Calendar No. 331

106TH CONGRESS

1ST SESSION S. 1214

[Report No. 106–159]

A BILL

To ensure the liberties of the people by promoting

federalism, to protect the reserved powers of theStates, to impose accountability for Federal preemption of State and local laws, and for otherpurposes.

OCTOBER 18, 1999

Committee on the Budget discharged, pursuant to the

order of August 4, 1977, and placed on the calendar
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Calendar No. 331

106TH CONGRESS

1ST SESSION S. 1214

[Report No. 106–159]

To ensure the liberties of the people by promoting federalism, to protect

the reserved powers of the States, to impose accountability for Federal

preemption of State and local laws, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 10, 1999

Mr. THOMPSON (for himself, Mr. LEVIN, Mr. VOINOVICH, Mr. ROBB, Mr.

COCHRAN, Mrs. LINCOLN, Mr. ENZI, Mr. BREAUX, Mr. ROTH, Mr.

BAYH, Mr. DOMENICI, Ms. COLLINS, Mr. THOMAS, and Mr. ABRAHAM)

introduced the following bill; which was read twice and referred jointly

pursuant to the order of August 4, 1977, to the Committees on the

Budget and Governmental Affairs, with instructions that if one committee reports, the other committee have thirty days to report or be discharged

SEPTEMBER 16, 1999

Reported by Mr. THOMPSON, with amendments

SEPTEMBER 16, 1999

Referred to the Committee on the Budget for a period not to exceed thirty

calendar days

[Omit the part struck through and insert the part printed in italic]

OCTOBER 18, 1999

Committee discharged, pursuant to the order of August 4, 1977, and placed

on the calendar
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A BILL

To ensure the liberties of the people by promoting federalism,

to protect the reserved powers of the States, to impose

accountability for Federal preemption of State and local

laws, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federalism Account5 ability Act of 1999’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) the Constitution created a strong Federal

9 system, reserving to the States all powers not dele10 gated to the Federal Government;

11 (2) preemptive statutes and regulations have at

12 times been an appropriate exercise of Federal pow13 ers, and at other times have been an inappropriate

14 infringement on State and local government author15 ity;

16 (3) on numerous occasions, Congress has en17 acted statutes and the agencies have promulgated

18 rules that explicitly preempt State and local govern19 ment authority and describe the scope of the pre20 emption;
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1 (4) in addition to statutes and rules that explic2 itly preempt State and local government authority,

3 many other statutes and rules that lack an explicit

4 statement by Congress or the agencies of their in5 tent to preempt and a clear description of the scope

6 of the preemption have been construed to preempt

7 State and local government authority;

8 (5) in the past, the lack of clear congressional

9 intent regarding preemption has resulted in too

10 much discretion for Federal agencies and uncer11 tainty for State and local governments, leaving the

12 presence or scope of preemption to be litigated and

13 determined by the judiciary and sometimes pro14 ducing results contrary to or beyond the intent of

15 Congress; and

16 (6) State and local governments are full part17 ners in all Federal programs administered by those

18 governments.

19 SEC. 3. PURPOSES.

20 The purposes of this Act are to—

21 (1) promote and preserve the integrity and ef22 fectiveness of our Federal system of government;

23 (2) set forth principles governing the interpre24 tation of congressional and agency intent regarding
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1 preemption of State and local government authority

2 by Federal laws and rules;

3 (3) establish an information collection system

4 designed to monitor the incidence of Federal statu5 tory, regulatory, and judicial preemption; and

6 (4) recognize the partnership between the Fed7 eral Government and State and local governments in

8 the implementation of certain Federal programs.

9 SEC. 4. DEFINITIONS.

10 In this Act the definitions under section 551 of title

11 5, United States Code, shall apply and the term—

12 (1) ‘‘local government’’ means a county, city,

13 town, borough, township, village, school district, spe14 cial district, or other political subdivision of a State;

15 (2) ‘‘public officials’’ means elected State and

16 local government officials and their representative

17 organizations;

18 (3) ‘‘State’’—

19 (A) means a State of the United States

20 and an agency or instrumentality of a State;

21 (B) includes the District of Columbia and

22 any territory of the United States, and an agen23 cy or instrumentality of the District of Colum24 bia or such territory;
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1 (C) includes any tribal government and an

2 agency or instrumentality of such government;

3 and

4 (D) does not include a local government of

5 a State; and

6 (4) ‘‘tribal government’’ means an Indian tribe

7 as that term is defined under section 4(e) of the In8 dian Self-Determination and Education Assistance

