March 31, 2011
The federal government—through laws and regulations—sometimes imposes requirements on state, local, and tribal governments and entities in the private sector to achieve national goals. In 1995, the Congress passed and the President signed the Unfunded Mandates Reform Act (UMRA) to ensure that, during the legislative process, the Congress receives information about such proposed requirements, known as federal mandates, and their costs before enacting a piece of legislation.
UMRA defines a legislative provision as a mandate if that provision, when enacted, would
- Impose an enforceable duty on state, local, or tribal governments or on private-sector entities;
- Reduce or eliminate funding authorized to cover the costs of complying with existing mandates; or
- Increase the stringency of conditions that apply to the distribution of funds through certain mandatory programs or make cuts in federal funding for those programs, if public recipients of those funds lack flexibility to alter the programs.
Duties imposed as conditions of federal assistance or requirements tied to participating in voluntary federal programs, such as programs that require entities to have licenses for grazing livestock on federal land, generally are not considered mandates as defined in UMRA.
UMRA established procedures for providing information to the Congress about proposed federal mandates. The law requires the Congressional Budget Office (CBO) to prepare mandate statements for bills that are approved by authorizing committees. In those statements, CBO must state whether the bill contains any mandates, address whether the direct costs of such mandates would be greater than the statutory thresholds established in UMRA, and identify any funding that the bill would provide to cover those costs. In 2010, the thresholds, which are adjusted annually for inflation, were $70 million for intergovernmental mandates and $141 million for private-sector mandates. If the total direct costs of all mandates in the bill would exceed the statutory threshold in any of the first five fiscal years in which the mandates would be in effect, CBO must provide an estimate of those costs (if feasible) and the basis of its estimate. In some cases, CBO cannot estimate the cost of a mandate—particularly when much of its impact would depend on the nature of the implementing regulations that would be promulgated by federal agencies. If CBO cannot estimate the cost of a mandate, its statement must indicate that such an estimate is not feasible and explain why.
Direct costs are defined in UMRA as amounts that the private sector or state, local, and tribal governments would be required to spend to comply with the enforceable duty, including amounts that states, localities, or tribes "would be prohibited from raising in revenues." Direct costs exclude amounts that those entities would spend to comply with applicable laws, regulations, or professional standards in effect when the federal mandate is adopted. In addition, such costs are limited to spending that would result directly from the enforceable duty imposed by the legislation rather than from the legislation's broad effects on the economy.
Not all legislation is subject to UMRA's requirements. In enacting that law, the Congress recognized that instances might arise in which budgetary considerations—such as who would bear the costs that a law might impose—should not be a key part of the debate about a legislative proposal. Thus, UMRA excludes from its procedures bills and other legislation that, for example, deal with constitutional or statutory rights, implement international treaty obligations, are necessary for national security, or alter provisions of the Social Security Act related to oldage, survivors', or disability benefits. (For further details, see Appendix A, which outlines UMRA's key provisions as they apply to CBO.)
In addition to the procedures UMRA established for providing information to the Congress, the law also lays out procedural rules for the House of Representatives and the Senate to encourage Members to take information about mandates into account when they consider legislation. Those rules are enforced through the use of points of order. A point of order can be raised in the House or Senate against the consideration of legislation if the committee reporting a bill has not published a statement by CBO on intergovernmental and private-sector mandates. In addition, Members of Congress may raise a point of order against legislation that seeks to impose an intergovernmental mandate whose costs exceed the threshold, unless the legislation authorizes or provides funding to cover those costs. If a point of order is raised under UMRA, each chamber resolves the issue according to its established rules and procedures.
CBO prepares a mandate statement for most of the legislation considered by the Congress. In most cases, that statement is prepared after a committee has approved legislation but before the legislation has been considered on the floor of the House or the Senate. Upon request, the agency also provides mandate statements for proposed floor amendments and some conference reports. In some instances, though, as noted in the tables in this report, CBO does not review a mandate before its enactment. That situation may occur when legislation is passed without being considered by a committee; when, after CBO's review, a bill is amended on the floor or in conference to include a provision that contains a mandate; or, in some cases, when a mandate is included in one of the appropriation bills, which CBO does not routinely review for mandates because UMRA does not apply to such bills.
