A COMMISSION REPORT 

Federal Regulation 

of State and Local Governments: 

The Mixed Record of the 1980s 

dUG 20 1993 

DEPOSITORY 56 

Lca=,aclrr-ir 

U.S. Advisory Commission on 

Intergovernmen t a1 Relations 

A- 126 

July 1993 
U.S. Advisory Commission on 

Intergovernmental Relations 

800 K Street, NW 

South Building 

Suite 450 

Washington, DC 20575 

(202) 653-5640 

FAX (202) 653-5429 

ii U.S. Advisory Commission on Intergovernmental Relations 
Executive Summary 

The 1960s and 1970s inaugurated a new era of regulato9 federalism. Adecade agq, the US AdviS~u Corn&- 

sion on Intergovernmental Relations (ACIR) issued a 

report-Regulatory Federalism: Policyl Process, Impact and 

Reform-showing that mandates and regulations had be- gun to rival grants and subsidies as federal tools for in- fluencing the behavior of state and local governments. In 

less than two decades, the Congress enacted dozens of 

statutes that utilized the new regulatory techniques. 

Many of the new requirements addressed long- standing social problems. Most also enjoyed broad sup- port from the general public and from state and local 

officials. As the number of requirements proliferated, 

however, questions began to be raised about the appro- priateness, costs, complexity, effectiveness, and efficiency 

of intergovernmental regulations. 

By 1981, efforts were under way in all three branches 

of the federal government to address the problems posed 

by regulation. For example, in National League of Cities v. 

Usery, the Supreme Court signaled a willingness to restore 

the Tenth Amendment as a check on federal actions. The 

Congress enacted the Paperwork Reduction Act, the Regu- latory Hexibility Act, and the State and Local Cost Estimate 

Act. President Ronald Reagan established a '&sk Force on 

Regulatory Relief and issued three executive orders de- signed to institutionalize presidential control over the reg- ulatory process, to restrain the issuance of costly 

mandates, and to require that agenciesconsider the feder- alism implications of their regulatory actions. 

How did the mechanisms work? Overall, early opti- mistic evaluations were premature. By 1990, as shown in 

this report-Federal Regulation of State and Local Govern- ments: The Mixed Record of the 1980s-the regulatory reform 

initiatives of the 1980s had failed to reduce existing require- ments or restrict new regulations significantly. 

ACIR's basic findings include the following: 

Adminhratiw rules and regulations affkcting state and lo- cal govemmem continued to incmase during the 1980s. An ef- fort was made to secure regulatory relief through 

administrative reforms, and there were some successes. 

Nevertheless, analyzing data on federal regulatory activity 

for 18 of the 36 mandates included in its earlierRegulatory 

Federalism report, ACIR found that overall regulation con- tinued to rise. Some of the most marked increases came in 

the Clean &Act, FairLabor StandardsAct, and Occupational 

Safe and Health Act. Clear reductions in regulation seem to 

have been achieved in only 5 of the 18 programs examined. 

Weaknesses in the design and implementation of Execu- tive Order 12612 on Federalism haveprevented the federalism 

assessment process from achieving its potential. The order, 

enacted in 1987, outlines principles and procedures de- signed to guide executive branch decisionmaking on issues 

that have federalism implications. The process has not 

been fully or consistently implemented, and it has not pro- duced the intended changes. 

The Congress continued to enact regulations. Between 

1981 and 1990, the Congress enacted 27 statutes that imposed new regulations on states and localities or significantly 

fq~~~dedp~~, /The fmrd fm the 197b m 22 such 

statutes.) Some regulations were costly (e.g., Safe Drinking 

Water Act Amendments of 1986 and Asbestos Hazard Emergency Response Act of 1986). Other mandates have been 

noted more for their intrusiveness than for their expense 

(e.g., requiring states to allow longer and heavier trucks on 

their highways and to raise the minimum drinking age). 

Although several regulatory relief measures were en- acted in the 1980~~ these deregulation initiatives were 

more than counterbalanced by new requirements. The 

Congress also attached new conditions to existing grant 

programs, particularly Medicaid, Aid to Families with De- pendent Children, and local government costs for federal 

water projects. 

The federal government has little systematic data con- cerning the cumulative financial costs of the regulations it im- poses on state and local governments. Since 1983, the best 

available information has been the Congressional Budget 

Office (CBO) estimates of the intergovernmental fiscal 

effects of proposed federal legislation. These estimates 

are approximate and generally conservative due to the in- herent difficulties in estimating mandates and to flaws in 

the statute. Basically, new regulations enacted between 

1983 and 1990 imposed cumulative, estimated costs of be- tween $8.9 and $12.7 billion on states and localities, de- pending on the definition of mandates that is used. 

By virtue of the Supreme Court's opinion in Garcia v. San 

Antonio Metropolitan 'Ransit Authority, reversing Nation- al League of Cities v. Useryl states are virtuallypowerless to 

challenge federal action in the courts on Tenth Amendment 

grounds. Cases following Garcia raised further questions 

about the relationship between the federal government 

and the state and local governments. Federal courts also 

became involved regularly in telling states and local gov- ernments what they must do, not just what they must not 

do. For example, courts have been active especially in 

overseeing state and local management of public institu- tions, such as prisons and mental hospitals. 

Despite the mixed record of the federal courts in deal- ing with federalism issues, the State and Local Legal Center 

has developed an impressive win-loss record in presenting 

the legal arguments of state and local governments before 

the Supreme Court. 

The Commission recommends that: (1) the federal 

government institute a moratorium on mandates for at 

least two years and conduct a review of mandating to re- store balance, partnership, and state and local self-gov- ernment in the federal system; (2) the Supreme Court 

reexamine the constitutionality of mandating as a princi- ple; (3) those responsible for administering and utilizing 

the congressional fiscal notes process, the Paperwork Re- duction Act, the Regulatory Flaa'bifity Act, and the Fedemlism 

Executive Order redouble their efforts to take fullest advan- tage of these mechanisms, and that state and local govern- ments identify and press for consideration of significant 

state-local effects in pending legislation and regulations. 

U.S. Advisow Commission on Intergovernmental Relations iii 
iv US. Advisory Commission on Intergovernmental Relations 
Preface 

A decade ago, the U.S. Advisory Commission on Inter- governmental Relations (ACIR) issued an in-depth report 

on a new trend, the use of compulsory federal regulations 

aimed at or implemented by state and local governments. 

In that report, Regulatory Federalism: Policy, Process, Im- pact, and Reform, ACIR probed the shift from an incentivebased (i.e., grant-in-aid) system designed to encourage 

state and local governments to perform an activity or provide 

a seMce, to a more command-based system requiring state 

and local action under federal regulation. This trend was 

identified first in a 1981 ACIR report,AnAgendaforAmerican Federalism: Restoring Confidence and Competence. 

In Regulatory Federalism, ACIR explained: 

State and local governments, like the business 

sector and private individuals, have been affected 

greatly by the massive extension of federal controls and standards over the past two decades. 

These extensions have altered the terms of a 

long-standing intergovernmental partnership. 

Where the federal government once encouraged 

state and local actions with fiscal incentives, it 

now also wields sanctions-or simply issues com- mands. The development of new techniques of 

intergovernmental regulation presents a chal- lenge to the balance of authority in, and the effective operation of, American federalism. 

Stating that “reform of the new regulatory programs deserves a priority position on the policy agenda of the 198Os,” 

the Commission listed six major findings from its report: 

1) During the 1960s and 1970s, state and local 

governments, for the first time, were brought 

under extensive federal regulatory controls. 

2) Federal intergovernmental regulation takes 

a variety of new administrative and legal forms. 

3) Although the new forms of regulation have 

been litigated heavily, by and large, the fed- eral courts have done little to constrain the 

regulatory proclivities of Congress or the executive branch. 

4) The real nature and extent of the impact of 

federal regulation on state and local govern- ments is still not fully understood. 

5) Intergovernmental conflict and confusion 

have hampered progress toward achieving 

national goals. 

6) Past efforts at regulatory reform have given little attention to problems of intergovernmental concern. 

Written in the early years of the Reagan administration, 

Regulatory Federalism came too early to assess an important thrust of the Reagan presidency: regulatory reform. 

Elected with a perceived mandate to attack excess regulation, the Reagan administration initiated a variety of programs during the 1980s designed to reduce or to eliminate 

regulatory burdens. Although aimed primarily at the pri- vate sector, the relief effort also benefited the public sec- tor. 

That effort consisted of a myriad of initiatives. For the 

public sector, the most important executive branch initia- tive was Executive Order 12612 on federalism, the product 

of a Working Group on Federalism that had been established early in the administration. 

Concern about the regulatory and financial burdens 

imposed on state and local governments was not limited to 

the executive branch. During this period, the Congress enacted the State and Local Government Cost Estimate Act, 

which provided that, “to the extent practicable,” each bill 

or resolution reported by a House or Senate Committee 

should be accompaniedby a fiscal note if the aggregate annual cost to state and local governments exceeded an estiU.S. Advisory Commission on Intergovernmental Relations v 
mated $200 million or if it was likely to “have exceptional 

fiscal consequences for a geographic region or a particular 

level of government.” The requirement is not mandatory, 

however, nor does it cover measures considered by the appropriations committees. 

Especially in the intergovernmental arena, some ob- servers maintained that these reform efforts provided effwtive regulatory relief. The administration itself estimated 

that its actions had eliminated nearly 12 million hours of 

papexwork affecting states and localities and had saved 

them billions of dollars in one-the and recurring costs. 

Less partial observers also argued that state and local governments, rather than corporations, were “the big winners” under deregulation. 

The decade of the 1980s was also judicially momentous for federalism. The most significant U.S. Supreme 

Court opinions were Garcia v. Sun Antonio Metropolittan 

Trunsit Authority (1985), South Dakota v. Dole (1987), and 

South Carolina v. Baker (1988). Together, these cases essentially reduced the status of the states to that of “interest 

groups” operating and competing in the national political 

process. The Court’s rulings also had the effect of over- turning the long-standing doctrine that the federal government is one of limited, delegated powers, thus opening the 

way for virtually unfettered exercises of national power 

vis-a-vis the states and local governments. It was these opin- ions that led ACIR to examine the judicial aspects of federalism more closely and to explore ways of rebalancing the 

federal system through constitutional reform. 

With this report, ACIR examines the actions and accomplishments of executive branch initiatives to restrain 

and reform intergovernmental regulation during the 

1980s. In addition, it inventories a number of significant 

new mandates enacted by the Congress during the past decade and develops a rough estimate of their cumulative 

costs. This study also traces the Supreme Court’s evolving 

doctrines affecting intergovernmental regulation. Finally, 

it presents the Commission’s findings and recommendations for responding to this situation. 

Robert B. Hawkins, Jr. 

Chairman 

vi U.S. Advisory Commission on Intergovernmental Relations 
Acknowledgments 

The principal analysts for this report were Timothy J. 

Conlan of George Mason University (Chapters 1,3,4, and 

5); David R. Beam of the Illinois Institute of Technology 

(Chapter 2); and Cynthia Cates Colella (Chapters 6,7, and 

8). All contributed to the Findings and Recommendations. 

All three were among the authors of ACIR’s 1984 report 

Regulatoty Federalism. 

Special thanks are extended to the U.S. General Accounting Office, which made available to ACIR previously 

unpublished data involving research on changes in 18 intergovernmental regulatory programs for 1981-1986. Draft case 

study documents summarizing regulatory trends in each of 

these programs provided the basis for much of the analysis 

in Chapter 2. Individuals at GAO who were instrumental 

in preparing this research or making this information 

available to ACIR included John Kamensky, Joel Marus, 

Paul Posner, John Vocino, and Mark Ward. 

Through participation in thinkers’ and critics’ sessions 

or through written comments, many other individualscontributed to the development and final preparation of this 

report. Those individuals included: 

Richard Bartholomew, New York State Senate, 

Washington Office 

Enid Beaumont, Academy for State and Local 

Government 

Joyce Benjamin, State and Local Legal Center 

James Blum, Congressional Budget Office 

Russell Chapin, consultant 

Dan Chenok, U.S. Office of Management andBudget 

Thomas Choman, National Association of Regulatory 

Utility Commissioners 

Paul Colborn, U.S. Department of Justice 

William G. Colman, consultant 

Margaret M. Donohoe, Regulatory Information 

Martha Fabricius, National Conference of State 

Jon Felde, National Conference of State Legislatures 

Jim Frech, Andersen Consulting 

Scott Gallagher, U.S. General Accounting Office 

Theresa A. Gullo, Congressional Budget Office 

Michael Hamilton, University of Southern Maine 

Service Center 

Legislatures 

Jeffrey Hart, New York State Senate, 

Louise Jacobs, Council of State Governments 

James Edwin Kee, George Washington University 

Harry Kelso, U S. Department of Justice 

Robert A. Licht, American Enterprise Institute 

Daniel R. Mandelker, Washington University 

James L. Martin, National Governors’ Association 

Donald Murray, National Association of Counties 

William Niskanen, Jr., CAT0 Institute 

William Olmstead, Administrative Conference 

Robert W. Rafuse, Jr., U.S. Department 

Edward Rastatter, U.S. Department 

Mavis Mann Reeves, University of Maryland 

Bernard Ross, American University 

Jeffrey Schiff, National Association of lbwns 

John Shannon, The Urban Institute 

Catherine L. Spain, Government Finance Officers’ 

Carl W. Stenberg, University of Virginia 

David B. Walker, University of Connecticut 

Margaret Wrightson, U.S. General Accounting 

Christine Wnuk, National Conference of State 

Christopher Zimmerman, National Conference of 

Washington Office 

of the United States 

of the Treasury 

of Transportation 

and Townships 

Association 

Office 

Legislatures 

State Legislatures 

The report was prepared under the direction of Bruce D. 

McDowell, director of Government Policy Research, with 

assistance from Sharon Lawrence, senior policy specialist. 

Joan A. Casey edited the document. Suzanne Spence pro- vided clerical support. 

The Commission and its staff are responsible for any 

errors of omission or commission. 

John Kincaid 

Executive Director 

U.S. Advisory Commission on Intergovernmental Relations vii 
_- 

viii US. Advisory Commission on Intergovernmental Relations 
Contents 

Findings and Recommendations ....................................................................... 1 

Findings .................................................................................. 1 

Recommendations ......................................................................... 4 

Recommendation 1 

Reconsidering the Constitutionality of Unfunded Federal Mandates ............................. 4 

Recommendation 2 

Using Existing Mechanisms to Press Harder for Relief from Burdensome Federal Regulations ..... 4 

Recommendations on Constitutional Balance ........................................................... 5 

5 

5 

Recommendation 1 

An Amendment of the Amendment Article .................................................... Recommendation 2 

A Commission of the States for Constitutional Revision ........................................ 

Chapfer I Origins and Evolution of Federal Regulation of State and Local Governments .................... The History of Federal Regulation .......................................................... 7 

7 

Types of Regulation .................................................................... 7 

Support for Goals of Regulation ......................................................... 7 

9 

Growth of Federal Regulation ........................................................... 9 

Changing Attitudes .................................................................... 9 

State and Local Concern ............................................................... 10 

A Decade of Reform and Relief Strategies ................................................... 10 

Tkmporary Respite or Permanent Relief? ................................................. 11 

Overview ................................................................................. 12 

A Rising Tide of Regulatory Complaints ..................................................... 

Part I Bends in Regulation-The Executive Branch ........................................ 15 

Chapter 2 The Reagan Administration’s Regulatory Relief Program ...................................... 17 

Relief. Not Reform .................................................................... 18 

Social Regulation Addressed ............................................................ 18 

Limited Statutory Changes ............................................................. 18 

Origins of the Relief Effort ................................................................. From Reform to Relief ..................................................................... 17 

17 

U.S. Advisory Commission on intergovernmental Relations ix 
Key Actions: Off and Running in 1981 ....................................................... Impact on State and Local Governments ..................................................... Intergovernmental Programs Subject to Review ............................................... An Assessment of Regulatory Changes. 1981-1986 ............................................. Review Methodology ................................................................... Major Findings ........................................................................ Illustrative Cases ...................................................................... Clean Air Act .......................................................................... Fair Labor Standards Act ............................................................... Occupational Safety and Health Act ..................................................... Success Stories ........................................................................ 

19 

19 

20 

22 

22 

24 

25 

25 

245 

26 

26 

Conclusion ............................................................................... 27 

Chapter 3 Executive Order 12612 on Federalism: Performance. Problems. and Potential .................... Policy Impact Analysis ..................................................................... 31 

The Working Group on Federalism .......................................................... Promulgating an Executive Order on Federalism .............................................. Federalism Principles .................................................................. 32 

Policymaking Criteria .................................................................. 32 

Agency Implementation ................................................................ 32 

Mixed Assessments of Executive Order 12612 ................................................. Positive Appraisals ..................................................................... 33 

A Systematic Survey of Agency Compliance .................................................. A Random Sample of Citations .......................................................... Patterns of Compliance in Major Rules ................................................... Conclusion ............................................................................... 38 

31 

31 

32 

33 

SkepticalJudgments ................................................................... 33 

34 

35 

37 

Part I1 Rends in Regulation . The Congress ......................................... ........ 41 

Chapter 4 Intergovernmental Regulatory Enactments in the 1980s ........................................ An Inventory of Intergovernmental Mandates Adopted in the 1980s ............................. Regulatory Expansion in the 1980s ....................................................... More Coercive Techniques .............................................................. Traditional Grant Conditions in the 1980s .................................................... 

Aid to Families with Dependent Children (AFDC) ........................................ Immigration Reform ................................................................... Water Resources Development Act of 1986 ............................................... The Uneven Pace of Regulation and Reform ................................................. Regulatory Relief Statutes Enacted in the 1980s ........................................... Regulatory Relief through Grant Consolidation ........................................... Statutory Regulation in Perspective ...................................................... Reasons for Legislative Activism ........................................................ Regulatory Federalism Becomes Commonplace ........................................... Major Legislation Regulates Heavily ..................................................... 

Medicaid ............................................................................. 

Conclusion ............................................................................... 

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48 

48 

49 

49 

49 

49 

51 

52 

52 

54 

54 

55 

Chapter 5 The Monetary Costs of Intergovernmental Regulatory Enactments in the 1980s ................... 

Estimating the Cost of Recent Federal Mandates Using the Congressional Budget Office Data ..... 

Estimating the Costs of New Federal Legislation .......................................... Data Limitations ....................................................................... 65 

59 

59 

Measuring Mandate Costs 59 

61 

Cost Estimate Overview 62 

Problems and Limitations 62 63 

Conclusion 67 

Research on the Cumulative Costs of Federal Mandates ....................................... .............................................................. 

................................................................ 

............................................................... 

............................................................................... 

x U.S. Advisory Commission on Intergovernmental Relations 
Part I11 The Judiciary and Regulation in the 1980s ........................................... 71 

Chapter 6 Regulatory Consequences of a New Judicial Philosophy ........................................ 73 

The Short Life of NLC ..................................................................... 73 

Court’s Holding Lacks Staying Power .................................................... 73 

From Constitutional Protection to Political Safeguards: Garcia v . San Antonio Metropolitan ’Ransit Authority .............................................. 74 

States in the Founders’ Vision ........................................................... 74 

States in the Political Process ........................................................... 75 

76 

Tenth Amendment Arguments Rejected .................................................. 76 

Intergovernmental 7hx Immunity Not Accepted ........................................... 77 

Baker’s Impact ........................................................................ 77 

The Spending Power in the Courts .......................................................... 77 

The Doctrine of Unconstitutional Conditions ............................................. 78 

Implied Preemption and the Dormant Commerce Clause ...................................... 79 

Judicial Power and Implied Preemption .................................................. 80 

Judicial Power and the Dormant Commerce Clause ........................................ 81 

The Negative Impact of the Fourteenth Amendment .......................................... 83 

Conclusion ............................................................................... 84 

Exploring the “Weak Essence” of Federalism: South Carolina v . Baker .......................... 

Chapter 7 Regulatory Consequences of a New Public Law Model ......................................... ’Raditional vs . Public Law Litigation ......................................................... Spallone v . United States and the Limits of Court Power ................................... Missouri v . Jenkins and the Breadth of Court Power ....................................... Subtle Distinctions and Mixed Messages .................................................. 

and the Custodial Institution ............................................................ Custodial Institutions .................................................................. Arguments for Far-Reaching Federal Judicial Power ....................................... Arguments for Limited Federal Judicial Power ............................................ The Custodial Cases and the Supreme Court ................................................. Lower Courts Given Little Guidance 

Hard Constitutional Choices: Federalism. Separation of Powers. Individual Rights, 

.................................................... Suing for Constitutional and Statutory Compliance: The Scope of Section 1983 ................... Section 1983 and State Immunity: A Note on the Eleventh Amendment ..................... Contemporary Construction of Section 1983: The Status of Governmental Liability 

and Official Immunity .................................................................. Local Governmental Liability ........................................................... Official Immunity., .................................................................... The Substantive Reach Expands ......................................................... Section 1983 and Expanded Immunities .................................................. 

91 

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95 

96 

96 

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97 

98 

98 

100 

Conclusion ............................................................................... 100 

Chapter 8 Conclusions and Prognoses ................................................................. 107 

Umpires of Federalism ..................................................................... 107 

An Era of Ambivalence: Jurisprudential Federalism in the Eighties ............................. 107 

Federalists. Nationalists. or Something Else? ................................................. 109 

Sandra Day O’Connor: Federalist ........................................................... 109 

O’Connor on the Guarantee Clause ..................................................... 111 

The Supreme Court in the 1990s: An Era of Ad Hoc Federalism? ............................... 113 

Before the Court: Legal/Constitutional Strategies in an Era of Judicial Uncertainty ............... 113 

The State and Local Legal Center ....................................................... 113 

The Advisory Commission on Intergovernmental Relations ................................. 113 

Concfusion ............................................................................... 114 

U.S. Advisory Commission on Intergovernmental Relations xi 
Tables and Figures 

Table 1-1 

Table 2-1 

Table 2-2 

Table 2-3 

Table 2-4 

Table 3-1 

Table 3-2 

Table 4-1 

Table 4-2 

Table 4-3 

Table 5-1 

Table 5-2 

Table 5-3 

Table 5-4 

Table 5-5 

Table 5-6 

Table 5-7 

Table 5-8 

Table 5-9 

Major Statutes Regulating State and Local Governments Enacted between 1931-1980 ............. Reagan Administration Regulatory Relief Actions for State and Local Governments. 1981-1982 .... Characteristics of 18 Intergovernmental Regulations ........................................... Summary of Changes in Mandating on State and Local Governments ........................... Funding Levels for Administrative Costs in “Intergovernmental Partnership” Programs ............ Federal Rules and References to E.O. 12612. by Agency. October 26.198 7.August 10. 1990 ........ Final Agency Rules that Reference E.O. 12612: A Random Sample ............................. Major New Enactments and Statutory Amendments Regulating State and Local Governments, 

1981-1990 ............................................................................. Congressional Enactments Providing Regulatory Relief to State and Local Governments. 1981-1990 .... Categorical and Block Grant Programs and Federal Outlays for Broad-Based and Other Grants. 

