[Federal Register Volume 60, Number 189 (Friday, September 29, 1995)]
[Notices]
[Pages 50651-50654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24261]
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OFFICE OF MANAGEMENT AND BUDGET
Guidelines and Instructions for Implementing Section 204,
``State, Local, and Tribal Government Input,'' of Title II of Public
Law 104-4
AGENCY: Office of Management and Budget.
ACTION: Memorandum for Heads of Departments and Agencies.
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SUMMARY: On March 22, 1995, the President signed into law the
``Unfunded Mandates Reform Act of 1995'' (P.L. 104-4). This notice
provides guidance to agencies on the Act.
FOR FURTHER INFORMATION CONTACT: Jeff Hill, 395-7340.
Attached to this notice is the material for inclusion in the
Federal Register.
Dated: September 25, 1995.
John B. Arthur,
Assistant Director for Administration.
Memorandum for the Heads of Departments and Agencies
FROM: Alice M. Rivlin, Director.
SUBJECT: Guidelines and Instructions and Implementing Section 204,
``State, Local, and Tribal Government Input,'' of Title II of P.L. 104-
4.
On March 22, 1995, President Clinton signed into law the ``Unfunded
Mandates Reform Act of 1995'' (P.L. 104-4) (the ``Act''). Section
204(a) of the Act requires that--
``Each agency shall, to the extent permitted in law, develop an
effective process to permit elected officers of State, local, and
tribal governments (or their designated employees with authority to
act on their behalf) to provide meaningful and timely input in the
development of regulatory proposals containing significant Federal
intergovernmental mandates.'' \1\
\1\ The Act's consultation requirement builds on that set forth
by President Clinton on October 26, 1993, in Executive Order No.
12875. In order ``reduce the imposition of unfunded mandates upon
State, local, and tribal governments,'' the Executive order requires
agencies, when they seek to impose unfunded mandates upon State,
local, or tribal governments through a regulation, to provide to the
Director of the Office of Management and Budget ``a description of
the extent of the agency's prior consultation with representatives
of affected State, local, and tribal governments, the nature of
their concerns, any written communications submitted to the agency
by such units of government, and the agency's position supporting
the need to issue the regulation containing the mandate'' (Sec.
1(a)(2)).
Section 204(b) of the Act provides an exemption from the Federal
Advisory Committee Act (5 U.S.C. App.) for intergovernmental
consultations involving intergovernmental responsibilities or
administration.
Section 204(c) requires the President to issue guidelines and
instructions to Federal agencies ``for appropriate implementation'' of
both of these provisions ``consistent with applicable laws and
regulations.'' In accordance with the President's delegation of
authority,\2\ OMB is today issuing those guidelines and
instructions.\3\
\2\ See 60 Fed. Reg. 45039 (August 29, 1995).
\3\ Portions of these guidelines and instructions are based on
OMB Memorandum M-94-10, entitled ``Guidance for Implementing E.O.
12875, `Reduction of Unfunded Mandates,' '' issued by Director Leon
E. Panetta on January 11, 1994. These guidelines and instructions
are not intended, and should not be construed, to create any right
or benefit, substantive or procedural, enforceable at law by a party
against the United States, its agencies, its officers, or its
employees. Neither are these guidelines and instructions intended,
nor should they be construed, to limit the availability of any
exclusion from the Federal Advisory Committee Act contained in that
Act or any applicable regulations.
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I. The Process for Intergovernmental Consultation
It is important that this intergovernmental consultation process
not only achieves meaningful input, but also builds a better
understanding among Federal, State, local, and tribal governments. As
described in Part II, below, the process required by the Federal
Advisory Committee Act is not to act as a hindrance to full and
effective intergovernmental consultation.
A. What Agencies Are Covered?
The process for intergovernmental consultation called for by
Section 204(a) applies to all Federal agencies (as
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defined in 5 U.S.C. 551(1)), with the exception of independent
regulatory agencies.
B. When Should Intergovernmental Consultations Take Place?
Intergovernmental consultation should take place as early in the
regulatory process as possible. Except where the need for immediate
agency action precludes prior consultation, consultation should occur
before publication of the notice of proposed rulemaking or other
regulatory action proposing a significant Federal intergovernmental
mandate. Consultation should continue after publication of the
regulatory action initiating the proposal. Except in exceptional
circumstances where the need for immediate action precludes prior
consultation, consultation must occur prior to the formal promulgation
in final form of the regulatory action.
C. With Whom Should Agencies Consult?
The statute directs agencies to develop an effective process to
ensure that ``elected officers of State, local, and tribal governments
(or their designated employees with authority to act on their behalf)''
who wish to provide meaningful and timely input are able to do so.
Each agency needs to develop an intergovernmental consultation
process for that agency. To do so, the agency should first develop a
proposal for that process, and consult with State, local, and tribal
governments (as appropriate) concerning this proposed process, as soon
as possible.