9 Act (25 U.S.C. 450b(e)).

10 SEC. 5. COMMITTEE OR CONFERENCE REPORTS.

11 (a) IN GENERAL.—The report accompanying any bill

12 or joint resolution of a public character reported from a

13 committee of the Senate or House of Representatives or

14 from a conference between the Senate and the House of

15 Representatives shall contain an explicit statement on the

16 extent to which the bill or joint resolution preempts State

17 or local government law, ordinance, or regulation and, if

18 so, an explanation of the reasons for such preemption. In

19 the absence of a committee or conference report, the com20 mittee or conference shall report to the Senate and the

21 House of Representatives a statement containing the in22 formation described in this section before consideration of

23 the bill, joint resolution, or conference report.

24 (b) CONTENT.—The statement under subsection (a)

25 shall include an analysis of—
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1 (1) the extent to which the bill or joint resolu2 tion legislates in an area of traditional State author3 ity; and

4 (2) the extent to which State or local govern5 ment authority will be maintained if the bill or joint

6 resolution is enacted by Congress.

7 SEC. 6. RULE OF CONSTRUCTION RELATING TO PREEMP8 TION.

9 (a) STATUTES.—No statute enacted after the effec10 tive date of this Act shall be construed to preempt, in

11 whole or in part, any State or local government law, ordi12 nance, or regulation, unless—

13 (1) the statute explicitly states that such pre14 emption is intended; or

15 (2) there is a direct conflict between such stat16 ute and a State or local law, ordinance, or regulation

17 so that the two cannot be reconciled or consistently

18 stand together.

19 (b) RULES.—No rule promulgated after the effective

20 date of this Act shall be construed to preempt, in whole

21 or in part, any State or local government law, ordinance,

22 or regulation, unless—

23 (1)(A) such preemption is authorized by the

24 statute under which the rule is promulgated; and
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1 (B) the rule, in compliance with section 7, ex2 plicitly states that such preemption is intended; or

3 (2) there is a direct conflict between such rule

4 and a State or local law, ordinance, or regulation so

5 that the two cannot be reconciled or consistently

6 stand together.

7 (c) FAVORABLE CONSTRUCTION.—Any ambiguities

8 in this Act, or in any other law of the United States, shall

9 be construed in favor of preserving the authority of the

10 States and the people.

11 SEC. 7. AGENCY FEDERALISM ASSESSMENTS.

12 (a) IN GENERAL.—The head of each agency shall—

13 (1) be responsible for implementing this Act;

14 and

15 (2) designate an officer (to be known as the

16 federalism officer) to—

17 (A) manage the implementation of this

18 Act; and

19 (B) serve as a liaison to State and local of20 ficials and their designated representatives.

21 (b) NOTICE AND CONSULTATION WITH POTEN22 TIALLY AFFECTED STATE AND LOCAL GOVERNMENT.—

23 Early in the process of developing a rule and before the

24 publication of a notice of proposed rulemaking, the agency

25 shall notify, consult with, and provide an opportunity for
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1 meaningful participation by public officials of governments

2 that may potentially be affected by the rule for the pur3 pose of identifying any preemption of State or local gov4 ernment authority or other significant federalism impacts

5 that may result from issuance of the rule. If no notice

6 of proposed rulemaking is published, consultation shall

7 occur sufficiently in advance of publication of an interim

8 final rule or final rule to provide an opportunity for mean9 ingful participation.

10 (c) FEDERALISM ASSESSMENTS.—

11 (1) IN GENERAL.—In addition to whatever

12 other actions the federalism officer may take to

13 manage the implementation of this Act, such officer

14 shall identify each proposed, interim final, and final

15 rule having a federalism impact, including each rule

16 with a federalism impact identified under subsection

17 (b), that warrants the preparation of a federalism

18 assessment.

19 (2) PREPARATION.—With respect to each such

20 rule identified by the federalism officer, a federalism

21 assessment, as described in subsection (d), shall be

22 prepared and published in the Federal Register at

23 the time the proposed, interim final, and final rule

24 is published.
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1 (3) CONSIDERATION OF ASSESSMENT.—The

2 agency head shall consider any such assessment in

3 all decisions involved in promulgating, implementing,

4 and interpreting the rule.

5 (4) SUBMISSION TO THE OFFICE OF MANAGE6 MENT AND BUDGET.—Each federalism assessment

7 shall be included in any submission made to the Of8 fice of Management and Budget by an agency for re9 view of a rule.

