Unfunded Mandates Reform Act

2 U.S.C. §§ 1501-1571 (2012); enacted March 22, 1995, by Pub. L. No. 104–4, 109 Stat. 48.

Lead Agencies:

Office of Management and Budget, Office of Information and Regulatory Affairs

Congressional Budget Office, Budget Analysis Division

Overview

This legislation, which was enacted in 1995 with broad, bipartisan support, requires Congress and federal agencies (excepting independent agencies) to give special consideration to proposed legislation and regulations imposing mandates on state, local, and tribal entities. It also contains a special provision (added at the end of the legislative process) requiring agencies to prepare a special statement, in the nature of a regulatory impact analysis, for any proposed rulemaking that is likely to result in an expenditure by the private sector in excess of $100 million. The Act thus contains the only broad regulatory impact analysis requirement currently mandated by statute, and as such codifies many of the provisions in Executive Order 12,866. The Act’s impact is, however, somewhat lessened because its provisions for judicial review of agency compliance with the Act are somewhat limited.

The Act’s purpose was to help reveal, and ultimately limit, the high (and often hidden) costs of federal mandates on state and local governments to undertake regulatory activity without sufficient federal compensation for this activity.

Title I of the Act modifies the legislative process by requiring any Congressional authorizing committee that approves a bill containing a federal mandate (with some exceptions) to identify that mandate in its committee report. The Congressional Budget Office must then estimate the overall impact of such mandates and a point of order can be raised by any member against a bill that lacks such an estimate or if the bill contains an unfunded mandate exceeding $50 million burden on state and local governments or $100 million on the private sector.

Title II of the Act addresses agency regulations containing regulatory mandates of state, local, and tribal governments and on the private sector. The key requirement is for a “statement to accompany significant regulatory actions.” The statement is required in “any general notice of proposed rulemaking that is likely to result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year.”

The statement must include (1) citation to the law under which the rule is being promulgated, (2) “a qualitative and quantitative assessment of the anticipated costs and benefits of the Federal mandate. . . as well as the effect of the Federal mandate on health, safety, and the natural environment,” along with an analysis of the availability of federal funds to help governments pay for the mandate, (3) estimates of future compliance costs and of disproportionate budgetary effects on regions or particular governments or segments of the private sector, (4) estimates of the effect on aspects of the national economy, and (5) a summary of the agency’s consultations with elected representatives. The agency must also develop a plan to specially notify small governments of such requirements and develop a process to receive meaningful and timely input from elected officials. An exemption from the Federal Advisory Committee Act is carved out for such consultations. A summary of this statement must appear in the notice of proposed rulemaking. However, the Act does allow agencies to prepare the statement “in conjunction with or as a part of any other statement or analysis . . .”

Before issuing a final rule that was subject to the above requirements, the agency must “identify and consider a reasonable number of regulatory alternatives and from those alternatives, select the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule.”

Judicial review of agency compliance with the Unfunded Mandates Reform Act is limited. The Act provides that judicial review of the agency statements accompanying significant regulatory actions is subject to review only under 5 U.S.C. § 706(1)—which allows courts to “compel agency action unlawfully withheld or unreasonably delayed.” This means that courts may compel the production of such agency statements but cannot review the contents of them. In fact, the Act makes clear that “the inadequacy or failure to prepare such statement (including the inadequacy or failure to prepare any estimate, analysis, statement or description) or written plan shall not be used as a basis for staying, enjoining, invalidating or otherwise affecting such agency rule.”

The Act requires OMB to submit annual reports to Congress on agency compliance with Title II of the Act, and OMB has submitted such reports since 1996.

Legislative History

In the 103rd Congress, eight bills were introduced that addressed the issue of unfunded mandates. This was directly in response to the pressure building over the previous 15 years from state and local governments. Over those years, Congress continued a pattern of cutting federal funding while enacting statutes that passed costs onto state and local governments without providing funding to cover those costs. To demonstrate their dissatisfaction, the state and local governments declared October 27, 1993, “National Unfunded Mandates Day.”