One approach an agency may wish to adopt is to designate a person
or an office through which intergovernmental consultation should be
coordinated. Another approach is for an agency to instruct those
responsible for developing a rule to seek out the views of elected
officers of their designated employees. An agency may also wish to
develop other effective means of generating meaningful input or expand
those that it already has. An agency will be able to obtain the fullest
range of meaningful input from State local, and tribal governments by
undertaking the following kinds of consultation.
(1) Heads of Government
Agencies should seek to consult with the highest levels of the
pertinent government units, e.g., the Office of the Governor, Mayor, or
Tribal Leader (or their designated employees with authority to act on
their behalf). These officials are the ones elected to represent the
people and are the ones that the public holds directly accountable for
the actions of those government units.
(2) Both Program and Financial Officials
Many regulatory agencies have functional counterparts in State,
local, and tribal governments, e.g., those government officials who
implement or enforce regulatory responsibilities required in whole or
part by the Federal agency. These local officials tend to be those most
familiar with the Federal agency's regulatory program, and should be
consulted as a source of important information concerning the likely
effects of, or effective alternatives to, Federal regulatory proposals.
In addition, agencies should consult with those State, local, and
tribal officials most directly responsible for ensuring the funding of
compliance with the Federal mandate, e.g., the applicable treasury,
budget, tax-collection, or other financial officials. These officials
are institutionally responsible for balancing the competing claims for
scarce State, local, or tribal resources.
(3) Washington Representatives
It is also important that Federal agencies consult with Washington
representatives, where available, of associations representing elected
officials. These Washington representatives often know which local
elected officials are the most knowledgeable about, interested in, or
responsible for, implementing specific issues, regulations or programs,
and can ensure that a broad range of government officials learn of and
provide valuable insight concerning a proposed intergovernmental
mandate.
(4) Small Governments
Agencies should make special efforts to consult with officials of
small governments, and to develop a plan for such consultation under
section 203 of Title II of the Act. Agencies may wish to consider
several mechanisms for reaching small governments, including special
task forces, periodic mailings through small government associations,
or communication through rural development councils.
D. How Much Consultation Should There Be?
The scope of intergovernmental consultation should be based on
common sense and be commensurate with the significance of the action
being taken. The more costly, the more potentially disruptive, the more
broadly applicable, the more controversial the proposed Federal
intergovernmental mandate--the more consultation there should be. An
agency should decide the extent of its consultation on a case-by-case
basis; a one-size-fits-all prescription is neither appropriate nor
desirable.
E. What Should Be the Content of Consultation?
Agencies should seek views of State, local, and tribal governments
regarding costs, benefits, risks, and alternative and flexible methods
of compliance regarding their regulatory proposals. Agencies should
also seek views on potential duplication with existing laws or
regulations at other levels of government, and on ways to harmonize
their rules with State, local and tribal policies and programs.
To assist with these consultations, agencies should first estimate
the direct costs to be incurred by the State, local, or tribal
governments in complying with the mandate and then inform the affected
governmental units of these cost estimates. Estimates should cover both
up-front and recurring costs, for a reasonable number of years after
the rule is to be put into effect. To the extent practicable, agencies
should make reasonable efforts to disaggregate these cost estimates as
they affect the various levels of government, or otherwise provide the
criteria by which those affected can disaggregate the cost estimates in
order to determine the potential costs to themselves. Where
quantitative estimates are not feasible, agencies should work with
other levels of government to discern and discuss qualitative costs.
Agencies should also consult on and estimate the benefits expected
from the mandate for States, localities, tribes, and their residents
and businesses. Estimates should cover both up-front and recurring
benefits for a reasonable number of years after the rule is to be put
into effect. To the extent practicable, agencies should make reasonable
efforts to disaggregate these benefit estimates as they affect the
various levels of government, or otherwise provide the criteria by
which those affected can disaggregate the benefit estimates in order to
determine the potential benefits to themselves. Where quantitative
estimates are not feasible, agencies should work with other levels of
government to discern and discuss qualitative benefits.
Agencies should also, during the consultative process, seek views
on the expected method of compliance. Governmental units may have
suggestions as to how to achieve the Federal regulatory objective in a
way that is more effective, efficient flexible,
[[Page 50653]]
and consistent with State, local, and tribal governmental regulatory
and other functions.
F. How Should Agencies Integrate These Intergovernmental Consultations
into the Rulemaking Process?
It is important for agencies to integrate these consultation
activities into the ongoing rulemaking process. The cost and benefit
estimates, any additional viable suggestions received during the pre-
notice consultations, and the agency plan to carry out
intergovernmental consultation should be included in the preamble to
the notice of proposed rulemaking. Publication of consultation plan in
the Federal Register will assure that those governmental units that are
not contacted directly will have access to the same cost and benefit
estimates as those who were contacted directly, and have the
opportunity to make their concerns known. Similarly, and consistent
with E.O. 12875, any preamble transmitted to the Federal Register on or
after October 2, 1995, should include, as of the particular stage of
the ruleamking, the extent of the agency's prior consultations with
representatives of affected State, local, and tribal governments, the
nature of their concerns, any written communications submitted to the
agency by such units of government, and the agency's position
supporting the need to issue the regulation containing the mandate.