Selected Years FY 1975.1991 ............................................................ Federal Mandates as a Percentage of Total Federal Aid Received by Various Jurisdictions .......... Annual Local Costs of Meeting Selected Mandates ............................................ Estimated Cumulative Capital and Operating Costs for Local Governments of Recent EPA Regulations . Potential Increase in Annual User Charges Due to Environmental Regulations ................... State and Local Cost Estimates Prepared by CBO. 1983-1988 ................................... CBO Analyses of State and Local Costs for Substantive Enactments. 1983-1990 .................. Availability of CBO State and Local Cost Estimates for Recently Enacted Regulations ............ Congressional Budget Office Cost Estimates of New Regulations Conforming to ACIR Criteria. 

FY 1984-1991 ......................................................................... 

8 

21 

23 

24 

25 

35 

36 

44 

50 

52 

60 

60 

61 

62 

62 

63 

64 

65 

Congressional Budget Offi Cost Estimates of New Regulations and Grant Conditions. FY 1984-1991 . 66 

67 

67 

Winners and Losers in Selected U.S. Supreme Court Cases. 1980-1991 .......................... 108 

Nationalist and Federalist Perspectives: Positions of Justices Marshall and O’Connor 

110 

Table 8-3 Amicus Scorecard 1987-1991 Supreme Court Terms ........................................... 114 

Table 8-4 ACIR Recommendations ................................................................... 115 

Table 5-10 Major .mX Legislation Restricting State and Local Government Revenues ........................ Estimated Costs Associated with Other Federal Regulations .................................... 

in Selected Supreme Court Cases. 1980-1991 .............................................. 

Table 5-11 

Table 8-1 

Table 8-2 

figure 4-1 The Growth of Regulatory Federalism: Enactments Added per Decade. 1931-1990 ................ 46 

Figure 4-2 Functional Composition of Federal Regulations. 1931-1990 ..................................... 46 

figure 4-3 Changing Composition of Regulatory Instruments. 1931-1990 ................................... 47 

Figure 4-4 Federal Mandates Enacted per Session of Congress. 1981-1990 ................................. figure 4-5 Number of Federal Preemption Statutes Enacted per Decade: 1790-1991 ......................... figure 4-6 Functional Makeup of Major Federal Legislation. 1951-1990 .................................... Figure 4-7 The Growing Proportion of Intergovernmental Regulation. 1951-1990 ........................... Figure 4-8 The Changing Mix of Intergovernmental Grants and Regulation. 1951-1990 ...................... Rgure 5-1 %ends in Federal Aid and Mandate Burdens. 1984-1991 

49 

53 

55 

55 

56 ....................................... 68 

xii U.S. Advisory Commission on Intergovernmental Relations 
U.S. Advisory Commission on Intergovernmental Relations xiii 
xiv US. Advisory Commission on Intergovernmental Relations 
Findings and Recommendations 

The 1960s and 1970s inaugurated a new era in Ameri- can intergovernmental relations-an era of regulatory fed- eralism. For the first time in the nation’s history, federal 

mandates and regulations began to rival grants and subsidies in importance as federal tools for influencing the behavior of state and local governments. In less than two 

decades, the Congress enacted dozens of statutes that uti- lized new and more coercive techniques to regulate state 

and local governments directly or sought to enlist them as 

administrative agents in regulating the private sector. 

Individually, many of these requirements addressed 

long-standing social problems and enjoyed strong public 

support. As such requirements proliferated and their cumulative burdens increased, however, serious questions began 

to be raised about the relative costs, complexity, effectiveness, and efficiency of intergovernmental regulations. 

By 1981, mounting concern over the “mandate problem” had produced a surge of regulatory relief and reform 

efforts on the part of all three branches of the federal government to address the problems posed by regulation. In 

1976, the Supreme Court signaled a willingness to restore 

the Rnth Amendment as a check on federal actions that 

endangered the institutional integrity and traditional 

functions of states and localities. Soon thereafter, the 

Congress enacted a series of statutes designed to restrain the 

growth and ease the burden of intergovernmental regula- tion, including the Paperwork Reduction Act, the Regulatory 

Ffexibility Act, and the State and Local Cost Estimate Act. 

At the beginning of his first term, President Ronald 

Reagan established a Thsk Force on Regulatory Relief, 

charged with reducing regulatory burdens. As the work 

continued, he issued three executive orders designed to 

institutionalize presidential control over the regulatory 

process, to restrain the issuance of costly mandates, and to 

require that agencies consider the federalism implications 

of their regulatory actions. 

These actions generated hopes that the fiscal and ad- ministrative burdens imposed by intergovernmental regulations would be reduced, that new mandates might be 

avoided, and that the goals of federal regulations might be 

achieved by less intrusive means. Initially, these hopes appeared to be met when some regulatory relief was pro- vided in a number of highly visible cases. Indeed, some of 

the earliest evaluations of President Reagan’s deregula- tion program identified state and local governments as sig- nificant winners in the process. 

Overall, however, such optimistic evaluations were 

premature. Acareful and comprehensive analysis of inter- governmental regulatory trends in all three branches of 

government indicates that, by 1990, substantial measurable 

growth in burdens on state and local governments had oc- curred. The modest successes achieved during the 198Os, 

particularly through the Prrperwork Reduction Act, paled be- side the increase in regulations. This record calls into question the effectiveness of the relief tools, as currently utilized. 

FINDINGS 

Finding 1 

Despite concerted presidential action to control federal rulemaking activity, the burdens imposed on state 

and Iocal governments by administrative rules and regu- lations continued to increase during the 1980s. 

As detailed in Chapter 2, the Reagan administration’s 

“regulatory relief” campaign, launched in 1981, was the 

first to give prominent attention to federal regulations affecting state and local governments, as well as those af- fecting the private sector. In the early part of the decade, 

while the Presidential Thsk Force on Regulatory Relief 

was in existence, 50 rules were targeted for intensive scrutiny and revision. The process established under Executive 

Order 12291 also called for thorough cost-benefit reviews of 

proposed rules that might cause a major increase in the corn- pliance costs of state and local governments. 

Some specific successes did result. Nevertheless, an 

analysis of data on five separate dimensions of federal regulatory activity for 18 of the 36 mandates included in the 

earlier ACIR Regulatory Federalism report suggests that 

the federal government’s overall regulatory burden on 

states and localities continued to rise during the 1980s. 

During the 1981-1986 period, more prescriptive program standards and administrative procedures were created 

U.S. Advisory Commission on Intergovernmental Relations 1 
in many of these 18 policy areas. One examination of fed- eral rulemaking activity identified a total of 140 regulatory 

changes during this sk-year period, which added an esti- mated net total of nearly 6,000 requirements. 

Overall, in 11 of the 18 program areas studied (or 61 

percent of the total), the combined programmatic, admin- istrative, and fiscal burden imposed by federal requirements on state and local governments actually appeared 

to increase rather than decrease. This increase was measured by changes in program standards, administrative 

procedures, net compliance costs, state administrative 

delegation, and enforcement patterns. Some of the most 

marked increases came in the areas of the Clean Air Act, 

Fair Labor Standards Act, and Occupational Safery and 

Health Act. Furthermore, the combined mandate burden 

appeared to remain about stable-that is, it was not reduced by the federal regulatory relief effort-for two ad- ditional statutes, the Hatch Act and Title VI civil rights 

requirements. Clear reductions in regulatory burden 

seem to have been achieved in only five of the 18 programs 

examined (28 percent). 

While federal efforts to increase the delegation of 

authority to states and to rely on less intensive methods 

of oversight did help diminish mandate burdens, they 

did not seem sufficient to counterbalance the combined 

impact of more stringent standards and procedures and 

reduced aid funding. 

finding 2 

AlthoughExecutive Order 12612 onFederalismhas 

had a positive impact on certain policy decisions, weaknesses in its design and implementation have prevented 

the federalism assessment process from achieving its 

potential. 

Executive Order 12612 outlines a series of principles 

and procedures designed to guide executive branch 

decisionmaking on issues that have federalism implica- tions. Since 1987, federal agencies have been instructed to: 

1) Assess the impact of their legislative and regula- tory proposals on the federal system; 

2) Minimize the adverse or unintended effects of 

federal policies on states and localities; and 

3) Restrict inappropriate preemption of state and lo- cal policy making and administrative prerogatives. 

Some federal, state, and local government officials 

believe that the Executive Order has enhanced their ability to focus attention on federalism issues during the legis- lative clearance and regulatory review processes. This 

objective was reinforced, they point out, when President 

George Bush affirmed his commitment to the principles of 

the Federalism Executive Order in a 1990 memorandum to 

the heads of executive branch departments and agencies. 

To date, however, the Executive Order 12612 process 

has not been fully or consistently implemented, and it has 

failed to produce the significant changes in federal agency 

decisionmaking expected by most state and local govern- ment officials. In particular: 

Patterns of compliance with Executive Order 

12612’s procedures vary widely among federal 

agencies. 

Some agencies routinely fail to implement the 

Executive Order’s certification and assessment 

procedures in even the most superficial way. 

Many agencies have failed to appoint a designated federalism official or have failed to inform 

the Office of Management and Budget (OMB) of 

their designee. 

In virtually all cases examined, significant regulations with important implications for state and local governments continue to be promulgated 

without the benefit of a comprehensive federalism assessment. 

Many of these problems stem directly from weaknesses in the design and procedures of Executive Order 

12612. In particular, the Office of Management and Budget, which is supposed to oversee and coordinate federal 

agency compliance with the order, has been granted neither the resources nor the enforcement authority necessary to ensure its effective implementation. Responsibility 

for deciding whether the Executive Order has been prop 

erly applied rests with each agency and its designated federalism official. Lacking the authority to challenge such 

agency determinations, OMB has little incentive to devote significant resources to implementing the order. 

Finding 3 

Between 1981 and 1990, the Congress enacted 27statUtes that imposed new regulatory burdens on states and 

localities or significantly expanded existing programs. 

This record of regulatory expansion was comparable to, 

and in some respects surpassed, the unprecedented pace 

of intergovernmental regulation compiled in the 1970s, 

when 22 such statutes were enacted. 

As of 1980, research by ACIR had identified 36 major 

federal mandates affecting state and local governments. 

Of this total, almost two-thirds were enacted in the 1970s. 

Yet, by 1990, despite a decade of attempts at deregulation, 

27 additional regulatory statutes had been enacted (see 

tabulation in Chapter 4). This total includes such laws as 

the Drug Free Worlplace Act of 1988, which addressed 

policy concerns for the first time. 

The burdens imposed by new federal mandates varied. Some contained costly financial obligations for states 

and localities. For example, the Safe Drinking Water Act 

Amendments of1986 will levy estimated costs of $2 billion 

to $3 billion annually on public drinking water systems. 

Other recent mandates, such as those requiring states 

to allow longer and heavier trucks on their highways and to 

raise the minimum drinking age, have been noted more far 

their intrusiveness than for their expense. Ironidy, the 

2 U.S. Advisorv Commission on Intergovernmental Relations 
1980s saw increased reliance on the two most openly coercive regulatoxy techniques: direct orders and crossover sanctions. Although these were once the least frequently used 

devices, they are now among the most common. 

The 1980s also witnessed the enactment of several 

regulatory relief measures, including the creation of a series of new block grants. Overall, however, these deregulation initiatives were more than counterbalanced by the 

accumulation of new requirements. The Congress also attached costly and intrusive new conditions to existing 

grant programs. (These conditions are not included in the 

inventory of 27 new regulatory statutes in Chapter 4.) Particularly noteworthy was a series of new conditions added 

to the Medicaid program, workfare conditions attached to 

the Aid to Families with Dependent Children program as 

part of welfare reform, and legislation increasing local 

government costs for federal water projects. 

Finding 4 

The federal government should, but does not, know 

the cumulative financial costs imposed on state and local 

governments by recently enacted federal mandates. Available evidence indicates that such costs are substantial 

and growing at a rate faster than overall federal aid. 

The federal government has little systematic data 

concerning the cumulative financial costs of the regulations it imposes on state and local governments. To date, 

the best available information about the costs of federal 

intergovernmental regulations is provided by the Congressional Budget Office (CBO). Since 1983, CBO has attempted to estimate the intergovernmental fiscal effects of 

proposed federal legislation. Between 1983 and 1989, CBO 

produced state and local cost estimates for more than 3,500 

bills and amendments, including 457 bills that were enacted 

into law. An analysis of these data indicates that: 

New legislation adopted since 1983 has imposed 

cumulative, estimated costs of between $8.9 billion and $12.7 billion on states and localities, depending on the definition of mandates that is used. 

On an annualbasis, these statutes imposed estimated costs of between $2.2 billion and $3.6 billion in FY 1991. 

Federally mandated costs have risen rapidly 

since 1986, growing at a pace faster than overall 

federal aid. 

Additional costly requirements are scheduled to 

take effect in the years ahead. 

Unfortunately, the CBO data provide only an approximate and highly conservative estimate of the fiscal magnitude of federal mandates. Individually, many of the CBO 

cost estimates were unavoidably rough and preliminary. 

Cumulatively, they were incomplete. In particular, no cost 

estimates were prepared by CBO for one-quarter of the27 

new intergovernmental statutes inventoried in Chapter 4, 

including some that later proved to be extremely costly. In 

other cases, subsequent research indicated that CBO estimates were too low. 

Many of these problems reflect difficulties inherent 

in the mandate estimating process. Accurately measuring 

the costs-or the benefits-associated with a single man- date can be extremely difficult, and such difficulties are 

compounded in compiling a cumulative price tag for all 

regulations. Thousands of separate local governments 

may be affected by a single statute, and the costs of com- pliance often vary widely from jurisdiction to jurisdiction. 

Moreover, some of the costs are relatively intangible, and 

others require subjective assessments about governmental behavior in the absence of regulation. 

Even in cases where cost estimates can be prepared, 

the size and complexity of congressional legislation and 

uncertainties concerning subsequent agency interpretation and implementation of the statutes sometimes 

prevent CBO from developing complete or adequate 

cost projections. 

At the same time, other shortcomings in CBO’s cost 

estimates reflect features of the fiscal notes statute itself 

and CBO’s organizational limitations. Currently, cost es- timates are required to be prepared when a committee re- ports a bill for full House or Senate consideration. This 

often leaves the budget office with only a few days to survey affected state and local governments and prepare a 

regulatory estimate, and it precludes the estimate from 

being used by the committee in developing the legislation. 

In addition, tax and appropriations bills are excluded 

from coverage under the State and Local Cost Estimate 

Act. Finally, partly because of its limited size, structure, 

and competing responsibilities, CBO has been unable to 

develop a regular network of state and local government 

contacts which would allow it to systematize the cost estimating process. As a result, most of the cost estimates are 

developed hurriedly on an ad hoc basis. 

Finding 5 

The Supreme Court has undermined the position of 

state and local governments vis-a-vis the federal government through its opinion in Garcia v. Sun Antonio Metropolitan nunsit Authorio. As a result of that opinion, states 

are virtually powerless to challenge any federal action in 

the courts on Tenth Amendment grounds. 

Furthermore, federal court actions to expand the substantive scope of 42 U.S.C. 1983 regarding civil rights violations have created grave uncertainty for states and localities 

regarding their scope of liability for official actions. 

The State and Local Legal Center, however, has re- ceived praise for its submissions to the Court on key cases 

affecting state and local governments. The litigants supported by the center, through its submission of amicus 

briefs, have been victorious in the majority of cases. 

In deciding Garcia v. Sun Antonio Metropolitan Pansit 

Authority, the Supreme Court refused to intercede in disputes between the federal and state and local govern- ments, abandoning the resolution of federalism questions 

to the political processes of the federal government. Sub- sequent to that decision, federal courts became active in 

telling state and local governments not only what they 

U.S. Advisory Commission on Intergovernmental Relations 3 
could not do but what they must do (e.g., raise tax rates.) 

Courts have been active especially in the past decade in 

overseeing state and local management of public institutions, such as prisons and mental hospitals. Expansions of 

the substantive scope of 42 U.S.C. 1983 were a common 

tool used by the courts to support their actions. 

Despite the mixed record of the federal courts in dealing with federalism issues, superb work is being done by 

the State and Local Legal Center in its efforts to restore 

balance to the nation's legal treatment of federalism questions. Over the past decade, the center has developed an 

impressive win-loss record in representing state and local 

interests before the courts. 

RECOMMENDATIONS 

Recommendation 1 

Reconsidering the Constitutionality 

of Unfunded Federal Mandates 

The Commission finds that unfunded federal mandates-by which the federal government imposes requirements on state and local governments without 

reimbursement of the resulting compliance costs-have 

reached such proportions as to constitute an overextension of the constitutionally delegated powers of the Congress and the Executive, an abridgement of the authority 

of citizens in their state and local communities to govern 

their own affairs, and an impairment of the ability of citi- zens to hold their elected federal officials accountable for 

the public costs of their decisions. This development is 

new and alarming. Even more alarming is the weight of re- Cent decisions by the U.S. Supreme Court toward the view 

that constitutional limits on the federal government's power 

are nonjusticiable, even though the Constitution is founded 

on the premise that the power of the federal government 

should be limited by the primary reach of state authority. 

The Commission recommends, therefore, that the 

Congress, the Executive Branch, and the federal Judiciary 

declare and honor a moratorium on the imposition of unfunded or underfunded mandates by statutory, administrative rulemaking, and judicial means for a period of at 

least two years, and that the Congress and the Executive 

Branch conduct a complete and thorough review of mandating for the purpose of restoring balance, partnership, 

and state and local self.government in the federal system. 

The Commission recommends, furthermore, that the 

US. Supreme Court reexamine the constitutionality of 

mandating as a principle and also consider the constitutionality of particular mandates in the context of the cumulative impact of mandates on the federal fabric of the 

Constitution of the United States. 

Recornmendation 2 

Using Existing Mechanisms to Press Harder 

for Relief from Burdensome Federal Regulations 

The Commission finds that several mechanisms were 

created in the 1980s to help limit the growth in federal regulation of state and local governments. These mechanisms include the fiscal notes requirement in the Congress, the 

Paperwork Reduction Act, the Regulatory Fhibility Act, the 

Federalism Executive Order and the Federal Register's 

semiannual state and local regulatory agenda in the ex- ecutive branch; the State and Local Legal Center estab- lished by several national associations of state and local 

governments; and the Mandates Monitor issued by the 

National Conference of State Legislatures. The Commis- sion applauds the creation of these new mechanisms, and 

finds that they have potential for more effective use. The 

Commission concludes that utilizing these mechanisms 

more fully offers an immediate potential for limiting and 

mitigating the burdens of federal regulation of state and local governments. The Commission also recognizes, however, 

that the regulatory relief mechanisms created during the 

1980s are not perfect, that growth has continued at a rapid 

pace, and that sigmficant improvements are needed in order 

to address the problem adequately. 

The Commission recommends, therefore, that those 

parties responsible for administering and utilizing the 

congressional fiscal notes process, the Paperwork Reduction Act, the Regulatory Fi'exibiriry Act, and the Federalism 

Executive Order redouble their efforts to take fullest advantage of these mechanisms. The Commission recommends, further, that: 

State and local governments (i) identify those 

bills pending in the Congress and regulations to 

be prepared within the executive branch of the 

federal government that may have significant effects on state and local governments, (ii) press 

the committees and subcommittees of Congress 

responsible for the identified bills, early and often, to consider the effects on state and local governments, (iii) call for preparation of fiscal notes 

by the Congressional Budget Office on significant provisions of those bills before final subcommittee and committee action, (iv) provide to 

the committees, subcommittees, and the Congressional Budget Offce with relevant fiscal and 

other information that should be taken into account in the legislative process, (v) press for early 

access to the administrative rulemaking process; 

and (vi) educate the public and the press about 

the impact of federal regulation on state and local 

governments, for example, by indicating the cost of 

unfunded federal mandates on tax and utility bills. 

The Congress and all appropriate agencies of the 

federal government should make compliance 

with the letter and the spirit of theStuteandkal 

Cost Estimate, Paperwork Reduction, and Regulatory Flexibility Acts and the Federalism Executive 

Order a high priority. 

The federal, state, and local governments should 

continue to evaluate ways to improve regulatory 

relief mechanisms and give high priority to the 

development of a more effective, efficient, and equitable intergovernmental partnership to achieve 

shared objectives with minimal unilateral and 

costly regulation. 

4 US. Advisory Commission on Intergovernmental Relations 
Recommendations 

on Constitutional Balance 

The Commission finds that increasing federal regula- tion of state and local governments, the lack of adequate 

constitutional protection for state and local authority in 

the decisions of the federal courts, and the increasingly 

crowded policy agenda of the federal government have 

contributed to a serious and growing imbalance in the fed- eral system. This imbalance makes it difficult for the fed- eral government to establish genuinely national priorities 

and to resolve major national problems. This imbalance 

also weakens the ability of state and local governments to re- spond to the needs of their citizens. The following recommendatiirns are directed at setting in motion a process for 

restoring balance in the federal system by opening a period 

of national discussion of appropriate federal and state roles 

in the American system of constitutional government. 

Recomrnenda tion 7 

An Amendment of the Amendment Article 

The Commission finds that existing procedures for 

calling a constitutional convention to amend the U.S. 

Constitution have proven to be a bamer to state initiative 

in the process of amending the U.S. Constitution in the 

absence of congressional initiative. 

The Commission therefore recommends that the 

Congress propose, and the states speedily ratify, an 

amendment to Article V of the U.S. Constitution to clarify 

the procedure for calling a constitutional convention for 

some limited purpose, thus removing the fear of a “runaway’’ convention that would exceed the purpose of its call. 

Specifically, the Commission recommends adoption of an 

amendment to the U.S. Constitution to provide the following: 

A convention called for the purpose of proposing 

amendments to the Constitution, pursuant to Ar- ticle y shall be limited to the consideration of 

amendments that pertain exclusively to subjects 

jointly specified by the legislatures of two-thirds 

of the several states. The Supreme Court of the 

United States shall have original jurisdiction to 

decide, in the case of dispute, whether a convention has exceeded the purpose of its call. 

Recommendation 2 

A Commission of the States 

for Constitutional Revision 

The Commission recommends that, prior to petitioning the Congress to call a constitutional convention, some 

number of states, but no less than nine, jointly create a 

Commission of the States for Constitutional Revision, for 

the purposes of conducting an inquiry into the constitutional problems of joint concern to the states and of formulating a common resolution to be submitted to the 

legislatures of the several states for their consideration. 

The Commission recommends further that the governor of each participating state be authorized to appoint 

one member of the revision commission subject to confirmation by the legislature of that state. 

The Commission recommends that this procedure be 

followed whether or not the Congress has proposed, and 

the states ratified, an amendment to clarify the procedures for limiting a constitutional convention to the purpose of its call. 

Adopted by the Commission 

March 1988 

U.S. Advisory Commission on Intergovernmental Relations 5 
6 U.S. Advisory Commission on intergovernmental Relations 
Origins and Evolution 

of Federal Regulation 

of State and Local Governments 

American intergovernmental relations underwent 

an important change in the 1970s. Federal aid to state 

and local governments as a proportion of federal, state, 

and local spending peaked in 1978 and then declined 

from 1979 through 1989. At the same time, more attention was being focused on the regulatory dimensions of 

American federalism. 