S. 993 had the strongest support in the 103rd Congress. It was introduced by Senator Dirk Kempthorne (R-ID) as the Community Regulatory Relief Act, and had more than 50 co-sponsors. However, S. 993 was not considered for a vote, and Congress adjourned without further consideration of the bill.

A new bill was introduced in the 104th Congress as S. 1 and H.R. 5, “The Unfunded Mandates Reform Act of 1995.” It was rapidly reported out of committee in both houses. In February, the House passed H.R. 5, and amended and passed S. 1. After disagreement between the House and Senate over amendments, the bill went to a conference committee (H.R. Rep. No. 104-76 (1995)). Both houses agreed to the conference report. The Senate vote was 91-9 and the House vote was 394-28.

On March 22, 1995, The Unfunded Mandates Reform Act of 1995 was signed into law by President Clinton as Pub. L. No. 104-4.

Bibliography

Legislative History and Congressional Documents

• Impact of Federal Mandates on State and Local Governments, Hearings Before the Subcomm. on Human Resources and Intergovernmental Relations of the H. Comm. on Government Operations, 103d Cong., 1st Sess. (Oct. 25, 1993).
• Federal Mandates on State and Local Governments, Hearings Before the S. Governmental Affairs Comm., 103d Cong., 1st Sess. (Nov. 3, 1993).
• Impact of Unfunded Mandates on State and Local Governments, Hearings Before the Subcomm. on Human Resources and Intergovernmental Relations of the H. Comm. on Government Reform and Oversight, 103d Cong., 2d Sess. (Feb. 26, 1994).
• Unfunded Federal Mandates: Who Should Pick Up the Tab?, Hearings Before the Subcomm. on Investigation and Oversight of the H. Science Comm., 103d Cong., 2d Sess. (Mar. 22, 1994).
• Unfunded Federal Mandates: Burdens and Costs in North Dakota, Hearings Before the S. Governmental Affairs Comm., 103d Cong., 2d Sess. (Apr. 5, 1994).
• Federal Mandate Reform Legislation, Hearings Before the S. Governmental Affairs Comm., 103d Cong., 2d Sess. (Apr. 28, 1994).
• Legislative Initiatives on Unfunded Mandates, Hearings Before the Subcomm. on Human Resources and Intergovernmental Relations of the H. Comm. on Government Reform and Oversight, 103d Cong. 2d, Sess. (May 18, 1994).
• S. 993, Federal Mandate Accountability and Reform Act of 1994, Senate Comm. on Governmental Affairs, S. Rep. No. 103-330, 103d Cong., 2d Sess. (Aug. 10, 1994).
• S. 1, Unfunded Mandate Reform Act of 1995, Senate Budget Comm. and Senate Comm. on Governmental Affairs, S. Rep. No. 104-2, 104th Cong., 1st Sess. (Jan. 12, 1995).
• H.R. 5, Unfunded Mandate Reform Act of 1995, House Rules Comm., and House Comm. on Government Reform and Oversight, H. Rep. No. 104-1, pts.1 and 2, 104th Cong., 1st Sess. (Jan. 13, 1995).
• Ways to Reduce Unfunded Federal Mandates and Regulatory Burdens on the Aviation Industry Without Affecting the Safety of the Traveling Public, Hearings before the Subcomm. on Aviation, House Transportation and Infrastructure Comm., 104th Cong., 1st Sess. (Feb. 1, 1995).
• S. 1, Unfunded Mandate Reform Act of 1995, Conference Comm. Report, H. Rep. No. 104-76, 104th Cong., 1st Sess. (Mar. 13, 1995).
• The Unfunded Mandates Reform Act of 1995: One Year Later, Hearing Before the Subcomm. on Human Resources and Intergovernmental Relations of the H. Comm. on Gov’t Reform and Oversight, 105th Cong., 1st Sess. (Mar. 22, 1996).
• Hearings on S. 1 before the Senate Budget Committee and the Senate Comm. on Governmental Affairs, 104th Cong. 1st Sess., (Jan. 5, 1999).
• Hearings on H.R. 5 before the House Rules, 104th Cong. 1st Sess., (Jan. 11, 1999).
• 1995 Unfunded Mandates Reform Act—An Overview of Effectiveness and Opportunities for Enhancement, Hearing Before the Rules Subcomm. on Technology and the House, 108th Cong., 1st Sess. (July 16, 2003).
• Passing the Buck, A Review of the Unfunded Mandates Reform Act, Hearing Before the Subcomm. on Oversight of Gov’t Management, the Federal Workforce, and the District of Columbia of the S. Comm. on Homeland Security and Governmental Affairs, 109th Cong., 1st Sess. (Apr. 14, 2005).
• The Tenth Anniversary of the Unfunded Mandates Reform Act, Hearing before the House Committee on Government Reform, 109th Cong., 1st Sess. (Mar. 8, 2005).
• Unfunded Mandates and Regulatory Overreach, Hearing Before the Subcomm. on Technology, Information Policy, Intergovernmental Relations and Procurement Reform of the Comm. on Oversight and Gov’t Reform, 112th Cong., 1st Sess. (Serial No. 112-2) (Feb. 15, 2011).
• Unfunded Mandates and Regulatory Overreach, Hearing Before the Subcomm. on Technology, Information Policy, Intergovernmental Relations and Procurement Reform of the Comm. on Oversight and Government Reform, 112th Cong., 1st Sess., (Serial No. 112-20) (Mar. 30, 2011).
• Unfunded Mandates, Regulatory Burdens and the Role of the Office of Information and Regulatory Affairs, Hearing Before the Subcomm. on Technology, Information Policy, Intergovernmental Relations and Procurement Reform of the Comm. on Oversight and Gov’t Reform, 112th Cong., 1st Sess. (Serial No. 112-56) (May 25, 2011).
• Report together with Minority Views to Accompany H.R. 373: The Unfunded Mandates Information and Transparency Act of 2011, House of Representatives, Comm. on Oversight and Government Reform, 113th Cong., 2d Sess., H. Rep. No. 112-483 (May 16, 2012).
• Report Together with Minority Views to Accompany H.R. 899: The Unfunded Mandates Information and Transparency Act of 2013, House of Representatives, Comm. on Oversight and Government Reform, 113th Cong., 2d Sess., H. Rep. No. 113-352 (Feb. 14, 2014).
• The Unfunded Mandates Reform Act: Opportunities for Improvement to Support State and Local Governments, Hearing Before Subcomm. on Regulatory Affairs and Fed. Mgmt. of the S. Comm. on Homeland Sec. and Governmental Affairs, 114th Cong. (2016) (video).

