CBO's Activities in 2010 Under the Unfunded Mandates Reform Act

March 31, 2011

In 1995, the Unfunded Mandates Reform Act (UMRA) was enacted to ensure that the Congress receives information, during the legislative process, about proposed federal requirements on state, local, and tribal governments and on various entities in the private sector. As required by UMRA, CBO prepares “mandate statements” for bills that are approved by authorizing committees. In those statements, CBO identifies requirements that would meet UMRA’s definition of a federal mandate and estimates whether the costs of such mandates would exceed annual dollar thresholds specified in that law.

In 1995, the Unfunded Mandates Reform Act (UMRA) was enacted to ensure that the Congress receives information, during the legislative process, about proposed federal requirements on state, local, and tribal governments and on various entities in the private sector. As required by UMRA, CBO prepares “mandate statements” for bills that are approved by authorizing committees. In those statements, CBO identifies requirements that would meet UMRA’s definition of a federal mandate and estimates whether the costs of such mandates would exceed annual dollar thresholds specified in that law.

Today CBO released its annual report on UMRA, part of a series begun in 1997, which summarizes mandates in legislation considered by the Congress in 2010 and in public laws passed by the Congress in that year (whether or not the mandates were reviewed by CBO at some earlier point). UMRA defines a legislative provision as a mandate if that provision, when enacted, would:

  • Impose an enforceable duty on state, local, or tribal governments or on private-sector entities;
  • Reduce or eliminate funding authorized to cover the costs of complying with existing mandates; or
  • Increase the stringency of conditions that apply to the distribution of funds through certain mandatory programs or make cuts in federal funding for those programs.

Most of the legislation that the Congress considered in 2010 did not contain federal mandates as defined in UMRA. In 2010, CBO reviewed 474 bills and other legislative proposals, of which 64 (about 14 percent) contained intergovernmental mandates and 85 (about 18 percent) contained private-sector mandates.  By comparison, the averages for the 2006-2009 period were 15 percent (intergovernmental) and 20 percent (private sector).

As in previous years, few laws enacted in 2010 contained mandates whose costs, in CBO’s estimation, would exceed UMRA’s thresholds. In 2010, those thresholds, which are adjusted annually for inflation, were $70 million for intergovernmental mandates and $141 million for private-sector mandates. Two laws contained intergovernmental mandates with costs estimated to exceed the threshold, and 11 laws contained private-sector mandates with such costs. Historically, CBO has identified intergovernmental mandates with costs estimated to exceed the threshold in less than 1 percent of public laws and private-sector mandates with such costs in less than 5 percent of public laws.

In total, laws enacted in 2010 contained 14 intergovernmental mandates and 46 private-sector mandates with costs that CBO estimated will exceed—or could not determine whether they will or will not exceed—the respective thresholds. The majority of those mandates were in two laws: the Patient Protection and Affordable Care Act (Public Law 111-148) and the Dodd–Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203).

This report was prepared by Leo Lex, Chief of CBO’s State and Local Government Cost Estimates Unit, and Amy Petz, of CBO’s Microeconomic Studies Division, with assistance from CBO’s mandate analysts.