The History of Federal Regulation 

Intergovernmental regulation was not a wholly new 

phenomenon, but most of the earliest requirements imposed on state and local governments were conditions of 

aid, designed to ensure fii and programmaticaccountability in the use of federal funds. They were not used ordinarily 

to achieve policy goals beyond the specifii scope of the fund- ing or beyond the constitutional reach of the Congress. 

Although aid requirements often were highly detailed 

and specific-frequently making the management and 

coordination of multiple grants difficult for recipient gov- ernments-they were based on long-established and widely 

accepted legal and intergovernmental principles. Conceptually, such conditions trad their origins to the earliest categorical cash grants enacted in the late 19th and early 20th 

centuries.' Legally, such conditions had long enjoyed judicial 

sanction, with the courts interpreting them as voluntary 

agreements freely entered into by willing state and local governments in exchange for federal funding2 

Types of Regulation 

By the late 197Os, this cooperative tradition was being 

challenged by the rise of several new and more intrusive 

techniques of intergovernmental regulation. As docu- mented in ACIR's 1984 report Regulatory Federalism: 

Policy, Process, Impact, and Reform, four new types of regulation proliferated in the 1960s and 1970~~ These types in- cluded crosscutting requirements, crossover sanctions, 

partial preemptions and direct orders. 

Crosscutting requirements are general provisions 

applied across the board to many or all federal grants to 

advance national social and economic goals. Examples in- clude Title VI of the 1964 Civil Rights Act, which guaran- tees nondiscrimination in federally assisted programs, and 

the National Environmental Policy Act of 1969, which re- quires environmental impact statements* 

Crossover sanctions are grant conditions that impose 

federal fiscal sanctions on one program for failure to com- ply with federal requirements under another, separately 

authorized, program. Illustrative of this form are the Education for All Handicapped Children Act, which requires 

that all handicapped children be provided education op- portunities, and the Emergency Highway Energy Comervation Act of 1974, which withheld a portion of federal-aid 

highway funds if states failed to establish a 55 mph speed 

limit on roads in their jurisdictions. 

Partial preemption consists of federal laws that set 

minimum national standards for certain activities. In these 

programs, responsibilities for administration and enforce- ment maybe delegated to states or localities provided they 

meet federal criteria. The Occupational Safety and Health 

Act of I970 and the Clean AirAct Amendments of 1970 may 

be classified as partial preemptions. 

Direct orders consist of legal requirements that are 

enforced by civil or criminal penalties. Exemplifying this 

type are the Equal Employment Opportunity Act of 1972, 

barring job discrimination by state and local governments, 

and the Marine Protection Research and Sanctuaries Act 

Amendments of 1977, which prohibits ocean dumping of 

sewage sludge by cities). 

Support for Coals of Regulation 

In Regularory Federalism, ACIR determined that, as of 

1980, 36 major intergovernmental regulations employed 

one or more of these new techniques (see nble 1-1). All 

but two of the requirements were enacted in the 1960s and 

U.S. Advisory Commission on Intergovernmental Relations 7 
Title 

Table 7-7 

Major Statutes Regulating State and Local Governments 

Enacted between 1931 -1 980 

Public Law me 

Age Discrimination Act of 1975 

Age Discrimination in Employment Act (1974) 

Architectural Bamers Act of 1968 

Civil Rights Act of 1964 (Title VI) 

Civil Rights Act of 1968 (Title VIII) 

Clean Air Act Amendments of 1970 

Coastal Zone Management Act of 1972 

Davis-Bacon Act (1931) 

Education Amendments of 1972 (Title IX) 

Education for All Handicapped Children Act (1975) 

Emergency Highway Energy Conservation Act (1974) 

Endangered Species Act of 1973 

Equal Employment Opportunity Act of 1972 

Fair Labor Standards Act Amendments of 1974 

Family Educational Rights & Privacy Act of 1974 

Federal Insecticide, Fungicide, and Rodenticide Act (1972) 

Federal Water Pollution Control Act Amendments of 1972 

Flood Disaster Protection Act of 1973 

Hatch Act (1940) 

Highway Beautification Act of 1965 

Marine Protection Research & Sanctuaries Act Amendments of 1977 

National Energy Conservation Policy Act (1978) 

National Environmental Policy Act of 1969 

National Health Planning and Resources Development Act of 1974 

National Historic Preservation Act of 1966 

Natural Gas Policy Act of 1978 

Occupational Safety and Health Act (1970) 

Public Utilities Regulatory Policies Act of 1978 

Rehabilitation Act of 1973 (Title 504) 

Resource Conservation and Recovery Act of 1976 

Safe Drinking Water Act of 1975 

Surface Mining Control and Reclamation Act of 1977 

Uniform Relocation Act of 1970 

Water Quality Act (1965) 

Wholesome Meat Act (1967) 

Wholesome Poultry Products Act (1968) 

Key: 

CC-Crosscutting Requirement 

CO-Crossover Sanction 

DO -Direct Order 

PP-Partial Preemption 

94-135 

93-259 

90-480 

88-352 

90-284 

91-604 

94-370 

74-403 

92-3 18 

94-142 

93-239 

93-205 

92-261 

93-259 

93-380 

92-516 

92-500 

93-234 

76-753 

89-285 

95-153 

95-619 

91-190 

93-64 

89-665 

95-621 

91-596 

95-617 

93-112 

94-580 

93-523 

95-87 

91-646 

88-668 

90-201 

90-492 

cc 

DO 

cc 

cc 

cc 

CC,CO,PP 

cc 

cc 

cc 

co 

co 

CC,PP 

DO 

DO 

cc 

PP 

cc, PP 

cc,co 

cc 

co 

DO 

PP 

cc 

co 

cc 

PP 

PP 

DO 

cc 

PP 

CC,PP,DO 

PP 

cc 

PP 

PP 

PP 

Source: US. Advisory Commission on Intergovernmental Relations, Regulatory Fedemlism: hlicy, Process, Impact, and Reform (Washington, DC, 1984), pp. 19-21. 

8 U.S. Advisory Commission on Intergovernmental Relations 
1970s. Most involved what is now commonly referred to as 

“social regulation,” addressing issues of public health and 

safety, civil rights, or environmental protection. 

These regulatory requirements typically addressed 

widely perceived problems and enjoyed considerable public support. For example, in early 1965, over half of the 

American public identified civil rights as “the most important problem facing this country t~day,”~ and public backing for the civil rights legislation of 1960s has been well 

documented! Similarly, the enactment in 1970 and 1972 

of sweeping federal laws to regulate air and water pollution was preceded by growing public concern about environmental problems. Among the general public, the 

percentage of respondents identifying air pollutionas a serious problem doubled between 1965 and 1968-from 28 

percent to 55 percent-while those concerned about water pollution increased from 35 percent to 58 percent during this period.’ By 1973,54 percent of the public indicated 

a willingness to pay $50 a year more in taxes to clean up air 

and water pollution.8 

Not only did the general public typically support these 

new regulatory statutes: but state and local government 

officials also endorsed most of the goals. Several intergov- ernmental regulations, including many civil rights provisions, national health planning requirements, coastal 

management regulations, and handicapped education legislation, were patterned after earlier state and local gov- ernment initiatives. 

Although some of these policies generated intergov- ernmental conflicts and tensions, there also were significant accomplishments. The civil rights laws of the 1960s 

effectivciy eliminated overt segregation in public services 

and accommodations, vastly increased minority voting 

participation, and proved more effective than judicial 

edicts in eliminating school segregation. In environmental 

policy, emissions of several major air pollutants have de- clined significantly (dramatically in the case of airborne 

lead) since the 1970~.~O Such reductions are particularly 

impressive in view of the fact that economic and population growth during this period would have generated substantial increases in pollution in the absence of such 

policies. Similarly, the percentage of monitoring tests 

showing unacceptable levels of specified pollutants also 

declined during this time period.” 

A Rising Tide of Regulatory Complaints 

Despite such accomplishments, the political dynamics 

of regulatory federalism began to change as the number 

and specificity of requirements proliferated. Today, few issues generate more intergovernmental tension than federal regulation of state and local government activities. 

Concerned about what they perceive to be an “explosion of 

federal mandates,”’* state and local government officials increasingly are voicing objections. “Federal mandates are putting a stranglehold on state budgets,” said a recent president 

of the National Conference of State L~gislatures.~~ 

However, supporters of new federal requirements observe that most regulatory goals still enjoy considerable 

public support, and they often defend them as a necessary 

response to state and local failures. As a key aide to the 

chairman of the Senate Finance Committee put it: “Mandates wouldn’t be necessary if [states] were doing what 

they should have been doing in the first place.”14 

Growth of Federal Regulation 

Federal regulation in many fields began gradually and 

grew incrementally. The requirements of the 1964 Civil 

Rights Act and the Clean Air Act Amendments of 1970, for 

example, were enacted only after earlier, less invasive approaches were judged to be inadequate. In the case of the 

Civil Rights Act, stronger federal requirements were necessary to overcome entrenched policies of racial segregation and discrimination in many states. Previous 

legislation addressing air and water pollution was replaced, observers indicate, because a more active federal 

role was deemed necessary to deal effectively with problems that spilled across state and local borders. 

Following such breakthroughs, however, subsequent 

laws often were adopted rapidly and with less legislative 

For example, civil rights protections on behalf 

of women, the handicapped, and elderly individuals were 

patterned explicitly-and often verbatim-after the 1964 

Civil Rights Act. They were adopted by the Congress with 

virtually no discussion or debate about the similarities and 

differences in the forms of discrimination faced by different groups and the types of remedies that might prove 

most effective in dealing with them. 

In addition, the total number of intergovernmental regulations grew by almost 160 percent during the 1970s. Federal spending on social regulation increased by over 400 

percent, and the number of pages of regulations published in 

the Federal Register increased almost three-fold.l6 

Changing Attitudes 

As the number and stringency of regulations mounted, 

concern increased in various quarters. Even some supporters of various requirements began to wonder if there 

might be too much of a good thing. In particular, questions 

were raised about the overall costs and the relative cost 

effectiveness of many regulations. 

These questions were reflected in changing public attitudes toward regulation and the federal government. The 

number of Americans who felt they could trust the federal 

government to “do what is right” in all or most cases plummeted from 61 percent to just 25 percent between 1972 and 

1980.” The proportion of the population agreeing that “government has gone too far in regulating business” increased 

by over one-third between 1964 and 1978, rising from 42 

percent to 58 percent.’* Although pluralities of the public 

still believed that the benefits of federal regulation outweighed the costs in such specific areas as worker safety, 

civil rights, and environmental protection, by 1978, a majority of Americans agreed that, overall, “the cost of government regulation outweighs the benefits.”19 

U.S. Advisory Commission on Intergovernmental Relations 9 
State and local Concern 

During this period, comparable concerns about the 

effects of federal regulations and mandates were growing 

among state and local officials. The most vigorous objections 

generally focused on fmcial costs of federal mandates. In 

some cases, the federal government provided little or no fi- nancial assistance for compliance and implementation. 

Questions also were raised about the ineffiency, inflexibil- ity, and intrusiveness of federal regulations, as well as the cu- mulative threat to state and local autonomy. 

In a 1981 survey of local officials, although many 

agreed with the basic goals and objectives of federal regulations, most respondents believed that mandated 

standards were unrealistic, excessively detailed, and 

needlessly difficult.20 In another survey of municipal officials, two-thirds or more believed that “urgent” action 

was necessary to alleviate the impact of seven different 

federal regulations, including the Clean Water Act, the 

Clean Air Act, handicapped access requirements, and the 

Occupational Safety and Health Act.*l Similarly, county of- ficials complained about the “enormous cumulative bur- dens” imposed by federal crosscutting requirements, 

including excessive costs, confusion, and 

Capturing the tone of growing concern about such 

requirements in 1980, then New York Mayor Edward I. 

Koch argued that a “mandate millstone” was strangling 

the vitality of the nation’s cities, that “a maze of complex 

statutory and administrative directives has come to 

threaten both the initiative and financial health of local 

governments throughout the country.”9 

The perception of rapidly mounting regulatory 

pressure from Washington was exacerbated by several 

developments. First, increasingly demanding conditions were being added to large grant programs, such as 

Medicaid and Aid to Families with Dependent Children 

(AFDC), for which state participation could be considered “voluntary” only in the technical sense. Second, 

New Federalism initiatives, such as block grants and 

General Revenue Sharing, which had been designed explicitly to increase state and local discretion in the use of 

federal funds, were delivering federal funds directly to 

jurisdictions that had never before received them. One 

result was to extend the influence of proliferating crosscutting requirements more broadly and deeply.” Finally, judicial mandates (i.e., court decisions) were being 

issued increasingly in traditional local government service areas, such as education, corrections, and mental 

health services. 

Scholarly research supported the apprehensions of 

public officials. One study examining the fiscal impact 

of six federal mandates in seven local jurisdictions concluded that the costs imposed were substantial, averaging about $25 per capita or about 19 percent of the total 

value of federal aid received by these jurisdictionsP 

Another study of federal and state mandates in ten diverse localities concluded that “there are significant fis- cal impacts of mandates on local governments and . . . these 

impacts have political as well as fd importanm.”~ 

A Decade of Reform and Relief Strategies 

Growing concerns about the effects of intergovern- mental mandates helped launch a broad array of efforts by 

the federal government to reform the regulatory process 

and to grant relief to state and local governments and oth- er subjects of regulation. By 1981, all three branches of the 

federal government had taken such actions. Although 

these efforts were most intense during the early years of 

the Reagan administration, they began during the 1970s 

and spanned much of the decade of the 1980s. 

In 1976, for example, the U.S. Suprcme Court barred 

the application of federal wage and hour regulations, a 

form of direct order mandate, to state and local governments. By doing so, the Court indicated a willingness to 

restore the Constitution’s Xnth Amendment as a check 

on federal actions that threatened the institutional integrity and the traditional functions of states and localities 

(see also Chapter 6). This decision spurred legal challenges 

lenges to other federal intergovernmental regulations 

(e.g., Surface Mining Control and Reclamation Act of 

1977and Age Discrimination in Employment Act of 1974), although they were unsuccessful. 

By the early 1980s, the Congress had enacted a series 

of statutes designed to restrain the growth of federal intergovernmental regulation, including the Pupwork Reduction Act of 1980, the Regulatory Flexibility Act of 1980, and 

the State and Local Cost Estimate Act of 1981 .27 

Within the executive branch, beginning in 1981, regulatory relief was identified as one of the fundamental components of President Ronald Reagan’s economic recovery 

strategy. Although deregulation was not focused specifically on intergovernmental regulations, requirements 

with significant intergovernmental impacts were among 

the major targets. The relief effort included a Presidential 

’bsk Force on Regulatory Relief and the promulgation of 

Executive Order 12291 in 1981. 

Chaired by then Vice President George Bush and 

staffed by high-ranking officials in the administration, the 

task force was asked to study the economic impact of 

pending rules and regulations and to review existing rules 

deemed to be particularly burdensome. After soliciting 

recommendations from state and local governments and 

the private sector, the task force selected 111 rules for in- tensive review and modification, of which one-quarter 

were intergovernmental in nature. 

Executive Order 12291, a key executive branch tool 

for regulatory relief, was issued in February 1981. It established, for the first time, a centralized regulatory review 

and clearance process in OMB. The order required federal agencies, where laws permit, to identify and adopt the 

most cost-effective approach when considering new regu- lations, to select alternatives in which social benefits outweigh social costs, and to submit proposed rules to OMB 

for review and comment before they are issued or pub- lished in the Federal Regkter. 

10 US. Advisory Commission on Intergovernmental Relations 
The Papenvork Reduction Act of 1980 requires 

igencies to submit annually to the Office of Managenent and Budget (OMB) copies of reports and forms 

:hat outside entities must complete, along with estinates of the work hours required to complete them. 

DMB reviews such forms, establishes a paperwork allowance or ceiling for each agency, and issues instructions for reducing or eliminating specific forms or requirements. The act stemmed from President Jimmy 

Carter’s efforts to respond to problems identified by 

the Federal Paperwork Commission. Many of the procedures were first laid out in Executive Order 12174 in 

1979, although the act expanded OMB’s enforcement 

authority and resources and extended paperwork control authority to additional agencies. 

The Regulatory Fleribiliw Act of 1980 requires that 

when issuing new regulations, federal agencies consider alternative procedures and strategies that recognize 

the limited resources and special needs of small governmental jurisdictions (with populations under 

s0,OOO) and small businesses, and minimize the regulatory impact on them. 

The State and Local Government Cost Estimate Act 

of1981 requires that, for significant legislation that is 

approved by congressional committees, the Congressional Budget Office (CBO) must prepare estimates of 

the costs that will be imposed on state and local governments. Such cost estimates are intended to be made 

available to members of Congress prior to floor consideration of such legislation, and they are generally included in committee reports. 

President Ronald Reagan’s interest in federalism 

reform spawned other policies with important implications for intergovernmental regulation. Although some 

proposals with potentially sweeping regulatory consequences were never enacted (notably the Federalism 

Initiative of 1982), ten new or substantially modified 

block grants were enacted in 1981 and 1982 in the areas 

of public health, education, community development, 

social services, and employment and training. In many 

cases, reporting requirements and other conditions of 

aid were sharply reduced. 

Moreover, Executive Order 12612 on Federalism 

was issued by President Reagan in October 1987. This 

order, which was reaffirmed by President Bush, sets 

forth criteria to be followed by federal agencies when 

proposing new legislation or rules that will significantly 

affect state and local functions and responsibilities. It 

requires that such federalism impacts be assessed and 

minimized wherever possible in both rulemaking and 

legislative proposals. 

Temporary Respite or Permanent Relief? 

In the view of some observers, the regulatory reform 

and federalism agendas of the Reagan administration provided states and localities with substantial relief from federal 

regulatory burdens. Those individuals point out that the 

President’s Thk Force on Regulatory Relief succeeded in: 

Revising Davis-Bacon requirements to give local 

governments more flexibility in calculating “prevailing wages” paid in federally supported construction projects; 

w Modifying regulations governing handicapped 

access in public transportation; and 

rn Reducing the reporting and accounting requirements in the federal school lunch program. 

The task force estimated that these and more than 20 other regulatory actions affecting state and local governments would save 11.8 million work hours per year, 

approximately $2 billion in annually recurring costs, and 

$4 billion to $6 billion in one-time capital costs.28 

The 1981 consolidation of dozens of categorical programs into block grants provided an opportunity to condense and simplify program-specific grant requirements. 

The merger of 33 education programs into the Chapter 2 

block grant, for example, allowed the administration to replace 667 pages of regulations governing the previous programs with a single 20-page set of requirements. Overall, 

OMB estimated that the 1981 block grants reduced paperwork requirements for states and localities by 5.9 million 

hours (91 percent).B 

These initiatives, combined with other administrative 

actions to accelerate the delegation of regulatory authority to the states under various partial preemption programs, led some analysts to conclude that state and local 

governments were among the biggest winners under deregulation. As the author of one study argued, “State and 

local governments quietly captured some of the most important and enduring victories of the president’s regulatoy 

relief campaign.”3o 

Others questioned the magnitude and durability of 

these deregulation initiatives. They pointed out that many 

of the most important accomplishments came very early in 

the Reagan administration. The lhsk Force on Regulatory 

Relief completed its mission during Reagan’s first term, 

and some of its principal accomplishments-such as handicapped access requirements in mass transit-have been 

overtaken by subsequent statutory and administrative developments. Although several additional block grants 

were enacted after 1982, there also have been efforts to 

earmark and reregulate several earlier ones. Finally, although the pace of new intergovernmental regulatory enactments appeared to slow in the early 1980s, in the last 

several years there has been new regulatory legislation in 

a number of areas. 

The Clean Air Act Amendments of 1990, for example, 

imposed new deadlines and requirements dealing with urban smog, acid rain, municipal incinerators, and toxic 

emissions.31 In education, the 1986 reauthorization of the 

Education for All Handicapped Children Act expanded services for pre-school children at an estimated cost to state 

and local governments of $575 million annually,j2 while 

US. Advisory Commission on Intergovernmental Relations 11 
the Asbestos Hazard Emergency Response Act of 1986 required schools to remove hazardous asbestos at an estimated cost of $3.15 billion over 30 years.33 

Among other requirements, federal Medicaid requirements enacted in 1988,1989, and 1990 expanded services for low-income children and made changes in 

nursing home regulations that were estimated to cost 

states an additional $2.5 billion; additional expanded coverage of low-income children enacted as part of the fiscal 

1991 budget reconciliation act was estimated to impose 

another $1.1 billion in costs over the next five years.34 

Some analysts have expressed concern that the pace 

of new regulatory enactments will accelerate as the Congress, constrained by large budget deficits, attempts to respond to new social problems: 

There is a danger that Congress, in striving to 

close the gap between its desire to define large 

goals and its unwillingness to provide the administrative means to achieve them, will try to conscript the states. That is, it will give orders to them 

as if they were administrative agents of the national 

government, while expecting state officials and 

electorates to bear whatever costs ensue.35 

Overview 

These recent developments raise important questions 

about intergovernmental regulatory trends in the 1980s 

and the effectiveness of the various relief strategies to 

deal with problems of regulatory federalism. For example: 

How many significant new intergovernmental 

regulations were enacted during the 1980s? 

How did the pace of regulatory enactments in the 

1980s compare with previous decades, both in absolute terms and relative to declines in overall 

legislative activity and changes in federal aid to 

states and localities? 

Can the costs of new regulatory enactments be 

quantified and, if so, did the fiscal burdens of intergovernmental regulation increase during the 

past decade? 

What do recent trends in regulation tell us about 

the congressional approach to intergovernmental 

legislation in the 198Os, and about the effectiveness of intergovernmental impact analysis procedures, such as the Congressional Budget Office’s 

fiscal notes process? 

Administratively, what impact have procedural 

changes, such as OMB’s regulatory review and 

clearance process, had on intergovernmental 

regulations? Were the burdens imposed by statutory mandates modified or reduced during the 

1980s through changes in administrative rules? 

H Have ad hoc changes in regulations, such as those 

advanced by the President’s Bsk Force on Regulatory Relief, proven to be permanent or temporary in their effects? 

How effectively has Executive Order 12612 on 

federalism been implemented, and what impact 

has it had on federal rulemaking and statutory 

recommendations? 

These and related issues are addressed in the following chapters. In Part I, trends in the executive branch during the early 1980s are examined. As part of that 

examination, Chapter 2 contains a review of the intergovernmental elements of the Reagan administration’s regulatory relief program and assesses their impact on specific 

rules imposed by 18 federal mandates. Chapter 3 is an 

evaluation of the implementation of Executive Order 

12612 on Federalism, exploring the extent to which federal agencies have used its procedures to ascertain and reduce regulations imposed on state and local governments. 