Executive Orders and White House Documents

• Executive Order 13,175, Consultation and Coordination with Indian Tribal Governments, 65 Fed. Reg. 67,249 (Nov. 9, 2000).

OMB/OIRA Documents

Reports to Congress on Unfunded Mandates

• Agency Compliance with Title II of Unfunded Mandates Reform Act of 1995, Report to Congress from the Director of OMB (Mar. 22, 1996). These are annual reports. The 4th Annual Report was issued in October 1999. Citations to the subsequent reports follow:
• Making Sense of Regulation: 2001 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Dec. 2001). Notice of availability of draft report and request for comments, 66 Fed. Reg. 22,041 (May 2, 2001); extended 66 Fed. Reg. 34,963 (July 2, 2001).
• Stimulating Smarter Regulation, 2002 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Dec. 2002). Notice of availability of draft report and request for comments, 67 Fed. Reg. 15,014 (Mar. 28, 2002).
• Informing Regulatory Decisions, 2003 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (September 2003). Notice of availability of draft report and request for comments, 68 Fed. Reg. 15,772 (Apr. 1, 2003).
• Progress in Regulatory Reform, 2004 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Dec. 2004). Notice of availability of draft report and request for comments, 69 Fed. Reg. 7987 (Feb. 20, 2004).
• Validating Regulatory Analysis, 2005 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Dec. 2005). Notice of availability of draft report and request for comments, 70 Fed. Reg. 14,735 (Mar. 23, 2005).
• 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Jan. 2007). Notice of availability of draft report and request for comments, 71 Fed. Reg. 19,213 (Apr. 13, 2006).
• 2007 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (June 2008). Notice of availability of draft report and request for comments, 72 Fed. Reg. 11,061 (Mar. 12, 2007).
• 2008 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Jan. 2009). Notice of availability of draft report and request for comments, 73 Fed. Reg. 55,169 (Sept. 24, 2008).
• 2009 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Jan. 27, 2010). Notice of availability of draft report and request for comments, 74 Fed. Reg. 48,101 (Sept. 21, 2009).
• 2010 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (July 2010). Notice of availability of draft report and request for comments, 75 Fed. Reg. 22,630 (Apr. 29, 2010).
• 2011 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (June 2011). Notice of availability of draft report and request for comments, 76 Fed. Reg. 18,260 (Apr. 1, 2011).
• 2012 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (Apr. 2013). Notice of availability of draft report and request for comments, 77 Fed. Reg. 22,003 (Apr. 12, 2012).
• 2013 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (May 2014). Notice of availability of draft report and request for comments, 78 Fed. Reg. 29,780 (May 21, 2013).
• 2014 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities (June 15, 2015). Notice of availability of draft report and request for comments, 79 Fed. Reg. 37,776 (July 2, 2014).

