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The House passed by a vote of 250-173 the Unfunded Mandates Information and Transparency Act (H.R. 50), which is intended to protect the private sector from regulatory costs imposed by the federal government.

The legislation, introduced again this year by Rep. Virginia Foxx (R-N.C.), was approved over Democrats' objections in January by the House Committee on Oversight and Government Reform (18 DER A-19, 1/28/15).

Foxx said costly unfunded mandates are often imposed on local governments and small businesses, stretching city and state budgets and making it harder for American businesses to hire.

Foxx said the bill would ensure that regulation writers in Washington know the costs involved and whether the expense of compliance might make it harder for family businesses to meet payroll and stay afloat.

“H.R. 50 will force Washington to think carefully about regulatory costs before it passes them on to Americans,” Foxx said. “This bill is about transparency and accountability and is something Democrats and Republicans can all support,” she said.

More Impact Analyses

The bill would require independent regulatory agencies for the first time to comply with the Unfunded Mandates Reform Act (UMRA) of 1995. It would codify the principles of Executive Order 12,866 and require that agencies conduct regulatory impact analyses under more circumstances.

Further, the bill would require agencies and the Congressional Budget Office to estimate the entire cost of a federal mandate, including foregone profit and costs passed on to consumers as a result of the mandate.

A provision in the bill opposed by many Democrats would require agencies to consult with the private sector prior to proposing a major rule. Also, the bill would allow any congressional committee to request that an agency conduct a retrospective review of an existing federal mandate.

Finally, the bill would extend judicial review, making regulations more susceptible to lawsuits to ensure agencies carefully consider the least costly and burdensome regulatory alternative

Veto Threat

On Feb. 3, the White House issued a veto threat against the measure, arguing it would layer additional, burdensome judicial review and other unnecessary changes on the regulatory process.

The bill would introduce needless uncertainty into agency decision making and undermine the ability of agencies to provide critical public health and safety protections, the White House said in a statement of administration policy.

Further, the bill would create needless grounds for judicial review, unduly slowing and increasing the cost of the regulatory process, it said.

CBO: $18 Million Cost

In a cost estimate of the bill released Feb. 2, the CBO said enacting H.R. 50 would increase net direct spending by $18 million over the 2015-2025 period, primarily for costs incurred by the Consumer Financial Protection Bureau for staffing and overhead.

“CBO expects that several independent agencies would increase fees to offset some of the costs of implementing the additional regulatory activities required by the bill; thus, H.R. 50 would increase the costs of existing mandates on public and private-sector entities to pay those fees,” it said.

To pay for the bill, the House adopted an amendment offered by Foxx to limit the total budget authority that the CFPB may request from the Federal Reserve to $550 million in fiscal year 2016, a reduction of $36 million.

Financial Regulators Hit

Rep. Maxine Waters (D-Calif.), ranking member of the Committee on Financial Services, said the bill would stop rulemaking by the nation's financial overseers dead in its tracks.

The bill would place significant administrative hurdles in front of regulators from the CFPB and the Securities and Exchange Commission, Waters said.

In addition, the bill would arm special interests with a time-tested weapon to delay and kill financial overhaul—the opportunity to challenge cash-strapped regulators in court on every rule, Waters said.

“But this is the ultimate point of the bill, to make regulating everything from securities, fraud, payday loans, credit cards, insider trading and derivatives that much harder,” Waters said.

Opposite of Transparent

Rep. Jared Polis (D-Colo.) spoke in opposition to the bill, saying that rather than increasing transparency or helping small business, it would do the opposite.

“By allowing rules to be written behind closed doors by big businesses and effectively preventing federal agencies from promoting the national interest,” this bill represents an assault on the health and safety of families and threatens to drown the government in mountains of unnecessary paperwork, Polis said.

The bill would allow big business to weigh in before the public and create even more hurdles before regulations become public and are implemented, Polis said. “This blocks transparency [and] handicaps public input,” he said.

But Rep. Jason Chaffetz (R-Utah), the chairman of the House Committee on Oversight and Government Reform, said the bill would increase transparency because now, many rules skip the notice of proposed rulemaking stage where public input is gathered. The bill would require consultation and input under more circumstances, he said.

Amendments Defeated

One Republican amendment was adopted and two Democratic amendments were defeated during debate of the legislation.

An amendment by Rep. Tom Reed (R-N.Y.) was adopted to require an assessment of the effects that a proposed or final rule are expected to have on private property owners, including the use and value of affected property.

An amendment by Rep. Elijah Cummings (D-Md.) would have struck the section of the bill requiring federal agencies to conduct a retrospective review of any regulation at the request of a congressional committee. The amendment was defeated by a vote of 179-245.

Rep. Gerald Connolly (D-Va.) offered an amendment, which was defeated, that would have essentially repealed the bill if economic growth fell below 5 percent in the year after the bill's enactment. The amendment was defeated by a vote of 173-249.

Senate Support

Last November, Sens. Rob Portman (R-Ohio) and Mike Crapo (R-Idaho) introduced their version of UMRA overhaul legislation during the dwindling days of the 113th Congress (223 DER A-23, 11/19/14).

According to a joint statement at the time, the senators introduced the bill to reduce excessive unfunded government mandates on job creators, giving them greater freedom to invest in their companies and hire new workers.

This year, Sen. Deb Fischer (R-Neb.) introduced the Unfunded Mandates Information and Transparency Act (S. 189) in the Senate, as a companion measure to the House bill. It has been referred to the Senate Committee on Homeland Security and Governmental Affairs.

Favor to Lobbyists

The Center for Effective Government said in a Feb. 4 statement that this legislation would allow companies and trade associations a “first look” at rules before they're even announced to the public.

“This special favor could allow corporate lobbyists to severely weaken or even kill crucial upgrades to our public protections,” the center said. “This bill would also expand industry's ability to challenge agency rules and evidence in court,” it said.