Part I1 presents regulatory trends in the Congress 

during the 1980s. An inventory of major new regulatory 

statutes and provisions enacted during the decade and 

their political and historical perspective is provided in 

Chapter 4. In Chapter 5, the costs of new regulatory statutes adopted in the 1980s are examined, utilizing Congressional Budget Office analyses to estimate the cumulative 

costs of additional regulations on states and localities 

since 1983. 

Part 111 presents an overview of the important role of 

the judicial branch in the development of intergovernmental regulation in this period. Chapters 6,7, and 8 con- tain analyses of evolving constitutional interpretations of 

the regulatory powers of the Congress and the courts’ role 

in devising and promulgating judicial mandates.= 

Notes 

See W. Brooke Graves, American Intergovernmental Relations 

(New York Charles Scribners Sons, 1964), Chs. 14,lS; and US. 

Advisory Commission on Intergovernmental Relations 

(ACIR), Improving Fedeml Grants Management (Washington, 

DC, 1977, p. 94. 

*Massachusetts v. Mellon, 262 US. 447 (1923). 

3The following definitions are derived from ACIR, Regilafory 

Federalism Policy, Pmm, Impact, and Reform (Washington, 

DC, 1984) ch. 1. 

For additional examples and discussion of these new regulatory 

forms, see ACIR, Regulatory Fededkm, pp. 7-10. 

Gallup Poll, cited in Gary Orfield, Congressional Power Congress and Social Change (New York Harcourt, Brace, Jovanovich, 1975), p. 67. 

%ee Robert Erihn, Norman Luttbeg, and Kent Tedin, American Public Opinion, 4th ed. (New York: Macmillan, 1991), pp. 

63-65; and James L Sundquist, Politics and Policy: The Eisen- hower; finne4, and Johnson Ears (Washington, DC The 

Brooking Institution, 1968), ch. VI. 

Charles O.Jon& Clean Air: The Policies and Politics of Pollution 

Control (Pittsburgh University of Pittsburgh Press, 1975), p. 142 

12 U.S. Advisory Commission on Intergovernmental Relations 
* U.S. Congress, Senate, Committee on Government Opera- tions, Subcommittee on Intergovernmental Relations, Confi- dence and Concern: Citizens View American Government, 93rd 

Cong., 1st Sess., 1973, p. 165. 

For additional evidence of this, see Seymour Martin Lipset and 

William Schneider, “The Public View of Regulation,” Public 

Opinion 2 (January/February 1979): 6-11. 

‘OU.S. Department of Commerce, Bureau of the Census, Eco- nomics and Statistics Administration, Statistical Absfmct of the 

United States, 1989 (Washington, DC, 1989), p. 200. 

“Ibid., p. 199. 

‘*Martha A. Fabricius, “Fiscal Impact of Proposed Mandates 

from the 102nd Congress,” State-Federal Issue Brief 4 (November 1991): 1. 

l3 John Martin, quoted in Oklahoma Senate, Fedeml Action Monitor XI (September 6, 1991). 

14Quoted in Julie Rovner, “Governors Ask Congress for Relief 

from Burdensome Medicaid Mandates,” Conpsional Quarterly Weekly Report, February 16, 1981, p. 417. 

”See James Q. Wilson, ‘%mencan Politics: Then and Now,” 

Commentaty 34 (February 1979): 41-46; and ACIR, Regulatory 

Fededkm, ch. 3. 

I6Cited in Timothy J. Conlan, New Federalism: Intetgovenimental 

Refonnjivm Nixon to Reagan (Washington, DC: The Brookings 

Institution, 1988), p. 203. 

“Ibid., p. 106. 

18Cited in Lipset and Schneider, “The Public View of ReylaIgIbid., p. 10. 

2oSee ACIR, Regulatory Federalism, p. 175. 

21 See Clint Page, “NLC Surveys Members on Federal Rules,”Nation’s Cities Weekly, April 6, 1981, p.10. 

=National Association of Counties, “The Effects of Crosscutting 

Requirements on County Government,” Memorandum 

(Washington, DC, 1981). 

Edward I. Koch, “The Mandate Millstone,” The Public Intemt 

61 (Fall 1980): 42. 

24See Donald E Kettl, TheRegulation ofAmerican Fedemlistn (Ba- ton Rouge: Louisiana State University Press, 1983). 

zs US. Congress, Joint Economic Committee, “The Impact of Se- lected Federal Actions on Municipal Outlays,” by Thomas 

tion,” pp. 9-10. 

Muller and Michael Fix, Government Regulation: Achieving Social and Economic Balance, Vol. 5, Special Study on Economic 

Change (Washington, DC, 1980), pp. 327,368. 

%Catherine H. Love11 et al., Fedemlarid State Mundatingon Local 

Governments: An Eaplomtion of Issues and Impacts (Riverside: 

University of California Riverside, Graduate School of Admin- istration, 1979), p. 194. 

27P.L 96-511,44 U.S.C. Sec. 3501; P.L. 96-354,5 U.S.C. Sec 601; 

**Presidential Task Force on Regulatory Relief, Reagan Administmtion Acliievements in Regulatory Relief for State and Local 

Governments: A Progress Reprt (Washington, DC, 1982) pp. i-ii. 

”See Richard S. Williamson, ‘% New Federalism: Proposals and 

Achievements of President Reagan’s First Three Years,” 

Publius: The Jounial of Federalism 16 (Winter 1986): 25. 

’‘Michael Fix, “Regulatory RelieE The Real New Federalism,” 

State Government News 27 (January 1985): 7. 

31See Arnold M. Kuzmack, “The Safe Drinking Water Act: A 

Case Study,” in Michael Fix and Daphne A. Kenyon, eds., Cop- ing with Mandates: What Are the Alternatives? (Washington, DC 

Urban Institute Press, 1990), p. 73. 

32U.S. General Accounting Office (GAO), Legislative Mandates: 

State Eqwriences Uffer Insights for Fedeml Action (Washington, 

DC, 1988), p. 48. 

P.L. 97-108,2 U.S.C. S~C 653. 

33Federal Register, October 30, 1987, p. 41826. 

34National Governors’ Association, “States Feeling the Pressure 

for Increased Spending for Health, Transportation, Education, 

and Corrections,” News Release, April 6, 1990; and Spencer 

Rich, “Benefits Grow among Budget Cuts: Deficit Reduction 

Bill Expands Health Aid for Poor Children,” Wmliington Post, 

November 3, 1990. 

35 Martha Derthick, “Preserving Federalism: Congress, the 

States, and the Supreme Court,” Brookings Review 4 (Winter 

Spring 1986): 36. See also John Kincaid, “From Cooperative to 

Coercive Federalism,” Annals of the American Academy of Polit- ical and Social Science 509 (May 1990): 139-152; GAO, Fedeml- State-Local Relations: Trends of the Past Decade and Enietgitig 

Issues (Washington, DC, 1990), ch. 5; and John Kincaid, “From 

Cooperation to Coercion in American Federalism: Housing, 

Fragmentation and Preemption, 1780-1992,” Journal of Law 

and Politics 9 (Winter 1993): 333-430. 

36See alsoTimothy J. Conlan and David R. Beam, “Federal Mandates: The Record of Reform and Future Prospects,” Intetgovemniental Penpective 18 (Fall 1992): 7-11. 

U.S. Advisory Commission on Intergovernmental Relations 13 
1 4 US. Advisory Commission on intergovernmental Relations 
Part I 

Trends in Regulation - 

The Executive Branch 

US. Advisory Commission on Intergovernmental Relations 1 5 
16 U.S. Advisory Commission on intergovernmental Relations 
The Reagan Administration’s 

Regulatory Relief Program 

By the early 198Os, all three branches of the federal 

government had signaled concern about the growth of 

federal mandating during the 1960s and 1970s. Bolstered 

by outspoken state and local government leaders, Washington seemed committed to taking strong action. 

It was left to the executive branch, however, to lead 

the effort. This was a task that newly elected President 

Ronald Reagan assumed with great enthusiasm. An oftenquoted statement from his 1981 Inaugural Address- 

“Government is not the solution to our problem. Government is the problem”-encapsulated his concern that expansion of the public sector had harmed the performance 

of the economy and had intruded on the freedom of individuals, businesses, states, and localities. 

Origins of the Relief Effort 

The Reagan platform and program built on popular 

currents of discontent and the official actions of his predecessors.l Since 1968, each president had sought, by one 

strategy or another, to limit or reorder federal activities. 

The Ford administration’s WIN (Whip Inflation Now) 

program later spawned the Economic Impact Statement 

(EIS) process operated by the Council on Wage and Price 

Stability. President Gerald Ford also established the Domestic Council Review Group on Regulatory Reform, a 

body that laid much of the groundwork for the later legislative action.2 

Democrat Jimmy Carter, Reagan’s immediate predecessor, had successfully campaigned in 1976 against what 

he termed the “awful federal bureaucracy.” Once in office, he launched programs for zero-based budgetary reviews and extensive departmental reorganizations. 

The Carter years also were noteworthy for a strong 

shift toward freeing the economy from various regulatory 

 control^.^ President Carter devised his own process for internal reviews of the cost of proposed regulations with Executive Order 12044, issued in March 1978. Its operations 

were overseen by a Regulatory Analysis Review Group 

(RARG), part of the Executive Office of the President. 

Of lasting impact and historical importance was the 

enactment of a growing list of deregulatory statutes affecting railroads (1976), airlines (1978), natural gas (1980), 

trucking (1980), rail transportation (1980), and banking 

(1980). Perhaps the most noteworthy event was the abolition of the Civil Aeronautics Board, an action that seemingly marked the end of a century of federal regulatory 

growth that had begun with the creation of the Interstate 

Commerce Commission in 1887. 

Events outside the nation’s capital propelled regulatory reform as well. In 1978, a nationwide tax revolt fol- lowed passage of California’s Proposition 13 property tax 

limitation referendum. Both events seemed to demonstrate mounting electoral discontent with the cost and 

scope of the public sector. 

From Reform to Relief 

Given the actions of his predecessors, President 

Reagan’s “regulatory relief” campaign did not represent a change in basic direction, although it was more 

dramatic and far-reaching and nearer to the center 

stage of domestic policy. Unlike those of his predecessors, Reagan’s program also: 

Was intended to provide “regulatory relief” by reducing, not simply rationalizing or improving, the 

amount of federal regulation; 

Attacked the newer forms of “social regulation,” 

including civil rights, environmental protection, 

and health and safety rules, as much or more than 

traditional “economic” regulation; and 

w 

U.S. Advisory Commission on Intergovernmental Relations 17 
Relied chiefly on the president’s administrative 

authority and powers, rather than on statutory 

change, to achieve its objectives. 

Relief, Not Reform 

First, Reagan differed from Presidents Carter, Nixon, 

and Ford in that he seemed concerned less with improving 

the operation of federal programs than with simply reducing 

their number and cost. Carter and Nixon had emphasized 

administrative solutions to problems of governmental opera- tions, relying on managerial devices like departmental reorganization and reformed budgetary, analytical, and 

personnel pr~cesses.~ Reagan, in contrast, 

set out to solve the problem not so much through 

reorganization or management reform at the federal level as by reducing the range of activities in 

which the federal government was involved, and 

by reducing the amount of “management” the 

federal government engaged in even for those 

functions it retained. In other words, the administration proposed to cure the problems of federal 

management by eliminating-or seriously curtailing-major segments of the federal operation? 

In federalism reform, for example, Reagan’s ap- proach differed considerably from that of President 

Nkon, even though the title New Federalism was applied 

to both presidents’ initiatives. One observer pointed out 

that, “Unlike Nixon, who hoped to rationalize active government, Reagan has tried on the whole to restrain domestic government.”6 (Emphasis added.) 

Perhaps nothing shows this difference more starkly 

than the fact that Nixon had fought for General Revenue 

Sharing (GRS) as a relatively simple and “string free” 

method of equitably distributing federal financial resources to the nation’s cities and states. It was the center- piece of his brand of New Federalism. Reagan, in contrast, 

presided over the same program’s abolition. 

The Reagan administration’s regular use of the ex- pression regulatory relief, in contrast to regulatory re- form, also revealed this change of ~rientation.~ The 

altered terminology suggested a preoccupation with the 

“burden” of regulation on the economy-another 

phrase that also figured prominently in official speeches 

and reports-and adesire to reduce and eliminate, rather than merely streamline or rationalize, federal regulatory activities. 

This orientation showed, for example, in the progress 

report issued by the Presidential Xisk Force on Regulatory 

Relief in August 1982, which gave principal emphasis to 

the financial and paperwork savings realized by the initiative. The report acknowledged that, while such statistics 

present “an oversimplification,” nonetheless, 

the easiest way to summarize the results of the review process is to cite the savings achieved to 

date: $9 to $11 billion in one-time investment 

18 U.S. Advisory Commission on Intergovernmental Relations 

costs and $6 billion in annual recurring costsfunds that will be put to more productive, 

job-creating uses. . . . In addition to these direct 

savings, the Administration has cut 200 million 

hours of paperwork for 1981 . . . ; it has also cut 

new rulemaking by one-half and the number of 

pages in the Federal Register by one-third! 

Social Regulation Addressed 

If the shift from reform to relief was one point of contrast, another was Reagan’s attackon what is termed social 

regulation as well as economic regulation? The latter originated with the creation of the Interstate Commerce Com- mission (ICC) in 1887, and concerned the areas served and 

fees charged by rail and other transporters, that is, the truly 

economic questions of “rates and routes.” Subsequently, 

many similar programs were administered by independent 

regulatory commissions modeled after ICC. In contrast, social regulation, which increased signfkantly during the 1960s 

and 1970swith the enactment of nondisrrimination, environ- mental, consumer, and health and safety legislation, was pimarily administered by regular executive agencies, such as 

the Environmental Protection Agency or the Occupational 

Safety and Health Administration. 

Although the Carter years were a time of significant 

deregulation, most of the action was concentrated on the 

older forms of economic regulation. Continuing regulatory growth in the social sphere was accepted and even promoted by President Carter.” The Reagan administration, 

in contrast, resisted expanded social regulation. Indeed, 

such newer statutes, among them bilingual education 

rules, energy efficiency standards, and noise abatements, 

provided the president with most of his examples of excessive regulation. 

limited Statutory Changes 

A third point of differentiation between the Reagan 

administration and predecessor programs concerned the 

character of deregulatory actions. Under President Carter, many key regulatory reform programs were legislative 

proposals. The Reagan administration, for the most part, 

did not seek substantive legislative change.I1 Instead, the 

president used both old and new tools of executive power 

to accomplish his goals. 

Toward this end, the staffing of regulatory agencies 

and functions was reduced, agency budgets were cut, and 

personnel were appointed with an eye toward their acceptance of the administration’s diminished regulatory agenda. Furthermore, expanded centralized control over 

agency rulemaking was established within the Office of 

Management and Budget (OMB). 

Many observers decried the administration’s lack of 

attention to legislative change, feeling that lasting reform 

would be impossible without it, but the effort represented 

an important experiment. Some observers noted that, un- til Reagan, “no president had made a concerted effort to 

bring [his] formidable array of management powers to 

bear on regulatory policy.”12 
Key Actions: Off and Running in 1981 

President Reagan took the most significant steps for 

carrying out this ambitious program very early in his first 

administration. He established the Presidential lhsk 

Force on Regulatory Relief, a cabinet-level body chaired 

by Vice President George Bush, just two days after his inauguration. The task force was charged with reviewing 

pending and existing regulations with the goal to “reverse 

the trend of recent years and see at the end of the year a 

reduction in the number of pages in the Federal Register 

instead of an increase.”13 One week later, on January 29, 

1981, the president ordered federal regulatory agencies to 

postpone the effective dates of all regulations scheduled 

to take effect by March 20. He also directed them to refrain from issuing any final regulations until that date. 

This @-day freeze was intended to allow the new administration time to review the so-called “midnight regulations” 

issued during the final days of the Carter presidency. 

Shortly thereafter, several rules were withdrawn, rescinded, or postponed indefinitel~.’~ 

Subsequently, President Reagan signed Executive 

Order 12291 on February 17,1981, establishing a new procedure for measuring the benefits of proposed rules 

against their costs and directing agencies to determine the 

most cost-effective approach for meeting their regulatory 

objectives. Responsibility for coordination and implementation was centralized in OMB and its Office of Information and Regulatory Affairs (OIRA), under the general 

supervision of the task force. 

Impact on State and local Governments 

The private sector, not the public sector, was to be the 

chief beneficiary of the Reagan administration’s deregulatory initiatives. The campaign for regulatory relief was designed principally as a component of the president’s 

policies for stimulating investment and employment, rather than of his New Federalism proposal for decentralizing 

domestic program responsibilities to states. 

Reflecting this orientation, responsibility for developing 

the administration’s initial program rested with economists, 

such as Murray Weidenbaum, who headed the transition 

task force on regulation and then chaired the Council of 

Economic Advisors, and James Miller, who had served as as- sistant director of the Council on Wage and Price Stability 

during the Ford administrati~n.’~ In a later survey of 171 key 

regulatory personnel, the most frequently cited goals of regulatory relief were ‘‘less cost to the regulated community” 

(13 percent of the respondents), “less paperwork burden on 

government and industry” (11 percent), “opening markets to 

foster greater competition” (10 percent), and “getting gov- ernment off industry’s back” (9 percent).“ 

Nonetheless, because of its broad scope, the president’s regulatory relief program had significant implications for state and local governments. This was true, first, 

because in many areas of social regulation, state and local 

governments bear the primary responsibility for assuring 

that businesses or individuals located within their borders 

comply with federal requirements. In sharp contrast, prior 

deregulation initiatives, which concentrated on areas of 

more traditional economic regulation, had comparatively 

few direct effects on state and local governments. Air 

transportation routes and rates, for example, had long 

been regulated exclusively by the federal government. 

Consequently, the Airline Deregulation Act of 1978, while a 

revolution for the industry, did not directly influence state 

and local policy and operations-although deregulation of 

industries, coupled with federal preemption of state or local authority to reregulate, did impose costs on state and 

local governments as they sought to compensate for service losses or reductions.” 

Second, in many areas of social regulation, stateand 

local governments are themselves regulated entities. 

Like business corporations, they may be compelled to 

comply with national standards for environmental quality, nondiscrimination, worker safety, and labor standards, among others. 

Third, intergovernmental regulatory relief also was 

an express, if somewhat secondary, objective of the program. Despite the deregulatory actions of his predecessors, 

President Reagan “was the first to give [intergovernmental regulation] prominent attention by including national 

rules affecting state and local governments in his proposals for regulatory reform.”18 This concern was secondary, 

however, to the economic objectives: only 4 percent of the 

federal executive survey respondents mentioned “returning power to the states” as central to their regulatory relief 

a~tivities.’~ Similarly, just 19 percent rated state officialsas 

having played at least a “moderate” role in the formulation of their specific regulatory reform proposals.2° 

Despite these views, cognizance was taken of the intergovernmental mandating issue from the outset.21 Executive Order 12291 defined major rules to include those 

that might cause “a major increase in costs or prices for. . . State or local government agencies” as well as industry 

and consumers. The president’s statement on “America’s 

New Beginning,” issued the day following the promulgation of Executive Order 12291, also pointed out the “costs 

to business, nonprofit institutions, and State and local 

governments of complying with regulations.”22 

Consistent with this orientation, state and local government officials, and the groups that represent them, 

such as the National Governors’ Association (NGA), were 

actively solicited for recommendations on needed regulatory changes. This request produced 2,500 submissions 

identifying rules regarded as especially burdensome or inefficient.23 Many of these regulations became the subject 

of federal reviews. For example, bilingual education re- quirements were among the first rules withdrawn by ex- ecutive agencies. According to the White House, the rules 

requiring all school systems to offer bilingual education to 

U.S. Advisory Commission on Intergovernmental Relations 19 
each child whose primary language was not English could 

have resulted in up to $1 billion in costs during the first five 

years of the program. Also modified in the first days of the 

regulatory relief campaign were noise emission standards 

for garbage trucks, proposed by the Environmental Protection Agency (EPA). Compliance with these, EPA had 

estimated, would cost $25 million annually, with most of this 

amount borne by municipalities.” 

On March 25, 1981, the vice president issued a list of 

36 rules to be postponed and 27 existing rules to be reviewed, including many affecting states and local jurisdiction~?~ Among these were rules governing: the provision 

of catheterization service by schools during the school day 

(postponed); urban transportation planning provisions for 

federal-aid highways and mass transit (postponed); new 

obligations for local governments receiving general revenue sharing funds to prevent discrimination against the 

handicapped (postponed); a variety of Medicaid regulations (to be reviewed); Davis-Bacon prevailing wage requirements (to be reviewed); and a review of Department 

of Transportation handicapped access provisions, estimated to impose capital costs on New York City alone of 

up to $1.6 billion. In addition, a June 13,1981, press release 

highlighting progress in regulatory relief gave special emphasis to the Department of Education’s elimination of 

regulations that put schools at risk the loss of federal 

funds if they distinguished between boys and girls in their 

dress codes.26 

At the end of President Reagan’s first year in office, 

the vice president issued a summary of actions taken by 

the Regulatory Relief Thsk Force. It observed that fully 

one-quarter of the regulations and paperwork requirements under review had their primary effect on state and 

local governments. Federal relief in these areas, the vice 

president said, would “lead to greater authority and accountability for State and local governments, improved 

delivery of local services, and substantial financial relief at 

a time of large Federal budget reductions.” This overview 

also emphasized that the brevity of regulations for the nine 

new block grants, just 10 pages, would reduce state and local 

reporting requirements by up to 91 percent?’ 

During 1982, federalism reform was the domestic 

policy theme, as indicated by the President Reagan’s State 

of the Union Message. A more comprehensive regulatory 

analysis, issued in August, gave special attention to the administration’s achievements in regulatory relief for state 

and local governments. It claimed cost savings for these 

jurisdictions of $4-$6 billion in capital investments and 

about $2 billion in annual recurring outlays as a result of 

the 13 regulatory reviews completed.= 

These results were reiterated in the final report of the 

task force, released in August 1983.” It also set forth ten regulatory policy guidelines, two of which had specrfic bearing 

on intergovenunental mandating. The report specified that: 

Federal regulations should not preempt 

State laws or regulations, except to guarantee 

rights of national citizenship or to avoid significant burdens on interstate commerce; and 

Regulations establishing terms or conditions 

of Federal grants, contracts, or financial assistance should be limited to the minimum necessary to achieving the purposesfor which the funds 

were authorized and appr~priated.~~ 

The report cited several advantages of decentralized 

decisionmaking; saying that these applied with particular 

force to regulatory action: 

Local regulations are more apt to be responsive 

to local circumstances. 

Local regulations afford citizens a greater degree 

of choice among divergent public policies. 

Local regulations allow for diversity and experimentati01-1.~~ 

Such considerations, it was pointed out, suggested 

that the federal government should defer to state and local governments except when fundamental questions 

(such as legal equality among the races) are involved. The 

efforts of the Interior Department and EPA to “defederalize” regulatory procedures for the control of surface mining 

and local air pollution problems were noted particularly. 