Other OMB Documents

• Memorandum for the Heads of Executive Departments and Agencies, and Independent Regulatory Agencies, Guidance for Implementing E.O. 12,875, Reduction of Unfunded Mandates, from Leon E. Panetta, OMB Director (with attached memorandum from OIRA Administrator Sally Katzen) (M-94-10) (Jan. 11, 1994).
• Memorandum for the Heads of Executive Departments and Agencies, Guidance for Implementing Title II of S.1, from Alice M. Rivlin, OMB Director (with attached memorandum on same subject from OIRA Administrator Sally Katzen) (M-95-09) (Mar. 31, 1995).
• Memorandum for the Heads of Departments and Agencies, Guidelines and Instructions for Implementing Section 204, State, Local, and Tribal Government Input, of Title II of P.L. 104-4, from Alice M. Rivlin, OMB Director, Sept. 21, 1995, 60 Fed. Reg. 50,651 (M-95-20) (Sept. 29, 1995).

Congressional Budget Office Documents

• Preliminary Analysis of Unfunded Federal Mandates and the Cost of the Safe Drinking Water Act, CBO Memorandum (Sept. 1, 1994).
• The Experience of the Congressional Budget Office During the First Year of the Unfunded Mandates Reform Act, CBO Paper (January 1997).
• A Review of CBO’s Activities Under the Unfunded Mandates Reform Act, 1996 to 2005, CBO Report (Mar. 1, 2006).
• A Review of CBO’s Activities in 2006 Under the Unfunded Mandates Reform Act, CBO Report (Apr. 1, 2007).
• A Review of CBO’s Activities in 2007 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 31, 2008).
• A Review of CBO’s Activities in 2008 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 31, 2009).
• A Review of CBO’s Activities in 2009 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 30, 2010).
• A Review of CBO’s Activities in 2010 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 31, 2011).
• A Review of CBO’s Activities in 2011 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 30, 2012).
• Input Regarding H.R. 373, the Unfunded Mandates Information and Transparency Act of 2011, Letter to the Hon. James Lankford (Mar. 30, 2012).
• A Review of CBO’s Activities in 2012 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 29, 2013).
• A Review of CBO’s Activities in 2013 Under the Unfunded Mandates Reform Act, CBO Report (Mar. 27, 2014).

Other Government Documents

• Advisory Commission on Intergovernmental Relations, Federal Court Rulings Involving State, Local, and Tribal Governments Calendar Year 1994: A Report Prepared Under Section 304, Unfunded Mandates Reform Act of 1995 (M-196) (July 1995).
• Richard S. Beth, Cong. Research Serv., RL 98-48, Mandates Information Act: Implications for Congressional Action on Legislation Containing Private Sector Mandates (May 15, 1998).
• U.S. General Accounting Office, Unfunded Mandates Reform Act Has Had Little Effect on Agencies’ Rulemaking Actions, A Report to the Senate Committee on Governmental Affairs (GAO/GGD-98-30) (February 1998).
• U.S. General Accounting Office, Unfunded Mandates: Analysis of Reform Act Coverage, Report to the Chairman, Subcomm. on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Comm. on Governmental Affairs, U. S. Senate (GAO-04-637) (May 2004).
• U.S. Gov’t Accountability Office, Unfunded Mandates: Views Vary About Reform Act’s Strengths, Weaknesses, and Options for Improvement (GAO-05-454) (Mar. 31, 2005).
• U.S. Government Accountability Office, Federal Mandates: Few Rules Trigger Unfunded Mandates Reform Act (GAO-11-385T) (Feb. 15, 2011).
• Robert Jay Dilger & Richard S. Beth, Cong. Research Serv., R40957, Unfunded Mandates Reform Act: History, Impact, and Issues (July 9, 2015).

