# Unfunded Mandates Reform Act; Intergovernmental Consultation > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A96-3113 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** February 13, 1996 - **Citation:** 61 FR 5531 ## Text DEPARTMENT OF COMMERCE Office of the Secretary [Docket No. 960129017-6017-01] RIN 0690-XX01 Unfunded Mandates Reform Act; Intergovernmental Consultation AGENCY: Department of Commerce. ACTION: Notice of proposed statement of policy. ----------------------------------------------------------------------- SUMMARY: The Department of Commerce (DOC) is publishing its Proposed Statement of Policy on Intergovernmental Consultation under the Unfunded Mandates Reform Act of 1995 for public comment. DOC's proposed policy reflects the guidelines and instructions the Director of the Office of Management and Budget (OMB) provided to each agency to develop an intergovernmental consultation process with regard to significant intergovernmental mandates contained in a notice of proposed rulemaking with input from State, local, and tribal officials. DATES: Comments on this proposed statement of policy are due on or before April 15, 1996. ADDRESSES: Comments may be submitted to the Assistant General Counsel for Legislation and Regulation, U.S. Department of Commerce, HCHB Room 5876, 14th and Constitution Avenue, N.W., Washington, D.C. 20230. FOR FURTHER INFORMATION CONTACT: Daniel Cohen, Attorney Advisor, at (202) 482-4144. SUPPLEMENTARY INFORMATION: The President signed the Unfunded Mandates Reform Act of 1995 (the Act) into law as Public Law 104-4 on March 22, 1995. Section 204(a) of the Act requires each agency to develop, to the extent permitted by law, an effective process to permit timely input by elected officers (or their designees) of State, local, and tribal governments in the development of a regulatory proposal containing a proposed ``significant intergovernmental mandate'' that is not a requirement specifically set forth in law. 2 U.S.C. 1531, 1534(a). A ``significant intergovernmental mandate'' under the Act is any provision in a Federal agency regulation that: (1) would impose an enforceable duty upon State, local, or tribal governments (except as a condition of Federal assistance); and (2) may result in the expenditure by State, local, and tribal governments, in the aggregate, of $100 million (adjusted annually for inflation) in any one year. [[Page 5532]] See 2 U.S.C. 658(5)(A)(i), 1532(a). DOC does not believe it has regulations to which the Act applies, nor does it anticipate that the legal authorities under which it promulgates regulations make future unfunded mandates, as defined in the Act, likely. Nonetheless, DOC publishes this notice and invites comments from State, local, and tribal governments, to conform fully with the spirit, intent and letter of the Act, and to have in place a process for any unfunded mandate which could affect the operations of the Department in the future. Section 204(b) of the Act excepts intergovernmental communications in certain circumstances from the requirements of the Federal Advisory Committee Act, 5 U.S.C. App. Those circumstances involve meetings: (1) exclusively between Federal officials and State, local elected officials or their designees; and (2) solely for the purposes of exchanging views, information, or advice relating to Federal programs established pursuant to a statute that explicitly or inherently provides for sharing intergovernmental responsibilities or administration. 2 U.S.C. 1534(b). Section 204(c) of the Act requires the President to issue guidelines and instructions for implementing sections 204 (a) and (b). 2 U.S.C. 1534(c). This authority was delegated to the Director of OMB who published the guidelines and instructions on September 29, 1995 (60 FR 50651). Paragraph I of the OMB guidelines and instructions provides that each agency develop, in consultation with State, local, and tribal governments, the intergovernmental consultation process required by section 204(a) of the Act. Paragraph I also calls for agencies to develop the process by making a proposal for comments by State, local and tribal governments. Accordingly, DOC is sending copies of today's proposed statement of policy to a list of elected State and local officials and of associations representing State and local governments compiled by the Deputy Assistant Secretary for Intergovernmental Affairs. To ensure that all such officials have the opportunity to participate and because there may be wider interest in DOC's process for intergovernmental consultation under the Act, DOC is also publishing this notice for public comment. Section 203 of the Act supplements section 204(a). 2 U.S.C. 1533. It requires that, prior to establishing regulatory requirements that might significantly or uniquely affect small governments, the agency shall have developed a plan that, among other things, provides for notice to potentially affected small governments, if any, and for a meaningful and timely opportunity to provide input in the development of regulatory proposals. The Act defines ``small government'' to mean any small governmental jurisdiction defined in the Regulatory Flexibility Act, 5 U.S.C. 601(5), and any tribal government. 2 U.S.C. 658(11). Both the Act and the OMB guidelines and instructions imply that agencies must make affirmative efforts to notify State, local, and tribal officials in addition to publishing a notice of proposed rulemaking in the Federal Register. Today's proposed statement of policy describes the extent and content of the pre-proposal notice and opportunity to consult. The proposed policy differentiates between State elected officials (or their designees) on the one hand and local elected officials (or their designees) on the other. DOC will attempt to send notices to the former, but the latter are so numerous that DOC proposes to give notice through appropriate associations who represent local governments, and through the Federal Register. The Act requires agencies to estimate the dollar impact of prospective Federal mandates to determine whether they exceed the $100 million annual threshold, and therefore are ``significant,'' as defined in the Act. The Act requires adjustment of the $100 million figure for inflation in years after 1995, but it is silent on: (1) how to adjust for inflation; and (2) whether and how to adjust estimated future expenditures for the time value of money. Under the proposed policy, DOC would adjust for inflation using the figures provided in the Annual Report of the President's Council of Economic Advisers, and discount to present value using OMB Circular A-94 which