10 (d) CONTENTS.—Each federalism assessment shall

11 include—

12 (1) a statement on the extent to which the rule

13 preempts State or local government law, ordinance,

14 or regulation and, if so, an explanation of the rea15 sons for such preemption;

16 (2) an analysis of—

17 (A) the extent to which the rule regulates

18 in an area of traditional State authority; and

19 (B) the extent to which State or local au20 thority will be maintained if the rule takes ef21 fect;

22 (3) a description of the significant impacts of

23 the rule on State and local governments;

24 (4) any measures taken by the agency, includ25 ing the consideration of regulatory alternatives, to
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1 minimize the impact on State and local governments;

2 and

3 (5) the extent of the agency’s prior consultation

4 with public officials, the nature of their concerns,

5 and the extent to which those concerns have been

6 met.

7 (e) PUBLICATION.—For any applicable rule, the

8 agency shall include a summary of the federalism assess9 ment prepared under this section in a separately identified

10 part of the statement of basis and purpose for the rule

11 as it is to be published in the Federal Register. The sum12 mary shall include a list of the public officials consulted

13 and briefly describe the views of such officials and the

14 agency’s response to such views.

15 (f) JUDICIAL REVIEW.—

16 (1) IN GENERAL.—Only a State or local govern17 ment, or its representative organization, that is ad18 versely affected or aggrieved by final agency action

19 under this section may file an action seeking judicial

20 review of compliance with this section.

21 (2) LIMITATION OF REVIEW.—Compliance by an

22 agency with this section shall be subject to judicial re23 view only—

24 (A) in connection with review of final agen25 cy action;
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1 (B) in accordance with this subsection; and

2 (C) in accordance with the limitations on

3 timing, venue, and scope of review imposed by

4 the statute authorizing judicial review.

5 (3) AGENCY DETERMINATIONS.—Any determina6 tion of an agency whether a federalism assessment

7 shall be prepared under this section shall be set aside

8 by a reviewing court only upon a showing that the

9 determination is arbitrary or capricious based on in10 formation available at the time the agency made the

11 determination.

12 (4) OMB DETERMINATIONS.—Any determination

13 by the Director of the Office of Management and

14 Budget that a federalism assessment shall be prepared

15 under this section, or any failure to make such deter16 mination, shall not be subject to judicial review.

17 (5) FEDERALISM ASSESSMENT.—The federalism

18 assessment required under this Act shall not be subject

19 to judicial review separate from review of the final

20 rule to which it applies. The federalism assessment

21 shall be part of the rulemaking record and shall be

22 considered by a court to the extent relevant, only in

23 determining under the statute granting the rule24 making authority whether the final rule is arbitrary

25 or capricious, an abuse of discretion, or is unsup-
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1 ported by substantial evidence where that standard is

2 otherwise provided by law.

3 (6) COURT ACTION.—If any agency fails to per4 form the federalism assessment or undertake any con5 sultation, a court may, giving due regard to preju6 dicial error, remand or invalidate the rule. The ade7 quacy of compliance with the specific requirements of

8 this section shall not otherwise be grounds for re9 manding or invalidating a rule under this section. If

10 the court allows the rule to take effect, the court shall

11 order the agency to promptly perform the federalism

12 assessment.

13 (g) EMERGENCY EXEMPTION.—

14 (1) IN GENERAL.—A rule may be adopted with15 out prior compliance with this section if—

16 (A) the agency for good cause finds that

17 conducting the federalism assessment under this

18 section before the rule becomes effective is im19 practicable or contrary to an important public

20 interest; and

21 (B) the agency publishes the rule in the

22 Federal Register with such finding and a suc23 cinct explanation of the reasons for the finding.

24 (2) COMPLIANCE.—If a rule is adopted under

25 paragraph (1), the agency shall comply with this sec-
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1 tion as promptly as possible unless the Director of the

2 Office of Management and Budget determines that

3 compliance would be clearly unreasonable.

4 SEC. 8. PERFORMANCE MEASURES.

5 Section 1115 of title 31, United States Code, is

6 amended by adding at the end the following:

7 ‘‘(g) The head of an agency may not include in any

8 performance plan under this section any agency activity

9 that is a State-administered Federal grant program, un10 less the performance measures for the activity are deter11 mined in cooperation with public officials as defined under

12 section 4 of the Federalism Accountability Act of 1999.’’.

