![handle is hein.congrec/cbo10979 and id is 1 raw text is: JANUARY 2013
Private-Sector Mandates in
Federal Legislation
Summary
Federal laws and regulations sometimes require non-
federal entities to expend their resources to carry out
national policies. The Unfunded Mandates Reform Act
of 1995 (UMRA), enacted as Public Law 104-4, defines
many of those requirements as federal mandates. The law
aims to ensure that Members of Congress receive infor-
mation about the potential effects of mandates as they
consider proposed legislation and that federal agencies
take information about mandates into account as they
weigh proposed regulations. To that end, UMRA requires
the Congressional Budget Office (CBO), at certain
points in the legislative process, to assess the cost of man-
dates that would apply to state, local, and tribal govern-
ments or to the private sector; it also requires most federal
agencies to estimate those costs and other effects in the
course of promulgating regulations to implement such
mandates. This report describes CBO's role in assessing
the impact of private-sector mandates during the legis-
lative process and provides information about the private-
sector mandates that have become law during the past
decade.1
What Constitutes a Mandate Under the
Unfunded Mandates Reform Act?
UMRA defines mandates as enforceable duties, which
CBO has interpreted to include requirements for or pro-
hibitions against certain activities. Private-sector man-
dates are also defined to include any reductions in the
authorization of appropriations for federal aid to help
entities in the private sector comply with existing
mandates.2 However, conditions for receiving federal
1. For information about mandates imposed on state, local, and
tribal governments, see Congressional Budget Office, Iter
g ove? nental M andates in Fedeai fe iationi (July 2009), and
Preefiptions in Federal fLieaon in the 111th and Previous
C'ongres.es (June 2011).
assistance or requirements for participating in a voluntary
federal program are not considered mandates under
UMRA.
What Role Does CBO Play in Identifying and
Estimating the Cost of Private-Sector
Mandates in Legislation?
As specified in UMRA, CBO reviews most legislation
reported by authorizing committees to identify any man-
dates on the private sector, including new mandates and
expansions or extensions of existing ones.3 For each piece
of legislation, CBO prepares a statement indicating
whether it contains private-sector mandates and, if so,
whether the total annual cost of those mandates would
exceed a threshold specified by UMRA in any of the first
five fiscal years after the mandates would take effect. The
cost threshold for private-sector mandates was initially set
at $100 million, with annual adjustments for inflation; in
2013, it equals $150 million.
How Does CBO Estimate the Cost of
Mandates on the Private Sector?
UMRA directs CBO to estimate how much the private
sector would have to spend to comply with a mandate.
2. The Congress often uses a two-step process to set appropriations
for programs or agencies. The first step is an authorizing bill that
governs the operation of the program or agency and that, in some
cases, sets a target or limit for the appropriations; the second step
is an appropriation bill that provides the funding for the program
or agency. This definition of a mandate applies to the target or
limit for appropriations set in an authorizing bill.
3. UMRA requires CBO to review bills and joint resolutions of a
public character that are reported by authorizing committees
[2 U.S.C. §658c(b) (2006)]. Such committees have legislative
jurisdiction over the establishment, operation, and continuation
of federal programs or agencies; they also control spending for
programs other than those that receive annual appropriations
under the aegis of the appropriations committees.](ViewImageLocal?handle=hein.congrec/cbo10979&div=1&collection=&method=preview&ext=.png&size=3)
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