A substantive modification was made to the required content of regulatory impact analyses. Section 2(3)(C) of v2 removes the requirement for agencies to analyze a "no action by the Federal Government" alternative when considering major rules, streamlining the list of required alternatives. A minor punctuation change was also made in Section 2(2)(B).
Unfunded Mandates Accountability and Transparency Act of 2025
- Sponsor
- Rep. Foxx, Virginia [R-NC-5]
- Committees
- Judiciary Committee (primary)
- Last action
- Jan 13, 2026
Bottom line
This bill broadens the requirements for federal agencies to analyze the costs and benefits of 'major rules' and consult with affected parties, aiming to increase transparency and accountability in the regulatory process.
What it actually does
This bill significantly amends the Unfunded Mandates Reform Act of 1995 (UMRA) by expanding its scope to include 'major rules' from all federal agencies, including independent regulatory agencies (with an exception for monetary policy). It mandates detailed initial and final regulatory impact analyses (RIAs) for these rules, enhances stakeholder consultation to include the private sector, and requires agencies to select the regulatory alternative that maximizes net benefits unless specific exceptions are approved by the Office of Information and Regulatory Affairs (OIRA). The bill also grants OIRA enhanced oversight responsibilities and introduces judicial review for agency compliance with these new requirements.
Proponents argue
Proponents argue the bill will reduce the burden of federal regulations on state, local, Tribal governments, and the private sector by requiring agencies to thoroughly assess costs and benefits, consider less burdensome alternatives, and engage in more robust consultation. They believe it will lead to more efficient, effective, and transparent rulemaking, preventing economically harmful or unnecessary regulations.
Opponents contend
Opponents might argue that the bill could create new bureaucratic hurdles and delays in the rulemaking process, potentially hindering agencies' ability to respond quickly to emerging issues or implement necessary protections. They may also contend that expanding judicial review of regulatory analyses could lead to increased litigation and uncertainty, empowering courts to second-guess agency expertise on complex technical matters.
The bill is moderately complex due to its amendments to existing law, but its structure allows for a clear understanding of its core changes within a reasonable timeframe.
Section 2(2) and Section 7(a)
Expanded Definition of 'Major Rule' and Inclusion of Independent Regulatory Agencies
The bill redefines 'major rule' to include any rule likely to cause an annual economic effect of $100 million or more (adjusted for inflation), a major increase in costs/prices, or significant adverse effects on competition, employment, etc. Crucially, it removes the exemption for 'independent regulatory agencies' from UMRA, meaning these agencies will now be subject to the same unfunded mandate requirements as executive agencies, with the exception of monetary policy rules from the Federal Reserve.
Supporters argue
Supporters argue that independent agencies, despite their structure, issue rules with significant economic impacts and should be held to the same transparency and accountability standards as other federal agencies. This ensures a comprehensive review of regulatory burdens across the government.
Critics contend
Critics might argue that applying UMRA to independent agencies could undermine their independence and expertise, subjecting their technical decisions to political or economic pressures not intended by their enabling statutes. It could also slow down critical regulatory actions.
Tradeoffs
Balances the desire for comprehensive regulatory oversight and accountability across all federal agencies against concerns about preserving the independence and operational efficiency of expert regulatory bodies.
Section 2(3) amending 2 U.S.C. 1532
Mandatory Regulatory Impact Analyses (RIAs) for Major Rules
Before proposing or finalizing any 'major rule,' agencies must prepare and publish both an initial and a final regulatory impact analysis (RIA) in the Federal Register. The initial RIA must accompany the notice of proposed rulemaking and be open for public comment, while the final RIA must accompany the final rule. These analyses must quantify anticipated benefits and costs, analyze alternatives, assess federal assistance availability, estimate disproportionate budgetary effects, and evaluate job creation/loss.
Section 3 amending 2 U.S.C. 1534
Enhanced Stakeholder Consultation
The bill expands the requirement for agencies to consult with 'impacted parties within the private sector (including small businesses)' in addition to State, local, and Tribal governments. It also updates consultation guidelines, mandating early and continuous engagement, consultation with a wide variety of stakeholders, estimation of benefits and costs during consultation, and seeking input on alternative compliance methods and cumulative impacts.
Section 4 amending 2 U.S.C. 1535
Maximizing Net Benefits Requirement
For any major rule requiring an RIA, agencies must select the regulatory alternative that 'maximizes net benefits,' considering only costs and benefits within the scope of the authorizing statute. Exceptions are allowed only with approval from the Administrator of the Office of Information and Regulatory Affairs (OIRA) and if the alternative accounts for unquantifiable costs/benefits (e.g., civil rights) or achieves additional benefits/cost reductions with proper justification.
Section 5 amending 2 U.S.C. 1538
Enhanced OIRA Responsibilities
The Administrator of OIRA is given enhanced responsibilities to provide 'meaningful guidance and oversight' to ensure major rules comply with UMRA and other applicable laws, and do not conflict with other agency policies. OIRA must notify agencies of non-compliance and request changes before finalization. Additionally, OIRA must submit an annual report to Congress detailing agency compliance with UMRA, including activities undertaken to improve compliance and an appendix on consultation activities.
Section 6 adding new 2 U.S.C. 209
Initiation of Rulemaking for Major Rules
When an agency decides to initiate a rulemaking that may result in a 'major rule,' it must establish an electronic docket and publish a 'notice of initiation of rulemaking' in the Federal Register at least 90 days before publishing a notice of proposed rulemaking. This notice must describe the rule's subject, objectives, legal authority, and invite public input on alternatives.
Section 8 amending 2 U.S.C. 1571
Judicial Review of Agency Compliance with RIA and Net Benefits Requirements
The bill grants individuals aggrieved by a final agency action in adopting a major rule the right to judicial review to determine if the agency complied with the requirements for regulatory impact analyses (Section 202(b) and (c)(1)) and the mandate to maximize net benefits (Section 205). The scope of review is governed by Chapter 7 of Title 5, U.S. Code (Administrative Procedure Act), and courts can order remedial action.
The $100,000,000 annual economic effect threshold for a 'major rule' will be adjusted once every 5 years to reflect increases in the Consumer Price Index for All Urban Consumers.
Section 2(2)(C) adding new 2 U.S.C. 1502(3)(A)
Why it matters:Standard legislative practice to ensure thresholds maintain their real value over time without requiring constant legislative updates.
Case for: Ensures the 'major rule' definition remains relevant and captures rules of consistent economic significance over time, preventing inflation from eroding the threshold's impact.
Case against: No specific opposition is typically raised against such indexing provisions, as they are generally seen as administrative adjustments rather than substantive policy changes.
Estimated impact: Ensures the scope of 'major rules' remains consistent in real terms, affecting which rules are subject to the bill's rigorous analysis requirements.
Amends the Congressional Budget Act of 1974 to apply a substantive point of order in Congress to 'Federal mandates' (which now includes private sector mandates due to other changes in the bill) that exceed certain thresholds. Previously, this point of order primarily applied to intergovernmental mandates.
Section 9 amending 2 U.S.C. 658d(a)(2)
Why it matters:Technical amendment to align existing legislative procedural rules with the expanded scope of UMRA.
Case for: Proponents argue this strengthens congressional oversight of costly private sector mandates by providing a procedural tool to challenge them, ensuring that Congress explicitly considers the burden of such mandates.
Case against: Critics might argue it could make it harder for Congress to pass legislation that imposes necessary (but costly) requirements on the private sector, even if those requirements are for public good (e.g., environmental protection, worker safety).
Estimated impact: Could increase the difficulty of passing legislation with significant private sector mandates, potentially leading to more debate and negotiation over their inclusion.