Unfunded Mandates Reform Act

• Federalism
• Terms and definitions
• Laws
• Court cases
• Major arguments
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• State survey of the federal grant review process
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• Federalism by the numbers
  • Federalism by the numbers: Federal mandates
  • Federalism by the numbers: Federal grants-in-aid
  • Federalism by the numbers: Federal information collection requests
  • Overview of federal spending during the coronavirus (COVID-19) pandemic
• Index of articles

See also: Unfunded mandates

The Unfunded Mandates Reform Act (UMRA) of 1995 is a federal law designed to limit the imposition of unfunded mandates by the federal government on state, local, and tribal governments, as well as the private sector. It requires federal agencies and Congress to assess the potential costs of proposed mandates and, in some cases, consult with affected governments before implementation.

UMRA was part of a broader effort to address federalism concerns about cost-shifting from the federal government to lower levels of government. The law emphasizes transparency, cost estimates, and intergovernmental communication in the policy-making process. It was signed into law by President Bill Clinton (D) on March 22, 1995.

From an administrative state perspective, UMRA placed new procedural requirements on federal agencies. When agencies develop rules likely to impose costs above a statutory threshold, they must prepare detailed cost-benefit analyses, consult with state and local officials, and consider alternative approaches. These requirements reflect broader debates about agency accountability and the limits of regulatory power, even as critics argue that UMRA’s thresholds and exemptions reduce its overall impact.

Background

Local government and business entities expressed growing dissatisfaction during the 1970s and 1980s with the increase in unfunded federal mandates, or statutory requirements, imposed on local governments and the private sector during the period, according to the Congressional Research Service. A 2016 Forbes report identified a total of 241 mandates or preemptions imposed on state and local governments between 1955 and 1995, 45 percent of which were enacted between 1985 and 1995. These mandates imposed new standards, requirements, and regulations for landfills, wastewater treatment, drinking water, stormwater, and compliance with the Americans with Disabilities Act, among other provisions. Local government and business advocates at the time called for new policies to curb the financial costs and resulting inefficiencies of complying with unfunded mandates associated with new federal laws and agency regulations.

The Unfunded Mandates Reform Act (UMRA) was crafted with the intention of minimizing the imposition of unfunded federal mandates on businesses and state, local, and tribal governments as well as improving communication and collaboration between the federal government and local government and business groups. The legislation aimed to accomplish these goals through the following general framework, according to the Congressional Research Service:

• Requires the Congressional Budget Office to estimate the direct costs of intergovernmental mandates exceeding $50 million (adjusted for inflation) and of private-sector mandates upwards of $100 million in any proposed legislation reported from committee.
• Prohibits the consideration of legislation containing intergovernmental mandates with costs estimated to exceed the threshold amounts.
• Requires federal administrative agencies, except for independent federal agencies, to estimate the impact on businesses and state and local governments of any proposed and final rules and to prepare written statements of estimated costs and benefits for mandates exceeding $100 million a year, with certain exceptions.

The bill was sponsored by U.S. Senator Dirk Kempthorne (R-Idaho) and supported by groups including the National Conference of State Legislatures, the United States Chamber of Commerce, the National Governors Association, and the National Association of Counties. President Bill Clinton (D) signed the UMRA into law on March 22, 1995.

Provisions

Reduce unfunded federal mandates

Federal legislation

The Unfunded Mandates Reform Act (UMRA) established procedures to minimize the impact of unfunded mandates on state, local, and tribal governments as well as the private sector. The legislation proposed the following procedural changes:

“

(1) to strengthen the partnership between the Federal Government and State, local, and tribal governments; (2) to end the imposition, in the absence of full consideration by Congress, of Federal mandates on State, local, and tribal governments without adequate Federal funding, in a manner that may displace other essential State, local, and tribal governmental priorities; (3) to assist Congress in its consideration of proposed legislation establishing or revising Federal programs containing Federal mandates affecting State, local, and tribal governments, and the private sector by— (A) providing for the development of information about the nature and size of mandates in proposed legislation; and (B) establishing a mechanism to bring such information to the attention of the Senate and the House of Representatives before the Senate and the House of Representatives vote on proposed legislation; (4) to promote informed and deliberate decisions by Congress on the appropriateness of Federal mandates in any particular instance; (5) to require that Congress consider whether to provide funding to assist State, local, and tribal governments in complying with Federal mandates, to require analyses of the impact of private sector mandates, and through the dissemination of that information provide informed and deliberate decisions by Congress and Federal agencies and retain competitive balance between the public and private sectors; (6) to establish a point-of-order vote on the consideration in the Senate and House of Representatives of legislation containing significant Federal intergovernmental mandates without providing adequate funding to comply with such mandates

