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Enacted on March 15, 1995, following intense pressure from the National Governors Association and others, the Unfunded Mandates Reform Act sets up procedural mechanisms that aim to prevent Congress from imposing costs on states without providing federal funds.

The Act also requires that, before an agency can issue an NPRM for a rule that could result in expenditures by State, local, and tribal governments or by the private sector of more than $100 million in a year, agencies must assess the anticipated costs and benefits of the Federal mandate. This provision does not apply to independent regulatory agencies.

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