Books and Articles

• Robert W. Adler, Unfunded Mandates and Fiscal Federalism: A Critique, 50 Vand. L. Rev. 1137 (1997).
• Daniel H. Cole & Carol S. Comer, Rhetoric, Reality, and the Law of Unfunded Federal Mandates, 8 Stan. L. & Pol’y Rev. 103 (1997).
• David A. Dana, The Case for Unfunded Environmental Mandates, 69 S. Cal. L. Rev. 1 (1995).
• Denise D. Fort, Essay, The Unfunded Mandates Reform Act of 1995: Where Will the New Federalism Take Environmental Policy?, 35 Nat. Resources J. 727 (1995).
• Elizabeth Garrett, Enhancing the Political Safeguards of Federalism? The Unfunded Mandates Reform Act of 1995, 45 U. Kan. L. Rev. 1113 (1997).
• Elizabeth Garrett, Framework Legislation and Federalism, 83 Notre Dame L. Rev. 1495 (2008).
• Daniel S. Herzfeld, Comment, Accountability and the Nondelegation of Unfunded Mandates: A Public Choice Analysis of the Supreme Court's Tenth Amendment Federalism Jurisprudence, 7 Geo. Mason L. Rev. 419 (1999).
• Makram B. Jaber, Comment, Unfunded Federal Mandates: An Issue of Federalism or a Brilliant Sound Bite, 45 Emory L. J. 281 (1996).
• Tracy A. Kaye, Show Me the Money: Congressional Limitations on State Tax Sovereignty, 35 Harv. J. on Legis. 149 (1998).
• Raymond W. Lawton & Bob Burns, Models of Cooperative Federalism for Telecommunications, 6 Alb. L. J. Sci. & Tech. 71 (1996).
• Susan E. Leckrone, Note, Turning Back the Clock: The Unfunded Mandates Reform Act of 1995 and Its Effective Repeal of Environmental Legislation, 71 Ind. L.J. 1029 (1996).
• Eileen M. Luna, The Impact of the Unfunded Mandates Reform Act of 1995 on Tribal Governments, 22 Am. Indian L. Rev. 445 (1998).
• Russell A. Miller, Clinton, Ginsburg, and Centrist Federalism, 85 Ind. L.J. 225 (2010).
• Robert M. M. Shaffer, Comment, Unfunded State Mandates and Local Governments, 64 U. Cin. L. Rev. 1057 (1996).
• Stuart Shapiro & Deanna Moran, The Checkered History of Regulatory Reform Since the APA, 19 N.Y.U. J. Legis. & Pub. Pol’y 141 (2016).
• Daniel E. Troy, The Unfunded Mandates Reform Act of 1995, 49 Admin. L. Rev. 139 (1997).
• Edward A. Zelinsky, The Unsolved Problem of the Unfunded Mandate, 23 Ohio N. U. L. Rev. 741 (1997).

Statutory Provisions

Unfunded Mandates Reform Act,

Title 2 U.S. Code, Chapter 25—Unfunded Mandates Reform

• § 1501. Purposes
• § 1502. Definitions
• § 1503. Exclusions
• § 1531. Regulatory process
• § 1532. Statements to accompany significant regulatory actions
• § 1533. Small government agency plan
• § 1534. State, local, and tribal government input
• § 1535. Least burdensome option or explanation required
• § 1536. Assistance to Congressional Budget Office
• § 1555. "Federal mandate" defined
• § 1571. Judicial review