The number of bills or other legislative proposals that contain mandates and the number of individual mandates that appear in proposed legislation generally differ. Because the House and the Senate may consider the same or similar mandates in more than one piece of legislation, the number of bills that contain mandates can exceed the number of individual mandates considered by the Congress in any given year. Conversely, because one bill may contain several mandates, the number of mandates can exceed the number of bills.
The tables in this report identify mandates in public laws enacted during calendar year 2010 and in other legislation considered by the Congress in 2010:
- Table 1 is a tally of mandates in public laws enacted between 2006 and 2010.
- Table 2 is a tally of the mandate statements CBO transmitted between 2006 and 2010.
- Tables 3 and 4 list laws enacted in 2010 that contain intergovernmental and privatesector mandates, respectively.
- Tables 5 and 6 list intergovernmental and private-sector mandates, respectively, that CBO reviewed in 2010 whose costs would exceed UMRA's thresholds or could not be determined.
- Tables 7 and 8 list the bills and proposals CBO reviewed in 2010 that contained intergovernmental and private-sector mandates, respectively.
All of the data in this report are for calendar years. (Although data for spending and receipts in the budget are presented for fiscal years, which run from October 1 through September 30, Congressional legislative sessions generally follow the calendar year; thus, data on CBO's cost estimates and mandate statements are presented as calendar year totals.)
Most of the legislation considered by the Congress in 2010 contained no mandates as defined in UMRA. Of the 474 bills and other legislative proposals reviewed by CBO, 14 percent (64 bills) contained intergovernmental mandates and 18 percent (85 bills) contained privatesector mandates. Moreover, most of the mandates that CBO examined in 2010 would not have imposed costs that exceeded the annual thresholds set by UMRA. Less than 1 percent (3 bills) had intergovernmental mandates with costs higher than the $70 million annual threshold, and 1 percent (7 bills) had mandates whose costs could not be determined. Similarly, CBO estimated that only about 3 percent (14) of the bills reviewed by CBO in 2010 contained private-sector mandates that would have imposed costs greater than the $141 million annual threshold. For 5 percent (23 bills), CBO could not determine whether the costs of their mandates would have exceeded the private-sector threshold.
Similarly, in the 15 years since the enactment of UMRA, most of the legislation considered by the Congress contained no mandates. Of the roughly 8,500 bills and other legislative proposals that CBO reviewed between 1996 and 2010, about 13 percent contained intergovernmental mandates, and about 16 percent contained private-sector mandates (see Figure 1). Also during that period, about 1 percent of the bills contained intergovernmental mandates whose aggregate costs exceeded the annual threshold established in UMRA, and less than 1 percent had aggregate costs that could not be estimated. For private-sector mandates, about 4 percent of the bills contained mandates with aggregate costs above the annual threshold, and 2 percent contained mandates whose aggregate costs to the private sector could not be estimated.
Two public laws enacted in 2010 contained intergovernmental mandates—a total of 7 mandates—with costs that CBO estimates will exceed the statutory threshold: the Patient Protection and Affordable Care Act (Public Law 111-148) and the Healthy, Hunger-Free Kids Act of 2010 (Public Law 111-296). In the 15 years since the enactment of UMRA, only 13 new laws have contained intergovernmental mandates with costs estimated to exceed the threshold.
Over the 15-year period, legislation enacted by the Congress generally contained more private-sector mandates than intergovernmental mandates. Eleven public laws enacted in 2010 contained private-sector mandates—a total of 25 mandates—with costs estimated to exceed the statutory threshold. Those laws included changes to the health care system and regulation of financial institutions, among others. Since 1996, CBO has identified private-sector mandates with costs estimated to exceed the threshold in 75 public laws.