G. What Compliance Reports Should Agencies Submit to OMB?
Under Section 208 of the Act, OMB is required to submit a report to
Congress on agency compliance with the requirements of Title II of the
Act, which includes the intergovernmental consultation requirement, on
or before March 22, 1996, and annually thereafter. Accordingly,
agencies should provide the Administrator of the Office of Information
and Regulatory Affairs, by January 15, 1996, and annually on that date
thereafter, a written report of each agency's compliance with Title II
of the Act. The report should include a description of the process
established by the agency to ensure meaningful input, as well as a
description of agency consultations with State, local, and tribal
governments for each proposed and final rule ``containing significant
Federal intergovernmental mandates.'' As part of the report to be
submitted by January 15, 1996, agencies should also describe the plans
they have developed to consult with small governments, under Section
203 of Title II of the Act.
II. The Exemption From the Federal Advisory Committee Act
In order to facilitate the consultation process, section 204(b) of
the Act provides an exemption from the Federal Advisory Committee Act
(``FACA'') (5 U.S.C. App.) ``for the exchange of official views
regarding the implementation of public laws requiring shared
intergovernmental responsibilities or administration.''\4\ This
exemption applies to all Federal agencies subject to FACA, and is not
limited to the intergovernmental consultations required by Section
204(a) but instead applies to the entire range of intergovernmental
responsibilities or administration. In accordance with the legislative
intent, the exemption should be read broadly to facilitate
intergovernmental communications on responsibilities or administration.
\4\ House Conference Report 104-76 (March 13, 1995), p. 40.
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This exemption applies to meetings between Federal officials and
employees and State, local, or tribal governments, acting through their
elected officers, officials, employees, and Washington representatives,
at which ``views, information, or advice'' are exchanged concerning the
implementation of intergovernmental responsibilities or administration,
including those that arise explicitly or implicitly under statute,
regulation, or Executive order.\5\
\5\ Specifically, this exemption from FACA applies where--
``(1) meetings are held exclusively between Federal officials
and elected officers of State, local, and tribal governments (or
their designated employees with authority to act on their behalf),
acting in their official capacities; and
``(2) such meetings are solely for the purposes of exchanging
information, or advice relating to the management or implementation
of Federal programs established pursuant to public law that
explicitly or inherently share intergovernmental responsibilities or
administration.''
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The scope of meetings covered by the exemption should be construed
broadly to include any meetings called for any purpose relating to
intergovernmental responsibilities or administration. Such meetings
include, but are not limited to, meetings called for the purpose of
seeking consensus; exchanging views, information, advice, and/or
recommendations; or facilitating any other interaction relating to
intergovernmental responsibilities or administration.
The guidance given above should help determine when a meeting
qualifies under Section 204(b) of the Act for an exemption from the
FACA. We also note that meetings that do not meet these guidelines for
an exemption may nonetheless not be subject to the FACA in the first
instance. Accordingly, to determine whether there is even a need for an
exemption from the FACA, agencies should also consult the FACA itself,
as well as the General Service Administration's regulations at 41 CFR
Subpart 101-6.10, and the court decisions construing the FACA.
* * * * *
It is important that agencies make their best efforts to implement
these guidelines and instructions. As the Conference Report stated,
``an important part of efforts to improve the Federal regulatory
process entails improved communications with State, local, and tribal
governments. Accordingly, this legislation will require Federal
agencies to establish effective mechanisms for soliciting and
integrating the input of such interests into the Federal decision-
making process.''\6\
\6\ House Conference Report 104-76 (March 13, 1995), p. 40.
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If agencies have any questions concerning these guidelines and
instructions, they should contact the Administrator of the Office of
Information and Regulatory Affairs, or her staff. OMB will provide
additional guidance as experience and need dictate.
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36272; File No. SR-OCC-95-01]
Self-Regulatory Organizations; the Options Clearing Corporation;
Notice of Withdrawal of a Proposed Rule Change
September 22, 1995.
On January 23, 1995, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ a proposed rule change clarifying OCC's Rules regarding
the unavailability of current index values. Notice of the proposed rule
was published in the Federal Register on March 17, 1995.\2\ On
September 19, 1995, OCC filed a request that the proposed rule change
be withdrawn.\3\
\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ Securities Exchange Act Release No. 35472 (March 10, 1995),
60 FR 14475 [File No. SR-OCC-95-01].
\3\ Letter from James C. Yong, First Vice President and General
Counsel, OCC, to Jerry Carpenter, Assistant Director, Division of
Market Regulation, Commission, (September 15, 1995).
[[Page 50654]]
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For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4\
\4\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-24261 Filed 9-28-95; 8:45 am]
BILLING CODE 8010-01-M
