agencies, including regulatory delays and
nonenforcement.21
ACIR defended its inclusion of grant-in-aid conditions in its list of “federally induced costs,”
which it had excluded from its definition of federal mandates a decade earlier, by asserting that
although the option of refusing to accept federal grants “seemed plausible when federal aid
constituted a small and highly compartmentalized part of state and local revenues, it overlooks
current realities. Many grant conditions have become far more integral to state and local
activities—and far less subject to voluntary forbearance—than originally suggested by the
contractual model.”22
On April 28, 1994, John Kincaid, ACIR’s executive director, testified at a congressional hearing
that legislation concerning unfunded mandates “should recognize that unfunded Federal mandates
18 ACIR, Regulatory Federalism: Policy, Process, Impact, and Reform, pp. 7-10.
19 National Conference of State Legislatures, “Unfunded Mandate Principles,” Washington, DC, 1994, p. 1, cited in
CRS Report 95-62, Mandates and the Congress, by Sandra S. Osbourn (out of print; available to congressional clients
by request).
20 ACIR, Federally Induced Costs Affecting State and Local Governments, M-193 (Washington, DC: ACIR, 1994),
p. 3.
21 ACIR, Federally Induced Costs Affecting State and Local Governments, p. 19. ACIR also included laws that expose
state and local governments to liability lawsuits, which, at the time, affected such programs as the Superfund toxic
wastes cleanup program.
22 ACIR, Federally Induced Costs Affecting State and Local Governments, p. 20.
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include, in reality, a range of Federally-induced costs for which reimbursements may be
legitimate considerations.”23 State and local government officials generally advocated the
inclusion of ACIR’s “federally induced costs” in legislation placing conditions on the imposition
of unfunded intergovernmental mandates. However, organizations representing various
environmental and social groups, such as the Committee on the Appointment of People With
Disabilities, the Natural Resources Defense Council, the American Federation of State, County,
and Municipal Employees, and the Service Employees International Union, argued that ACIR’s
definition was too broad. These groups testified at various congressional hearings that some
federal mandates, particularly those involving the environment and constitutional rights, should
be retained, even if they were unfunded.24
Statutory Direct Orders
With respect to definitions, there was, and continues to be, a general consensus among federalism
scholars, state and local government officials, and other organizations that federal policies which
impose unavoidable costs on state and local governments or business are, in the absence of
sufficient compensatory funding, unfunded federal mandates. Because statutory direct orders,
such as the Equal Employment Opportunity Act of 1972, which bars employment discrimination
on the basis of race, color, religion, sex, and national origin, are compulsory, they are considered
federal mandates. In the absence of sufficient compensatory funding, they are unfunded federal
mandates. However, there was, and continues to be, a general consensus that some statutory
direct orders, particularly those involving the guarantee of constitutional rights, should be exempt
from legislation placing conditions on the imposition of unfunded federal mandates.25 For
example, on April 28, 1994, then-Governor (and later Senator) Benjamin Nelson, testifying on
behalf of the National Governors Association at a congressional hearing on unfunded mandate
legislation, argued,
At the outset, Mr. Chairman, I want to make it absolutely crystal clear that the Governors’
position opposing unfunded environmental mandates must not be interpreted as an effort
to discontinue environmental legislation and regulations or oppose any individual’s civil
or constitutional rights. The Governors consider the protection of public health and State
natural resources as among the most important responsibilities of our office. We all take
an oath of office to protect the health and safety of our citizens. In addition, we have worked
with Congress over the years to enact strong Federal environmental laws. 26
23 U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandate Reform Legislation, 103rd Cong., 2nd
sess., April 28, 1994, S.Hrg. 103-1019 (Washington: GPO, 1995), p. 56.
24 U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandate Reform Legislation, pp. 53-55, 57-63,
68-70, 162-185, 200-230 and 247-249; U.S. Congress, Senate Committee on Governmental Affairs and Senate
Committee on the Budget; U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandates on State and
Local Governments, 103rd Cong., 1st sess., November 3, 1993, S.Hrg. 103-405 (Washington: GPO, 1994), pp. 241-245;
and U.S. Congress, Senate Committee on Governmental Affairs, S.1–Unfunded Mandates, 104th Cong., 1st sess.,
January 5, 1995, S.Hrg. 104-392 (Washington: GPO, 1995), pp. 90-107.
25 U.S. Government Accountability Office (GAO), Unfunded Mandates: Views Vary About Reform Act’s Strengths,
Weaknesses, and Options for Improvement, GAO-05-454, March 31, 2005, pp. 9, 13, 14, at http://www.gao.gov/
new.items/d05454.pdf.
26 U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandate Reform Legislation, 103rd Cong., 2nd
sess., April 28, 1994, S.Hrg. 103-1019 (Washington: GPO, 1995), p. 7.
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Total and Partial Statutory Preemptions
Total and partial preemptions of state and local spending and regulatory authority by the federal
government are compulsory, but there was, and continues to be, disagreement concerning whether
they should be considered federal mandates, or whether they should be included in legislation
designed to provide relief from unfunded federal mandates. Total preemptions in the
intergovernmental arena prevent state and local government officials from implementing their
own programs in a policy area. For example, states have been “stripped of their powers to engage
in economic regulation of airlines, bus, and trucking companies, to establish a compulsory
retirement age for their employees other than specified state policymakers and judges, or to
regulate bankruptcies with the exception of the establishment of a homestead exemption.”27
Partial preemption typically is a joint enterprise, “whereby the federal government exerts its
constitutional authority to preempt a field and establish minimum national standards, but allows
regulatory administration to be delegated to the states if they adopt standards at least as strict as
the federal rules.”28 Legally, the state decision to administer a partial preemption program is
voluntary. States that do not have a program in a particular area or do not wish to assume the
costs of administration and enforcement can opt out and allow the federal government to enforce
the standards.29 Nonetheless, the federal standards apply.
Total and partial statutory preemptions are distinct from unfunded federal intergovernmental
mandates because they do not necessarily impose costs or require state and local governments to
take action. Nonetheless, some federalism scholars and state and local government officials have
argued that total and partial statutory preemptions should be included in legislation placing
conditions on the imposition of unfunded federal mandates because they can have similar adverse
effects on state and local government flexibilities and, in some instances, resources.30 A leading
federalism scholar identified 557 federal preemption statutes as of 2005.31
Others argue that total and partial preemptions are distinct from unfunded federal mandates and,
therefore, should not be included in legislation placing conditions on the imposition of unfunded
federal mandates. In addition, some business organizations oppose including preemptions in any
law or definition involving unfunded federal mandates because federal preemptions can result in
the standardization of regulation across state and local jurisdictions, an outcome favored by some
business interests, particularly those with interstate and global operations.32
Grant-in-Aid Conditions
Conditions of grants-in-aid are generally not considered unfunded mandates because the costs
they impose on state and local governments can be avoided by refusing the grant. However,
27 Joseph F. Zimmerman, “National-State Relations: Cooperative Federalism in the Twentieth Century,” Publius: The
Journal of Federalism, vol. 31, no. 2 (Spring 2001), p. 23.
28 ACIR, Federally Induced Costs Affecting State and Local Governments, M-193 (Washington, DC: ACIR, 1994),
p. 22.
29 ACIR, Federally Induced Costs Affecting State and Local Governments, p. 23.
30 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, pp. 5, 11, 12, 23, 38, 39, 43, 47, 48, at http://www.gao.gov/new.items/d05454.pdf.
31 Joseph F. Zimmerman, “Congressional Preemption During the George W. Bush Administration,” Publius: The
Journal of Federalism, vol. 37, no. 3 (Summer 2007), p. 436.
32 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, p. 12, at http://www.gao.gov/new.items/d05454.pdf; and Paul L. Posner, “The Politics
of Preemption: Prospects for the States,” PS (July 2005), p. 372.
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federalism scholars and state and local government officials have argued that, in the absence of
sufficient compensatory funding, grant conditions should be considered unfunded federal
intergovernmental mandates, even though the grants themselves are voluntary.33 In their view,
federal “grants often require major commitments of state resources, changes in state laws, and
even constitutional provisions to conform to a host of federal policy and administrative
requirements” and that some grant programs, such as Medicaid, are “too large for state and local
governments to voluntarily turn down, or when new and onerous conditions are added some time
after state and local governments have become dependent on the program.”34 For example, on
April 28, 1994, Patrick Sweeney, a Democratic Member of Ohio’s state House of Representatives
testifying on behalf of the National Conference of State Legislatures (NCSL), asserted at a
congressional hearing on unfunded mandate legislation that
A great majority of the current problem can be attributed to Federal entitlements that are
defined but then not adequately funded, and the proliferation of a mandatory requirement
for what previously were voluntary programs. Programs like Medicaid are voluntary in
theory only. A State cannot unilaterally opt out of Medicaid at any time it wishes, once it
is in the program, without having to obtain a Federal waiver or face certain lawsuits. 35
Federal Tax Provisions
Federalism scholars and state and local government officials argue that federal tax policies that
preempt state and local authority to tax specific activities or entities are unfunded mandates, and
should be covered under legislation placing restrictions on unfunded mandates, because the fiscal
impact of preempting state or local government revenue sources cannot be avoided and “can be
every bit as costly” as mandates ordering state or local government action.36 For example, P.L.
105-277, the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999
(Title XI, Internet Tax Freedom Act) created a three-year moratorium preventing state and local
governments from taxing internet access, or imposing multiple or discriminatory taxes on
electronic commerce.37 A grandfather clause allowed the 13 states that had already imposed and
collected a tax on internet access before October 1, 1998, to continue implementing those taxes.
The moratorium on internet access taxation was extended eight times and made permanent by
P.L. 114-125, the Trade Facilitation and Trade Enforcement Act of 2015. The grandfather clause
was temporarily extended through June 30, 2020, allowing the seven states that still imposed a
tax on internet access to continue to do so. The NCSL has cited research suggesting that states
33 Paul L. Posner, “Mandates: The Politics of Coercive Federalism,” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 287; and
Paul L. Posner, The Politics of Unfunded Mandates: Whither Federalism? (Washington, DC: Georgetown University
Press, 1998), pp. 4, 12-14.
34 Paul L. Posner, The Politics of Unfunded Mandates: Whither Federalism? (Washington, DC: Georgetown University
Press, 1998), pp. 12, 13. See also, Joseph F. Zimmerman, “Federally Induced State and Local Government Costs,”
paper delivered at the 1991 Annual Meeting of the American Political Science Association, Washington, DC,
September 1, 1991, p. 4.
35 U.S. Congress, Senate Committee on Governmental Affairs, Federal Mandate Reform Legislation, 103rd Cong., 2nd
sess., April 28, 1994, S.Hrg. 103-1019 (Washington: GPO, 1995), p. 11.
36 National Conference of State Legislatures, “Policy Position on Federal Mandate Relief,” effective through August
2011, at http://www.ncsl.org/Default.aspx?TabID=773&tabs=855,20,632#FederalMandate; and Paul L. Posner,
“Mandates: The Politics of Coercive Federalism,” in Intergovernmental Management for the 21st Century, eds.
Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), pp. 287, 292, 293.
37 For additional information and analysis concerning the Internet Tax Freedom Act see CRS Report R43772, The
Internet Tax Freedom Act: In Brief, by Jeffrey M. Stupak; and CRS Report R41853, State Taxation of Internet
Transactions, by Steven Maguire.
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could receive an additional $6.5 billion annually in state sales tax revenue if the moratorium was
lifted.38
In addition, because most state and local income taxes have been designed purposively to
conform to federal tax law, changes in federal tax policy can impact state and local government
finances. For example, federal tax cuts adopted in 2001 and 2003 affecting depreciation,
dividends, and estate taxes “forced states to acquiesce and accept their consequences or decouple
from the federal tax base.”39 Yet, federal tax changes are generally considered not to be unfunded
mandates because states and localities can avoid their costs by decoupling their income tax from
the federal income tax. Nevertheless, because federal tax changes can affect state and local
government tax bases, most state and local government officials advocate their inclusion in
federal legislation placing conditions on the imposition of unfunded federal mandates.
Federal Court Decisions; Administrative Rules Issued by Federal Agencies;
and Regulatory Delays and Nonenforcement
Federalism scholars, state and local government officials, and other organizations argue that, in
the absence of sufficient compensatory funding, court decisions and regulatory actions taken by
federal agencies, including regulatory delays and nonenforcement, are unfunded mandates and
should be included in legislation placing conditions on the imposition of unfunded mandates
because these actions can impose costs on state and local governments that cannot be avoided.
UMRA’s provisions concerning administrative rules are discussed in greater detail later in this
report (see the section on “UMRA and Federal Rulemaking (Title II)”).