Moreover, the report contained a warning against the 

temptation to add grant conditions that are not germane 

to the basic purpose for which funds had been appropriated, for example, the air quality attainment provisions 

tied to federal transportation grants. 

rn 

I nte rgove r n mental Programs 

Subject to Review 

Fifty regulations affecting state and local government, singled out by the Reagan administration for regulatory reviews either by the presidential task force or 

independently by various federal agencies, are listed in 

nble 2-1 (page 21). Among these were Davis-Bacon requirements, bilingual education rules, Section 504 of the 

Rehabilitation Act, the Education for All Handicapped Children Act, the Clean Air Act, and most of the others that 

were on the list of the “ten most burdensome federal mandates” from ACIR’s Regulatory Federalism report.32 Also 

included were many other regulatory programs identified 

in ACIR’s inventory of major federal statutes regulating 

state and local governments (see Table l-l).” Examples 

are rules established under the National Historic Pramation 

Act of 1966, Title IX of the Education Act Amendments of 

1972 (pertaining to sex discrimination in education), and the 

Su$me Mining Control and Reclamation Act of 1977. 

The Reagan administration employed a very broad 

definition of mandating in selecting federal regulationsaffecting state and local government for review. Targeted 

was a large number of grant-in-aid requirements, including community development block grant regulations, de20 U.S. Advisory Commission on intergovernmental Relations 
Table 2-1 

1981 -1 9821 

Reagan Administration Regulatory Relief Actions for State and Local Governments, 

Advisory Council on Historic Preservation 

1. Protection of Historic and Cultural Properties* 

Corps of Engineers 

2. Dredge and Fill Permit Program* 

3. Water Conservation Clause (Engineer Regulation 

1105-2-20)* 

Department of Agriculture 

4. National School Lunch Program-Cost Accounting 

5. State Administration of Food Stamp Program (7 CFR 

270 et. seq.) 

(7 CFR 210)* 

Department of Education 

6. Bilingual Education (Lau Rules) (45 CFR 52052) 

7. Education Consolidation and Improvement Act (34 

8. Education of Handicapped Children (34 CFR 300)* 

9. General Administrative Regulations (EDGAR)* 

10. Personal Appearance Codes (34 CFR 106) 

11. Section 504 of the Rehabilitation Act (34 CFR 104)* 

12. Title IX-Athletics Policy (34 CFR 106)* 

Department of Energy 

14. Residential Conservation Service Program (10 CFR 

Department of Health and Human Services 

15. Grant Administration Manual* 

16. Health Care Facility Capital Expenditures (42 CFR 122) 

17. Health Care Financing Administration Rules (42 

18. Medicaid Regulations (42 CFR 431,435,436,441,447)* 

19. Regulations Implementing Block Grants (45 CFR 16, 

20. Survey and Certification of Health Care Facilities (42 

Department of Housing and Urban Development 

21. Community Development (24 CFR 570, Subpart F)* 

22. Environmental Policies (24 CFR 58)* 

23. Lease and Grievance Procedures (24 CFR 866)* 

24. Minimum Property Standards for One- andTwo-Fam25. Modernization of Public Housing Projects (24 CFR 868) 

CFR 201-204; 298) 

456)* 

CFR 431,435,436,440,441,447,456) 

74,96) 

CFR 405,431,442,489,490)* 

ily Dwellings* 

26. Tenant Allowance for Utilities in Low-Income Housing (24 CFR 865)* 

Department of Interior 

27. Surface Mining Regulations (30 CFR 700-850)* 

Department of Justice 

28. Section 504 of the Rehabilitation Act (28 CFR 41)* 

Department of Labor 

29. Mass Transit Labor Protection (UMTA)* 

30. OFCCP/Affirmative Action (41 CFR 60 et. seq.)* 

31. Prevailing Wage (Davis-Bacon) (29 CFR 1,3, 5)* 

Department of Transportation 

32. Airport Layout Plan Approvals* 

33. Charter Bus Operations* 

34. Federal Highway Administration Rules (23 CFR 450, 

35. Guide to Reporting Highway Statistics* 

36. Highway Geometric Design Standards for 3R Projects 

37. Non-Urbanized Area Formula Grants (23 CFR 825) 

38. Section 504 of the Rehabilitation Act (49 CFR 27)* 

39. UMTA White Book-Procurement of Buses 

Environmental Protection Agency 

40. Consolidated Permits (40 CFR 122)* 

41. Construction Grant Regulations (40 CFR 35) 

42. Emissions Trading Policy 

43. Financial Assistance for Environmental Programs (40 

44. Pretreatment (40 CFR 403)* 

45. State Implementation Plans (SIPS)* (40 CFR 51) 

Federal Emergency Management Agency 

46. Executive Order 11988-Floodplain Management* 

47. Insurance in Coastal High Hazard Areas (44 CFR 9)* 

Oftice of Management and Budget 

48. Local Clearinghouses (Circular A-95)* 

49. Urban Impact Analysis (E.O. 1Un4 and Circular 

Ofice of Personnel Management 

50. Merit System of Personnel Administration* 

655,772) 

(23 CFR 625)* 

CFR 35) 

A-116)* 

Indicates a regulation designated for review by the Presidential Task Force on Regulatory Relief. 

Includes programs for which regulatory reviews were completed by the Presidential Task Force on Regulatory Relief or federal agen- cies, programs for which reviews were under way at the time of the report (August 1982), and additional programs designated for review. 

Source: Presidential Task Force on Regulatory Relief, Reagan Administmtion Achievements in Regulatory Relieffor State and Local Government: A Progress Report (Washington, DC, 1982), pp. 3-23. 

U.S. Advisory Commission on Intergovernmental Relations 21 
sign standards for highways, food stamp procedures, and 

school lunch program cost accounting requirements. 

Although grant regulations were clearly rules, they 

were not typically defined as mandates. These types of ad- ministrative requirements existed in early federal aidprograms, and had won clear judicial acceptance as a proper 

exercise of the federal government’s conditional spending 

p0wer.3~ The issues posed by such programmatic conditions of aid, then, could be, and often were, differentiated 

from those created by the growth of the four newer types 

of regulatory federalism programs. 

Also singled out for review by the ’hsk Force was a 

number of administrative procedures employed by federal agencies in grant management. Examples of these 

were the A-95 Project Notification and Review process 

and the Urban Impact Analysis procedure, both administered by OMB. The former had been created initially 

to allow state and local governments an opportunity to 

comment on, and coordinate plans for, federally funded 

projects in their region. Such procedures fell outside of 

the types of programs most commonly identified with 

mandating. 

An Assessment of Regulatory Changes, 

All of these key efforts were concentrated principally 

in the first two and one-half years of President Reagan’s 

first term. In August 1983, the Thsk Force on Regulatory 

Relief issued its final report and disbanded. At that time, it 

claimed “substantial improvements in federal regulatory 

policies,” which would result in “savings of more than $150 

billion to consumers, businesses, universities, and state 

and local governments over the next ten 

Others were less congratulatory. Murray Weidenbaum concluded that “only a fraction of the regulatory re- forms envisioned at the beginning of 1981” had been 

accomplished.s Journalistic and academic observers 

thought they had identified a “bipartisan swing back to 

more regulati~n.”~’ 

One additional important step followed 17 months 

later, in January 1985. Executive Order 12498 established 

a formal regulatory planning process, requiring each 

agency to submit to the Office of Management and Budget a statement on its regulatory policies and goals for the 

coming year, including basic information on all significant 

regulatory actions contemplated. This order extended 

White House oversight from specific rules to every 

agency’s overall rulemaking activities, as the draft programs were to be reviewed for consistency with the president’s priorities.38 

In August, the first Regulatory Program of the United 

States Government was issued, a document that in substance and purpose invited comparison with the executive 

budget, first established in 1921.” The difference is that 

1981 -1 986 

the latterprocedure for executive control precedes formal 

legislative review, while the former does not. This pro- duced considerable criticism, especially by some members 

of Congress, who felt that the administration was placing 

the goal of consistency with its own regulatory principles 

and the findings of cost-benefit analyses over adherence 

to federal statutes. The measure was challenged for intruding on constitutionally protected prerogatives of both 

the Congress and executive agencies. Representative 

John Dingell, chairman of the House Energy and Commerce Committee, mounted a counterattack against Executive Order 12498 by requiring agencies under the 

committee’s jurisdiction to report on all regulatory modifications made as a result of OMB’s advice.@ 

Review Methodology 

As suggested in Chapter 1, impressions differ consid- erably concerning the effectiveness of the Reagan administration’s effort to restrain federal regulation by 

executive action. To assess the impact of the regulatory re- lief program on state and local governments, the U.S. 

General Accounting Office (GAO) gathered data concerning administrative procedures for 18 of the major 

federal mandates identified by ACIR in Regulatory Federalism. These previously unpublished data offer the 

most complete record of changes in existing intergovernmental regulatory programs affecting state and local 

governments during the 1980s. The following discussion 

is based on draft material that was made available to 

ACIR for this study.41 

GAO examined changes in regulatory requirements during 1981-1986, using information from the Federal Register and the Code of Federal Regulations (CFR). To 

bolster and help interpret conclusions suggested by these 

empirical data, and to obtain information on changes in 

the level of funding, delegation of regulatory decisionmaking to states, and the intensity of federal administrative oversight, GAO also interviewed federal agency 

officials, public interest group members, and state and lo- cal officials. Data were obtained for 18 programs in envi- ronment and health, community development, civil rights, 

and labor (see Bble 2-2, page 23). 

Although comparable, detailed data are not available for the last two years of the Reagan administration 

or the firstyearsof the Bush administration, findingsfor 

1981-1986 appear to reflect the overall trend for the 

1980s. The years studied went well beyond the period of 

the most extensive administrative action. They followed 

expressions of congressional concern with regulation 

and mandating, as demonstrated by the enactment of 

the Paperwork Reduction Act, the Regulatory Flexibility 

Act, and the State and Local Government Cost Estimate 

Act. They also embraced the period in which President 

Reagan championed his far-reaching New Federalism 

proposals. The most important and most recent development not within the scope of this research effort, 

namely, the implementation of Executive Order 12612 

on Federalism, is considered in detail in the next chapter. 

, 

22 U.S. Advisory Commission on Intergovernmental Relations 
Table 2-2 

Characteristics of 18 Intergovernmental Regulations 

DescriptionlDate of Statute Objective 

Public Mandate 

Law 5Pe 

Age Discrimination Prevent discrimination on the basis of age 94-135 cc 

in Employment Act (1974) in federally assisted programs 

Clean Air Act (1970) Establish national air quality and emissions standards 91-604 CC,CO,PP 

Davis-Bacon Act (1931) Assure that locally prevailing wages are paid 74-403 cc 

Endangered Species Act of 1973 Protect and conserve endangered and threatened 93-205 CC,PP 

to construction workers employed under federal 

contracts and assistance programs 

animal species 

protections to state and local government employees 

to the environment 

Fair Labor Standards Act Extend federal minimum wage and overtime pay 93-259 DO 

Amendments of 1974 (FLSA) 

Rodenticide Act (FIFR4, 1972) 

Federal Insecticide, Fungicide, and Control the use of pesticides that may be harmful 92-516 PP 

Flood Disaster Protection Act of 1973 Expand coverage of the national flood insurance program 93-234 DO 

Handicapped Education (1975) Provide a free appropriate public education to all 94-142 CO' 

handicapped children 

Hatch Act (1940) Prohibit public employees from engaging in certain 76-753 cc 

political activities 

Historic Preservation Act (1966) 

National Environmental Assure consideration of the environmental impact 91-190 cc 

Protect properties of historical, architectural, archaeological, 89-665 cc 

and cultural significance 

Policy Act of 1969 (NEPA) of major federal actions 

Ocean Dumping (1!377)2 Prohibit Ocean dumping of municipal sludge 95-153 DO 

Occupational Safety and Health Eliminate unsafe and unhealthful working conditions 91-596 PP 

Rehabilitation Act of 1973 Prevent discrimination on the bask of physical or mental 93-112 cc 

Act of 1970 (OSHA) 

handicap in federally assisted programs 

Safe Drinking Water (1974) Assure drinking water purity 93-523 CC,PP,DO 

Title VI Civil Rights (1964) Prevent discrimination on the basis of race, color, 88-352 cc 

Uniform Relocation (1970) Set federal policies and reimbursement procedures for 91-646 cc 

Wholesome Meat (1967) Establish system for the inspection of meat sold 90-201 PP 

or national origin in federally assisted programs 

property acquisition under federally assisted programs 

in interstate commerce 

Key: 

CC-Crosscutting Requirement 

CO-Crossover Sanction 

DO-Direct Order 

PP-Partial Preemption 

Although participation in the Educational forAll Handicapped Cliildren Act (PIL 94 142) is voluntary, the failure of a participating state 

to comply with federal requirements may result in the withholding of funds from several federal handicapped education programs. The 

requirements of F!L. 94-142 are nearly identical to those established by the Department of Education under Section 504 of the Rehabilitation Act, a crosscutting requirement. 

=Marine Protection Research and Sanctuaries Act Amendments of 1977. 

Source: US. General Accounting Office, unpublished case studies. 

U.S. Advisory Commission on Intergovernmental Relations 23 
Major Findings 

Despite the administration’s regulatory relief campaign, federal regulation of state and local governments 

continued to increase during the 1980s. More prescriptive 

regulations added programmatic requirements and compliance costs, while federal funding for state administration generally declined. Overall, it is suggested from this 

analysis that the effectiveness of the regulatory relief 

strategies of the Reagan administration was limited. 

The results were not completely uniform. As nble 

2-3 indicates, mandating rose between 1981-1986 in 11 of 

the 18 program areas and remained stable in two. It fell in 

five cases, with the largest reductions occurring under the 

Davis-Bacon Act, the Uniform Relocation and Real Properties Acquisitions Act, and the Flood Disaster Protection Act. 

The general upward trend was consistent enough, however, to indicate a continuing increase in intergovernmental 

regulation during the same time the federal government 

mounted the most direct attack ever on federal mandates. 

Regulatory Changes. Between 1981 and 1986, a total of 

140 regulatory changes was identified, which added an 

estimated net total of 5,943 requirements in the 18 

policy areas. These included a net 4,702 additions to program standards and a net 1,241 changes in administrative 

Tabk 2-3 

Summary of Changes in Mandating 

on State and Local Governments 

(for 18 Programs, 1981 -1 986) 

Mandate Burden Increased (11) 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

Clean Air Act 

Endangered Species Act 

Fair Labor Standards Act (FLSA) 

Handicapped Education (1975) 

Historic Preservation Act 

Ocean Dumping 

Occupational Safety and Health Act (OSHA) 

Pesticides (FIFRA) 

Rehabilitation Act of 1973 (Section 504) 

Safe Drinking Water Act 

Wholesome Meat Act 

Mandate Burden Stable (2) 

1. Hatch Act 

2. Title VI Civil Rights 

Mandate Burden Reduced (5) 

1. Age Discrimination in Employment Act 

2. Davis-Bacon Act 

3. Flood Disaster Protection Act 

4. National Environmental Policy Act (NEPA) 

5. Uniform Relocation Act 

Source: US. General Accounting Office, unpublished case studies. 

procedures. There was an increase in both the stringency of 

program standards and the prescriptiveness of administrative procedures. For example, during the review perid 

Thirty-six states were affected by new visibility 

standards for federal park lands issued by the Environmental Protection Agency. 

An additional 7.7 million state and local em- ployees were brought under the coverage of the 

Fair Labor Standards Act. 

Nearly 2,500 requirements expanding existing oc- cupational safety and health standards for states 

were issued by the Occupational Safety and 

Health Administration. 

More than 2,200 requirements were promulgated 

by seven federal agencies under Section 504 of 

the Rehabilitation Act of 1973. 

About 250 animal and plant species were added 

to the endangered and threatened lists under the 

Endangered Species Act of 1973, an increase of 

over 150 percent since 1980. 

Approximately 415 new requirements affecting 

state and local governments were added by the 

National Park Service and Advisory Council on 

Historic Preservation under the National Historic 

Preservation Act of 1966. 

There was a net increase of 382 monitoring/oversight procedures and 238 financial management 

processes. 

I 

Funding Levels. As requirements mounted, the costs 

of compliance also generally rose, but federal assistance 

declined. In nine of the 18 programs in which 

states serve as “partners” in assuring compliance with national standards, federal agencies provide grants to support state administrative operations, such as technical 

assistance and oversight. This federal grant support declined between FY 1981 and FY 1988 for all nine programs, by amounts ranging from $1.9 million for Flood 

Disaster Protection to $12.2 million under the Clean Air 

Act and $15.5 million for Handicapped Education. On a 

percentage basis, the largest cuts were in the Endangered 

Species and Historic Preservation programs (see Tmble 

2-4). For most programs, the largest cuts occurred in FY 

1982. After that year, there were slower rates of decline or 

modest increases for several programs. In the other nine 

programs studied, state and local governments are regulated directly by the federal government, and no federal 

funds are generally available for compliance with standards. Increased state and local costs were anticipated for 

several of these programs. Most importantly, the Urban 

Mass Transportation Administration (now the Federal 

llansit Administration) estimated that local transit authorities would need to spend up to an additional $79 million 

annually to provide services, such as wheelchair lifts and 

extended service hours for handicapped persons, not previously required under more lenient interim regulations. 

24 U.S. Advisory Commission on Intergovernmental Relations 
Table 2-4 

Funding levels for Administrative Costs 

in “Intergovernmental Partnership” Programs 

(millions of constant 1981 dollars) 

Program 

Clean Air Act 

Endangered Species Act 

FIFRA (certification 

and training) 

FIFRA (enforcement) 

Flood Disaster Protection 

Handicapped Education 

Historic Preservation 

OSHA 

Safe Drinking Water 

Wholesome Meat Act 

FY 

1981 

$83.6 

5.4 

3.0 

10.1 

4.5 

899.5 

25.3 

63.3 

37.0 

28.3 

FY 

1986 

$71.4 

3.3 

2.0 

9.2 

2.6 

884.0 

15.2 

56.8 

27.0 

23.5 

Percent 

Change 

-15% 

-38 

-34% -9 

-35 

-2 

-40 

-8 

-25 

-16 

Other Changes. Two other specific administration strategies mitigated the regulatory burden on states and localities 

to some degree. Perhaps most important, increased authority was delegated to states, thus refocusing program 

decisionmaking. For example, EPA responded to state requests for additional discretion by delegating authority to 49 

states to monitor and enforce compliance with newly established clean air standards, such as maximum levels for sulfuric acid emissions. Changes of this kind occurred in eight of 

the nine “partnership” programs.43 The overall value of this 

approach was limited, however, bemuse it was implemented 

at the same time that program standards increased and federal funds for state enforcement decreased. 

A movement to rely on less intensive oversight of 

state and local activities also reduced intergovernmental 

burdens. Agency strategies for ensuring state and local 

compliance were relaxed in seven of the 18 programs. In 

several instances, agencies depended more on state oversight, court actions, or complaint mechanisms to monitor 

adherence to federal standards. Federal budget and staffing cuts were the key reasons why federal agencies reduced oversight intensity, and federal assurance that 

states and localities were complying with national standards seems to have been weakened. Furthermore, the 

trend was not consistent. Afew federal agencies strengthened oversight by increasing their reliance on more active 

monitoring strategies. Examples include the Federal 

Emergency Management Agency in enforcing the Flood 

Disaster Protection Act, and the EPA for the FIFRA (pesticide) and Safe Drinking Water programs. 

I I I us t rative Cases 

As shown in the foregoing data, there was a considerable increase in the stringency of program standards and 

in the specificity of administrative procedures, and a decline in funding. Often, such increasing stringency reflected the impact of legislative or judicial decisions that 

constrained the scope of possible executive action. 

Clean Air Act 

A primary example of this development may be found 

in the Clean Air Act, identified in the early ACIR study as 

one of the “ten most burdensome” programs of intergovernmental regulation and singled out for review by the 

Environmental Protection Agency. Despite such designations, the scope and severity of the rules were increased 

during the early 1980s. 

The Clean AirAcrAmendmentsof 1970, adopted at the 

height of popular concern over the declining quality of the 

natural environment, went far beyond prior law. The 

amendments “conscripted” state and local governments 

into the antipollution battle.” They granted the Environmental Protection Agency authority to establish and enforce national standards for air pollutants, and required 

each state to submit to EPA for approval a state implementation plan (SIP) specifying how national standards 

would be achieved. Following approval of the plan, EPA is 

required by law to oversee state performance and progress 

toward plan goals. 

The act also empowered EPA to (1) publish regulations prescribing national ambient air quality standards, 

(2) make grants to states and localities for carrying out air 

pollution programs, and (3) impose sanctions on states 

that fail to enforce air quality standards. Further, the 

agency was authorized to prepare air quality implementation plans for states that fail to prepare their own. 

During 1980-1986, EPA promulgated a wide variety of 

new air quality program standards and administrative requirements. Included among these, in response to legislative amendments, were 1981 rules requiring states to 

devise strategies to reduce existing visibility impairments 

from man-made air pollution at national park and wilderness area sites, and to prevent future impairment^.^^ 

These new standards were opposed by many of the 36 

states affected, typically because they believed the issue 

was strictly local. Consequently, only one of these states 

included the visibility standard in its SIP. In 1982, the Environmental Defense Fund and other plaintiffs filed suit 

against EPA, alleging that the agency had failed to enforce 

requirementsfor the adoption and implementation of visibility The settlement agreement reached in 1984 

led EPA to establish specific deadlines for the completion 

of revised state plans, which were to include emissions 

limitations, schedules of compliance, and appropriate visibility monitoring research. 

Similarly, in 1984, EPA revised its national standard 

for asbestos contr01.~’ This effort was undertaken to reinstate the “work practice and equipment” provisions of the 

standard that the U.S. Supreme Court held not to be an 

emission (The Congress had amended the act 

in 1977 to authorize the requirements that were being 

challenged by the Court.) EPA promulgated new standardsfor spraying, fabricating, and insulating materials, as 

well as demolition and renovation. 

U.S. Advisory Commission on Intergovernmental Relations 25 
Fair Labor Standards Act 

Another illustration of the combined impact of legislative and judicial actions is the Fair Labor Standards Act 

(FLSA). As originally enacted in 1938, FLSA excluded 

employees of state and local governments from its minimum wage and overtime provisions. Imposing such requirements seemed beyond the proper reach of the 

federal government, given the legal and political opinions 

of that time. In 1974, however, the Congress amended 

FLSA to extend its coverage to virtually all state and local 

government workers.49 

State and local officials protested within and outside 

the legal system, with unexpected success. In 1976, the Supreme Court held in National League of Cities v. Usery5O 

that the 1974 amendments to FLSA exceeded the regulatory authority granted the Congress under the commerce 

clause of the Constitution. Further, the Court indicated 

that the FLSA amendments operated “to directly displace 

the States’ freedom to structure integral operations in areas of traditional governmental functions.. . ,” thusviolating their protected rights under the Bnth Amendment. 

By this decision, the Court removed most state and local 

employees from coverage under FLSA. 