13 ‘‘(g) When developing a performance plan under this

14 section that includes a State-administered Federal grant

15 program, the agency shall consult with public officials as

16 defined under section 4 of the Federalism Accountability

17 Act of 1999.’’.

18 SEC. 9. CONGRESSIONAL BUDGET OFFICE PREEMPTION

19 REPORT.

20 (a) OFFICE OF MANAGEMENT AND BUDGET INFOR21 MATION.—Not later than the expiration of the calendar

22 year beginning after the effective date of this Act, and

23 every year thereafter, the Director of the Office of Man24 agement and Budget shall submit to the Director of the

25 Congressional Budget Office information describing in-
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1 terim final rules and final rules issued during the pre2 ceding calendar year that preempt State or local govern3 ment authority.

4 (b) CONGRESSIONAL RESEARCH SERVICE INFORMA5 TION.—Not later than the expiration of the calendar year

6 beginning after the effective date of this Act, and every

7 year thereafter, the Director of the Congressional Re8 search Service shall submit to the Director of the Congres9 sional Budget Office information describing court deci10 sions issued during the preceding calendar year that pre11 empt State or local government authority.

12 (c) CONGRESSIONAL BUDGET OFFICE REPORT.—

13 (1) IN GENERAL.—After each session of Con14 gress, the Congressional Budget Office shall prepare

15 a report on the extent of Federal preemption of

16 State or local government authority enacted into law

17 or adopted through judicial or agency interpretation

18 of Federal statutes during the previous session of

19 Congress.

20 (2) CONTENT.—The report under paragraph

21 (1) shall contain—

22 (A) a list of Federal statutes preempting,

23 in whole or in part, State or local government

24 authority;
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1 (B) a summary of legislation reported from

2 committee preempting, in whole or in part,

3 State or local government authority;

4 (C) a summary of rules of agencies pre5 empting, in whole or in part, State and local

6 government authority; and

7 (D) a summary of Federal court decisions

8 on preemption.

9 (3) AVAILABILITY.—The report under this sec10 tion shall be made available to—

11 (A) each committee of Congress;

12 (B) each Governor of a State;

13 (C) the presiding officer of each chamber

14 of the legislature of each State; and

15 (D) other public officials and the public on

16 the Internet.

17 SEC. 10. FLEXIBILITY AND FEDERAL INTERGOVERN18 MENTAL MANDATES.

19 (a) DEFINITION.—Section 421(5)(B) of the Congres20 sional Budget Act of 1974 (2 U.S.C. 658(5)(B)) is

21 amended—

22 (1) by striking ‘‘(i)(I) would’’ and inserting ‘‘(i)

23 would’’;

24 (2) by striking ‘‘(II) would’’ and inserting

25 ‘‘(ii)(I) would’’; and
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1 (3) by striking ‘‘(ii) the’’ and inserting ‘‘(II)

2 the’’.

3 (b) COMMITTEE REPORTS.—Section 423(d) of the

4 Congressional Budget Act of 1974 (2 U.S.C. 658b(d)) is

5 amended—

6 (1) in paragraph (1)(C) by striking ‘‘and’’ after

7 the semicolon;

8 (2) in paragraph (2) by striking the period and

9 inserting ‘‘; and’’; and

10 (3) by adding at the end the following:

11 ‘‘(3) if the bill or joint resolution would make

12 the reduction specified in section 421(5)(B)(ii)(I), a

13 statement of how the committee specifically intends

14 the States to implement the reduction and to what

15 extent the legislation provides additional flexibility, if

16 any, to offset the reduction.’’.

17 (c) CONGRESSIONAL BUDGET OFFICE ESTIMATES.—

18 Section 424(a) of the Congressional Budget Act of 1974

19 (2 U.S.C. 658c(a)) is amended—

20 (1) by redesignating paragraph (3) as para21 graph (4); and

22 (2) by inserting after paragraph (2) the fol23 lowing:

24 ‘‘(3) ADDITIONAL FLEXIBILITY INFORMA25 TION.—The Director shall include in the statement
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1 submitted under this subsection, in the case of legis2 lation that makes changes as described in section

3 421(5)(B)(ii)(I)—

4 ‘‘(A) if no additional flexibility is provided

5 in the legislation, a description of whether and

6 how the States can offset the reduction under

7 existing law; or

8 ‘‘(B) if additional flexibility is provided in

9 the legislation, whether the resulting savings

10 would offset the reductions in that program as11 suming the States fully implement that addi12 tional flexibility.’’.

13 SEC. 11. EFFECTIVE DATE.

14 This Act and the amendments made by this Act shall

15 take effect 90 days after the date of enactment of this

16 Act.