Section 201 states that “ach agency shall, unless otherwise prohibited by law, assess the effects of ederal regulatory actions on tate, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Other sections in title II require agencies to prepare a written statement containing specific descriptions and estimates for any proposed rule or any final rule for which a proposed rule was published that includes any federal mandate that may result in the expenditure of $100 million or more in any 1 year by state, local, and tribal governments, in the aggregate, or the private sector—one of the items required in the written statement is a qualitative and quantitative assessment of the anticipated costs and benefits of the federal mandate (sec. We compared the substance of these 80 economically significant rules to the requirements in UMRA and concluded that 2 of the rules were required to have an UMRA written statement on file at CBO. Only 2 of the 30 rules had a separate written statement prepared specifically to comply with UMRA. Requirements in Sections 202 and 205 of UMRA Are Similar to Previous Statutory and Executive Order Requirements

Several of the requirements in sections 202 and 205 of UMRA are similar to the requirements in previous statutes and executive orders. Only 2 of the 110 economically significant rules that were promulgated during the first 2 years of UMRA were described as significant federal intergovernmental mandates in OIRA’s reports on agencies’ compliance with title II of the act. Of the 132 rules that either RISC or we identified as economically significant rules that had been promulgated during the 2 years following the enactment of UMRA, 73 were final rules for which small government plans would have been required if the rules had a significant or unique effect on small governments. Conclusions

Our review of federal agencies’ implementation of title II of UMRA indicates that this title of the act has had little direct effect on agencies’ rulemaking actions during the first 2 years of its implementation. First, many of the UMRA requirements did not appear to apply to most economically significant rules promulgated during this period. Economically significant rules that may cost individuals or businesses more than $100 million per year are not covered by UMRA’s requirement to develop a written statement if they (1) do not have an associated notice of proposed rulemaking; (2) do not impose an enforceable duty; (3) impose such a duty but only as a condition of federal assistance or as part of a voluntary program; or (4) do not involve an expenditure of $100 million in any 1 year by the private sector or by state, local, and tribal governments. Sections 203 and 204 of UMRA also appeared to have had little impact on agencies’ rulemaking actions. Officials in the agencies where the section 207 pilot programs were established said that the pilots were not initiated to satisfy UMRA requirements.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed federal agencies' implementation of the Unfunded Mandates Reform Act of 1995 (UMRA), focusing on what effect title II of UMRA has had on agencies' rulemaking actions.

What GAO Found

GAO noted that: (1) the enactment of title II of UMRA appears to have had only limited direct impact on agencies' rulemaking actions in the first 2 years since its implementation; (2) most of the economically significant rules promulgated during UMRA's first two years were not subject to the requirements of title II; (3) title II contains exemptions that allowed agencies not to take certain actions if they determined that the actions were duplicative or not reasonably feasible; (4) written statements were not on file at the Congressional Budget Office for 80 of the 110 economically significant rules promulgated in the first 2 years of UMRA's implementation; (5) GAO concluded that UMRA did not require written statements for 78 of these 80 rules; (6) some of the rules did not have an associated notice of proposed rulemaking; (7) many did not impose an enforceable duty other than as a condition of federal financial assistance or as a duty arising from participation in a voluntary program; (8) others did not result in expenditures of $100 million by the state, local, and tribal governments, in the aggregate, or by the private sector in any 1 year; (9) the written statements that agencies prepared for 30 of the economically significant rules appeared to meet most of the UMRA requirements for those statements; (10) in almost every case, the written statements were not separate documents specifically prepared to comply with UMRA but were the rules themselves and any associated economic analysis; (11) also, sections 202 and 205: (a) give agencies discretion in how they can comply with the requirements; and (b) are similar to requirements in previous statutes and Executive Order 12866, which was issued in 1993; (12) during the first 2 years of UMRA's implementation, the requirement in section 204 of the act that agencies develop a process to consult with state, local, and tribal governments before promulgating any significant federal intergovernmental mandate appears to have applied to no more than four Environmental Protection Agency rules and no rules from other agencies; (13) section 203 small government plans were not developed for any of the 73 final rules promulgated during the first 2 years of UMRA implementation; (14) officials in the four agencies that GAO contacted said none of their final rules had a significant or unique effect on small governments; and (15) the Office of Management and Budget designated three UMRA pilot programs in two agencies, but none of these efforts appears to have been initiated because of UMRA.