Less than 10 years later, the Supreme Court took the 

unusual step of specifically overruling its own prior find- ing. In the far-reaching case of Garcia v. Sun Antonio Metropolitan Emit Authority:’ the Court held that the 

Congress possessed sufficient authority under the interstate commerce clause to apply FLSA’s pay requirements 

to state and local government employees, including those 

engaged in the most traditional local government activities. This decision extended FLSA coverage to approximately 13.8 million government workers. (For a detailed 

discussion of these cases, see Chapter 6.) 

Responding to the Court’s reversal, the Congress 

stepped in to offer relief in 1985. Recognizing the substantial costs imposed by the new FLSA rules, and spurred by 

local government protests, federal lawmakers again 

amended the law to exempt some 6.1 million government 

workers (about 44 percent).52 

Despite this favorable action, the Court’s ruling and 

the 1985 amendments resulted in a major increase in regu- lation for states and localities. Some 7.5 million state and 

local employees were included under the law even after 

the Department of Labor POL) revised FLSA program 

standards in the wake o€ the 1985 amendment^?^ In addition, new procedures were established for data gathering, 

oversight, and enforcement. New DOL rules meant 

changes in collective bargaining agreements and other 

employment practices, which increased costs for state and 

local governments. DOL estimated the additional state 

and local minimum wage and overtime costs at $612 million annually, none of which is reimbursable through federal aid funds. Furthermore, state and local governments 

had to create separate procedures to distinguish overtime 

accumulated prior to and after the 1985 amendments. 

This and other actions necessitated higher computer and 

record-keeping costs. 

Occupational Safety and Health Act 

A third example of continuing regulatory expansion in 

the 1980s is provided by the Occupational Safety and Health 

Act (OSHA). Adopted in 1970, OSHKs workplace safety 

and health standards are directed principally at private 

sector employers. The act also allows states to assume responsibility for operating and enforcing their own pro- grams if their health and safety standards are at least as 

stringent as the federal standards. 

Although public employees are normally excluded 

from OSHA, so-called state plan states must develop 

standards for their state and local government workers 

that are equal to standards applied to the private sector. 

About half of the states have selected this option. They receive some federal assistance to help pay for their programs, but they also are subject to federal monitoring and 

reporting requirements. 

Generally, in response to the act’s provision that standards be based on the most recent scientific data and the 

need to maximize worker protection, the Labor Department added nearly 2,500 requirements that necessitated a 

substantial commitment of state time and resources in order to develop implementation and enforcement strate- gies and to create training mechanisms. For example, the 

hearing protection standard established in 1981 requires 

employers to monitor employee exposure to workplace 

noise, to supply hearing protection equipment, and to assure 

that employees are tested for any possible hearing loss. The 

asbestos protection program established in 1986 required 

employers to monitor and limit employee exposure to asbestos, train employees in the use of respirators and asbestos 

avoidance, and establish a program of medical surveillance. 

Despite this increase in requirements, federal funding to states for the administration of OSHAprograms fell 

by 8 percent (in constant dollars) between 1981 and 1986. 

(No funds are provided to assist states in complying with 

the requirements.) The most significant decrease oc- curred between 1985 and 1986 as a result of mandatory 

federal budget reductions. On the other hand, OSHA 

delegated more enforcement responsibilities to the states 

and shifted away from on-site reviews to certification and 

review of state records. In these respects, the federal over- sight presence declined. Nonetheless, the combined ef- fect of the changes, especially new funding constraints, led 

some states to consider terminating their OSHA pro- grams, thus relinquishing their status as state plan states. 

California discontinued its program in 1987, in part because of the unavailability of additional federal funds. 

Success Stories 

The brief profiles of the Clean Air Act Amendments 

and the Fair Labor Standards Act both suggest the limited 

effectiveness of administrative attempts to reduce federal 

agency rules and requirements in the face of legislative 

and judicial bodies inclined toward more expansive interpretations. The example of the Occupational Safety and 

Health Act, in particular, shows the problems resulting 

from the proliferation of new requirements coupled with 

cuts in financial support. These cases demonstrate that 

26 U.S. Advisory Commission on Intergovernmental Relations 
President Reagan’s election, the creation of the Presidential risk Force on Regulatory Relief, and the new 

rulemaking procedures associated with Executive Order 

12291 did not alter the fundamental dynamics of the 

policymaking process. 

On the other hand, the research also pointed to some 

instances-involving 5 of the 18 statutes studied-where 

the burden of federal rules and requirements was lessened during 1981-1986. Perhaps the most striking case was 

the adoption by federal agencies of a common set of regulations for implementing the Uniform Relocation and Real 

Properties Acquisition Policies Act of 1970 As its 

name suggests, URA contemplated standardized procedures, but by the early 1980s, federal agencies had developed a host of separate regulations for relocating and 

reimbursing people displaced by federal construction 

projects. Consequently, the act was targeted as a candidate for reform by the Bsk Force on Regulatory Relief. 

A presidential memorandum issued in 1985 designated the Department of Transportation (DOT) as the 

lead agency to develop model URA regulations. In 1986, 

17 agencies adopted the model rule devised by DOT, thus 

creating a single, uniform federal approach to relocation 

assistance. The adoption of this common rule eliminated 

conflicts among the requirements of different federal 

agencies, easing regulatory problems for state and local 

governments. The rule also reduced states’ administrative 

workload by lowering the number of calculations and the 

amount of relocation information needing verification. 

The result was positive even though the common 

rule increased the total number of regulatory requirements because it was often more comprehensive and 

specific than the old separate rules. The clarification of 

relocation requirements did not reduce the fiscal costs 

associated with compliance, nor was it expected to result in any significant dollar savings. 

Another comparative success story involved the 

Davis-Bacon Act?’ This legislation, first adopted in 1931 

and since applied to nearly 80 separate federal aid programs, offers “prevailing wage” protections to workers on 

federally assisted construction projects. 

During the 1981-1986 period, the Department of Labor revised its methods for determining prevailing wages 

three times in order to eliminate circumstances that were 

resulting in excessive wage rates or creating inequities. In 

1983, for instance, DOL rescinded what was known as the 

“30 percent rule,” which defined the prevailing wage as 

the local wage ratepaid to the greatest number of similarly 

employed workers, if that rate was paid to at least 30 percent of those employed. (If not, the average rate for all 

workers was to be used.)The department revised the standard from 30 to 50 percent, reflecting a concern that the 

existing rule ignored the wages paid to as many as 70 percent of all workers, which was generally lower than the 

rate established by regulation. Similarly, DOL acted in 

1985 to bar the use of data from metropolitan counties in 

making wage determinations for rural areas. DOL also 

prohibited the use of wage data from projects subject to 

the Davis-Bacon Act, thus assuring that wage determinations would be based on the rates actually prevailing in private construction projects. 

DOL estimated that the regulatory changes adopted 

during 1981-1986 reduced construction costs for federal 

and federally assisted projects in the range of $120 million 

annually. Although the federal government obtains most 

of this fiscal benefit, state and local governments also are 

aided by the resulting reductions in their matching share 

of project costs. DOL, however, has not been able to accurately estimate the cost savings to these jurisdictions.56 

Conclusion 

Beginning in early 1981, the executive branch 

launched a comprehensive program of regulatory relief. 

This program extended and expanded steps instituted during the Ford and Carter administrations. Though aimed 

principally at the private sector, the Reagan program also 

took cognizance of the growing state and local concern 

about mandating. Various reports issued by the Presidential Task Force on Regulatory Relief and other observers 

highlighted specific accomplishments in reducing certain 

regulations that affected state and local governments. 

An examination of 18 major intergovernmental regulation statutes shows that mandates under these programs 

continued to rise during 1981-1986 in 11 cases and remained roughly constant in another two. Changes appeared to lessen the administrative and fiscal effect for 

state and local governments in only five of the statutes. 

Overall, federal programmatic and administrative standards continued to rise for most programs, including some 

that had been singled out for executive branch regulatory 

reviews, while federal assistance to support state program 

administration declined. 

nken together, these results seem to suggest the limitations of the administrative strategy toward deregulation 

employed by President Reagan as well as by his predecessors. This conclusion is quite consistent with the views ex- pressed by other observers at the time, among them 

Murray L. Weidenbaum, the first chairman of President 

Reagan’s Council of Economic Advisers and one of the 

early architects of the regulatory reform initiative. In 

mid-1983, he noted: 

[Tlhe major obstacles to further substantial improvement in the regulatory process clearly cannot be eliminated by executive action. The basic 

statutes governing all regulatory activities are too 

full of rigid requirements and limitations that can 

only be changed by act of Congress. Recent experience shows that the fundamental shortcomings of 

government regulation result from statutory deficiencies more than from administrative ones?’ 

Even where rule changes were advanced, he added, the 

courts had struck down many specific actions judged to be 

inconsistent with the provisions of federal statutes. Hence, 

U.S. Advisoly Commission on Intergovernmental Relations 27 
just as the regulatory relief campaign was in fact winding 

down, Weidenbaum argued that “the time is ripe for . . . a 

new phase of regulatory reform: the review and revision of 

the substantive laws governing the regulatory pr~cess.”’~ 

Notes 

’ ACIR reviewed the issue of growth of government in the years 

prior to the 1980 presidential election, noting substantial con- cern over administrative failures and red tape, poor program 

performance, excessive cost and waste, and inadequate political 

accountability. See U.S. Advisory Commission on Intergovern- mental Relations, A Crisis of Confidence and Competence 

(Washington, DC, 1980). This is the introductory volume in a 

10-part series on “The Federal Role in the Federal System: The 

Dynamics of Growth.” 

*See Marshall R. Goodman and Margaret T Wrightson, Managing Regulatory Reform: The Reagan Strategy and Its Impact (New 

York: Praeger Publishers, 1987), pp. 30-32. 

The intellectual and political foundations of deregulation are 

examined in Martha Derthick and Paul J. Quirk, The Politicsof 

Deregulation (Washington, DC: The Brooking Institution, 

1985). 

David R. Beam, “Public Administration is Alive and WellAnd Living in the White House,” Public Administration Review 

38 (January-February 1978): 72-77. 

Lester M. Salamon and Michael S. Lund, “Governance in the 

Reagan Era: An Overview,” in Lester M. Salamon and Michael 

S. Lund, eds., The Reagan Presidency and the GovemingofAmer 

ica (Washington, DC The Urban Institute, 1984), p. 13. 

Timothy J. Conlan, New Federalism: Intergovernmental Reform 

from Niron to Reagan (Washington, DC: The BrookingsInstitution, 1988), p. 99. 

’For a discussion of this terminology, see George C. Eads and 

Michael Fix, Relief or Reform? Reagan’s Regulatory Dilemma 

(Washington, DC: The Urban Institute, 1984), esp. pp. 1-2. 

Presidential Task Force on Regulatory Relief, Reagan Administration Achievements in Regulatory Relie$ A Pmgress Repod 

(Washington, DC, 1982) p. i. 

This distinction between social and economic regulation is discussed in Eads and Fix, Relief or Reform? pp. 12-15, and in 

Goodman and Wrightson, Managing Regulatory Reform, p. 48. 

‘“Major social regulation signed into law by President Carter included the Resource Conservation and Recovery Act (1976), 

Surface Mining Control and Reclamation Act (1977), Marine 

Protection Research and Sanctuaries Act Amendments (1977), 

National Energy Conservation Policy Act (1978), and Public 

Utilities Regulatory Policies Act (1978). See Goodman and 

Wrightson, Managing Regulatory Reform, pp. 33-34. 

’’ Murray Weidenbaum commented that statutory changes had 

been “disappointingly few,” a situation he attributedlargely to a 

fear within the administration that raising controversial ques- tions might impede enactment of tax and budget initiatives to 

which it gave higher priority. See his “Regulatory Reform un- der the Reagan Administration” in George C. Eads and Mi- chael Fix, TheReagan Regulatory Strategy (Washington, DC: The 

Urban Institute, 1984) p. 19. 

12Goodman and Wrightson, Managing Regulatory Reform, p. 27. 

13‘‘Remarks by the President,” January 22, 1981, in Materials on 

President Reagan’s Pmgram OfReguZatory Relief, June 13,1981, p. 

37. 

14See The White House, “Fact Sheet: President Reagan’s Initia- tives to Reduce Regulatory Burdens,” February 18, 1981. 

28 U.S. Advisory Commission on Intergovernmental Relations 

l5 Goodman and Wrightson, Managing Regulatory Reform, p. 36. 

161bid., p. 50. 

l7 Joseph E Zimmerman, “Regulating Intergovernmental Rela- tions in the 199Os,” Annals of the American Academy of Politicai 

and Social Science 509 (May 1990): 48-59. See also ACIR, Feder- al Preemption of State and Local Authority (Washington, DC, 

l8GOOdrnan and Wrightson, Managing Regulator,, Reform, p. 89. 

“bid., p. 50. 

”bid., p. 61. 

”See Richard S. Williamson, Reagan’s Federalism His Efforts to 

Decentralue Government (Philadelphia: Center for the Study of 

Federalism and Lanham, Maryland: University Press of Amenca, 19!30), Ch. 5. 

22BOth documents are included in Materialson President Reagan’s 

Progmm of Regulatory Relief, pp. 45-50 and 55-59. 

Goodman and Wrightson, Managing Regulatory Reform, p. 103. 

24 “Fact Sheet on President Reagan’s Initiatives to Reduce Regu- latory Burdens,” February 18, 1981, p. 3, included in Materids 

on President Reagan’s Pmgmm of Regulatory Relief, pp. 61-66. 

The bilingual education rules were withdrawn by the Secretary 

of Education on February 2, 1981. On February 9, 1981, EPA 

asked the D.C. Court of Appeals to remand to it the rule setting 

noise emission standards. 

“The Vice President, “Statement by the Vice President Regard- ing Actions Taken by the President’s Task Force on Regulatory 

Relief,” included in Materials on President Reagan’s Pmgmm of 

Regulatory Relief, pp. 69-88. 

26The White House, “Highlights of Recent Progress,” June 13, 

1981, p. 1, included in Materialson President Reagan’s Pmgram of 

Regulatory Reliej p. vii. 

27The Vice President, “Media Advisory,” December 30,1981, p. 

3. The large-scale grant consolidations occurred under the Omnibus Budget Reconciliation Act of 1981 (OBRA). 

28Presidential Task Force on Regulatory Relief, Reagan Adrninistration Achievements in Regulatory Relief for State and Local 

Governments: A Pmgress Report (Washington, DC, August 

29 See Presidential Task Force, Reagan Administmfion Regulatory 

301bid., p. 19. 

311bid., pp. 50-51. 

32ACIR, Regulatory Federalism: Policy, Process, Impact, and Re331bid., pp. 6, 19-21. 

34For an historical overview of such provisions, see ACIR, Cate- gorical Gmnts: Their Role and Deskn (Washington, DC, 1977), 

ch. 1. 

35 Presidential Task Force, Reagan Administmtion Regulatory 

Achievements, p. 1. 

%Murray L Weidenbaum, Confessions of a One-Armed Economist (St. Louis: Washington University, Center for the Study of 

American Business, 1983) p. 44. 

37‘A Bipartisan Swing Back to More Regulation,” Business Week, 

May 30,1983, pp. 74-75, cited in Eads and Fix, The Reagan Regu- latory Stmtegy, p. 37. 

%See the discussion in Goodman and Wrightson, Managing Reg- ulatory Refinn; pp. 3,434, and Michael D. Reagan, Regulation: Thehliticsofhlicy (Boston: Little, Brown, and Company, 

1992). 

1982), pp. 1-2. 

Achievements, pp. 81-83. 

form (Washington, DC, 1984), p. 184. 

1987), pp. 165-166. 
39The most recent volume is Regulatory Progmm of the United 

States Government, April 1,1992-March 31, 1993 (Washington, 

DC, 1993) 

40For a more detailed discussion of these legislative objectives, 

see Reagan, Regulation: The Politics of Policy, pp. 166-171. 

41The Commission wishes to acknowledge the cooperation of 

John Kamensky, then assistant director of GAO’s Intergovernmental Relations Group, and his staff, in making available their 

data and preliminary appraisal. The conclusions expressed here 

are the views of the author and not those of the General Ac- counting Office. 

42Such “partnership programs” include the National Historic 

Preservation Act of 1966; Safe Drinking Water Act of 1974; 

Clean Air Act Amendments of 1970; Endangered Species Act 

of 1973; Federal Insecticide, Fungicide, and Rodenticide Act; 

Flood Disaster Protection Act of 1973; National Environmental 

Policy Act of 1969; Occupational Safety and Health Act of 1970; 

and Wholesome Meat Act. 

437’he exception was the Wholesome Meat Act. 

44MeI Dubnick and Alan Gitelson, “Nationalizing State Poli- cies,” in Jerome 3. Hanus, ed., The Nationalization of State Covemment (Lexington, Massachusetts: D.C. Heath and Company, 

1981), p. 57. 

4s40 CFR Part 51.300; Subpart I? 

46Environmental Defense Fund v. Gonuch, 713 E 2d 802 @.c. 

4740 CFR Part 61. 

“Adam0 Wrecking Company v. United States, 434 U.S. 275 

1983). 

(1977). 

@Fair Labor Standards Act Amendments of 1974 (PL 93 2.59). 

”426 U.S. 833 (1976). 

”469 U.S. 528 (1985). 

’*Fair Labor Standards Act Amendments of 1985 (PL 99 150). 

”29 CFR Part 553. 

54F!L 91 646. The Uniform Relocation Act established procedures covering moving expenses and replacement housing intended to assure equitable treatment for persons and 

businesses displaced as a result of federally assisted programs. 

Although federal agencies are responsible for overseeing the 

act’s provisions for activities they support, state and local gov- ernments ultimately administer financial payments to those 

displaced as a result of federally assisted programs. 

5’P.L 74 403. 

%In addition to these changes, DOL initiated two other reguIatory 

revisions that would have reduced state and local burdens. Nei- ther was implemented because of federal court actions. In May 

1982, DOL modified the helper-to-journeyman ratio to reflect 

the widespread construction industry practice of employing 

many semiskilled workers. Cost savings were estimated at $363 

million annually. The AFLCIO sought and obtained apermanent injunction that blocked implementation of the rule. See 

Building and Construction Trades Department, AFLCIO v. 

Donovan, 553 E Supp. 352 (1982). 

57 Weidenbaum, “Regulatory Reform under the Reagan Admin- istration,” p. 37. 

’ahid., p. 38. 

U.S. Advisory Commission on Intergovernmental Relations 29 
30 US. Advisory Commission on Intergovernmental Relations 
Executive Order 1261 2 on Federalism: 

Performance, Problems, and Potential 

Federal regulations increased administrative require- ments for state and local governments during the 1980s. 

That growth occurred despite numerous executive branch 

initiatives in the early 1980s designed to provide regulatory 

relief. Although many of the reform initiatives benefited 

state and local governments, most were designed primari- ly to respond to problems experienced by the private sec- tor. On October 26, 1987, however, President Ronald 

Reagan promulgated Executive Order 12612 on Federal- ism, which was intended to address the regulatory con- cerns of states and localities. This chapter examines the 

implementation and effects of the executive order. 

Policy Impact Analysis 

Since 1969, important federal initiatives have been 

implemented to ascertain the effects of proposed federal 

programs and activities on (1) the environment (environmental impact statements), (2) the economy (inflation impact statements), (3) cities (urban impact statements), (4) 

state and local governments (state and local cost esti- mates), and (5) the economic and social targets of regula- tion (regulatory impact analyses). E.O. 12612 added 

another type of impact analysis to the federal policy arsenal-a federalism assessment. 

The order outlines a series of principles and procedures designed to guide federal agencies in formulating 

legislative and regulatory proposals that will affect state 

and local governments. It is intended to minimize the adverse or unintended effects of federal policies on states 

and localities and to restrict inappropriate preemption of 

state and local policymaking and administrative prerogatives. 

Although E.O. 12612 has had a positive impact on 

certain policy decisions, a systematic analysis of its implementation underscores a number of problems and 

weaknesses, including: 

rn Varying patterns of compliance; 

Routine failure by certain federal agencies to 

comply with the certification and assessment procedures; and 

Failure to carry out federalism assessments in a 

number of regulations with important implications for state and local governments. 

w 

The Working Croup on Federalism 

The origins of the Executive Order on Federalism can 

be traced to the work of a policy task force in the Reagan 

administration during the mid-1980s. By the president’s 

second term in office, some administration officials had 

become dissatisfied with the limitations of the deregulation initiatives. They sought to respond with new federal- ism and regulatory initiatives. One of these new initiatives 

was the creation of the Working Group on Federalism, an 

interagency task force established by the Domestic Policy 

Council in 1985. 

The working group issued a report in November 1986 

in which it raised deep concerns about the “evisceration of 

federalism as a constitutional and political principle.” It 

argued that the gradual development of an “expansive, intrusive, and virtually omnipotent national government” 

had served over time to transform state governments from 

“the hub of political activity and the very source of our political tradition [into] . . . administrative units of the na- tional government.”’ 

Although the group praised earlier initiatives by the 

Reagan administration to consolidate categorical pro- grams into block grants, to reduce intergovernmental reg- ulation, and to cut federal taxes, it argued that such 

actions “focused more on certain symptoms of federal- ism’s decline than on its root causes.”* Consequently, the 

working group recommended that additional reforms, 

U.S. Advisory Commission on Intergovernmental Relations 31 
ranging from proposed amendments to the Constitution 

to procedural and institutional changes in the legislative 

and administrative processes, be considered by the president. 

Among the latter was a proposal that the president issue “a 

comprehensive executive order on federalism setting forth 

concrete guidelines to be referred to by agencies when they 

undertake actions with federalism implication^."^ 

Promulgating an Executive Order 

on Federalism 

This final recommendation led directly to President 

Reagan’s issuance of E.O. 12612 on October 26,1987. The 

order identified principles and administrative procedures 

to guide federal agencies in formulating and implement- ing policies affecting state and local governments! 

Federalism Principles 

Specifimlly, E.O. 12612 spelled out nine “fundamental 

federalism principles” to mist executive branch agencies 

and departments in the design of new legislative proposals 

and administrative rules. These included the following 

Federalism is rooted in the knowledge that our 

political liberties are best assured by limiting 

the size and scope of the national government. 

In most areas of governmental concern, the 

States uniquely possess the constitutional authority, the resources, and the competence to 

discern the sentiments of the people and to 

govern accordingly. 

The nature of our constitutional system en- courages a healthy diversity in the public po- licies adopted by the people of the several 

States according to their own conditions, 

needs, and desires. 

Acts of the national government-whether 

legislative, executive, or judicial in naturethat exceed the enumerated powers of that 

government under the Constitution violate 

the principle of federalism established by the 

Framers. 

In the absence of clear constitutional or statutory authority, the presumption of sovereignty 

should rest with the individual States. Uncer- tainties regarding the legitimate authority of 

the national government should be resolved 

against regulation at the national level? 

Policymaking Criteria 

’R> supplement these general principles, E.O. 12612 specified additional policymaking criteria, which encompassed 

special provisions intended to minimize federal preemption 

of state authority and to guide the development of legishtive 

proposals submitted to Congress, including: 

H 

H 

H 

H 

Federal action limiting the policymaking discretion of the States should be taken only 

where constitutional authority for the action 

is clear and certain and the national activity is 

necessitated by the presence of a problem of 

national scope. 

