A Review of CBO's Activities in 2009 Under the Unfunded Mandates Reform Act

April 1, 2010

The federal governmentthrough laws and regulationssometimes requires state, local, and tribal governments and various entities in the private sector to expend resources to achieve national goals. In 1995, the Unfunded Mandates Reform Act (UMRA) became law, aimed at ensuring that, during the legislative process, the Congress receives information about such proposed requirements, known as federal mandates, 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.

The law requires CBO to prepare mandate statements for bills that are approved by authorizing committees. Those statements address whether the direct costs of a bills federal mandates would be greater thanthe annual thresholds specified in UMRA and identify any funding that the bill would provide to cover those costs. In a report released yesterday, CBO reviews its activities under UMRA for calendar year 2009. The report, which is published annually, covers public laws enacted and legislation considered by the Congress that would impose federal mandates on state, local, or tribal governments or on the private sector.

Most of the legislation that the Congress considered in 2009 did not contain federal mandates as defined in UMRA. Historically, CBO has reviewed an average of about 580 pieces of legislation per year and has identified intergovernmental and private-sector mandates in an average of 13 percent and 16 percent of them, respectively. In 2009, CBO reviewed fewer pieces of legislation (419) and identified about the same number of mandates as in previous years. Therefore, the percentages of bills containing intergovernmental or private-sector mandates in 2009 are slightly higher than the historical averages. Of the bills that CBO reviewed, 17 percent contained intergovernmental mandates and 25 percent contained private-sector mandates.

As in previous years, few laws enacted in 2009 contained mandates whose costs, in CBOs estimation, would exceed UMRAs thresholds. In 2009, those thresholds, which are adjusted annually for inflation, were $69 million for intergovernmental mandates and $139 million for private-sector mandates. Specifically, no laws contained intergovernmental mandates with costs estimated to exceed the threshold, and 14 laws (11 percent of the total enacted) contained private-sector mandates with such costs. Historically, CBO has identified intergovernmental mandates with costs estimated to exceed the threshold in less than 1 percent of public laws and private-sector mandates with such costs in less than 5 percent of public laws.

This report was prepared by Leo Lex, Unit Chief of CBOs State and Local Government Cost Estimates Unit, and Amy Petz, of CBOs Microeconomic Studies Division, with assistance from CBOs mandate analysts.