”

Federal regulations

In addition to establishing procedures for the review of unfunded mandates in federal legislation, the UMRA included provisions for the review of any unfunded mandates within federal agency regulations. The legislation proposed the following requirements for federal agencies:

“

(7) to assist Federal agencies in their consideration of proposed regulations affecting State, local, and tribal governments, by— (A) requiring that Federal agencies develop a process to enable the elected and other officials of State, local, and tribal governments to provide input when Federal agencies are developing regulations; and (B) requiring that Federal agencies prepare and consider estimates of the budgetary impact of regulations containing Federal mandates upon State, local, and tribal governments and the private sector before adopting such regulations, and ensuring that small governments are given special consideration in that process; and (8) to begin consideration of the effect of previously imposed Federal mandates, including the impact on State, local, and tribal governments of Federal court interpretations of Federal statutes and regulations that impose Federal intergovernmental mandates.

”

Exemptions

The UMRA exempted any legislative or regulatory provisions that:

“

(1) enforces constitutional rights of individuals; (2) establishes or enforces any statutory rights that prohibit discrimination on the basis of race, color, religion, sex, national origin, age, handicap, or disability; (3) requires compliance with accounting and auditing procedures with respect to grants or other money or property provided by the Federal Government; (4) provides for emergency assistance or relief at the request of any State, local, or tribal government or any official of a State, local, or tribal government; (5) is necessary for the national security or the ratification or implementation of international treaty obligations; (6) the President designates as emergency legislation and that the Congress so designates in statute; or (7) relates to the old-age, survivors, and disability insurance program under title II of the Social Security Act (including taxes imposed by sections 3101(a) and 3111(a) of the Internal Revenue Code of 1986 (relating to old-age, survivors, and disability insurance)).

”

Impact

The enactment of the UMRA has resulted in mixed outcomes, according to various scholars. "Parties participating in its implementation and researchers in the academic community, policy research institutes, and nonpartisan government agencies have reached different conclusions concerning the extent of UMRA’s impact on intergovernmental relations," observed Robert Jay Digler of the Congressional Research Service (CRS) in a 2018 analysis of the law. Digler continued his analysis by describing what supporters of the legislation consider to be the positive effects of its implementation and continued areas for improvement:

“

State and local government officials and federalism scholars generally view UMRA as having a limited, though positive, impact on intergovernmental relations. In their view, the federal government has continued to expand its authority through the 'carrots' of increased federal assistance and the 'sticks' of grant conditions, preemptions, mandates, and administrative rulemaking. Facing what they view as a seemingly ever growing federal influence in American governance, they generally advocate a broadening of UMRA’s coverage to enhance its impact, emphasizing the need to include conditions of grant assistance and a broader range of federal agency rulemaking, including rules issued by independent regulatory agencies.

”

Theresa Gullo of the Congressional Budget Office (CBO) made similar observations about the positive impacts of the law in a 2004 article for the National Tax Journal:

“

Since UMRA's enactment, the quantity of detailed information provided to the Congress about federal mandates has increased. Furthermore, that information played a prominent role in the Congressional debate over several important intergovernmental issues.

”

Gullo also echoed Digler's observation that many state and local government officials equate certain federal grant conditions with unfunded mandates and support expanding the law to include these provisions:

“

UMRA’s success is tempered in some observers’ view, however, by the fact that the law omits certain types of requirements—many that state and local governments find onerous—from its provisions. Specifically critics charge that: Conditions for obtaining federal grants, even new conditions on existing grant programs, are generally not considered to be mandates; Certain types of provisions, some with very significant impacts on other levels of government, are specifically excluded from all of UMRA's requirements; and, Mandates with total costs below the statutory thresholds are not subject to the points of order, even if those mandates severely restrict state and local authority. These limitations, critics argue, mean that the Congress has continued to enact legislation that has significant impacts on state and local government budgets.

”

See also

• Unfunded mandate
• Administrative Procedure Act
• Freedom of Information Act
• Congressional Budget Office

External links

• Unfunded Mandates Reform Act of 1995 (full text)
• Search Google News for this topic

Footnotes

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