UMRA’s Definition of an Unfunded Federal Mandate
After taking various definitions into consideration, Congress defined federal mandates in UMRA
more narrowly than state and local government officials had hoped. Federal intergovernmental
mandates were defined as any provision in legislation, statute, or regulation that “would impose
an enforceable duty upon State, local, or tribal governments” or “reduce or eliminate the amount”
of federal funding authorized to cover the costs of an existing mandate.40 Provisions in
legislation, statute, or regulation that “would increase the stringency of conditions of assistance”
or “would place caps upon, or otherwise decrease” federal funding for existing intergovernmental
grants with annual entitlement authority of $500 million or more could also be considered a
federal intergovernmental mandate, but only if the state, local, or tribal government “lack
authority under that program to amend their financial or programmatic responsibilities to continue
providing required services that are affected by the legislation, statute, or regulation.”41
38 Michael Mazerov, “Congress Should End—Not Extend—the Ban on State and Local Taxation of Internet Access
Subscriptions,” Center on Budget and Policy Priorities, Washington, DC, July 10, 2014, Table 2, at
http://www.cbpp.org/cms/?fa=view&id=4161; and Michael Mazerov, “State Implications of a Permanent Internet Tax
Freedom Act,” Presentation to the NCSL Executive Committee Task Force on State and Local Taxation, January 8,
2016, at http://www.ncsl.org/documents/task_forces/ITFA_Presentation_Final.pdf.
39 Paul L. Posner, “Mandates: The Politics of Coercive Federalism,” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 292.
40 2 U.S.C. §658(5)(A).
41 2 U.S.C. §658(5)(B).
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Private-sector mandates were defined as “any provision in legislation, statute, or regulation that
would impose an enforceable duty upon the private sector” or “reduce or eliminate the amount”
of federal funding authorized “for the purposes of ensuring compliance with such duty.”42
Key words in both definitions are “enforceable duty.” Because statutory direct orders, total and
partial preemptions, federal tax policies that preempt specific state and local tax policies, and
administrative rules issued by federal agencies cannot be avoided, they are enforceable duties and
are covered under UMRA. In contrast, because federal grants are voluntary, grant conditions are
not considered enforceable duties and, therefore, are not covered under UMRA. Federal tax
policies that impose costs on state and local governments that can be avoided by decoupling the
state or local government’s affected income tax provision from the federal income tax code are
not enforceable duties, and, therefore, also are not covered under UMRA.
UMRA considers a mandate unfunded unless the legislation authorizing the mandate fully meets
its estimated direct costs by either (1) providing new budget authority (direct spending authority
or entitlement authority) or (2) authorizing appropriations. If appropriations are authorized, the
mandate is still considered unfunded unless the legislation ensures that in any fiscal year, either
(1) the actual costs of the mandate are estimated not to exceed the appropriations actually
provided; (2) the terms of the mandate will be revised so that it can be carried out with the funds
appropriated; (3) the mandate will be abolished; or (4) Congress will enact new legislation to
continue the mandate as an unfunded mandate.43 This mechanism for reviewing and revising
mandates on the basis of their actual costs, which was introduced into UMRA in the “Byrd lookback amendment” (as described in Appendix A), applies only to intergovernmental mandates
enacted in legislation as funded through appropriations.
Exemptions and Exclusions
UMRA generally excluded preexisting federal mandates from its provisions, but, as mentioned, it
did include any provision in legislation, statute, or regulation that “would increase the stringency
of conditions of assistance” or “would place caps upon, or otherwise decrease” federal funding
for existing intergovernmental grants with annual entitlement authority of $500 million or more.44
However, this provision applies “only if the state or locality lacks authority to amend its financial
or programmatic responsibilities to continue providing the required services.”45
On June 28, 2012, the Supreme Court ruled in National Federation of Independent Business
(NFIB) v. Sebelius that the withdrawal of all Medicaid funds from the states for failure to comply
with Medicaid’s expansion under health care reform (P.L. 111-148; the Patient Protection and
Affordable Care Act) violated the Tenth Amendment. Prior to that ruling, CBO determined that
large intergovernmental entitlement grant programs, such as Medicaid and Temporary Assistance
to Needy Families, “allow states significant flexibility to alter their programs and accommodate
new requirements,” and, as a result, it determined that UMRA provisions generally did not apply
to these programs.46 Subsequent to the Supreme Court’s ruling, CBO has indicated that UMRA’s
42 2 U.S.C. §658(7)(A) and 2 U.S.C. §658(7)(B).
43 2 U.S.C. §658d(a)(2); §425 of the Congressional Budget and Impoundment Control Act of 1974, as amended, P.L.
93-344, 88 Stat. 297, 2 U.S.C. §658 et seq.
44 2 U.S.C. §658(5)(B).
45 U.S. Congress, Senate Committee on Finance, Work, Opportunity, and Responsibility for Kids Act, report to
accompany H.R. 4737, 107th Cong., 2nd sess., July 25, 2002, S.Rept. 107-221 (Washington: GPO, 2002), p. 61; and 2
U.S.C. §658(5)(B).
46 U.S. Congress, Senate Committee on Finance, Work, Opportunity, and Responsibility for Kids Act, report to
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provisions may apply to changes in “the stringency of conditions” or reductions in funding for
“certain large mandatory programs … if the affected governments lack the flexibility to alter the
programs.”47
Otherwise, UMRA’s Title I does not apply to conditions of federal assistance; duties stemming
from participation in voluntary federal programs; and legislative provisions that cover individual
constitutional rights, discrimination, emergency assistance, grant accounting and auditing
procedures, national security, treaty obligations, and certain parts of Social Security relating to the
old-age, survivors, and disability insurance program under title II of the Social Security Act.48
UMRA did not indicate that these exempted provisions and rules were not federal mandates.
Instead, it established that their costs would not be subject to its provisions requiring written cost
estimate statements, or to its provisions permitting a point of order to be raised against the
consideration of reported legislation in which they appear. The Senate Committee on
Governmental Affairs report accompanying S. 1, The Unfunded Mandates Reform Act of 1995,
provided its reasoning for adopting the exempted provisions and rules:
A number of these exemptions are standard in many pieces of legislation in order to
recognize the domain of the President in foreign affairs and as Commander-in-Chief as
well as to ensure that Congress’s and the Executive Branch’s hands are not tied with
procedural requirements in times of national emergencies. Further, the Committee thinks
that Federal auditing, accounting and other similar requirements designed to protect
Federal funds from potential waste, fraud, and abuse should be exempt from the Act.
The Committee recognizes the special circumstances and history surrounding the
enactment and enforcement of Federal civil rights laws. During the middle part of the 20th
century, the arguments of those who opposed the national, uniform extension of basic equal
rights, protection, and opportunity to all individuals were based on a States rights
philosophy. With the passage of the Civil Rights Acts of 1957 and 1964 and the Voting
Rights Act of 1965, Congress rejected that argument out of hand as designed to thwart
equal opportunity and to protect discriminatory, unjust and unfair practices in the treatment
of individuals in certain parts of the country. The Committee therefore exempts Federal
civil rights laws from the requirements of this Act.49
In addition, as will be discussed in the next section, UMRA does not require all legislative
provisions that contain federal mandates, even those that contain mandates that meet UMRA’s
definition, to have a CBO written cost estimate statement. In some instances, CBO may
determine that cost estimates may not be feasible or complete. In addition, UMRA only requires
estimates of direct costs imposed by the legislation. Estimates of indirect, secondary costs, such
as effects on prices and wages when the costs of a mandate imposed on one party are passed on to
others, such as customers or employees, are not required.50
accompany H.R. 4737, 107th Cong., 2nd sess., July 25, 2002, S.Rept. 107-221 (Washington: GPO, 2002), p. 61. For
additional information and analysis concerning National Federation of Independent Business (NFIB) v. Sebelius, see
CRS Report R42367, Medicaid and Federal Grant Conditions After NFIB v. Sebelius: Constitutional Issues and
Analysis, by Kenneth R. Thomas.
47 CBO, “CBO’s Activities Under the Unfunded Mandates Reform Act,” at https://www.cbo.gov/publication/51335.
48 2 U.S.C. §658a.
49 U.S. Congress, Senate Committee on Governmental Affairs, Unfunded Mandate Reform Act of 1995, report to
accompany S. 1, 104th Cong., 1st sess., January 11, 1995, S.Rept. 104-1 (Washington: GPO, 1995), p. 12.
50 GAO, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637, May 12, 2004, pp. 11-17, at
http://www.gao.gov/new.items/d04637.pdf.
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UMRA and Congressional Procedure (Title I)
UMRA’s Procedures
Under Title I, which took effect on January 1, 1996, CBO was directed, to the extent practicable,
to assist congressional committees, upon their request, in analyzing the budgetary and financial
impact of any proposed legislation that may have (1) a significant budgetary impact on state,
local, and tribal governments; (2) a significant financial impact on the private sector; or (3) a
significant employment impact on the private sector. CBO was also directed, if asked by a
committee chair or ranking minority member, to conduct a study, to the extent practicable, of the
budgetary and financial impact of proposed legislation containing a federal mandate. If
reasonably feasible, the study is to include estimates of the future direct costs of the federal
mandate “to the extent that such costs significantly differ from or extend beyond the 5-year
period after the mandate is first effective.”51
Although the actions noted above are technically discretionary, UMRA does contain mandatory
directives. When an authorizing committee reports a public bill or joint resolution containing a
federal mandate, UMRA requires the committee to provide the measure to CBO for budgetary
analysis.52 CBO is required to provide the committee a cost estimate statement of a mandate’s
direct costs if those costs are estimated to equal or exceed predetermined amounts, adjusted for
inflation, in any of the first five fiscal years the legislation would be in effect. In 2021, these
threshold amounts are $85 million for intergovernmental mandates and $170 million for privatesector mandates. CBO is also required to inform the committee if the mandate has estimated
direct costs below these thresholds and briefly explain the basis of the estimate.
CBO must also identify any increase in federal appropriations or other spending that has been
provided to fund the mandate.53 The federal mandate is considered unfunded unless estimated
costs are fully funded. As described above, under “UMRA’s Definition of an Unfunded Federal
Mandate,” UMRA provides that mandate costs be considered as funded only if the legislation
covers the mandate costs either by providing new direct spending or entitlement authority or by
authorizing appropriations and incorporating a mechanism to provide for the mandate to be
revised or abolished if the requisite appropriations are not provided.
Direct costs for intergovernmental mandates are defined as “the aggregate estimated amounts that
all State, local and tribal governments would be required to spend or would be prohibited from
raising in revenues in order to comply with the Federal intergovernmental mandate.”54 Direct
costs for private-sector mandates are defined as “the aggregate estimated amounts that the private
sector will be required to spend in order to comply with the Federal private sector mandate.”55
To accomplish these tasks, CBO created the State and Local Government Cost Estimates Unit
within its Budget Analysis Division to prepare intergovernmental mandate cost estimate
statements as well as other studies on the budgetary effects of mandates. It also added new staff to
its program analysis divisions to prepare private-sector mandate cost estimate statements.56
51 2 U.S.C. §602.
52 2 U.S.C. §658b.
53 2 U.S.C. §658c.
54 2 U.S.C. §658 (3)(A)(i).
55 2 U.S.C. §658 (3)(B).
56 Theresa A. Gullo and Janet M. Kelly, “Federal Unfunded Mandate Reform: A First-Year Retrospective,” Public
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A congressional committee is required to include the CBO estimate of mandate costs in its report
on the bill. If the mandate cost estimate is not available, or if the report is not expected to be in
print before the legislation reaches the floor for consideration, the committee is to publish the
mandate cost estimate in the Congressional Record in advance of floor consideration. In addition
to identifying direct costs, the committee’s report must also assess the likely costs and benefits of
any mandates in the legislation, describe how they affect the competitive balance between the
private and public sectors, state the extent to which the legislation would preempt state, local, or
tribal law, and explain the effect of any preemption. For intergovernmental mandates alone, the
committee is to describe in its report the extent to which the legislation authorizes federal funding
for direct costs of the mandate, and detail whether and how funding is to be provided.57
CBO Cost Estimate Statements
CBO submitted 14,381 estimates of mandate costs to Congress from January 1, 1996, when
UMRA’s Title I became effective, to December 31, 2020 (see Table 1). Each of these statements
examined the mandate costs imposed on the private sector or state, local, and tribal governments
by provisions in a specific bill, amendment, or conference report. About 11.2% of these cost
estimate statements (1,615 of 14,381) identified costs imposed by intergovernmental mandates,
and less than 1.0% of them (127 of 14,381) identified intergovernmental mandates that exceeded
UMRA’s threshold. CBO was unable to determine costs imposed by intergovernmental mandates
in 84 bills, amendments, or conference reports.
Table 1. CBO Estimates of Costs of Intergovernmental Mandates,
104th-116th Congresses
Congress
104th (1996)
Cost
Estimate
Statements
Transmitted
Statements With
Identified
Intergovernmental
Mandates
Intergovernmental
Mandate Costs
Exceeding the
Threshold
CBO
Unable to
Determine
Mandate
Costs
718
69
11
6
105th (1997-1998)
1,062
128
14
14
106th (1999-2000)
1,279
158
7
1
107th (2001-2002)
1,038
110
10
8
108th (2003-2004)
1,172
152
16
7
109th (2005-2006)
978
171
18
6
110th (2007-2008)
1,382
168
7
6
111th (2009-2010)
893
134
11
19
112th (2011-2012)
862
124
4
8
113th (2013-2014)
976
86
5
0
114th (2015-2016)
1,227
110
8
2
115th (2017-2018)
1,582
118
3
2
116th (2019-2020)
1,212
87
13
5
Administration Review, vol. 58, no. 5 (September/October 1998), p. 381. The State and Local Government Cost
Estimates Unit is now named the State, Local, and Tribal Government Cost Estimates Unit.