With respect to national policies administered by the States, the national government should grant the States the maximum 

administrative discretion possible. 

Executive departments and agencies shall: 

(1) encourage States to develop their own 

policies to achieve program objectives.. . , (2) 

refrain, to the maximum extent possible, 

from establishing uniform, national standards for programs, and. . . (3) when national 

standards are required, consult with appropriate officials and organizations representing the States. 

To the extent permitted bylaw, Executive departments and agencies shall construe, in 

regulations and otherwise, a Federal statute 

to preempt State law only when the statute 

contains an express preemption provision or 

there is some other firm and palpable evidence compelling the conclusion that the 

Congress intended preemption of State law, 

or when the exercise of State authority directly conflicts with the exercise of Federal 

authority under the Federal statute. 

Any regulatory preemption of State law shall 

be restricted to the minimum level necessary. 

Executive departments and agencies shall 

not submit to the Congress legislation that 

would: (a) directly regulate the States in ways 

that would interfere with functions essential 

to the States’ separate and independent existence or operate to directly displace the 

States’ freedom to structure integral opera- tions in areas of traditional governmental 

functions; and (b) attach to Federal grants 

conditions that are not directly related to the 

purpose of the grant: 

Agency Implementation 

In order to ensure the application of these principles 

and criteria to policies and regulations with federalism implications, the executive order also set forth implementation procedures. Each agency head was instructed to 

designate an official to oversee compliance and determine 

whether proposed agency actions warranted the preparation of a formal and comprehensive assessment of their 

federalism iniplications. If warranted, such federalism 

assessments are required to contain: 

32 US. Advisory Commission on Intergovernmental Relations 
Certification that the policy has been assessed in 

light of the federalism principles, criteria, and requirements set forth in the order; 

Identification of any provisions or elements of the 

policy that are inconsistent with such federalism 

principles and criteria; 

An estimate of additional costs or burdens that 

will be imposed on states and the probable source 

of funding to address those costs; and 

A description of the extent to which the policy interferes with aspects of state sovereignty or the 

performance of traditional state functions. 

Any federalism assessments must accompany the 

agency’s submissions to the Offi of Management and Budget (Om) for legislative clearance or regulatory review. In 

addition, OMB is responsible for providing government-wide coordination and review of agency compliance 

with the executive order. 

rn 

Mixed Assessments 

of Executive Order 12612 

There has been little formal or comprehensive evaluation of the performance and accomplishments of E.O. 12612. 

Positive Appraisals 

Some federal, state, and local officials believe that the 

executive order has enhanced their ability to focus attention on federalism issues during the legislative clearance 

and regulatory review processes. Supporters note that 

President Bush affirmed his personal commitment to the 

principles of the federalism executive order in a 1990 

memorandum to the heads of executive branch departments and agencies.’ 

Robert C. Raymond of the Department of Health and 

Human Services maintains that the order has “changed 

the nature of internal debate. You frequently find people 

citing it to make their case, arguing either that there is a 

significant federalism impact or an overriding national 

need.”8 James Martin of the National Governors’ Association agrees, noting that state and local government representatives “try to use it all the time” to influence the 

design of federal regulations. “It provides essential hooks 

for influencing policy debates.’* 

Such views are shared by some of the designers of 

the executive order. Paul Colborn, of the Office of General Counsel in the Department of Justice, served on 

the staff of the Working Group on Federalism. He 

agrees that E.O. 12612 has influenced agency decisionmaking. Although there have been relatively few formal 

federalism assessments, Colborn believes that “there 

are many informal reviews of federalism issues within 

federal agencies now. My sense is that there is a lot more 

attention to federalism showing up in the preambles and 

explanations of new regulations.”1° He notes, for example, that such informal, “small a,” assessments succeeded in the late 1980s in deterring the administration from 

proposing legislation to preempt California’s Proposition 65 food labeling requirements. 

On the other hand, Colborn and others emphasize 

that the purpose of the executive order is not to guaranteeresultsfavorable to statesand localities. Rather, it is 

designed to assure that federalism issues are adequately 

considered in the process of making executive branch 

decisions. For example, the Justice Department conducted its first formal federalism assessment when considering federal legislation to overturn the Supreme 

Court’s ruling in McNally v. United States, a case limiting the use of federal mail fraud statutes to prosecute 

state and local officials for corruption.” The department 

and the Reagan administration ultimately proposed 

such legislation, but only after a full consideration of 

the federalism issues involved. 

Skeptical Judgments 

Notwithstanding such positive assessments of the executive order’s performance, many other appraisals havc 

been more circumspect, if not critical. Few officials can 

point to important instances in which E.O. 12612 has significantly altered agency decisions. Some have expressed 

concerns about fundamental weaknesses in the order’s 

procedures that have kept it from achieving its full potential. This is particularly true of OMB officials charged with 

coordination and review of the E.O. 12612process. “I wish 

that I could point to some successes with 612,” observed 

one former OMB official, “but the record to date has been 

disappointing.”12 “To my knowledge, there is no case to 

hold up as a good example,” another agreed.I3 

These officials give several reasons for such negative 

evaluations. First and foremost, there is a conviction 

among some OMB staff that the executive order process 

“lacks teeth.” “There is no enforcement mechanism,” observes Kimberly Newman.14 Decisions about the need to 

perform a federalism assessment and certification that requirements have been met rest entirely with each agency’s 

designated federalism official. “We don’t have authority 

under the order to second-guess the agency federalism official,” observes another OMB official. 

Contrast this situation with OMB’s regulatory review 

authority under E.O. 12291. The budget agency has the 

power, where statutory authority permits, to return proposed regulations to the issuing agency if the Office of Information and Regulatory Affairs staff believes that the 

economic assessment requirements have not been adequately met or the underlying data is incomplete or has 

been misinterpreted. 

This lack of authority in the federalism order was intentional. “We didn’t want to create a new scheme full of 

red tape and routine filings,” explains Paul Colborn. “We 

deliberately left the decision to perform a federalism 

assessment to agency discretion in order to avoid a lot of 

U.S. Advisory Commission on Intergovernmental Relations 33 
boilerplate language on every regulatory and legislative 

proposal.” As a result, the tendency to mass produce rou- tine, superficial federalism certifications has been avoided 

by most, although not all, federal agencies. This accom- plishment, however, leaves OMB with little procedural 

recourse if an agency fails to consider relevant federalism 

issues. Newman explains: 

As new rules and proposals have come in from 

Transportation, HUD, and so on, we have attempted on an ad hoc basis to go back and get additional information when federalism issues have 

been raised. But it’s hard to get anything more 

than “we considered it.”15 

Due to these procedural weaknesses, agency com- pliance with the executive order has often been haphazard. 

Following President Bush’s election in 1988, many federal 

agencies failed to designate a federalism official until January 1990, when the president sent a memorandum to department and agency heads reaffming his commitment to E.O. 

1x12 and reminding them of its requirements. 

Although OMB officials observed a positive response 

from this expression of presidential support, agency compliance remained incomplete. Six months after the president’s memorandum, OMB’s list of designated agency 

officials included only five of the 14 executive departments and 17 independent federal agencies. Among the 

agencies missing were many with important intergovernmental responsibilities, including the departments of 

Agriculture, Education, and Housing and Urban Development; the Environmental Protection Agency; the Occu- pational Safety and Health Administration; and the 

Federal Emergency Management Agency.I6 

Moreover, in approximately half of the agencies that 

had a designated federalism official, that person was the 

cabinet secretary or agency head. Although this might be 

interpreted as a sign of high-level commitment, it raises 

questions about the degree of attention that may be given 

to federalism issues, particularly during the often critical 

early stages of developing legislative initiatives and proposed rulemakings. 

Hence, it is not surprising that important legislative 

proposals and regulations have managed to escape the 

executive order’s purview. For example, there was no fed- eralism assessment for the Bush administration’s trans- portation policy proposals, despite their implications for 

distributing billions of dollars of federal aid and restructuring federal programs for mass transit, interstate, primary, and secondary highways.” Similarly, despite the 

recent promulgation of multi-billion dollar environmental 

regulations to assure that states and localities provide 

cleaner drinking water, remove asbestos from schools, and 

improve their waste disposal practices, one of OMB’s environmental analysts confessed that he had “never seen” a 

federalism assessment prepared by the EPA.’* Likewise, 

Robert Raymond confirmed that his agency at HHS “has 

never done a full-blown federalism a~sessment.”’~ 

A Systematic Survey of Agency Compliance 

Many of the problems identified by officials familiar 

with the implementation of E.O. 12612 can be substantiated 

by a systematic analysis of announcements and rules promulgated in the Feduul Register. These data confirm that: 

Patterns of compliance vary dramatically among 

agencies. 

Many agencies routinely fail to follow the certification and assessment procedures. 

In many cases, compliance with the order’sprocedures is strictly pro-forma. 

Formal federalism assessments were not made 

for a number of significant new rules that were 

clearly intended to be covered by requirements. 

These conclusions are based on a computer-assisted 

search of all Federal Register entries between October 

26,1987, and August 10,1990. During this 34-month penod, 89,015 entries were published in the Federal Rqptec including agency announcements, notices of proposed 

rulemaking, and final rules and regulations. Of this total, 2,999 contained some reference to the federalism 

executive order, and 1,751 of these references were included in final rules. 

The frequency of references to E.O. 12612 varied dramatically among regulatory agencies and departments, with 

ten of them being responsible for 2,874 of the 2,999 references (see TQble 3-1, page 35). The patterns of citation also 

varied enormously. The Department of Transportation 

(DOT) stands out with more than 2,OOO references, and 

Commerce (DOC), Justice (DOJ), and Housing and Urban 

Development (HUD) each had more than 100 references. 

To some extent, these variations reflect differences in 

overall regulatoq activity. DOC and DOT, for example, 

were extremely active regulators during this period. The 

departments of Energy, Health and Human Services, and 

Interior also were active, but they produced far fewer references to E.O. 12612. 

The need to reference the executive order also depends on an agency’s substantive jurisdiction. One would 

not expect frequent references by agencies that primarily 

regulate the private sector rather. Yet, the pattern is not 

predictable. The Environmental Protection Agency and 

the Department of Education heavily regulate public enti- ties, yet their Federal Register entries contain few references to the executive order. In contrast, active regulatory 

departments like Commerce and Transportation direct 

many of their rules to private sector activities, such as airline safety (air worthiness directives) and ocean fsheries. In 

such regulations, they routinely cite the executive order to 

acknowledge that the proposals have no federalism impact. 

These differences underscore the distinctive imple- mentation approaches that agencies have adopted. Some 

include pro-fonna references to E.O. 12612 whether or 

not the rule affects state or local governments. Others are 

m 

m 

34 U.S. Advisory Commission on Intergovernmental Relations 
Table 3-1 

Federal Rules and References to E.O. 1261 2, by Agency, October 26,1987-August 10,1990 

Federal 

Department 

or Agency 

Total Entries with Final Rules 

Federal Register Reference to Citing 

Entries E.O. 12612 Percent E.O. 12612 Percent 

Commerce 

Education 

Energy 

Health and Human Services 

Housing and Urban Development 

Interior 

Justice 

Labor 

Transportation 

Environmental Protection Agency 

5,570 

1,270 

7,962 

5,576 

1.018 

6,509 

2,239 

2,835 

7,059 

4.758 

370 

5 

41 

19 

134 

15 

119 

28 

2,112 

11 

6.6% 

0.4 

0.5 

0.3 

13.2 

0.2 

5.3 

1.0 

29.9 

0.2 

242 

4 

18 

10 

66 

7 

83 

11 

1,214 

7 

4.3%’ 

0.3 

0.2 

0.2 

6.5 

0.1 

3.7 

0.4 

17.2* 

0.1 

’ Omitting Ocean fisheries regulations, the Commerce Department issued 174 final rules citing E.O. 12612 (3.1% of total entries). 

Source: ACIR compilation from the Federal Regkfec 

Omitting air worthiness directives, the Transportation Department issued 441 final rules citing E.O. 12612 (6.2% of total entries). 

far more selective. Some agencies, such as EPA, regularly 

fail to discuss the executive order and its requirements, even 

in major rules affecting states and localities, in which the 

agency evidently has considered issues involving federalism. 

A Random Sample of Citations 

In order to determine how often federal agencies go 

beyond pro-forma certifications and review federalism issues seriously, or undertake a formal federalism asses- sment when that appears warranted, a random sample of 

final rules was examined. Omitting air worthiness and 

Ocean fisheries regulations, the agencies included in Tible 

3-1 issued 823 final rules mentioning E.O. 12612 between 

October 26,1987, and August 10,1990. These were listed 

and numbered consecutively, and a random sample of 30 

rules was drawn. 

Only four of the 30 rules drawn from this group had a 

clear intergovernmental impact: 

The Chapter 1 program regulations issued by the 

Department of Education; 

w EPA’s rules governing state implementation 

plans under the Clean Air Act; 

w Regulations promulgated by HHS mandating 

that federal contractors and grantees operate a 

drug-free workplace; and 

HUD’s regulations governing the development 

of enterprise zones (see Tible 3-2, page 36). 

Not one of these regulations was judged to warrant a 

full federalism assessment. Given the size of the sample, 

this suggests that only a tiny fraction of federal rules that 

are analyzed for their impacts on state and local governments are scrutinized for their federalism implications. 

Judging from this sample, the executive order requirew 

ments are commonly given perfunctory treatment by fed- eral regulatory agencies. For instance, HUD’s enterprise 

zone regulations altered the department’s method for 

ranking and selecting communities to participate in the 

program. The program specifically sought “to encourage 

state and local governmental actions to augment.. . federally designated enterprise zones.” Yet, the agency’s designated federalism official determined that the regulations 

“do not have federalism implications and, thus, are not 

subject to additional review under the order.”M 

The effects of HHS rules for implementing the 

Drug-Free Workplace Act were more far-reaching. This act 

required that all federal grantees and contractors, including state and localgovernments, certify that they operate a 

drug-free work environment and implement employee 

education and treatment programs intended to assure that 

result. Failure to comply with the act’s crosscutting requirements, as demonstrated by drug-related convictions 

of state and local government employees or other evi- dence of failure to make a “good faith” effort to eliminate 

drug use in the workplace, could result in the suspension 

or termination of federal aid to the agency or jurisdiction 

in question. 

Although such requirements were potentially costly 

and far-reaching, federal officials determined that this 

rule “will not have sufficient Federalism implications to 

warrant the preparation of a Federalism assessment.”*’ 

This decision reflected a judgment that the burdens imposed on state and local government grant recipients were 

somewhat streamlined compared to those placed on fed- eral contractors. In particular, states could elect to make a 

single annual certification to each federal agency from 

which they received funds, rather than submit a separate 

certification for each grant. 

Although the remaining 26 rules were drawn from a 

group that cited the executive order, none were intergovernmental in character. The large percentage of nonU.S. Advisory Commission on Intergovernmental Relations 35 
Table 3-2 

Final Agency Rules that Reference E.O. 1261 2: A Random Sample 

Department of Commerce 

Individual Validated Licenses and Commodity Control Lists, 55 FR 31852, August 6, 1990 

U. S. Standards for Grades of Fish Fillets, 55 FR 23550, June 11, 1990 

Department of Education 

Chapter 1 Program in Local Educational Agencies-Final Regulations, 54 FR 21752, May 19, 1989 

Department of Energy 

Financial Assistance Rules: Technical Amendments, 54 FR 23958, June 5, 1989 

Department of Health and Human Services 

Requirements for a Drug-Free Workplace-Grants, 54 FR 4947, January 31, 1989 

Department of Housing and Urban DeveIopment 

Enteqwise Zone Development, 53 FR 48638, December 2, 1988 

Home Equity Conversion Mortgage Insurance, June 9, 1989 

Acceptance by Overseas Immigration and Naturalization Service Offices and U.S. Consulates of Jurisdiction of RelaAdjustment to Permanent Resident Status, 54 FR 50339, December 6, 1989 

Documentary Requirements, Waivers, and Proceedings to Determine Deportability of Aliens in the United States, 55 

Department of Justice 

tive Petitions, 54 FR 34141, August 18, 1989 

FR 24858, June 19, 1990 

Department of 'Ransportation 

Light Truck Fuel Economy Standards-l990-91,53 FR 11074, April 5,1988 

Changes to Honolulu and Guam Marine Inspection Zones, 53 FR 21814, June 10,1988 

Amendments to Railroad Safety Regulations, 53 FR 28594, July 28, 1988 

Improved Flammability Standards-Airplane Cabins, 53 FR 32564, August 25,1988 

Editorial Changes, Coast Guard Reorganization, 53 FR 34532, September 7,1988 

Inspection, Repair, and Maintenance, 53 FR 49402, December 7, 1988 

Traffic Alert and Collision Avoidance System, 54 FR 940, January 10, 1989 

Odometer Disclosure Requirements, 54 FR 7772, February 23, 1989 

Special Flight Rules in Vicinity of Grand Canyon, 54 FR 1 11926, March 22, 1989 

Control of Drug Use in Natural Gas and Hazardous Liquid Pipeline Operations, 54 FR 14922, April 13, 1989 

Federal Motor Vehicle Safety Standards--Air Brake Systems, 54 FR 18890, May 3, 1989 

Special Federal Aviation Requirements, 54 FR 23864, June 2, 1989 

Motor Vehicle Safety Standards-Air Brake Systems, 54 FR 25460, June 15, 1989 

Anti-Drug Program for Aviation Personnel, 54 FR 53282, December 27, 1989 

Shippers Use of Thnk Cars with Localized Thin Spots, 55 FR 922, January 5, 1990 

Imported Vehicles Subject to Federal Safety Standards, 55 FR 3742, February 5, 1990 

Prevention of Pollution from Ships, 55 FR 18578, May 2, 1990 

Special Local Regulation-Sheboygan Independence Day, 55 FR 23200, June 7,1990 

Removal of Transponder with Automatic Altitude Reporting in Fargo, North Dakota, 55 FR 29986, July 23, 1990 

Environmental Protection Agency 

State Implementation Plan Completeness Review, 55 FR 5824, February 16, 1990 

Note: 

Source: ACIR compilation from the Fedeml Register: 

Italics indicate regulations affecting state and local governments. 

36 U.S. Advisory Commission on Intergovernmental Relations 
intergovernmental requirements in the sample (87 per- cent) highlights once again the tendency of certain agen- cies, particularly the departments of Commerce and 

Transportation, to make pro-forma references to E.O. 

12612 even when they are not required. 

Patterns of Compliance in Major Rules 

A key question remains unanswered: Are there other 

cases in which important intergovernmental rules are promulgated without a federalism assessment? 

We attempted to isolate the most important intergovernmental regulations promulgated during this period by 

examining those that were classified by OMB as major 

rules according to the criteria of Executive Order 12291. 

For the purposes of this order, a major rule is defined as a 

regulation that is likely to result in: 

1. An annual effect on the economy of $100 million 

or more; 

2. A major increase in the costs or prices for con- sumers, individual industries, Federal, State, and 

local government agencies, or geographic re- gions; or 

3. A significant adverse effect on competition, em- ployment, investment, productivity, or innovation, or on the ability of United States-based 

enterprises to compete with foreign-based enterprises in domestic or export markets. 

Major rules were isolated for EPA and HUD, which 

appear to respond differently to the requirements of E.O. 

12612. These rules were examined for their intergovern- mental effects, for references to the order, and for some 

form of federalism assessment. As was the case with overall references to E.O. 12612, patterns of citation and com- pliance for major rules varied considerably between the 

two agencies. 

EPA placed 4,758 announcements in the Federal Reg- ister between October 26, 1987 and August 10, 1990. Of 

these, 1,382 involved the issuance of final rules, 373 of 

which referred to the regulatory impact analysis that is 

usually required when a major rule is promulgated. In 

most of these cases, the regulatory impact analysis was not 

carried out because the rule was not considered to be major in scope. 

OMB reported that EPA promulgated six major final 

rules in 1988 and another three in 1989.” Not one of the 

nine rules referred to E.O. 12612, and none was accompanied by a formal federalism assessment. Only seven of the 

1,382 final rules issued or discussed by EPAduring this period mentioned the requirements of E.O. 12612. None of 

these rules was deemed to be major, however, nor did any 

contain a full federalism assessment.” 

The absence of references to the executive order does 

not mean that EPA did not promulgate any rules during 

this period that imposed significant fiscal and administrative requirements on state and local governments. On the 

contrary, several of the most costly and far-reaching rules 

issued during this period were clearly intergovernmental 

in character. Included in this group were rules covering 

materials containing asbestos in schools; requirements for 

financial responsibility, notification, record keeping, and 

reporting for underground storage tanks; toxic chemical 

release reporting under community-right-to-know legislation; national drinking water regulations for filtration, disinfection, and turbidity; and effluent guideline plans 

under the Clean Water Act. 

EPA estimated that its asbestos removal requirements would affect 100,OOO school buildings and impose 

costs of $3.145 billion over 30 years.24 Similarly, the 

agency’s underground storage tank regulations were estimated to impose incremental costs of $48 billion over 30 

years.u Substantial portions of this cost would be borne directly by state and local jurisdictions, which operate independent fleets of vehicles for police, fire, school, highway, 

and other government departments. In addition, state and 

local governments were responsible for implementing 

major portions of the regulatory program. Yet, in neither 

of these cases, nor in the other major regulations listed 

above, did the agency make any reference or citation to 

the president’s executive order on federalism. 

The agency’s procedural noncompliance with the 

formal requirements of E.O. 12612 does not necessarily 

indicate a pattern of insensitivity to intergovernmental 

considerations. Prior to issuing its asbestos removal requirements, EPA established a committee of state and local school and health agency officials to help design 

regulations responsive to state and local government experience and Similarly, EPA stressed that two 

of the “key operating principles” used in designing its underground storage tank requirements were that the program “must be designed to be implemented at the state 

and local levels” and that “the requirements must be kept 

simple, understandable, and easily implemented” by small 

owners and jurisdictions.2’ 

In 1985, the agency created a state-EPA consultation 

committee, with 17 state representatives, that meets four 

times a year. Nevertheless, the agency’s failure to evince 

even superficial or pro-forma compliance with the technical 

requirements of E.O. 12612 would appear to underscore 

important weaknesses in the design and implementation 

of the executive order. 

Compliance with the formal requirements of the executive order on federalism was generally higher at the 

Department of Housing and Urban Development, but the 

eventual outcome was much the same. Major regulations 

with important intergovernmental implications were subjected to little more detailed scrutiny under the order at 

HUD than at EPA 

HUD placed 1,018 announcements in the Federal Register from October 27, 1987, until August 10, 1990. Of 

these, 249 were final rules, including 128 that were considered for major rule status under E.O. 12291,66 that addressed E.O. 12612, and 63 that addressed both sets of 

requirements.28 Whereas fewer than one percent of the final rules that were scrutinized for major economic imU.S. Advisory Commission on Intergovernmental Relations 37 
pacts at EPAmade any reference to the executive order on 

federalism, 52percent of such rules issued by HUD did so. 

