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Unfunded Mandates Reform Act (UMRA) of 1995

Original Text

Effective Dates
3/22/1995 - Present

Reform Goals
The Act created new government-wide reports to inform Congress of federal activities that would impose costs on local governments or the private sector, and ensure Congress considered reimbursing these costs. Title II of UMRA included requirements for federal regulatory agencies to ‘consider’ the cost impact of rules on local government and the private sector.

Requirements (What of whom?)
Similar to Executive Order 12866, UMRA mandated that federal executive branch agencies calculate the costs of a new regulation to state, local, and tribal governments or to the private sector. For rules with expected impact of greater than > $100 million (adjusted annually by inflation) [1], agencies must submit a report analyzing the costs and benefits to OIRA. UMRA also requires agencies to consider a “reasonable number” of alternative regulations, and select the least costly or most cost-effective rule.  The act exempts independent regulatory agencies. [2]

Oversight for rule compliance
The Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) receives agency reports.

Reform “Teeth”
Agency submission of UMRA reports is enforceable in federal courts, but OIRA has no authority to take action based on the report results.

Outcomes
Since most agencies were preparing cost benefit analyses for significant rules under EO 12866, most were not required to complete a separate UMRA “written mandate cost estimate statement”. Independent regulatory agencies were not required to comply with either EO 12866 or UMRA.

Commentary
This rule added little incremental value to previous reforms.

References

  1. The threshold in 2016 is $156 million.
  2. ‘‘SEC. 421. DEFINITIONS. ‘‘For purposes of this part: ‘‘(1) AGENCY.—The term ‘agency’ has the same meaning as defined in section 551(1) of title 5, United States Code, but does not include independent regulatory agencies."