57 2 U.S.C. §658c(a).
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Congress
Total
Cost
Estimate
Statements
Transmitted
Statements With
Identified
Intergovernmental
Mandates
Intergovernmental
Mandate Costs
Exceeding the
Threshold
CBO
Unable to
Determine
Mandate
Costs
14,381
1,615
127
84
Sources: U.S. Congressional Budget Office (CBO), A Review of CBO’s Activities Under the Unfunded Mandates
Reform Act, 1996 to 2005, March 2006, p. 4; CBO, A Review of CBO’s Activities in 2008 Under the Unfunded
Mandates Reform Act, March 2009, p. 21; CBO, A Review of CBO’s Activities in 2010 Under the Unfunded Mandates
Reform Act, March 2011, p. 6; CBO, A Review of CBO’s Activities in 2012 Under the Unfunded Mandates Reform Act,
March 2013, p. 4; CBO, A Review of CBO’s Activities in 2014 Under the Unfunded Mandates Reform Act, March 2015,
p. 4; CBO, “Mandate Statements Transmitted by CBO, 2007 to 2018,” at https://www.cbo.gov/publication/
51335; and CBO, “Cost Estimates,” February 17, 2021, at https://www.cbo.gov/cost-estimates.
Notes: CBO began preparing mandate statements in January 1996. The figures for the 104th Congress reflect
bills on the legislative calendar in January 1996 and bills reported by authorizing committees thereafter.
CBO has submitted 14,258 estimates to Congress that examined private-sector mandate costs
imposed by provisions in a specific bill, amendment, or conference report from January 1, 1996,
when UMRA’s Title I became effective, to December 31, 2020 (see Table 2). The number of
statements transmitted to Congress shown in Table 2 is less than the number shown in Table 1
because CBO is sometimes asked to review a specific bill, amendment, or conference report
solely for intergovernmental mandates.
Table 2. CBO Estimate of Costs of Private-Sector Mandates, 104th-116th Congresses
Congress
104th (1996)
Cost
Estimate
Statements
Transmitted
Statements
With Identified
Private-Sector
Mandates
Private-Sector
Mandate Costs
Exceeding
Threshold
CBO Unable to
Determine
Mandate Costs
673
91
38
2
105th (1997-1998)
1,023
140
36
14
106th (1999-2000)
1,253
191
26
20
107th (2001-2002)
1,034
139
37
22
108th (2003-2004)
1,168
171
38
28
109th (2005-2006)
974
184
45
32
110th (2007-2008)
1,382
256
67
49
111th (2009-2010)
893
190
41
50
112th (2011-2012)
862
147
40
35
113th (2013-2014)
976
124
22
13
114th (2015-2016)
1,226
162
14
14
115th (2017-2018)
1,582
207
17
17
116th (2019-2020)
1,212
188
37
24
14,258
2,190
456
320
Total
Sources: CBO, A Review of CBO’s Activities Under the Unfunded Mandates Reform Act, 1996 to 2005, March 2006,
p. 4; CBO, A Review of CBO’s Activities in 2008 Under the Unfunded Mandates Reform Act, March 2009, p. 21; CBO,
A Review of CBO’s Activities in 2010 Under the Unfunded Mandates Reform Act, March 2011, p. 6; CBO, A Review of
CBO’s Activities in 2012 Under the Unfunded Mandates Reform Act, March 2013, p. 4; CBO, A Review of CBO’s
Activities in 2014 Under the Unfunded Mandates Reform Act, March 2015, p. 4; CBO, “Mandate Statements
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Transmitted by CBO, 2007 to 2018,” at https://www.cbo.gov/publication/51335; and CBO, “Cost Estimates,”
February 17, 2021, at http://www.cbo.gov/search/ce_sitesearch.cfm.
Notes: CBO began preparing mandate statements in January 1996. The figures for the 104th Congress reflect
bills on the legislative calendar in January 1996 and bills reported by authorizing committees thereafter. In some
years, CBO transmitted more cost estimate statements for intergovernmental mandates than private-sector
mandates because sometimes CBO was asked to review a specific bill, amendment, or conference report solely
for intergovernmental mandates.
About 15.3% of these private-sector estimates (2,190 of 14,258) identified costs imposed by
mandates, and about 3.2% of them (456 of 14,258) identified costs that exceeded UMRA’s
threshold. CBO was unable to determine costs imposed by private-sector mandates in 320 bills,
amendments, or conference reports.
Points of Order for Initial Consideration
UMRA provides for the enforcement of its informational requirements on legislation by
establishing a point of order in each chamber against consideration of a measure on which the
reporting committee has not published the required estimate of mandate costs. This point of order
applies only to measures reported by committees (for which CBO estimates of mandate costs are
required), but it applies for both intergovernmental and private-sector mandates. In addition,
however, if the informational requirement is met, a point of order against consideration of a
measure may still be raised, if, for any fiscal year, the estimated total mandate cost of unfunded
intergovernmental mandates in the measure exceeds UMRA’s threshold amount ($85 million in
2021). This point of order may be raised also if CBO reported that no reasonable estimate of the
cost of intergovernmental mandates was feasible.58
Uniquely among the requirements established by UMRA, this substantive point of order
addressing intergovernmental mandates contained in legislation constitutes a potential means of
control over the actual imposition of mandate costs. Even in this case, however, the mechanisms
established by UMRA provide a means of controlling mandates only on the basis of estimates of
the costs that will be incurred in subsequent fiscal years. The only provision of UMRA that offers
a possibility of controls based on costs actually incurred by affected entities is the requirement,
mentioned earlier, that a mandate can be considered funded through appropriations only if it
directs that, if insufficient appropriations are made, the mandate must be revised, abolished, or
reenacted as unfunded.
In several respects, the applicability of the substantive point of order differs from that of the
informational point of order. First, it applies to any measure coming to the floor for consideration,
whether or not reported by a committee, and also to conference reports. For a measure that has
been reported, this point of order applies to the measure in the form reported, including, for
example, to a committee amendment in the nature of a substitute. In addition, this point of order
applies against an amendment or motion (such as a motion to recommit with amendatory
instructions), and does so on the basis not that the mandate costs of the amendment or motion
itself exceeds the threshold, but that the amendment or motion would cause the total mandate
costs in the measure to do so. Finally, however, this point of order applies only against
intergovernmental mandates. UMRA imposes no comparable control in relation to private-sector
mandates.
Because federal mandates are created through authorization bills, the UMRA points of order
generally do not apply to bills reported by the House and Senate Committees on Appropriations.
However, if an appropriation bill, resolution, amendment, or conference report contains
58 2 U.S.C. §658d(a); and 2 U.S.C. §658c(b)(3).
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legislative provisions that would either increase the direct costs of a federal intergovernmental
mandate that exceeds the threshold, or cause those costs to exceed the threshold, a point of order
may be raised against the provisions themselves. In the Senate, if this point of order is sustained,
the provisions are stricken from the bill.59
In the House, the chair does not rule on a point of order raised under these provisions. Instead, the
House, by majority vote, determines whether to consider the measure despite the point of order.
To prevent dilatory use of the point of order, the chair need not put the question of consideration
to a vote unless the Member making the point of order meets the “threshold burden” of
identifying specific language that is claimed to contain the unfunded mandate. Also, if several
points of order could be raised against the same measure, House practices under UMRA allow all
of them to be disposed of at once by a single vote on consideration. If the Committee on Rules
proposes a special rule for considering the measure that waives the point of order, UMRA
subjects the special rule itself to a point of order, which is disposed of by the same mechanism. 60
In the Senate, if questions are raised challenging the applicability of an UMRA point of order
(e.g., to prevent its use for dilatory purposes), the presiding officer, to the extent practicable,
consults with the Committee on Homeland Security and Governmental Affairs to determine if the
measure contains an intergovernmental mandate and with the Senate Committee on the Budget to
determine if the mandate’s direct costs meet UMRA’s threshold for allowing a point of order to
be raised. The Senate Committee on the Budget may draw for this purpose on CBO cost estimate
statements. If there are no such challenges, or the presiding officer rules against the challenge, the
Senate determines whether to consider the measure despite the point of order. It may do so by
voting on a motion to waive the point of order.61
Initially, a majority vote was sufficient to waive the point of order in the Senate.62 In 2005, the
Senate increased its threshold to waive an UMRA point of order to three-fifths of Senators duly
chosen and sworn (normally 60 votes), as was already required of many other Budget Act points
of order. Two UMRA points of order were raised in the Senate that year, and both were sustained,
defeating two amendments to an appropriations bill that would have increased the minimum wage
(see Table 3). In 2007, the Senate returned its threshold for waiving an UMRA point of order to a
majority vote.63
On May 5, 2015, the Senate agreed to the conference report on S.Con.Res. 11, the concurrent
budget resolution for FY2016, which the House had previously agreed to on April 30, 2015. The
59 2 U.S.C. §658d(c).
60 2 U.S.C. §658e(a); and 2 U.S.C. §658e(b)(3).
61 2 U.S.C. §658d(d); and 2 U.S.C. §658d(e).
62 2 U.S.C. §558d(a); §403(b)(1) of H.Con.Res. 95, adopted April 28, 2005.
63 2 U.S.C. §558d(a).
On April 2, 2009, the Senate approved, by unanimous consent, an amendment (S.Amdt. 819) to S.Con.Res. 13, the
concurrent budget resolution for FY2010, which would have again increased the vote necessary in the Senate to waive
an UMRA point of order to three-fifths of Senators duly chosen and sworn (normally 60 votes). The amendment was
subsequently dropped in the final version of the concurrent budget resolution for FY2010.
On March 23, 2013, the Senate agreed, by voice vote, to an amendment (S.Amdt. 538) to S.Con.Res. 8, the concurrent
budget resolution for FY2014. It would have restored the requirement for waiving an UMRA point of order in the
Senate to three-fifths of the full Senate (normally 60 votes). S.Con.Res. 8 was received in the House on April 15, 2013,
and held at the desk. Because the House did not act on the measure, and no other legislation on the matter was
approved by Congress, the simple majority requirement for appealing or waiving UMRA points of order in the Senate
remained in effect.
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resolution included a provision that restored the requirement for waiving an UMRA point of order
in the Senate to three-fifths of Senators duly chosen and sworn (normally 60 votes).
On February 5, 2021, the House agreed to S.Con.Res. 5, the concurrent resolution on the budget
for FY2021, which the Senate had agreed to earlier that day. The resolution included a provision
that returned the Senate’s threshold for waiving an UMRA point of order to a majority vote.
Prior to the Senate’s increasing the threshold necessary to waive an UMRA point of order in
2015, a scholar familiar with UMRA argued that, inasmuch as the general floor procedures of the
Senate already allows Senators to force a majority vote on a mandate by moving to strike it from
the bill, UMRA’s enforcement procedure of waiving a point of order by majority vote meant that
UMRA mattered only in the House.64 As evidence of this, the scholar noted that during UMRA’s
first 10 years of operation, when the threshold to waive an UMRA point of order was a majority
vote in both the House and Senate, 13 UMRA points of order were raised, all in the House (see
Table 3).
Table 3. UMRA Points of Order in the House and Senate, by Congress
Points of
Order Raised
in the House
Points of
Order
Sustained in
the House
Points of
Order Raised
in the Senate
Points of
Order
Sustained in
the Senate
104th (1996)
3
1
0
0
105th (1997-1998)
4
0
0
0
106th (1999-2000)
4
0
0
0
107th (2001-2002)
2
0
0
0
108th (2003-2004)
0
0
0
0
109th (2005-2006)
6
0
2
2
110th (2007-2008)
8
0
0
0
111th (2009-2010)
13
0
1
0
112th (2011-2012)
10
0
0
0
113th (2013-2014)
6
0
0
0
114th (2015-2016)
5
0
1
0
115th (2017-2018)
1
0
0
0
116th (2019-2020)
1
0
0
0
Total
63
1
4
2
Congress
Source: Congressional Record, various years. A list of UMRA points of order raised to date is provided in
Appendix B.
