Unfunded Mandates Reform Act

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

Lead Agencies:

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

Congressional Budget Office, Budget Analysis Division

Overview

The Unfunded Mandates Reform Act (UMRA), 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 provision requiring agencies to prepare a written 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. UMRA thus contains the only broad regulatory impact analysis requirement currently mandated by statute, and as such codifies many of the provisions in Executive Order 12866, Regulatory Planning and Review. UMRA’s impact is, however, somewhat lessened because its provisions for judicial review of agency compliance with UMRA are somewhat limited.

UMRA’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 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 (CBO) 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; these thresholds are adjusted annually for inflation.

Title II addresses federal agency regulations containing regulatory mandates of state, local, and tribal governments and on the private sector. The key requirement is for a written “statement to accompany significant regulatory actions.” 2 U.S.C. § 1532. 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.” 2 U.S.C. § 1532(a).

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 "of the affected State, local, and tribal governments" including the comments and concerns raised and the agency's evaluation of them.

The agency must also develop a plan to specially notify state, local, and tribal governments of such requirements and develop a process to receive meaningful and timely input from elected officials. 2 U.S.C. § 1534(a). An exemption from the Federal Advisory Committee Act is carved out for such consultations. 2 U.S.C. § 1534(b). A summary of this statement must appear in the notice of proposed rulemaking. However, UMRA does allow agencies to prepare the statement “in conjunction with or as a part of any other statement or analysis.” 2 U.S.C. § 1532(c).

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.” (2 U.S.C. § 1535).

Judicial review of agency compliance with UMRA is limited. UMRA 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, UMRA 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” (2 U.S.C. § 1571(a)(3)).

UMRA requires OMB to submit annual reports to Congress on agency compliance with Title II, and OMB has submitted such reports since 1996. 2 U.S.C. § 1538. UMRA also requires the Advisory Commission on Intergovernmental Relations to submit an annual report to Congress and the President "describing any Federal court case to which a State, local, or tribal government was a party" in the previous year and required these entities to undertake additional responsibilities or activities to comply with Federal law. 2 U.S.C. § 1554.

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.”

Senator Dirk Kempthorne introduced the Community Regulatory Relief Act (S. 993), which had more than 50 co-sponsors. However, S. 993 was not considered for a vote, and Congress adjourned without further consideration of the bill.

The Unfunded Mandates Reform Act of 1995 (S. 1 and its companion bill, the Unfunded Mandate Reform Act of 1995 (H.R. 5) was introduced in the 104th Congress. 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, Hearing Before the Subcomm. on Human Res. and Intergovernmental Rels. of the H. Comm. on Gov’t Operations, 103d Cong. (1993).
  • Federal Mandates on State and Local Governments, Hearing Before the S. Governmental Affs. Comm., 103d Cong. (1993).
  • Impact of Unfunded Mandates on State and Local Governments, Hearing Before the Subcomm. on Human Res. and Intergovernmental Rels. of the H. Comm. on Gov’t Reform and Oversight, 103d Cong. (1994).
  • Unfunded Federal Mandates: Who Should Pick Up the Tab?, Hearing Before the Subcomm. on Investigation and Oversight of the H. Science Comm., 103d Cong. (1994).
  • Unfunded Federal Mandates: Burdens and Costs in North Dakota, Hearing Before the S. Governmental Affs. Comm., 103d Cong. (1994).
  • Federal Mandate Reform Legislation, Hearing Before the S. Governmental Affs. Comm., 103d Cong. (1994).
  • Legislative Initiatives on Unfunded Mandates, Hearing Before the Subcomm. on Human Res. and Intergovernmental Rels. of the H. Comm. on Gov’t Reform and Oversight, 103d Cong. (1994).
  • S. 993, Federal Mandate Accountability and Reform Act of 1994, S. Rep. No. 103-330 (1994).
  • Unfunded Mandate Reform Act of 1995, S. Rep. No. 104-2 (1995).
  • Unfunded Mandate Reform Act of 1995, H. Rep. No. 104-1, pts. 1 and 2 (1995).
  • Ways to Reduce Unfunded Federal Mandates and Regulatory Burdens on the Aviation Industry Without Affecting the Safety of the Traveling Public, Hearing Before the Subcomm. on Aviation, H. Transp. and Infrastructure Comm., 104th Cong. (1995).
  • Unfunded Mandates Reform Act of 1995, H. Rep. No. 104-76 (1995).
  • The Unfunded Mandates Reform Act of 1995: One Year Later, Hearing Before the Subcomm. on Human Res. and Intergovernmental Rels. of the H. Comm. on Gov’t Reform and Oversight, 105th Cong. (1996).
  • Hearings on S. 1 Before the Senate Budget Committee and the Senate Comm. Governmental Affs., 104th Cong. (1999).
  • Hearings on H.R. 5 before the House Rules, 104th Cong. (1999).
  • Passing the Buck, A Review of the Unfunded Mandates Reform Act, Hearing Before the Subcomm. on Oversight of Gov’t Management, the Fed. Workforce, and the District of Columbia of the S. Comm. on Homeland Sec. and Governmental Affs., 109th Cong. (2005).
  • The Tenth Anniversary of the Unfunded Mandates Reform Act, Hearing Before the H. Comm. on Gov’t Reform, 109th Cong. (2005).
  • Unfunded Mandates and Regulatory Overreach, Hearing Before the Subcomm. on Tech., Info. Pol'y, Intergovernmental Rels. and Procurement Reform of the Comm. on Oversight and Gov’t Reform, 112th Cong. (2011).
  • Unfunded Mandates and Regulatory Overreach, Hearing Before the Subcomm. on Tech., Info. Pol'y, Intergovernmental Rels. and Procurement Reform of the Comm. on Oversight and Gov't Reform, 112th Cong. (2011).
  • Unfunded Mandates, Regulatory Burdens and the Role of the Office of Information and Regulatory Affairs, Hearing Before the Subcomm. on Tech., Info. Policy, Intergovernmental Rels. and Procurement Reform of the Comm. on Oversight and Gov’t Reform, 112th Cong. (2011).
  • Unfunded Mandates Information and Transparency Act of 2011, H. Rep. No. 112-483 (2012).
  • Unfunded Mandates Information and Transparency Act of 2013, H. Rep. No. 113-352 (2014).
  • The Unfunded Mandates Reform Act: Opportunities for Improvement to Support State and Local Governments, Hearing Before Subcomm. on Regulatory Affs. and Fed. Mgmt. of the S. Comm. on Homeland Sec. and Governmental Affs., 114th Cong. (2016).

Executive Orders and White House Documents

OMB/OIRA Documents

Reports to Congress on Unfunded Mandates

Other OMB Documents

Congressional Budget Office Documents

Other Government Documents

Books and Articles

Statutory Provisions

Unfunded Mandates Reform Act,

Title 2 U.S. Code

Chapter 25—Unfunded Mandates Reform

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