currently provides for 7 percent as a discount rate for government-wide use. Dated: January 30, 1996 Jane Bobbitt, Assistant Secretary for Legislative and Intergovernmental Affairs. Based of the foregoing, DOC proposes this Statement of Policy: Statement of Policy on the Process for Intergovernmental Consultation Under the Unfunded Mandates Reform Act of 1995 I. Purpose This Statement of Policy implements sections 203 and 204 of the Unfunded Mandates Reform Act of 1995 (Act), 2 U.S.C. 1533, 1534, consistent with the guidelines and instructions of the Director of the Office of Management and Budget (OMB). II. Applicability This Statement of Policy applies to the development of any regulation (other than a regulation for a financial assistance program) containing a significant intergovernmental mandate under the Act. A significant intergovernmental mandate is a mandate that: (1) would impose an enforceable duty upon State, local, or tribal governments (except as a condition of Federal assistance); and (2) may result in the expenditure by State, local, and tribal governments, in the aggregate, of $100 million (adjusted annually for inflation) in any one year. DOC officials may apply this Statement of Policy selectively if there is a need for immediate agency action that would warrant waiver of prior notice and opportunity for public comment under the Administrative Procedure Act, 5 U.S.C. 553. III. Intergovernmental Consultation When to begin. As early as practicable in the development of a notice of proposed rulemaking (for other than a financial assistance program) that involves an enforceable duty on State, local, or tribal governments, the responsible Secretarial Officer, in consultation with the Office of the General Counsel, should estimate whether the aggregate compliance expenditures will be in the amount of $100 million or more in any one year. In making such an estimate, the Secretarial Officer should adjust the $100 million figure in years after 1995 using the rate of inflation in the Annual Report of the President's Council of Economic Advisers, and should discount estimated future expenditures to present value, using the discount rate under OMB Circular A-94. Content of notice. Upon determining that a proposed regulatory mandate on State, local, or tribal governments may be a significant intergovernmental mandate, the Secretarial Officer responsible for the rulemaking should provide adequate notice to pertinent government officials: (1) describing the nature and authority for the rulemaking; (2) explaining DOC's estimate of the resulting increase in their governmental expenditure level; (3) inviting them to participate in developing the notice of proposed rulemaking by participating in meetings with DOC or by presenting their views in writing on the likely effects of the regulatory requirement or legally available policy alternatives that DOC should take into account. If the [[Page 5533]] authorizing statute for a rule requires publication of an advance notice of proposed rulemaking, then those content requirements may be addressed in that advance notice. How to notify State and tribal officials. With respect to State and tribal governments, Secretarial Officers should give notice by letter, making use of mailing lists maintained by the Deputy Assistant Secretary for Intergovernmental Affairs, that includes, among others, elected chief executives (or their designees), the National Governors Association, and the National Conference of State Legislatures. The Secretarial Officer should also publish a notice in the Federal Register. How to notify local officials. With respect to local governments, the Secretarial Officer should provide notice through the Federal Register and by letter to the following associations: the National League of Cities, the National Association of Counties, and the U.S. Conference of Mayors. If a significant intergovernmental mandate might affect local governments in a limited area of the United States, the Secretarial Officer, in consultation with the Deputy Assistant Secretary for Intergovernmental Affairs, should, if practicable, give notice by letter to appropriate local officials. Exemption from the Federal Advisory Committee Act. Secretarial Officers are encouraged to meet with elected officials (or their designees) to exchange views, information, and advice concerning the implementation of intergovernmental responsibilities or administration. Meetings for this purpose that do not include other members of the public are exempt from the Federal Advisory Committee Act. 2 U.S.C. 1534(b). Small government consultation plan. If the proposed regulatory requirements might significantly or uniquely affect small governments, as defined in the Regulatory Flexibility Act, 5 U.S.C. Sec. 601(5), then the Secretarial Officer should summarize the agency's plan for intergovernmental consultation under section 203 of the Act in the Supplementary Information section of the notice of proposed rulemaking. Unless impracticable, the plan should provide for notice by letter to potentially affected small governments. Documenting compliance. The Supplementary Information section of any notice of proposed and final rulemaking involving a significant intergovernmental mandate should describe DOC's determinations and compliance activities under the Act. The Supplementary Information section of the notice of proposed rulemaking should describe the estimated impact of such a mandate, the assumptions underlying its calculation, and the resulting determination of whether the rulemaking involves a significant intergovernmental mandate. It should discuss, as appropriate, cost and benefit estimates and any reasonable suggestions received during prior intergovernmental consultations. Any substantive pre-notice written communications on the proposed rulemaking should be described in the Supplementary Information, and should be made available for inspection in the Central Reference and Records Facility, Room 6204, Herbert Clark Hoover Building, 14th and Constitution Avenue, N.W., Washington, D.C. 20230. The final rule should contain a response to significant comments received. Reporting. Pursuant to OMB guidelines and instructions, the DOC Office of the General Counsel, with assistance from the Secretarial Officers, will prepare the annual report to OMB on compliance with the intergovernmental consultation requirements of the Act (initially due on January 15, 1996, and annually on that date thereafter). [FR Doc. 96-3113 Filed 2-12-96; 8:45 am] BILLING CODE 3510-GB-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-3113. Public record. Not legal advice.