As indicated in Table 3, 63 UMRA points of order have been raised in the House. Only one of
these points of order, the first one, which was raised on March 28, 1996, in opposition to a
proposal to add a minimum wage increase to the Contract With America Advancement Act of
1996, resulted in the House voting to reject consideration of a proposed provision. During the
111th-114th Congresses, UMRA points of order in the House were often raised not to challenge
unfunded federal mandates per se, but to use the 10 minutes of debate allowed each House
64 Elizabeth Garrett, “Framework Legislation and Federalism,” Notre Dame Law Review, vol. 83, no. 4 (2008), p. 1502.
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Member initiating an UMRA point of order to challenge the pace of legislative consideration,
limitations on the offering of amendments to appropriations bills, or the inclusion of earmarks in
legislation.65
Also, as indicated in Table 3, UMRA points of order have been raised in the Senate four times. In
2005, points of order were raised against two amendments relating to an increase in the minimum
wage. In each case the Senate declined to waive the point of order, and the chair ruled that the
amendment was out of order because it contained unfunded intergovernmental mandates in
excess of the threshold.66 In 2009, an UMRA point of order was raised against intergovernmental
mandates in a health care reform bill.67 The Senate voted to waive the point of order, 55-44.68 The
Senate subsequently approved the bill with the mandates.69 In 2016, an UMRA point of order was
raised against intergovernmental mandates in a bill designed to assist Puerto Rico in addressing
its debt.70 The Senate voted to waive the point of order, 85-13.71 The Senate subsequently
approved the bill with the mandates.72
Impact on the Enactment of Statutory Intergovernmental and
Private-Sector Mandates
Although UMRA points of order have been sustained just three times, most state and local
government officials assert that UMRA has reduced “the number of unfunded federal mandates
by acting as a deterrent to their enactment.”73 For example, in 2001, Raymond Scheppach, thenNGA’s executive director, testified before a House subcommittee that UMRA had slowed the
growth of unfunded mandates and improved communications between federal policymakers and
state and local government officials:
Direct mandates have declined sharply in the wake of the Act. But I would venture that
UMRA has had an even greater intangible benefit. As Congressman Portman once told us,
he was certain this would be one of those bills that he could frame and hang on his wall,
and it would become just another relic of history. But, to his surprise, the Act has led—
time and again—to members asking his advice: “Do you think this bill will cause an
UMRA problem? With whom should I work?” The very threat of a CBO report has
65 Based on CRS review of the 34 points of order raised in the House during the 111th-114th Congresses.
66 “Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and
Independent Agencies Appropriations Act, 2006,” proceedings in the Senate, Congressional Record, daily edition, vol.
151 (October 19, 2005), pp. S11526, S11547-S11548.
67 Senator Robert Corker, “H.R. 3590, the Service Members Home Ownership Tax Act of 2009,” remarks in the
Senate, Congressional Record, daily edition, vol. 155, no. 199 (December 23, 2009), pp. S13803, S13804.
68 “Consideration of H.R. 3590, the Service Members Home Ownership Tax Act of 2009, Senate Rollcall Vote No.
390,” Congressional Record, daily edition, vol. 155, no. 199 (December 23, 2009), p. S13831.
69 “Consideration of H.R. 3590, the Patient Protection and Affordable Care Act, Senate Rollcall Vote No. 396,”
Congressional Record, daily edition, vol. 155, no. 201 (December 24, 2009), p. S13831.
70 Senator Bernie Sanders, “National Sea Grant College Program Amendments of 2015 (Puerto Rico Oversight,
Management, and Economic Stability Act—PROMESA),” Senate debate on S. 2328, Congressional Record, vol. 162,
no. 105 (June 29, 2016), pp. S4691-S4702.
71 “Motion to Concur, Senate Rollcall Vote No. 115,” Congressional Record, daily edition, vol. 162, no. 105 (June 29,
2016), p. S4702.
72 “Vote on Motion to Concur, Senate Rollcall Vote No. 116,” Congressional Record, daily edition, vol. 162, no. 105
(June 29, 2016), p. S4702.
73 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, p. 15, at http://www.gao.gov/new.items/d05454.pdf.
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engendered efforts to reach out to state and local leaders before the fact—instead of after.
It has changed the nature of our intergovernmental discussion in a very positive way. 74
More recently, NCSL has argued that UMRA has brought increased attention to the fiscal effects
of federal legislation on state and local governments, improved federal accountability, and
enhanced consultation.75 In addition, there have been documented instances in which either
sponsors of legislation have modified provisions to avoid a CBO statement that unfunded
intergovernmental mandate costs exceeded the threshold, or measures with such costs estimated
to exceed the threshold were altered prior to floor consideration to reduce their costs below the
threshold.76
As mentioned, since UMRA’s Title I became effective in 1996, CBO has submitted 14,381
written cost estimate statements to Congress that examined the costs imposed by provisions in a
specific bill, amendment, or conference report on the private sector and/or state and local
governments. It identified intergovernmental mandates in 1,615 of them (11.2%). CBO reports
that, as of December 31, 2019, 16 laws (containing 22 intergovernmental mandates) have been
enacted since UMRA became effective in 1996 that have costs estimated to exceed the statutory
threshold.77 Those laws are as follows:
Two increases in the minimum wage. P.L. 104-188, the Small Business Job
Protection Act of 1996, enacted in 1996, was estimated to cost state and local
governments more than $1 billion during the first five years that it was in effect.
P.L. 110-28, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and
Iraq Accountability Appropriations Act, 2007, enacted in 2007, was estimated to
cost state and local governments slightly less than $1 billion during the first five
years that it was in effect.
Preemption of state taxes on premiums for certain prescription drug plans in P.L.
108-73, the Family Farmer Bankruptcy Relief Act of 2003, enacted in 2003, was
estimated to cost states $70 million in revenue in 2006, the first year it was in
effect, and increase to about $95 million annually by 2010.
The temporary preemption of states’ authority to tax certain internet services and
transactions in P.L. 108-435, the Internet Tax Nondiscrimination Act, enacted in
2004, was estimated to reduce state and local government tax revenue by at least
$300 million. The extension of this preemption in P.L. 110-108, the Internet Tax
Freedom Act Amendments Act of 2007, enacted in 2007, was estimated to reduce
state and local government tax revenue by about $80 million annually. Making
the moratorium permanent (while allowing state and local governments that had
been collecting such taxes prior to October 1, 1998 to continue to collect such
74 Joint Hearing, U.S. Congress, House Committee on Government Reform, Subcommittee on Energy Policy, Natural
Resources and Regulatory Affairs, and House Committee on Rules, Subcommittee on Technology and the House,
Unfunded Mandates: A Five Year Review and Recommendations for Change, hearing on the Unfunded Mandates
Reform Act of 1995, 107th Cong., 1st sess., May 24, 2001, H. Hrg. 107-19 (Washington: GPO, 2001), p. 61.
75 National Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at
http://www.ncsl.org/state-federal-committees.aspx?tabs=855,20,632.
76 Paul L. Posner, “Unfunded Mandates Reform Act: 1996 and Beyond,” Publius: The Journal of Federalism, vol. 27,
no. 2 (Spring 1997), pp. 57-59; GAO, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637, May 12,
2004, p. 19, at http://www.gao.gov/new.items/d04637.pdf; and GAO, Unfunded Mandates: Views Vary About Reform
Act’s Strengths, Weaknesses, and Options for Improvement, GAO-05-454, March 31, 2005, p. 15, at
http://www.gao.gov/new.items/d05454.pdf.
77 CBO, Enacted Intergovernmental Mandates With Estimated Costs That Exceed the Statutory Threshold, 1996 to
2019, at https://www.cbo.gov/publication/51335.
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taxes, but only through June 2020) in P.L. 114-125, the Trade Facilitation and
Trade Enforcement Act of 2015, enacted in 2016, was estimated to cost state and
local governments more than $100 million in the final three months of FY2020
(July through September) and more than several hundred million dollars annually
thereafter.
The requirement that state and local governments meet certain standards for
issuing driver’s licenses, identification cards, and vital statistics documents in
P.L. 108-458, the Intelligence Reform and Terrorism Prevention Act of 2004,
enacted in 2004, was estimated to cost state and local governments more than
$100 million over 2005-2009, with costs exceeding the threshold in at least one
of those years.
The elimination of matching federal payments for some child support spending in
P.L. 109-171, the Deficit Reduction Act of 2005, enacted in 2006, was estimated
to cost states more than $100 million annually beginning in 2008.
The requirement that state and local governments withhold taxes on certain
payments for property and services in P.L. 109-222, the Tax Increase Prevention
and Reconciliation Act of 2005, enacted in 2006, was estimated to cost state and
local governments more than $70 million annually beginning in 2011.
Requirements on rail and transit owners and operators to train workers and
submit reports to the Department of Homeland Security in P.L. 110-53, the
Implementing Recommendations of the 9/11 Commission Act of 2007, enacted in
2007, was estimated to cost state and local governments more than UMRA’s
threshold in at least one of the first five years following enactment.
The requirement that commuter railroads install train-control technology in P.L.
110-432, the Railroad Safety Enhancement Act of 2008, enacted in 2008, was
estimated to cost state and local governments more than UMRA’s threshold in at
least one of the first five years following enactment.
The requirement that public entities that handle health insurance information
comply with new regulations; health insurance plans pay an annual fee based on
average number of people covered by the policy; public employers pay an excise
tax on employer-sponsored health insurance coverage defined as having high
costs; health insurance plans comply with new standards for extending coverage;
and public entities must comply with new notice and reporting requirements on
health insurance plans in P.L. 111-148, the Patient Protection and Affordable
Care Act, enacted in 2010, was estimated to have costs for state and local
governments that would greatly exceed UMRA’s thresholds in each of the first
five years following enactment.
The requirement that schools provide meals that comply with new standards for
menu planning and nutrition and with nutrition standards for all food sold in
schools in P.L. 111-296, the Healthy, Hunger-Free Kids Act of 2010, enacted in
2010, was estimated to have costs for state and local governments that would
exceed UMRA’s threshold beginning the first year that the mandates take
effect.78
78 CBO, A Review of CBO’s Activities in 2014 Under the Unfunded Mandates Reform Act, March 2015, pp. 5, 40, at
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50051-UMRA2_0.pdf; CBO, Selected CBO
Publications Related to Health Care Legislation, 2009-2010, December 2010, pp. 17, 18, 148, 166, at
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The aggregate cost of requiring Puerto Rico and its instrumentalities to comply
with the directives and processes of a federal oversight board tasked with
overseeing the territory’s fiscal affairs and to pay for the costs of the oversight
board’s staff and operating expenses in P.L. 114-187, the Puerto Rico Oversight,
Management, and Economic Stability Act (PROMESA), enacted in 2016, was
estimated to exceed UMRA’s threshold.
The aggregate cost of requiring public and private entities to offer terrorism
insurance, collect and report information to the federal government, and collect
surcharges from policyholders, as required by P.L. 116-94, the Further
Consolidated Appropriations Act, 2020, would exceed UMRA’s threshold in at
least one of the first five years the mandates are in effect.
State and local government interest groups argue that these statistics confirm UMRA’s
effectiveness in serving as a deterrent to the enactment of new unfunded mandates that exceed
UMRA’s threshold and meet UMRA’s definition of a federal mandate. However, they also argue
that many mandates with costs below UMRA’s threshold, or that do not meet UMRA’s definition
of a federal mandate, have been adopted since UMRA’s enactment.79
CBO also reports that from January 1, 2006, to December 31, 2019, 2,587 public laws were
enacted. Of these laws, 220 had at least one intergovernmental mandate as defined under UMRA.
These laws imposed 457 mandates on state and local governments, with 17 of these mandates
exceeding UMRA’s threshold, 16 with estimated costs that could not be determined, and 424 with
estimated costs below the threshold.80 CBO reported that hundreds of other laws had an effect on
state and local government budgets, but those laws did not meet UMRA’s definition of a federal
mandate.81
As mentioned, CBO has submitted 14,258 cost estimate statements to Congress that examined the
costs imposed by provisions in a specific bill, amendment, or conference report that might impact
the private sector. It identified private-sector mandates in 2,190 of them (15.3%). CBO reports
that from January 1, 2006, to December 31, 2019, 333 of the 2,587 public laws that were enacted
had at least one private-sector mandate as defined under UMRA. These laws imposed 856
mandates on the private sector, with 129 of these mandates exceeding UMRA’s threshold, 97
http://www.cbo.gov/ftpdocs/120xx/doc12033/12-23-SelectedHealthcarePublications.pdf; and S.Rept. 111-178,
Healthy, Hunger-Free Kids Act of 2010, Estimated Costs and Unfunded Mandates.
79 National Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at
http://www.ncsl.org/Default.aspx?TabID=773&tabs=855,20,632#FederalMandate.
80 CBO, Laws Enacted Between 2006 and 2019 That Contain Mandates, at https://www.cbo.gov/publication/51335;
and CBO, “Laws That Contain Mandates,” at https://www.cbo.gov/umra-search/law.
81 CBO, A Review of CBO’s Activities in 2008 Under the Unfunded Mandates Reform Act, March 2009, p. 48, at
http://www.cbo.gov/ftpdocs/100xx/doc10058/03-31-UMRA.pdf; CBO, A Review of CBO’s Activities in 2010 Under
the Unfunded Mandates Reform Act, March 2011, p. 5, at http://www.cbo.gov/ftpdocs/121xx/doc12117/03-31UMRA.pdf; CBO, A Review of CBO’s Activities in 2011 Under the Unfunded Mandates Reform Act, March 2012, pp.
