Stateline Story

States Fight For Federal Law To Redress Balance of Power

  • August 11, 1999
  • By Sunny Kaplan

WASHINGTON -- States say Congress oversteps its authority, sometimes unwittingly, with lawmaking activity that tramples on state prerogatives. Some recent examples include proposals to protect the privacy of medical records that would preempt stronger state laws, or declare the Internet a tax-free zone, which could cause the evaporation of important state revenue streams.

Legislation that attempts to address the problem is pending in both the U.S. Senate and House and Senate. One bill, sponsored by Sen. Fred Thompson (R-Tenn.), cleared the Senate Governmental Affairs Committee Tuesday (Aug. 3) on a bipartisan 12 to 2 vote. A companion measure, sponsored by Rep. David M. McIntosh (R-Ind.) has been sent to the House Government Reform Committee.

Just last week, President Clinton signed an executive order that declares that federal regulations may preempt state and local laws only when Congress expressly dictates they do.

The Senate and House bills would tell courts to tilt in favor of states in interpreting laws that don't have explicit language on preemption, and require a federal "impact assessment" with state and local governments to assess the costs incurred by a federal regulation.

"The absence of clear congressional intent regarding preemption of state and local authority has resulted in too much discretion for Federal agencies and uncertainty for state and local governments, leaving the presence of scope of preemption to be determined by litigation in the Federal judiciary," McIntosh said.

Delaware Gov. Tom Carper, who has just ended a one-year term as chairman of the National Governors' Association, supports the legislation, but doesn't believe it goes far enough. Carper said at a congressional hearing last month that as power is being shifted to the states with one hand, Congress and the Clinton Administration have been busy taking it away with the other.

"The federal government has often ignored the powerful role and the constitutional rights of states in the American system of government that enables elected officials of all levels of government to best serve the people," Carper said.

He was testifying before the Senate Governmental Affairs Committee on Sen. Thompson's Federalism Accountability Act of 1999.

The NGA was instrumental in constructing the House version of the bill, along with six other state and local government associations, together known as the "Big Seven." They include the National Conference of State Legislatures, Council of State Governments, U.S. Conference of Mayors, National League of Cities, National Association of Counties, and the International City/County Management Association.

Carper said devolution -- the flow of money and programs from Congress to the states -- has given the nation's "laboratories of democracy" a shot at crime reduction, education reform, employment practices, pollution prevention, health coverage and transportation.

Block grants have been given to the states in the areas of welfare, transportation, children's health, childcare, drug prevention, and health expansion.

"Even as states have benefited enormously from block grants over the past few years, the federal government has preempted state laws affecting trade, telecommunications, financial services, electronic commerce, and other issues," Carper said.

For example, the 1998 Internet Tax Freedom Act imposed a three-year moratorium on the imposition of new taxes on Internet access. This impinges on sales taxes, which are an important source of revenue for the states. The Telecommunications Act of 1996 preempted regulation of inherently local business to federal regulators, Carper said.

Bills pending in Congress that have the potential to preempt state laws include:

  • Medical records privacy legislation that would establish a federal standard for the privacy of medical records and preempt any stronger state legislation.
  • Electric utility deregulation legislation that could jeopardize the policymaking and revenue-raising capacity of states and local governments.
  • Juvenile justice legislation that would require states to prosecute juveniles as adults in certain circumstances.

Carper urged Congress to amend the bill to add a "point of order," a procedure also included in the 1995 Unfunded Mandates Reform Act. It requires members of Congress to be told if a bill would preempt the authority of state and local governments.

"It enforces accountability. If you are going to mandate you'd better say it," said Frank Shafroth, the director of state/federal relations for the National Governors' Association.

Many business and environmental groups are against the bill. Those engaged in interstate business are eager to have uniform federal standards to avoid having to comply with 50 different state laws, said Gary Bass, executive director of the Washington, D.C.-based nonprofit research and advocacy group, OMB Watch.

"Although the (act) intends to clarify issues around federal preemption of state and local laws, it could very well have the opposite effect and throw federal regulations into a sea of judicial muddle," he said

"Not only does the bill contain no limits on judicial review, its requirements are often extremely broad and vague, making prime targets for future court challenges. In the end, this could have the detrimental effect of undermining federal assurances for public health, safety, and the environment," the group's official statement said.

Interest groups which fear that the states rights legislation could force them to deal with a welter of confusing and often conflicting state laws so far seem to have the upper hand. The anti-preemption bill is currently stalled in committee in the House of Representatives.

An official of the House Government Reform and Oversight Committee said the bill was clearly unacceptable to a majority of the House in its present form.