News Home

HOUSE ON REGULATION: UNFUNDED MANDATE REFORM
Fri, 2013-07-19 14:22 | Regulation | Dan Goldbeck

The House Oversight Committee will soon begin markup of H.R. 899, the “Unfunded Mandates Information and Transparency Act of 2013.” Representative Virginia Foxx (R-NC) originally introduced the bill in 2011 (then as H.R. 373). The American Action Forum (AAF) originally reviewed the bill here. The current iteration is substantively similar to the version from the 112th Congress. In addition, it maintains a bipartisan set of cosponsors.

The bill would expand the requirements under the Unfunded Mandates Reform Act (UMRA) that lawmakers and regulators need to address when enacting policies or rulemakings. Some of the most notable changes include:

Extending UMRA coverage to independent agencies;
• Expanding the definition of “costs” to include, for example, forgone profits;
• Requiring agencies to publish more extensive analyses of federal mandates;
• Establishing a retrospective review system;
• Allowing for greater judicial review.

Currently, UMRA requires the Congressional Budget Office (CBO) to report annually on how legislation imposes intergovernmental (those on state and local governments) and private sector mandates. Last year, AAF found that 2011 was relatively light on legislative mandates, but 2012 was a different story.

For 2012 legislation, state and local governments saw the number of mandates imposed on them nearly double to 44. Private entities saw a roughly commensurate rise in the number of mandates that trigger UMRA (those imposing a burden of at least $142 million) from seven to twelve.

However, CBO currently only examines provisions in legislation that would establish mandates in the future. Thus, there is often a lag between when CBO reports on them and when the regulations become effective. For example, according to CBO, 2010 was a record year in legislative unfunded mandates – due in large part to the Affordable Care Act (ACA) and Dodd-Frank.

It should be no surprise to find two years later, the Administration itself admitting that 2012 was a record year for regulatory costs. Some notable rules did, in fact, trigger UMRA. The Food and Nutrition Service’s school lunch standards rule was 2012’s most costly UMRA rule, with $3.2 billion in costs on state and local school authorities.

However, as noted in both a 2010 Congressional Research Service (CRS) report, and a 2011 Government Accountability Office (GAO) report, there are many rules that UMRA does not catch despite imposing large costs on certain entities. GAO found that there are currently 14 ways in which rules can slip past UMRA’s coverage. Furthermore, from 2000 to 2009, only 13 percent of major final rules actually triggered UMRA.

In testimony included in the CRS report, numerous governors lamented how certain regulations were able to escape UMRA’s reach. Their main concern was the ACA. To date, the ACA has imposed $8.6 billion in costs on state governments. This is in line with CBO’s cost estimate stating: “total costs of those mandates to state, local, and tribal governments and the private sector would greatly exceed the annual thresholds established in UMRA.” However, none of the five rules that should have triggered UMRA – based upon having state costs above the threshold – carried an UMRA designation. H.R. 899 seeks to correct these discrepancies.