5-7, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-30-UMRA.pdf; CBO, A Review of CBO’s
Activities in 2012 Under the Unfunded Mandates Reform Act, March 2013, pp. 5-9, at http://www.cbo.gov/sites/default/
files/cbofiles/attachments/44032_UMRA.pdf; CBO, A Review of CBO’s Activities in 2013 Under the Unfunded
Mandates Reform Act, March 2014, p. 5, at http://www.cbo.gov/sites/default/files/cbofiles/attachments/45209UMRA.pdf; CBO, A Review of CBO’s Activities in 2014 Under the Unfunded Mandates Reform Act, March 2015, p. 5,
at http://www.cbo.gov/sites/default/files/cbofiles/attachments/50051-UMRA.pdf; and CBO, Laws Enacted Between
2006 and 2016 That Contain Mandates, at https://www.cbo.gov/publication/51335.
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with estimated costs that could not be determined, and 630 with estimated costs below the
threshold.82
Congressional Issues for Title I
Exemptions and Exclusions
State and local government officials argue that UMRA’s exemptions and exclusions reduce its
effectiveness in limiting the enactment of unfunded federal intergovernmental mandates. They
argue that federal programs in the exempted and excluded areas can still result in the imposition
of costs on state, local, and tribal governments. Also, because UMRA does not include these costs
as “mandates,” they are exempt even from the requirement for CBO to estimate these costs. For
example, in 2008, NCSL asserted that “although fewer than a dozen mandates have been enacted
that exceed the threshold established in UMRA, Congress has shifted at least $131 billion in costs
to states over the past five years” and that during the 110th Congress at least $31 billion in
additional costs were imposed on states through new mandates.83
To reduce these costs, NCSL has recommended that UMRA’s provisions on points of order and
requirements for written cost estimate statements also apply to (1) all open-ended entitlement
grant-in-aid programs, such as Medicaid, and legislative provisions that would cap or enforce a
ceiling on the cost of federal participation in any entitlement or mandatory spending program; (2)
new conditions of federal funding for existing federal grants and programs; (3) legislative
provisions that reduce state revenues, especially when changes to the federal tax code are
retroactive or otherwise provide states with little or no opportunity to prospectively address the
impact of a change in federal law on state revenues; and (4) mandates that fail to exceed the
statutory threshold only because they do not affect all states.84
For the most part, business interests have generally supported state and local government officials
in their efforts to broaden UMRA’s coverage of federal intergovernmental mandates. In perhaps
the most extensive effort to obtain various viewpoints on UMRA, in 2005, the Government
Accountability Office (GAO) held group meetings, individual interviews, and received written
responses from 52 individuals and organizations, including academic centers and think tanks,
businesses, federal agencies, public interest advocacy groups, and state and local governments,
concerning unfunded mandates. GAO reported that UMRA’s coverage was the issue most
frequently commented on by parties from all five sectors, including business, and that most of the
parties representing business viewed UMRA’s relatively narrow coverage as a major weakness
that leaves out many federal actions with potentially significant financial impacts on nonfederal
parties.85 However, GAO also found that the business sector has “generally been in favor of
82 CBO, Laws Enacted Between 2006 and 2019 That Contain Mandates, at https://www.cbo.gov/publication/51335;
and CBO, “Laws That Contain Mandates,” at https://www.cbo.gov/umra-search/law.
83 National Conference of State Legislatures, Mandate Monitor, vol. 6, no. 1 (April 8, 2008), p. 1.
84 NCSL also advocates a revision of the definition of direct costs to capture and more accurately reflect the true costs
to state governments of particular federal actions; requiring that mandate statements accompany appropriations bills;
enactment of legislation that would require federal reimbursement, as long as the mandate exists, to state and local
governments for costs imposed on them by any new federal mandates; restrictions regarding the preemption of state
laws; repeal or modification of certain existing mandates; and a review of UMRA’s existing exclusions. See National
Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at http://www.ncsl.org/
Default.aspx?TabID=773&tabs=855,20,632#FederalMandate.
85 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, p. 9, at http://www.gao.gov/new.items/d05454.pdf.
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federal preemptions for reasons such as standardizing regulation across state and local
jurisdictions.”86
Although GAO found that most of the parties it contacted viewed UMRA’s coverage of
intergovernmental mandates as being too narrow, it also reported that some of the participants
opposed an expansion of UMRA’s coverage:
A few parties from the public interest sector and academic/think tank sectors considered
some of the existing exclusions important or identified UMRA’s narrow scope as one of
the act’s strengths.... Specifically, these parties argued in favor of maintaining UMRA’s
exclusions or expanding them to include federal actions regarding public health, safety,
environmental protection, workers’ rights, and the disabled.... [They also] focused on the
importance of the existing exclusions, particularly those dealing with constitutional and
statutory rights, such as those barring discrimination against various groups. 87
With respect to private-sector mandates in legislation, UMRA allows a point of order to be raised
only if UMRA’s informational requirements are not met; that is, only if the committee reporting
the measure fails to publish a CBO cost estimate statement of the private-sector mandate’s costs.
Over the years, various business organizations, including the U.S. Chamber of Commerce, have
advocated the extension of UMRA’s substantive point of order for intergovernmental mandates to
the private sector, permitting a point of order to be raised against consideration of legislation that
includes private-sector mandates with costs that exceed UMRA’s threshold.88
The GAO report also noted that “parties primarily from the academic/think tank and state and
local governments sectors ... noted that while much attention has been focused on the actual
(direct) costs of mandates, it is important to consider the broader implications on affected
nonfederal entities beyond direct costs, including indirect costs such as opportunity costs, forgone
revenues, shifting priorities, and fiscal trade-offs.”89
During the 115th Congress, H.R. 50, the Unfunded Mandates Information and Transparency Act
of 2018, passed by the House on July 13, 2018, would have broadened UMRA’s coverage to
include both direct and indirect costs, such as foregone profits and costs passed onto consumers,
and, when requested by the chair or ranking member of a committee, the prospective costs of
legislation that would change conditions of federal financial assistance. The bill also would have
made private-sector mandates subject to a substantive point of order and remove UMRA’s
exemption for rules issued by most independent agencies. The House passed similar legislation
during the 112th, 113th, and 114th Congresses.90
86 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement, p.
12.
87 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
pp. 9, 13-14.
88 U.S. Congress, Senate Committee on Government Reform, S. 389–The Unfunded Mandates Information Act, hearing
on S. 389, 105th Cong., 2nd sess., June 3, 1998, S.Hrg. 105-664 (Washington: GPO, 1998), pp. 28-35.
89
GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, pp. 22, 23, at http://www.gao.gov/new.items/d05454.pdf. GAO also found that “parties
across the sectors suggested that various forms of retrospective analysis are needed for evaluating federal mandates
after they are implemented” and “parties in the academic/think tank sector suggested analyzing the benefits of federal
mandates, when appropriate, not just costs.”
90 House-passed legislation during the 112th Congress, H.R. 4078, the Red Tape Reduction and Small Business Job
Creation Act: Title IV, the Unfunded Mandates Information and Transparency Act of 2012; during the 113th Congress,
H.R. 899, the Unfunded Mandates Information and Transparency Act of 2014, and H.R. 4, the Jobs for America Act:
Division III, the Unfunded Mandates Information and Transparency Act of 2014; and during the 114th Congress, H.R.
50, the Unfunded Mandates Information and Transparency Act of 2015. Similar legislation was also introduced in the
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Similar legislation was introduced during the 116th Congress (H.R. 300, the Unfunded Mandates
Information and Transparency Act of 2019, and S. 4077, the Unfunded Mandates Information and
Transparency Act) and 117th Congress (H.R. 701, the Unfunded Mandates Information and
Transparency Act of 2021, and S. 170, the Unfunded Mandates Information and Transparency
Act).
UMRA and Federal Rulemaking (Title II)
UMRA’s Title II, which became effective on March 22, 1995, generally requires federal agencies,
unless otherwise prohibited by law, to prepare written statements that identify costs and benefits
of a federal mandate to be imposed through the rulemaking process that may result in the
expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of
$100 million or more (adjusted annually for inflation) in any one year, before “promulgating any
general notice of proposed rulemaking.”91 In 2021, the threshold for preparing a written statement
is $170 million. These informational requirements for regulations, like the Title I cost estimate
requirements for legislation, apply to both intergovernmental and private-sector mandates. Title II
establishes no equivalent to the point of order mechanism in Title I through which either house
can decline to consider legislation proposing covered unfunded intergovernmental mandates
above the applicable threshold level.
The written assessments that federal agencies are to prepare for their regulations must identify the
law authorizing the rule and include a qualitative and quantitative assessment of anticipated costs
and benefits, the share of costs to be borne by the federal government, and the disproportionate
budgetary effects upon particular regions, state, local, or tribal governments, or particular
segments of the private sector. Assessments must also include estimates of the effect on the
national economy, descriptions of consultations with nonfederal government officials, and a
summary of the evaluation of comments and concerns obtained throughout the promulgation
process.92 Impacts of “any regulatory requirements” on small governments must be identified,
notice must be given to those governments, and technical assistance must be provided.93 Also,
federal agencies are required, to the extent permitted in law, to develop an “effective process to
permit elected officers of State, local, and tribal governments (or their designated employees with
authority to act on their behalf) to provide meaningful and timely input in the development of
regulatory proposals containing significant Federal intergovernmental mandates.”94 UMRA also
requires federal agencies to consider “a reasonable number” of regulatory alternatives and select
the “least costly, most cost-effective or least burdensome alternative” that achieves the objectives
of the rule.95
UMRA requires the Office of Management and Budget’s (OMB’s) director to collect the
executive branch agencies’ written cost estimate statements and periodically forward copies to
CBO’s director. It also directs OMB to establish pilot programs in at least two federal agencies to
test innovative regulatory approaches to reduce regulatory burdens on small governments, and
provide Congress a written annual report detailing compliance with the act by each agency for the
Senate.
91 2 U.S.C. §1532.
92 2 U.S.C. §1532.
93 2 U.S.C. §1533.
94 2 U.S.C. §1534.
95 2 U.S.C. §1535.
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preceding reporting period.96 OMB’s director has delegated these responsibilities to its Office of
Information and Regulatory Affairs (OIRA).
Most of these provisions were already in place when UMRA was adopted. For example,
Executive Order 12866, issued in September 1993, required agencies to provide OIRA with
assessments of the costs and benefits of all economically significant proposed rules (defined as
having an annual impact on the economy of $100 million or more), including some rules that
were not mandates; identify regulatory alternatives and explain why the planned regulatory action
is preferable to other alternatives; issue regulations that were cost-effective and impose the least
burden on society; and seek the views of state, local, and tribal officials before imposing
regulatory requirements that might significantly or uniquely affect them. 97
Title II’s Exemptions and Exclusions
UMRA’s requirement for federal agencies to issue written cost estimate statements for mandates
issued through the rulemaking process that may result in expenditures of $100 million or more
(adjusted annually for inflation) by state and local governments, in the aggregate, or by the
private sector, in any one year, is subject to the exemptions and exclusions that apply to
legislative provisions (e.g., conditions of federal assistance, duties arising from participation in a
voluntary federal program, and constitutional rights of individuals). UMRA’s requirements also
do not apply (1) to provisions in rules issued by independent regulatory agencies; (2) if the
agency is “otherwise prohibited by law” from considering estimates of costs in adopting the rule
(e.g., under the Clean Air Act the primary air quality standards are health-based and the courts
have affirmed that the U.S. Environmental Protection Agency is not to consider costs in
determining air quality standards for ozone and particulate matter); or (3) to any rule for which
the agency does not publish a general notice of proposed rulemaking in the Federal Register.98
GAO has found that about half of all final rules published in the Federal Register are published
without a general notice of proposed rulemaking, including some rules with impacts over $100
million annually.99
In addition, UMRA’s threshold for federal mandates in rules is limited to expenditures, in
contrast to the thresholds in Title I, which refer to direct costs. As a result, a federal rule’s
estimated annual effect on direct costs might meet Title I’s threshold, but might not meet Title II’s
threshold if the rule does not compel nonfederal entities to spend that amount. For example, under
Title I, direct costs include any amounts that state and local governments are prohibited from
96 2 U.S.C. §§1536-1538.
97 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, GAO-GDD-98-30,
February 4, 1998, p. 29, at http://www.gao.gov/assets/230/225165.pdf; and GAO, Unfunded Mandates: Views Vary
About Reform Act’s Strengths, Weaknesses, and Options for Improvement, GAO-05-454, March 31, 2005, p. 27, at
http://www.gao.gov/new.items/d05454.pdf. For further analysis concerning OIRA, see CRS Report RL32397, Federal
Rulemaking: The Role of the Office of Information and Regulatory Affairs, coordinated by Maeve P. Carey.
98 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, pp. 26, 27, at http://www.gao.gov/new.items/d05454.pdf; and U.S. Office of
Management and Budget (OMB), Office of Information and Regulatory Affairs, 2008 Report to Congress on the
Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, 2008, p. 25.
99 GAO, Federal Rulemaking: Agencies Often Published Final Actions Without Proposed Rules, GAO/GGD-98-126,
August 31, 1998, pp. 1, 2, at http://www.gao.gov/assets/230/226214.pdf; and GAO, Federal Rulemaking: Past Reviews
and Emerging Trends Suggest Issues That Merit Congressional Attention, GAO-06-228T, November 1, 2005, pp. 8-10,
at http://www.gao.gov/assets/120/112501.pdf.
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raising in revenue to comply with the mandate. These costs are not considered when determining
whether a mandate meets Title II’s threshold because funds not received are not expenditures.100
Also, in contrast to Title I, Title II does not require the agencies issuing regulations to address the
question of whether federal funding is available to cover the costs to the private sector of
mandates imposed by regulations. In general, agencies lack authority to provide such funding,
which could be provided only by legislative action. Title II addresses the funding only of
intergovernmental mandates, and only by requiring that agencies identify the extent to which
federal resources may be available to carry out those mandates.101 The differences in the coverage
of Title I and Title II may reflect a compromise reached with congressional Members who
opposed using UMRA as a vehicle to address broader regulatory reform advocated by business
interests. For example, Senator John Glenn argued in the Senate Committee on Governmental
Affairs’ committee report on UMRA:
Another problematic change from S. 993 is the expansion of the “regulatory accountability
and reform” provisions of Title 2 to go beyond intergovernmental mandates to address any
and all regulatory effects on the private sector. The intended purpose of S. 1 is to control
unfunded Federal mandates on State and local governments. I have always supported that
goal. Moreover, I believe that if we keep the bill sharply focused on that purpose, we can
get the legislation passed quickly and signed into law. If, however, we let the bill be
stretched to cover other issues, we hurt prospects for enactment and we break our pledge
to our friends in the State and local governments.... I believe that the bill should be brought
back to its original purpose by limiting regulatory analysis to intergovernmental
mandates.... In short, I support using this legislation to control intergovernmental
regulatory costs. I oppose using this bill to address broader regulatory reform issues.102
Federal Agency Cost Estimate Statements in Major Federal Rules
From March 22, 1995, when UMRA’s Title II became effective, to the end of FY2019, OMB
reviewed 1,205 final rules with estimated benefits and/or costs exceeding $100 million
annually.103 Most (75.5%) of those “major” rules (910) did not contain provisions meeting
UMRA’s definition of a mandate.
100 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, p. 27, at http://www.gao.gov/new.items/d05454.pdf.
101 2 U.S.C. §1532 (a)(2).
102 U.S. Congress, Senate Committee on Governmental Affairs, Unfunded Mandate Reform Act of 1995, report to
accompany S. 1, 104th Cong., 1st sess., January 11, 1995, S.Rept. 104-1 (Washington: GPO, 1995), p. 28.
103 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, GAO-GDD-98-30,
February 4, 1998, p. 16, at http://www.gao.gov/assets/230/225165.pdf; OMB, 1997 Report to Congress on the Costs
and Benefits of Regulations, September 1997, chapter 3; OMB,1998 Report to Congress on the Costs and Benefits of
Regulations, January 1999, p. 44; OMB, 2000 Report to Congress on the Costs and Benefits of Regulations, June 2000,
pp. 37, 38; OMB, Making Sense of Regulation: 2001 Report to Congress on the Costs and Benefits of Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, December 2001, pp. 20, 21; OMB, Stimulating Smarter
Regulation: 2002 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, December 2002, pp. 46, 47; OMB, Informing Regulatory Decisions: 2003Report to
Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local, and Tribal Entities,
September 2003, p. 10; OMB, Progress in Regulatory Reform: 2004 Report to Congress on the Costs and Benefits of
Regulations and Unfunded Mandates on State, Local, and Tribal Entities, December 2004, p. 12; OMB, Validating
Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on
State, Local, and Tribal Entities, December 2005, p. 11; OMB, 2006 Report to Congress on the Costs and Benefits of
Regulations and Unfunded Mandates on State, Local, and Tribal Entities, January 2007, p. 6; OMB, 2007 Report to
Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local, and Tribal Entities, June
2008, p. 7; OMB, 2008 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State,
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Whereas, as Table 1 and Table 2 show, CBO identified slightly more private-sector mandates
than intergovernmental mandates, Table 4 shows that most of the mandates identified in
regulations have been directed at the private sector. This emphasis appears consistent with the
original concern of business advocates to extend the concept of mandates to the area of regulatory
reform.
As indicated in Table 4, during the time period covered, 297 major rules met UMRA’s definition
of a mandate on the public or private sector and, therefore, were issued an UMRA cost estimate
statement: 277 of these major rules contained private-sector mandates only, 8 contained both
private and public-sector mandates, and 12 contained public-sector mandates only.
Table 4. UMRA Written Mandate Cost Estimate Statements Issued by
Federal Agencies in Final Rules, 1995-2019
Private-Sector
Mandates
Private- and
Public-Sector
Mandates
Public-Sector
Mandates
Number of
Major
Rules With
UMRA
Mandates
June 1995-May 2000
75
0
5
80
June 2000-May 2001
16
0
2
18
May 2001-October 2001
4
0
0
4
FY2002
5
0
0
5
FY2003
17
0
0
17
FY2004
9
1
0
10
FY2005
3
0
1
4
FY2006
9
0
2
11
FY2007
11
0
0
11
FY2008
8
0
0
8
FY2009
11
0
1
12
FY2010
13
0
0
13
FY2011
13
0
0
13
FY2012
9
1
1
11
Time Period
Local, and Tribal Entities, January 2009, p. 8; OMB, 2009 Report to Congress on the Benefits and Costs of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal Entities, January 2010, p. 3; OMB, 2010 Report to
Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal
Entities, July 2010, p. 3; OMB, 2011 Report to Congress on the Benefits and Costs of Federal Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, June 2011, p. 3; OMB, 2012 Report to Congress on the
Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, April 2013, p.
3; OMB, 2013 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, May 2014, p. 4; OMB, 2014 Report to Congress on the Benefits and Costs of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal Entities, June 2015, p. 2; OMB, 2015 Report to
Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal
Entities, March 2016, p. 2; OMB, 2016 Draft Report to Congress on the Benefits and Costs of Federal Regulations and
Agency Compliance with the Unfunded Mandates Reform Act, December 23, 2016, p. 2; OMB, 2017 Report to
Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates
Reform Act, December 9, 2019, p. 1; and OMB, 2018, 2019, 2020 Draft Report to Congress on the Benefits and Costs
of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act, December 23, 2019, p. 3.
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Private-Sector
Mandates
Private- and
Public-Sector
Mandates
Public-Sector
Mandates
Number of
Major
Rules With
UMRA
Mandates
FY2013
10
2
0
12
FY2014
10
1
0
11
FY2015
12
1
0
13
FY2016
27
2
0
29
FY2017
11
0
0
11
FY2018
1
0
0
1
FY2019
3
0
0
3
Total
277
8
12
297
Time Period
Sources: Joint Hearing, U.S. Congress, House Committee on Government Reform, Subcommittee on Energy
Policy, Natural Resources and Regulatory Affairs, and House Committee on Rules, Subcommittee on Technology
and the House, Unfunded Mandates: A Five Year Review and Recommendations for Change, hearing on the Unfunded
Mandates Reform Act of 1995, 107th Congress, 1st session, May 24, 2001, H. Hrg. 107-19 (Washington: GPO,
2001), p. 40; U.S. Office of Management and Budget (OMB), Making Sense of Regulation: 2001 Report to Congress
on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local, and Tribal Entities, December 2001,
pp. 189-195; OMB, Stimulating Smarter Regulation: 2002 Report to Congress on the Costs and Benefits of Regulations
and Unfunded Mandates on State, Local, and Tribal Entities, December 2002, pp. 161, 162; OMB, Informing Regulatory
Decisions: 2003 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, September 2003, pp. 202-204; OMB, Progress in Regulatory Reform: 2004 Report to Congress on
the Costs and Benefits of Regulations and Unfunded Mandates on State, Local, and Tribal Entities, December 2004, pp.
225-234; OMB, Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, December 2005, pp. 143-148; OMB, 2006 Report to Congress
on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local, and Tribal Entities, January 2007, pp.
141-143; OMB, 2007 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, June 2008, pp. 76-81; OMB, 2008 Report to Congress on the Costs and Benefits of
Regulations and Unfunded Mandates on State, Local, and Tribal Entities, January 2009, pp. 77-81; OMB, 2009 Report
to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities,
January 27, 2010, pp. 62-65; OMB, 2010 Report to Congress on the Benefits and Costs of Federal Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, July 20, 2010, pp. 73-79; OMB, 2011 Report to Congress on
the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, June 24, 2011,
pp. 94-98; OMB, 2012 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on
State, Local, and Tribal Entities, April 2013, pp. 101-104; OMB, 2013 Report to Congress on the Benefits and Costs of
Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, May 2014, pp. 79-83; OMB, 2014
Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal
Entities, June 2015, pp. 73-77; OMB, 2015 Report to Congress on the Benefits and Costs of Federal Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, March 2016, pp. 73-76; OMB, 2016 Draft Report to Congress
on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act,
December 23, 2016, pp. 56-60; OMB, 2017 Report to Congress on the Benefits and Costs of Federal Regulations and
Agency Compliance with the Unfunded Mandates Reform Act, December 9, 2019, pp. 68-74; and OMB, 2018, 2019,
2020 Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded
Mandates Reform Act, no date provided, pp. 46, 47.
The 20 major rules with public-sector mandates, 11 issued by the U.S. Environmental Protection
Agency (EPA), are as follows:
EPA’s Rule on Standards of Performance for Municipal Waste Combustors and
Emissions Guidelines (1995), with estimated costs of $320 million annually;104
104 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, January 2007, pp. 18-19.
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EPA’s Standards of Performance for New Stationary Sources and Guidelines for
Control of Existing Sources: Municipal Solid Waste Landfills (1996), with
estimated costs of $110 million annually;105
EPA’s National Primary Drinking Water Regulations: Disinfectants and
Disinfection Byproducts (1998), with estimated costs of $700 million
annually;106
EPA’s National Primary Drinking Water Regulations: Interim Enhanced Surface
Water Treatment (1998), with estimated costs of $300 million annually;107
EPA’s National Pollutant Discharge Elimination: System B Regulations for
Revision of the Water Pollution Control Program Addressing Storm Water
Discharges (1999), with estimated costs of $803.1 million annually;108
EPA’s National Primary Drinking Water Regulations; Arsenic and Clarifications
to Compliance and New Source Contaminants Monitoring (2001), with estimated
costs of $189 million to $216 million annually;109
U.S. Department of Health and Human Services’ (DHHS’s) Standards for
Privacy of Individually Identifiable Health Information (2001), with estimated
costs of $2.4 billion over 10 years;110
EPA’s Establishing Location, Design, Construction, and Capacity Standards
for Cooling Water Intake Structures at Large Existing Power Plants
(FY2004), with estimated costs totaling about $265 million annually;111
EPA’s Rulemaking on Section 126 Petition from North Carolina to Reduce
Interstate Transport of Fine Particulate Matter and Ozone (FY2005), with
estimated costs totaling more than $110 million;112
EPA’s National Primary Drinking Water Regulations: Long Term 2 Enhanced
Surface Water Treatment (FY2006), with estimated costs between $80 million
and $130 million per year;113
105 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, p. 19.
106 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, p. 19.
107 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, p. 19.
108 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, p. 20.
109 OMB, 2011 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, June 24, 2011, p. 33.
110 OMB, Making Sense of Regulation: 2001 Report to Congress on the Costs and Benefits of Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, December 2001, p. 191.
111 OMB, Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Regulations and
Unfunded Mandates on State, Local, and Tribal Entities, December 2005, p. 147.
112 OMB, 2006 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, January 2007, p. 141.
113 OMB, 2011 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, June 24, 2011, p. 33.
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EPA’s National Primary Drinking Water Regulations: Stage 2 Disinfection
Byproducts Rule (FY2006), with estimated costs of at least $100 million
annually;114
U.S. Department of Health and Human Services’ (DHHS’s) Health Insurance
Reform; Modifications to the Health Insurance Portability and Accountability Act
(HIPAA) Electronic Transaction Standards (FY2009), with estimated costs of
$1.1 billion per year;115
EPA’s National Emission Standards for Hazardous Air Pollutants from Coal- and
Oil-Fired Electric Utility Steam Generating Units and Standards for Performance
for Electric Utility Steam Generating Units (FY2012), with estimated costs of
$8.2 billion annually;116
U.S. Department of Agriculture’s (USDA’s) Nutrition Standards in the National
School Lunch and School Breakfast Programs (FY2012, FY2013, and FY2016),
with estimated costs of $479 million annually in 2012. CBO was unable to fully
quantify the rule’s costs in FY2013 and FY2016;117 and
DHHS’s Patient Protection and Affordable Care Act; Benefit and Payment
Parameters for 2014 (issued in FY2013), 2015 (issued in FY2014), 2016 (issued
in FY2015), and 2017 (issued in FY2016).118 Although DHHS was unable to
quantify the user fees that will be associated with these three rules, CBO found
that the combined administrative cost and user fee impact for each of them may
be high enough to constitute a state, local, or tribal government mandate (or a
private-sector mandate) under UMRA.119
114 OMB, 2016 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance
with the Unfunded Mandates Reform Act, December 23, 2016, pp. 34-35.
115 OMB, 2010 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, July 2010, pp. 77-78.
116 OMB, 2013 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, May 2014, p. 80.
117 OMB, 2013 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, p. 80.
118 OMB, 2016 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance
with the Unfunded Mandates Reform Act, December 23, 2016, p. 36; and OMB, 2018, 2019, 2020 Draft Report to
Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates
Reform Act, December 23, 2019, p. 14.
119 The Department of Health and Human Services’ Standards for Privacy of Individually Available Health
Information, issued in 2001, was identified by CBO as costing state and local governments $240 million annually, but
the rule was later determined not to be an enforceable duty as defined under UMRA. The Department of Homeland
Security’s (DHS’s) Chemical Facility Anti-Terrorism Standards Rule, issued in 2007, was identified as having the
potential to require certain municipalities that own and/or operate power generating facilities to purchase security
enhancements. However, DHS was unable to determine whether the rule would impose an enforceable duty on state
and local governments of $100 million or more (adjusted for inflation) in any one year. OMB includes the rule as a
state and local government mandate meeting UMRA’s requirements “for the sake of completeness.” The Department of
Labor’s Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and
Computer Employees (FY2016 and FY2019) revised and indexed for inflation salary thresholds for determining
overtime requirements for salaried workers. CBO found that employee enumeration impacts and compliance costs were
estimated to be well over $100 million annually and that, in addition to private sector industries, some local
government entities will be substantially affected by the rule.
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Impact on the Rulemaking Process
In 1997, Senators Fred Thompson and John Glenn, chair and ranking minority member of the
Senate Committee on Governmental Affairs, respectively, asked GAO to review federal agencies’
implementation of UMRA’s Title II. On February 4, 1998, GAO issued its report, concluding that
“our review of federal agencies’ implementation of Title II of UMRA indicates that this title of
the act has had little direct effect on agencies’ rulemaking actions during the first 2 years of its
implementation.”120
GAO concluded that Title II had limited impact on agencies’ rulemaking primarily because of its
limited coverage. For example, GAO noted that written mandate cost estimate statements were
not on file at CBO for 80 of the 110 economically significant rules published in the Federal
Register between March 22, 1995, and March 22, 1997. GAO examined the 80 economically
significant rules that lacked a written mandate cost estimate statement and concluded that UMRA
did not require a written mandate cost estimate statement for 78 of them because the rule either
did not have an associated notice of proposed rulemaking (18 instances); did not impose an
enforceable duty (3 instances); imposed such a duty but only as a condition of federal assistance
(33 instances); imposed such a duty but only as part of a voluntary program (11 instances); did
not involve an expenditure of $100 million in any single year by the private sector or by state,
local, and tribal governments (12 instances); or incorporated requirements specifically set forth in
law (1 instance). GAO concluded that written mandate cost estimate statements should have been
filed at CBO for two of the rules that lacked one, but, in both instances, the rules appeared to
satisfy UMRA’s written statement requirements.121
Even where UMRA applied, GAO concluded that the act did not appear to have had much effect
on federal agencies’ rulemaking actions because UMRA does not require agencies to take the
actions required in the statute if the agencies determine that the actions are duplicative of other
actions or that accurate estimates of the rule’s future compliance costs are not feasible.122 Because
federal agencies’ rules commonly contain an estimate of compliance costs, GAO found that most
agencies rarely prepared a separate UMRA written cost estimate statement. Moreover, Executive
Order 12866, which was issued more than a year before UMRA’s enactment, already required
federal agencies to provide OIRA with assessments of the costs and benefits of all economically
significant rules. GAO also concluded that UMRA did not substantially change agencies’
intergovernmental consultation processes.123
In 2001, OMB’s director, Mitchell L. Daniels Jr., acknowledged at a House hearing coinciding
with UMRA’s fifth anniversary that UMRA’s Title II had not resulted in major changes in federal
agency rulemaking. He noted that, according to OMB’s five annual reports to Congress on the
implementation of Title II, 80 rules had required the preparation of a separate written mandate
cost estimate statement (see Table 4). He said that “it was hard to believe that only 80 regulations
had significant impacts on state, local, or tribal governments, or the private sector. In fact, it
appears that agencies have attempted to limit their consultative processes, and ignored potential
alternative remedies, by aggressively utilizing the exemptions outlined by the Act.”124 He added
120 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, GAO-GDD-98-30,
February 4, 1998, p. 29, at http://www.gao.gov/assets/230/225165.pdf.
121 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, pp. 12-16.
122 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, p. 28.
123 GAO, Unfunded Mandates: Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, pp. 21, 22.
124 Joint Hearing, U.S. Congress, House Committee on Government Reform, Subcommittee on Energy Policy, Natural
Resources and Regulatory Affairs, and House Committee on Rules, Subcommittee on Technology and the House,
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that “when agencies fail to solicit or consider the views of states and localities, they deny
themselves the benefit of state and local innovation and experience. This will not be accepted
practice in this [George W. Bush] Administration.”125
In 2004, GAO released a second study of UMRA’s implementation of Title II (and the first for
Title I), focusing on statutes enacted and rules published during 2001 and 2002. GAO found that
5 of 377 statutes enacted and 9 of 122 major or economically significant final rules issued in 2001
or 2002 were identified as containing federal mandates at or above UMRA’s thresholds.126 GAO
concluded its report by stating that “the findings raise the question of whether UMRA’s
procedures, definitions, and exclusions adequately capture and subject to scrutiny federal
statutory and regulatory actions that might impose significant financial burdens on affected
nonfederal parties.”127
As noted, in 2005, GAO sought and received input from participating parties about UMRA’s
strengths and weaknesses and potential options for reinforcing the strengths or addressing the
weaknesses. It also held a symposium on federal mandates to examine those identified strengths
and weaknesses in more depth.128 Although the symposium’s participants viewed UMRA’s
coverage as its most significant issue, GAO reported that comments received concerning federal
agency consultation with state and local governments under Title II “focused on the quality of
consultations across agencies, which was viewed as inconsistent” and that “a few parties
commented that UMRA had improved consultation and collaboration between federal agencies
and nonfederal levels of government.”129
At a Senate hearing held on April 14, 2005, OIRA’s director, John Graham, testified that OMB
includes summaries of agency consultations with state and local government officials in its
annual report to Congress and that “this year’s report shows an increased level of engagement.”130
He added that there were “some very good examples of consultation that are documented in that
report at the Department of Education, the Environmental Protection Agency and so forth, but I
think that it would be fair to say that those best practices are not necessarily uniform across the
federal government or across any particular agency.”131 State and local government officials
Unfunded Mandates: A Five Year Review and Recommendations for Change, hearing on the Unfunded Mandates
Reform Act of 1995, 107th Cong., 1st sess., May 24, 2001, H. Hrg. 107-19 (Washington: GPO, 2001), p. 40.
125 Joint Hearing, U.S. Congress, House Committee on Government Reform, Subcommittee on Energy Policy, Natural
Resources and Regulatory Affairs, and House Committee on Rules, Subcommittee on Technology and the House,
Unfunded Mandates: A Five Year Review and Recommendations for Change, p. 40.
126 GAO, Unfunded Mandates: Analysis of Reform Act Coverage, GAO-04-637, May 12, 2004, pp. 4, 28-33, at
http://www.gao.gov/new.items/d04637.pdf.
127 GAO, Unfunded Mandates: Analysis of Reform Act Coverage, pp. 36, 37.
128 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, pp. 3, 4, at http://www.gao.gov/new.items/d05454.pdf.
129 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
p. 20.
130 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia, Passing the Buck: A Review of the
Unfunded Mandates Reform Act, hearing on the Unfunded Mandates Reform Act, 109th Cong., 1st sess., April 14, 2005,
S. Hrg. 109-82 (Washington: GPO, 2005), p. 52.
131 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia, Passing the Buck: A Review of the
Unfunded Mandates Reform Act, p. 16.
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testifying at the hearing stated that federal agency consultation had improved somewhat, but
remained “sporadic.”132
Congressional Issues for Title II
Exemptions and Exclusions
State and local government public interest groups continue to advocate a broadening of Title II’s
coverage. For example, as mentioned, they advocate a broader definition of what UMRA
considers a mandate, under the presumption that a broader definition would subject more rules to
Title II. An alternative approach would be to separate debates concerning the definition of
“mandate” and UMRA’s coverage, and, instead, apply Title II’s information requirements to
whatever classes of federally induced costs Congress deems appropriate to cover. This approach
might be implemented by incorporating coverage of various kinds of “federally induced costs,”
adopting the terminology proposed earlier by ACIR. In either case, inasmuch as Title II’s
requirements are informational only, their extension to new classes of regulations, or to new kinds
of federally induced costs, would not affect the authority of agencies to issue regulations or the
substance of the regulations that could be issued.
As mentioned, UMRA’s threshold for federal mandates in rules is limited to expenditures, in
contrast to the thresholds in Title I that refer to direct costs. H.R. 701, the Unfunded Mandates
Information and Transparency Act of 2021, and S. 170, its Senate companion bill, would broaden
UMRA’s coverage to include both direct and “reasonably foreseeable” indirect costs, such as
revenues lost due to a major rule. The bills also would make private-sector mandates subject to a
substantive point of order and remove UMRA’s exemption for rules issued by most independent
agencies.
State and local government advocacy groups have also argued that Title II should apply to rules
issued by independent regulatory agencies.133 Although OMB does not review rules issued by
independent regulatory agencies, in recent years it has included information concerning
independent regulatory agency rules in its annual UMRA report to Congress. According to those
reports, independent regulatory agencies issued 312 major rules from FY1997 through
FY2019.134 As mentioned, H.R. 701 and S. 170 would remove UMRA’s exemption for rules
issued by most independent agencies.135
132 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia, Passing the Buck: A Review of the
Unfunded Mandates Reform Act, pp. 22, 23, 27.
133 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia, Passing the Buck: A Review of the
Unfunded Mandates Reform Act, hearing on the Unfunded Mandates Reform Act, 109th Cong., 1st sess., April 14, 2005,
S. Hrg. 109-82 (Washington: GPO, 2005), pp. 112-126, 167-174.
134 OMB, 2007 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, June 2008, p. 16; OMB, 2014 Report to Congress on the Benefits and Costs of Federal
Regulations, June 2015, p. 106; OMB, 2017 Draft Report to Congress on the Benefits and Costs of Federal Regulations
and Agency Compliance with the Unfunded Mandates Reform Act, February 23, 2018, pp. 90, 91; and OMB, 2018,
2019, 2020 Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the
Unfunded Mandates Reform Act, no date provided, pp. 4, 19.
135 Both bills would retain the exemption for rules that concern monetary policy proposed or implemented by the Board
of Governors of the Federal Reserve System, the Federal Open Market Committee, or the Bureau of Consumer
Financial Protection.
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The National Association of Counties (NACO) and other state and local government public
interest groups have also advocated a strengthening of OMB’s role in the enforcement of Title II
to ensure consistent application of UMRA’s provisions across federal agencies.136 For example,
NCSL’s current policy statement on unfunded mandates recommends that UMRA be amended to
include “the creation of an office within the Office of Management and Budget that is analogous
to the State and Local Government Cost Estimates Unit at the Congressional Budget Office.”137
Business organizations, led by the U.S. Chamber of Commerce, also have advocated an
independent review of federal agency cost estimates, recommending that the reviews be
conducted by OMB or GAO. They also have advocated the permitting of early judicial challenges
to an agency’s failure to complete an UMRA cost estimate statement or for completing one that is
deficient.138
During the 112th Congress, H.R. 214, the Congressional Office of Regulatory Analysis Creation
and Sunset and Review Act of 2011, would have created a Congressional Office of Regulatory
Analysis.139 The bill included a provision that would have transferred from CBO’s director to the
director of the proposed Congressional Office of Regulatory Analysis the responsibility to
compare federal agency estimates of the cost of regulations implementing an act containing a
federal mandate with the CBO’s estimate of those costs. The Congressional Office of Regulatory
Analysis would also have received federal agency statements that accompany significant
regulatory actions.
As mentioned, organizations representing various environmental and social groups have argued
that UMRA has achieved its stated goals of strengthening the partnership between the federal
government and state, local, and tribal governments by promoting informed and deliberate
decisions by Congress on the appropriateness of federal mandates. In their view, broadening
UMRA’s coverage would dilute its impact. For example, a participant at GAO’s 2005 symposium
on federal mandates argued that eliminating any of UMRA’s exclusions and exemptions might
make the identification of mandates less meaningful, saying “The more red flags run up, the less
important the red flag becomes.”140 Also, some of the participants at the symposium from the
academic, policy research institute, and public interest advocacy sectors argued that it was
essential that some of the existing exclusions, such as those dealing with constitutional and
statutory rights barring discrimination against various groups, be retained. They also advocated
136 U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of
Government Management, the Federal Workforce, and the District of Columbia, Passing the Buck: A Review of the
Unfunded Mandates Reform Act, hearing on the Unfunded Mandates Reform Act, 109th Cong., 1st sess., April 14, 2005,
S. Hrg. 109-82 (Washington: GPO, 2005), p. 124.
137 National Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at
http://www.ncsl.org/Default.aspx?TabID=773&tabs=855,20,632#FederalMandate.
138 Joint Hearing, U.S. Congress, House Committee on Government Reform, Subcommittee on Energy Policy, Natural
Resources and Regulatory Affairs, and House Committee on Rules, Subcommittee on Technology and the House,
Unfunded Mandates: A Five Year Review and Recommendations for Change, hearing on the Unfunded Mandates
Reform Act of 1995, 107th Cong., 1st sess., May 24, 2001, H. Hrg. 107-19 (Washington: GPO, 2001), pp. 80, 88, 89.
139 H.R. 214, the Congressional Office of Regulatory Analysis Creation and Sunset and Review Act of 2011, was
introduced on January 7, 2011, and referred to the House Committee on the Judiciary and House Committee on
Oversight and Government Reform. The bill was later referred to the House Committee on the Judiciary’s
Subcommittee on Courts, Commercial and Administrative Law and the House Committee on Oversight and
Government Reform’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending.
140 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
GAO-05-454, March 31, 2005, p. 13, at http://www.gao.gov/new.items/d05454.pdf.
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additional exclusions to include federal actions regarding public health, safety, environmental
protection, workers’ rights, and the disabled.141
Federal Agency Consultation Requirements
State and local government public interest groups assert that enhanced requirements for federal
agency consultation with state and local government officials during the rulemaking process are
needed.142 For example, the NCSL has asserted that federal agency “consultation with state and
local governments in the construction of these rules is haphazard.”143 It recommends that Title II
be amended to include “enhanced requirements for federal agencies to consult with state and local
governments.”144
OMB asserts that “federal agencies have been actively consulting with states, localities, and tribal
governments in order to ensure that regulatory activities were conducted consistent with the
requirements of UMRA.”145 In addition, OMB notes that it has had guidelines in place since
September 21, 1995, to assist federal agencies in complying with the act.146 The current
guidelines suggest that (1) intergovernmental consultations should take place as early as possible,
beginning before issuance of a proposed rule and continuing through the final rule stage, and be
integrated explicitly into the rulemaking process; (2) agencies should consult with a wide variety
of state, local, and tribal officials; (3) agencies should estimate direct benefits and costs to assist
with these consultations; (4) the scope of consultation should reflect the cost and significance of
the mandate being considered; (5) effective consultation requires trust and significant and
sustained attention so that all who participate can enjoy frank discussion and focus on key
priorities; and (6) agencies should seek out state, local, and tribal views on costs, benefits, risks,
and alternative methods of compliance, and whether the federal rule will harmonize with and not
duplicate similar laws in other levels of government.147
OMB often includes summaries of selected consultation activities by agencies whose actions
affect state, local, and tribal governments in its annual draft and final UMRA reports to Congress.
OMB has argued that the summaries are an indication that federal agencies are complying with
the act. For example, in OMB’s final 2015 UMRA report to Congress, OMB wrote in the
introduction to these summaries:
Four agencies subject to UMRA (the Departments of Energy, Health and Human Services,
Interior, and Labor) provided examples of consultation activities that involved State, local,
and tribal governments not only in their regulatory processes, but also in their program
planning and implementation phases. These agencies have worked to enhance the
141 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
p. 13.
142 National Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at
http://www.ncsl.org/Default.aspx?TabID=773&tabs=855,20,632#FederalMandate.
143 National Conference of State Legislatures, “Policy Position on Federal Mandate Relief,” effective through August
2011.
144 National Conference of State Legislatures, “State and Federal Budgeting: Federal Mandate Relief,” at
http://www.ncsl.org/Default.aspx?TabID=773&tabs=855,20,632#FederalMandate.
145 OMB, 2011 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities, June 24, 2011, p. 93.
146 OMB, Agency Compliance with Title II of the Unfunded Mandates Reform Act of 1995: 4 th Annual Report to
Congress from the Director of the Office of Management and Budget, October 1999, p. 2.
147 OMB, 2015 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, March 2016, p. 73.
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regulatory environment by improving the way in which the Federal Government relates to
its intergovernmental partners. Many of the departments and agencies not listed here (i.e.,
the Departments of Justice, State, Treasury, and Veterans Affairs, the Small Business
Administration, and the General Services Administration) do not often impose mandates
upon States, localities, or tribes, and thus have fewer occasions to consult with these
governments. Other agencies, such as the National Archives and Records Administration,
are exempt from UMRA’s reporting requirements, but may nonetheless engage in
consultation where their activities would affect State, local, and Tribal governments.
As the following descriptions indicate, Federal agencies conduct a wide range of
consultations. Agency consultations sometimes involve multiple levels of government,
depending on the agency’s understanding of the scope and impact of its rule or policy.148
As mentioned, H.R. 701 and S. 170 would require federal agencies to enhance their consultation
with UMRA stakeholders.
Concluding Observations
In 1995, UMRA’s enactment was considered an historic, milestone event in the history of
American intergovernmental relations. For example, when signing UMRA, President Bill Clinton
said,
Today, we are making history. We are working to find the right balance for the 21 st century.
We are recognizing that the pendulum had swung too far, and that we have to rely on the
initiative, the creativity, the determination, and the decisionmaking of people at the State
and local level to carry much of the load for America as we move into the 21 st century.149
Since UMRA’s enactment, parties participating in its implementation and researchers in the
academic community, policy research institutes, and nonpartisan government agencies have
reached different conclusions concerning the extent of UMRA’s impact on intergovernmental
relations and whether UMRA should be amended. State and local government officials and
federalism scholars generally view UMRA as having a limited, though positive, impact on
intergovernmental relations. In their view, the federal government has continued to expand its
authority through the “carrots” of increased federal assistance and the “sticks” of grant
conditions, preemptions, mandates, and administrative rulemaking. Facing what they view as a
seemingly ever growing federal influence in American governance, they generally advocate a
broadening of UMRA’s coverage to enhance its impact, emphasizing the need to include
conditions of grant assistance and a broader range of federal agency rulemaking, including rules
issued by independent regulatory agencies.
Other organizations, representing various environmental and social groups, argue that UMRA’s
coverage does not need to be broadened. In their view, UMRA has accomplished its goals of
fostering improved intergovernmental relations and ensuring that when Congress votes on major
federal mandates it is aware of the costs imposed by the legislation. They assert that UMRA’s
current limits on coverage should be maintained or reinforced by adding exclusions for mandates
regarding public health, safety, workers’ rights, environmental protection, and the disabled.150
148 OMB, 2015 Report to Congress on the Costs and Benefits of Regulations and Unfunded Mandates on State, Local,
and Tribal Entities, p. 99.
149 President Bill Clinton, “Remarks on Signing the Unfunded Mandates Reform Act of 1995,” Weekly Compilation of
Presidential Documents, vol. 31, no. 12 (March 22, 1995), p. 455.
150 GAO, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement,
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During the 111th Congress, UMRA received increased attention as Congress considered various
proposals to reform health care. Governors, for example, expressed opposition to proposals that
would have required states to contribute toward the cost of expanding Medicaid eligibility,
asserting that the expansion could inflate state deficits and impose on states what Tennessee
Governor Philip Bredesen reportedly described as the “mother of all unfunded mandates.”151 As
mentioned, at that time, CBO had determined that UMRA provisions did not apply to Medicaid’s
conditions of federal assistance because, in its view, states had “significant flexibility to make
programmatic adjustments in their Medicaid programs to accommodate” new federal
requirements.152 Following the Supreme Court’s ruling in National Federation of Independent
Business (NFIB) v. Sebelius (June 28, 2012), CBO indicated that UMRA’s provisions may apply
to changes in “the stringency of conditions” or reductions in funding for “certain large mandatory
programs … if the affected governments lack the flexibility to alter the programs.”153
As discussed, H.R. 701 and S. 170 would
require federal agencies to prepare and publish in the Federal Register an initial
and final regulatory impact analysis before promulgating any proposed or final
major rule. This would prevent federal agencies from forgoing an UMRA
analysis by publishing a major rule without first issuing a notice of proposed
rulemaking;
require federal agencies to meet enhanced levels of consultation with state, local,
and tribal governments and the private sector before issuing a notice of proposed
rulemaking or a final rule;
require the initial and final regulatory impact analysis to provide a description of
the agency’s consultation with elected representatives of each affected state,
local, or tribal government and examine, among other things: (1) the rule’s
anticipated costs and benefits; (2) a reasonable number of regulatory alternatives,
including those that require no federal action, use incentives and market-based
means to encourage the desired behavior, and permit the greatest flexibility in
achieving the rule’s objectives; (3) any disproportionate budgetary effects on any
region, state, local, or tribal government, type of community, including urban or
rural communities, or specific segments of the private sector; and (4) the rule’s
effect on job creation or loss;
require federal agencies to select the regulatory alternative that maximizes net
benefits, taking into consideration only the costs and benefits that arise within the
scope of the statutory provision that authorizes the rulemaking;
broaden UMRA’s coverage to include assessments of indirect as well as direct
costs by amending the definition of costs to include any reasonably foreseeable
indirect costs, including revenues lost as a result of a major rule;
GAO-05-454, March 31, 2005, pp. 5-7, 9-14, at http://www.gao.gov/new.items/d05454.pdf.
151 Robert Pear and David M. Herszenhorn, “Senators Hear Concerns Over Costs of Health Proposal,” The New York
Times, August 6, 2009, at http://www.nytimes.com/2009/08/07/health/policy/07health.html?hpw; Clifford Krauss,
Governors Fear Added Costs in Health Care Overhaul, The New York Times, August 6, 2009, at
http://www.nytimes.com/2009/08/07/business/07medicaid.html; and Chas Sisk, “Tennessee Gov. Bredesen takes lead
role in fight over health costs,” The Tennessean, August 18, 2009.
152 CBO, “Cost Estimate for the Patient Protection and Affordable Care Act,” November 18, 2009, p. 18, at
http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf.
153 CBO, “CBO’s Activities Under the Unfunded Mandates Reform Act,” at https://www.cbo.gov/publication/51335.
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expand the scope of reporting requirements to include regulations imposed by
most independent regulatory agencies; and
make private-sector mandates subject to a substantive point of order.
Advocates argue that these reforms will “improve the quality of congressional deliberations and
... enhance the ability of Congress, federal agencies, and the public to identify federal mandates
that may impose undue harm on state, local, and tribal governments and the private sector.”154
Opponents argue that these reforms are “an assault on the nation’s health, safety, and
environmental protections, would erect new barriers to unnecessarily slow down the regulatory
process, and would give regulated industries an unfair advantage to water down consumer
protections.”155
Underlying disagreements over UMRA’s future are fundamentally different values concerning
American federalism. One view emphasizes the importance of freeing state and local government
officials from the constraints brought about by the directives and costs associated with federal
mandates so they can experiment with innovative ways to achieve results with greater efficiency
and cost effectiveness. This view focuses on the positive effect active state and local governments
can have in promoting a sense of state and community responsibility and self-reliance,
encouraging participation and civic responsibility by allowing more people to become involved in
public questions, adapting public programs to state and local needs and conditions, and reducing
the political turmoil that sometimes results from single policies that govern the entire nation.156
Another view emphasizes the federal government’s responsibility to ensure that all citizens are
afforded minimum levels of essential government services. This view focuses on the propensity
of states to restrict governmental services because they compete with one another for businesses
and taxpaying residents; the variation in state fiscal capacities that makes it difficult for some
states to provide certain governmental services even though they might have the political will to
do so; and the propensity of states to have different views concerning what services are essential
and what constitutes a sufficient level of essential government services.157
Given these disagreements over fundamental values, it is perhaps not surprising that there are
differences of opinion concerning UMRA’s future. Using President Clinton’s words, debates over
UMRA’s future are more than just arguments over who will pay for what; they are also about
finding “the right balance” for American federalism in the 21st century.
154 U.S. Congress, House Committee on Oversight and Government Reform, Unfunded Mandates Information and
Transparency Act of 2015, report to accompany H.R. 50, 114th Cong., 1st sess., February 2, 2015, H.Rept. 114-11
(Washington: GPO, 2015), p. 2.
155 U.S. Congress, House Committee on Oversight and Government Reform, Unfunded Mandates Information and
Transparency Act of 2015, p. 37.
156 Thomas R. Dye, Understanding Public Policy, 6th edition (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1987), p.
301.
157 Thomas R. Dye, Understanding Public Policy, p. 300; ACIR, Categorical Grants: Their Role and Design
(Washington, DC: ACIR, 1978), pp. 50-58; and Claude E. Barfield, Rethinking Federalism: Block Grants and Federal,
State, and Local Responsibilities (Washington, DC: American Enterprise Institute, 1981), pp. 4-8.
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Appendix A. The Rise of Unfunded Mandates as a
National Issue
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