Nevertheless, a more detailed examination of the resulting rules showed that numerous regulations with important intergovernmental impacts were promulgated 

with only a cursory discussion of their federalism implications. A survey of these regulations again uncovered no instance in which a major rule was subjected to a full-scale 

federalism assessment. 

In some cases, a more detailed analysis of federalism 

issues was deemed unnecessary because the rule in question was designed to increase state or local flexibility. This 

was the case when HUD joined other federal agencies in 

issuing a common rule establishing uniform administrative 

requirements for federal grants. Much more common, however, were regulations with important federalism impacts 

but little statutory flexibility. Thus, in issuing final regulations governing implementation of the Fair Housing Act 

Amendments of 1988, the agency’s general counsel and 

designated federalism official determined that 

the policies contained in this rule would, if implemented, have federalism implications and are 

subject to review under the Order. . . . The effect 

of the amended Fair Housing Act will be to encourage States and localities to amend their laws 

to match the. . . strengthened Federal law. . . or 

suffer the eventual lossof [federal] recognition.. 

. [and] eligibility for grant funds. . . . While the 

rule would have federalism impacts, review under the Federalism Executive Order is not required because the implementation of the statute 

leaves little discretion with HUD to lessen these 

impacts. HUD’s statutory mandate is clear.” 

A similar rationale was elaborated in regulations involving 

comprehensive homeless assistance plans and the public 

housing drug elimination program. HUD acknowledged 

that both sets of rules entailed important federalism implications, but no detaiIed assessment was deemed necessary 

given the degree of statutory prescriptiveness involved. 

Conclusion 

Promulgation of Executive Oorder 12612 represented 

the last comprehensive initiative undertaken by the 

Reagan administration to restrain federal government in- volvement in state and local affairs. Its authors believed 

that a presidentially sponsored federalism impact analysis 

process would complement earlier federalism reform initiatives and limit the promulgation of unduly burdensome 

and preemptive federal regulations. 

However, the weight of both anecdotal assessments 

and systematic analysis suggests that E.O. 1x12 has had 

little impact on federal regulations that affect state and local 

governments. Many federal agencies have failed to appoint a 

designated federalism official. During the regulatory process, some agencies routinely fail to follow the most basic 

procedures outlined in the order. Among those agencies 

that do comply, such compliance appears to be largely 

pro-forma. Although some officials can cite isolated examples to the contrary, the sample of regulations reviewed 

uncovered no instance in which a thorough federalism 

assessment was undertaken by an agency in the course of 

promulgating significant intergovernmental regulations. 

Such limitations appear to result from weaknesses in 

design and procedures of the order. Among these weaknesses is the fact that the Office of Management and 

Budget, which is to oversee and coordinate federal agency 

compliance, has been granted neither the resources nor 

the enforcement authority necessary to assure its effective 

implementation. These constraints could be rectified by 

amending the executive order and increasing the resources devoted to ensuring compliance with it. 

Some shortcomings of E.O. 12612 go beyond the order. Analysis of several major regulations promulgated by 

the Department of Housing and Urban Development suggests that even the most thorough federalism assessment 

procedures would have limited effect in certain cases be- cause the statutes in question provide little regulatoly , 

flexibility. As was concluded in Chapter 2, after analyzing 

earlier regulatory relief efforts, these cases reflect the lim- itations of any unilateral administrative strategy for providing regulatory relief.’O An effective regulatoly impact 

assessment process must be part of a comprehensive strategy 

that devotes attention to the legislative process as well. 

Notes 

*Working Group on Federalism, “The Status of Federalism in 

America: A Report of the Working Group on Federalism of the 

Domestic Policy Council” (Washington, DC, November 1986), 

p. 1. 

*Ibid., p. 3. 

.I FedemJ Regkter, October 30, 1987, pp. 4168541688. 

Ibid., p. 67. 

Ibid., pp. 41686-41687. 

Bid. 

The White House, “Memorandum for the Heads of Executive 

Departments and Agencies,” February 16,1990. 

‘Remarks of Robert C. Raymond, director, Research, Evalua- tion, and Special Analyses, Office of the Assistant Secretary for 

Planning and Evaluation, Department of Health and Human 

Services, to the Washington Intergovernmental Roundtable, 

March 13, 1990. 

9Remarks of James L Martin, Legislative Counsel, National 

Governors’ Association, to the Washington Intergovernmental 

Roundtable, March 13, 1990. 

‘OInterview with Paul Colborn, Office of Legislative Counsel, 

U.S. Department of Justice, June 12,1990. 

“483 US. 350 (1987). 

‘*Interview with James Mason, Office of Information and Regu- latory Affairs, Office of Management and Budget, July 12,1990. 

I3InteMew with Kimberly A. Newman, Intergovernmental Af- fairs Liaison, Office of Management and Budget, June 21,1990. 

141bid. 

38 U.S. Advisory Commission on Intergovernmental Relations 
lSIbid. 

16Some omissions of departments and agencies from OMBs list 

of federalism officials may be the result of miscommunication. 

Representatives of the Department of Transportation, for example, note that the department's general counsel was designated as DOT'S federalism official in January 1988, although 

this is not indicated on OMBs tally. 

l7 DOT officials note, however, that federalism assessments were 

made for sunset legislation for the Interstate Commerce Com- mission and for hazardous materials transportation legislation. 

181nterYjew with Rick Belzer, Office of Information and Regula- tory Affairs, Office of Management and Budget, July 12,1990. 

''Remarks to Washington Intergovernmental Roundtable, 

March 13, 1990. 

*'Federal Register, December 2, 1988, p. 48639. 

21Fedeml Register, January 31, 1989, p. 4950. 

22 Office of Management and Budget, Regulatory Pmgmrn of the 

United States, April I, 1990-March 31, 1991 (Washington, DC, 

23These seven were rules pertaining to State Implementation 

Plan Completeness Review (Clean Air Act); Implementation 

Plans, Surface Coal Mines and Fugitive Emissions; Implemen- tation Plans, Air Quality New Source Review; Preparation, 

Adoption, and Submittal of Implementation Plans (Clean Air); 

Maintaining a Drug-Free Workplace; Cooperative Agreements 

1991) pp. 627-629. 

and Superfund State Contracts for Superfund Response Actions; and Uniform Administrative Requirements for Grants 

and Cooperative Agreements to State and Local Governments. 

24Federal Register, October 30, 1987, p. 41844. 

2s Federal Register,.September 23, 1988, p. 37082. 

260MB, Regulatory Pmgmrn of the United States Govenunetit, 

April 1, 1988-March 31, 1989 (Washington, DC, 1989), p. 27. 

27Federal Register, September 23, 1988, p. 37082. 

28Those rules, which were analyzed for economic burdens but not 

federalism impacts, generally were not intergovernmental in 

character. Most dealt with issues such as Federal Housing Ad- ministration requirements on home mortgage interest rates. 

2gFedeml Register, January 23, 1989, p. 3232. Similarly, although 

Executive Order 12291 requires that major rules must be rigor- ously analyzed to assure that social benefits outweigh costs and 

that the most cost-efficient mode of regulation is selected, these 

requirements apply only when permitted by statute. Despite 

the professed lack of statutory flexibility in the Fair Housing 

Amendments, HUD proceeded nevertheless to conduct a regulatory impact analysis pursuant to Executive Order 12291, although refraining from conducting a federalism assessment. 

30For a comprehensive analysis of the pros and cons of an ad- ministrative approach to deregulation, see Marshall R. 

Goodman and Margaret T. Wrightson, Managing Regiilatory 

Refonn: The Reagaii Stmtegv arid Its Impact (New York: Praeger 

Publishers, 1987). 

US. Advisory Commission on Intergovernmental Relations 39 
40 U.S. Advisory Commission on Intergovernmental Relations 
Part II 

Trends in Regulation - 

The Congress 

U.S. Advisory Commission on Intergovernmental Relations 41 
42 U.S. Advisory Commission on Intergovernmental Relations 
I n tergovern mental Regu latory Enactments 

in the 1980s 

In the foregoing examination of executive branch 

rulemaking and regulatory relief activities, it was demonstrated that federal requirements increased during the 

1980s in a majority of the regulatory programs examined. 

Intergovernmental regulation was reduced in approximately one-quarter of the cases studied. Moreover, the 

principal regulatory relief mechanism for state and local 

governments, Executive Order 12612, produced little substantive change. 

As discussed in Chapters 2 and 3, one important reason for this sustained level of federal rulemaking activity 

lays outside of the bureaucracy. In several cases, the promulgation of additional administrative and programmatic 

requirements was a direct consequence of previously enacted statutes. Because of such legislative stimulation of 

the regulatory process, any comprehensive understanding 

of regulatory federalism in the 1980s and 1990s must examine trends in legislative enactments as well as administrative rulemaking. 

In Part 11, the regulatory record of the Congress during the 1980s is examined, especially the extent to which 

the Congress increased the statutory requirements on 

state and local governments. Chapter 5 contains an analysis of the financial costs attributable to such regulations. 

An Inventory of Intergovernmental Mandates 

Adopted in the 1980s 

Tible 4-1 contains a description of 27 statutes enacted 

during the 1980s that imposed significant new regulations 

on states and localities. 

Some, like the 1988 Ocean Dumping Ban Act (P.L. 

100-688), which prohibits any additional dumping of municipal sewage sludge in Ocean waters, were relatively simple and direct. Others were lengthy and complex laws that 

imposed multiple new obligations and requirements on 

both public and private entities. The 1990 Clean Air Act 

Amendments (P.L. 101-549), for example, contained provisions affecting both the intergovernmental regulatory system for controlling urban smog and industrial pollution 

and direct limitations on emissions from municipal incinerators and power plants. New policy concerns for federal 

regulators were addressed in some legislation, such as the 

DmgFree Workplace Act of 1988. Others, such as the Education of the Handicapped Act Amendments of 1986, built on 

and expanded earlier federal initiatives. 

Despite these and other differences, all of the statutes in the inventory conform to the regulatory framework 

developed by ACIR in Regulatory Federalism: Policy, Process, Impact, and Reform. All of the laws imposed significant new regulations on states and localities, utilizing 

either partial preemptions, direct orders, crosscutting requirements, or crossover sanctions.' 

The consistency of the inventory with this conceptual 

framework permits comparisons with ACIR's earlier research and analysis of regulatory trends over time. It 

means, however, that traditional forms of legal conditions attached to individual grant-in-aid programs are excluded from 

this list, even though the conditions may be extremely costly 

or intrusive. Some of the more important examples of traditional grant conditions adopted in the 198Os, such as those 

attached to the Medicaid and AFDC programs, will be discussed later in this chapter. Also omitted from the list are 

statutes that provided intergovernmental regulatoy relief, 

such as the Local Government Anti-Trust Act of 1984 and the 

Fair Labor Standarh Act Amendmenfs of 1985. These, too, 

will be addressed separately. 

Finally, this inventory does not include federal statutes that imposed only modest requirements on state and 

local governments. For example, the Uniformed and Overseas Citizens Absentee Voting Act of 1986 (P.L. 99-410) required states to accept a uniform federal absentee ballot 

form for federal elections if state absentee ballots are not 

made available on a timely basis. Also omitted from this 

U.S. Advisory Commission on Intergovernmental Relations 43 
Table 4-1 

Major New Enactments and Statutory Amendments Regulating State and Local Governments, 

1981 -1 990 

Title PublicLaw Qpe 

Age Discrimination in Employment Act Amendments of 1986 

Outlawed mandatory retirement at age 70, with a seven-year delay in coverage for 

police, fire fighters, and college professors. 

Established comprehensive national standards to prohibit discrimination in public 

services and accommodations and to promote handicapped access to publicbuildings 

and transportation. 

Directed school districts to inspect for asbestos hazards, develop management response 

plans, and take necessaly actions to protect health and the environment; required state 

review and approval of local management response plans. 

Created new management procedures for the disbursement of federal aid funds to 

states, resulting in an overall reduction of interest earned on federal funds by states. 

Overturned federal court ruling and authorized the promulgation of "baby doe" reg- ulations protecting seriously ill newborns. 

Reversed Supreme Court ruling in Grove City CoZZege v. Bell and expanded institu- tional coverage of laws prohibiting racial, gender, handicapped, and age discrimina- tion by recipients of federal assistance. 

Imposed strict new deadlines and requirements dealing with urban smog, municipal in- cinerators, and toxic emissions; enacted new program for controlling acid rain. 

Established minimum national standards for licensing and testing commercial and 

school bus drivers; directed states to issue and administer licenses by 1992 or risk 

losing 5-10 percent of major highway grants. 

Extended Medicare hospital insurance taxes and coverage to all new state and local 

government employees. 

Required certification by all federal grantees and contractors of a drug-free workplace 

and creation of employee awareness, sanction, and treatment programs. 

Expanded coverage and services for preschool children, ages 3-5. 

Prevented states from claiming sovereign immunity under the 11th Amendment 

from lawsuits by parents seeking tuition reimbursement under the Handicapped 

Education Act, thereby reversing the Supreme Court's holding in Dellmuth v. Muth. 

Promulgated new national hazardous waste cleanup standards and timetables; es- tablished community right-to-know program, requiring state and local notification 

of potential hazards and dissemination of information to public; expanded local 

emergency response planning. 

Extends Civil Rights Act of 1968 to cover the handicapped and families with children. 

Reauthorized and strengthened scope and enforcement of the Resource Conswvation and Recovety Act of1976; established program to regulate undergroundstorage 

tanks for petroleum and hazardous substances; required annual EPA inspections of 

state and locally operated hazardous waste sites. 

Americans with Disabilities Act (1990) 

Asbestos Hazard Emergency Response Act of 1986 

Cash Management Improvement Act of 1990 

Child Abuse Amendments of 1984 

Civil Rights Restoration Act of 1987 

Clean Air Act Amendments of 1990 

Commercial Motor Vehicle Safety Act of 1986 

Consolidated Omnibus Budget Reconciliation Act of 1985 

Drug-Free Workplace Act of 1988 

Education of the Handicapped Act Amendments of 1986 

Education of the Handicapped Act Amendments of 1990 

Emergency Planning and Community Right-to-Know Act of 1986 

Fair Housing Act Amendments of 1988 

Hazardous and Solid Waste Amendments of 1984 

99-592 

101-327 

99-519 

101-453 

98-457 

100-259 

101-549 

99-570 

99-72 

100-690 

99-457 

101-476 

99-499 

100-430 

98-616 

DO 

CC,DO 

DO 

cc 

co 

cc 

PP 

co 

DO 

cc 

co 

co 

PP 

DO 

PP 

44 U.S. Advisory Commission on Intergovernmental Relations 
Table 4-7 (cont.) 

1981 -1 990 

Major New €nadments and Statutory Amendments Regulating State and Local Governments, 

Title Public Law Type 

Handicapped Children’s Protection Act of 1986 

Reversed Supreme Court decision in Smith v. Robinson to allow the recovery of at- torneys’ fees under the Education for all Handicapped Children Act. 

Set uniform national minimum legal drinking age of 21. 

Amended Safe Drbding Water Act to require that states establish programs for assisting 

schools with testing and remedymg lead contamination problems in drinking coolers. 

Outlawed remaining ocean dumping of municipal sewage sludge. 

Overturned Supreme Court ruling in Public Employees Retirement System of Ohio v. 

Betts, broadening the Age Discrimination in Employment Act’s prohibitions against dis- crimination in employee benefit plans. 

Promulgated new procedures and timetables for setting national drinking water stan- dards; established new monitoring requirements for public drinking water systems; 

tightened enforcement and penalties for non-complying water systems. 

Prohibited state and local governments from withdrawing from Social Security coverage; accelerated scheduled increases in payroll taxes and payment of payroll taxes 

by state and local governments. 

Extended Social Security coverage to all state and local government employees not 

otherwise covered by a public employee retirement system. 

Enacted uniform national size and weight requirements for trucks on interstate 

highways. 

Required that states and political subdivisions assure that all polling places used in 

federal elections are accessible, and that a reasonable number of accessible registration sites be provided. 

Extended provisions of the 1965 VotingRightsAct for 25years and expanded its wverage of disabled voters and those needing language assistance; amended the Voting 

Rights Act to prohibit any voting practice that results in discrimination, regardless of 

intent, thereby overturning Supreme Court decision in Mobile v. Bolden. 

Established new grant programs and set forth requirements for states for identifying 

and controlling nonpoint pollution; promulgated new requirements for testing and 

permitting municipal storm sewer discharges; directed EPA to develop regulations 

governing toxic wastes in sewage sludge; reduced and restructured funding programs 

for municipal waste treatment plants. 

Highway Safety Amendments of 1984 

Lead Contamination Control Act of 1988 

Ocean Dumping Ban Act (1988) 

Older Workers Benefit Protection Act of 1990 

Safe Drinking Water Act Amendments of 1986 

Social Security Amendments of 1983 

Social Security: Fiscal 1991 Budget Reconciliation Act 

Surface ’bansportation Assistance Act of 1982 

Voting Accessibility for the Elderly and Handicapped Act (1984) 

Voting Rights Act Amendments of 1982 

Water Quality Act of 1987 

99-372 

98-363 

100-572 

100-688 

101-433 

99-339 

98-21 

101-508 

97-424 

98-435 

97-205 

100-4 

co 

co 

DO 

DO 

DO 

PCDO 

DO 

DO 

co 

DO 

DO 

PP,CC,DO 

~~ 

Key: 

CC-Crosscutting Requirement 

CO -Crossover Sanction 

DO-Direct Order 

PP-Partial Preemption 

U.S. Advisory Commission on Intergovernmental Relations 45 
inventory is the Rail Safefy Improvement Act of 1988 (P.L. 

100-342), which amended the Nafional Driver Register Act 

of 1982 to provide greater access by railroad employees 

and job applicants to driving records maintained by state 

governments. 

Regulatory Expansion in the 1980s 

The level of federal regulatory activity during 1981 to 

1990 compared with earlier decades is shown in Figure4-1. 

This comparison makes clear that, despite efforts to constrain the growth of intergovernmental regulation, the 1980s 

were years of regulatory expansion rather than contraction. 

nirenty-seven new laws or major amendments to statutes 

added significant regulatory requirements for state or local 

governments. This is comparable to the 22 major pieces of 

intergovernmental regulation adopted during the 1970s. 

Some of the new enactments imposed significant fi- nancial costs on state and local jurisdictions, whereas others 

were noteworthy more for their limitations on policymaking discretion. The Safe Drinking Water Act Amendmentsof 

1986, for example, were recently estimated to impose ad- ditional annual costs of $2 billion to $3 billion on public 

water systems? The Asbestos Hazard Emergency Response 

Act of1986 required schools to remove hazardous asbestos at an estimated cost of $3.15 billion over 30years.' An 

estimated $575 million will be spent annually for implementation of the 1986 reauthorization of theEducafion for 

All Handicapped Children Act, which expanded services for 

preschool children? A more complete analysis of the cu- mulative costs of these and other regulatory statutes enacted in the 1980s, together with related trends in federal 

grant-in-aid funding, is presented in the next chapter. 

In contrast, other recent mandates have been noted 

more for their intrusiveness than their expense. The Congress, during the past decade, enacted laws requiring 

states to allow longer and heavier trucks on interstate 

highways, raise the minimum age for the consumption of 

alcoholic beverages to 21, and abolish mandatory retuement age policies. 

As in the past, approximately two-thirds of the intergovernmental regulations enacted in the 1980s involved 

either energy and environmental policy or civil rights (see 

Figure 4-2). Of the newest statutes, 40 percent prohibited 

some form of discrimination on the basis of age, race, gen- der, or physical handicap, compared with 28 percent of 

earlier intergovernmental regulations. Of the post-1980 

statutes, 24 percent involved environmental or energy 

policy, compared with 42 percent of earlier regulatory 

statutes. In both eras, the remainderwas made up of regulations affecting transportation, health and safety, or gen- eral management. 

More Coercive Techniques 

Although civil rights and environmental protection 

remained the focus of functional activity throughout the 

time period examined, policymakers in the 1980s relied increasingly on more coercive techniques of intergovernmental regulation. As Figure 4-3 illustrates, 68 percent of 

30 

25 

2cl 

15 

1E 

4 

( 

Figure 4-7 

The Growth of Regulatory Federalism: 

Enactments per Decade, 1931 -1 990 

Crosscutting Regulations 

Partial Preemptions la 

Crossover Sanctions 

Direct Orders 

1971-80 $ 1981-90 

Note-Includes new programs and major amendments. 

Sources: Table 4-1 and ACIR, Regulatory Fedendism, Appen- dix Table 1. 

Figure 4-2 

Functional Distribution of Federal Regulations, 

1931 -1 990 

(percent) 

100- 

90- 1 Miscellaneous 

2 Health and Safety 'Oa Management 70- 

Transportation 

Environment 

a CivilRights 

50- 

40- 

30- 

20- 

10- 

0- 

1931-80 198 1-90 

Sources: Table 4-1 and ACIR, Regulatory Fedemlkm, Appen- dix Table 1. 

46 U.S. Advisory Commission on Intergovernmental Relations 
Figure 4-3 

Changing Composition of Regulatory Instruments, 1931-1 990 

Sa 

Crosscutting 

Regulations .. Crossover 

Sanctions 

7 

inct 

5 

irect 

193 1-1980 

Partial 

%em tions 9 

Direct 

Orders 

11 

198 1- 1990 

the requirements enacted between 1981 and 1990 utilized 

crossover sanctions or direct order mandates. In contrast, 

only 28 percent of earlier intergovernmental regulations 

employed these two instruments. Reliance on crosscutting 

requirements declined sharply in the 1980s. 

Another important difference between intergovern- mental requirements is the extent to which the post-1980 

statutes built and expanded on existing regulations and 

policies rather than establishing new fields of regulatoq 

activity. Approximately 90 percent of the statutes in 

ACIR’s 1984 inventory applied one of the new techniques 

of intergovernmental regulation to a policy goal, such as 

protecting endangered species of plants and animals, for 

the first time. 

Only 25 percent of the statutes enacted between 1981 

and 1990 addressed substantially new issues or problems. 

These included laws: 

Removing hazardous asbestos from schools; 

Establishing national standards for truck licensing; 

Setting national requirements for truck size and 

weight; 

Discouraging drug abuse by federal grantees and 

contractors; 

Notifying local communities about hazardous 

chemicals; 

Establishing a uniform minimum legal age for 

purchasing alcoholic beverages; 

Reducing lead contamination in school water 

supplies; and 

Promoting access to polling places by the elderly 

and physically handicapped. 

A few of the new laws, such as the Clean AirAmendrnents of 1990, combined refinements and expansions of 

existing requirements with regulations targeted at new 

problems like acid precipitation. The remainder of the 

post-1980 statutes, however, expanded or modified existing regulatory goals and programs, such as adding testing 

requirements and identifying additional contaminants in 

the Safe Drinking Water Act; codifying and expanding prohibitions against various forms of discrimination; and 

expanding coverage of state and local government employees in Social Security and Medicare. Six of the laws were 

designed to reverse recent court decisions, thus restoring 

and in some cases expanding the coverage of earlier rules 

and requirements. Included in this category were the: 

Child Abuse Amendments of 1984; 

Civil Rights Restoration Act of 1987; 

Education of the Handicapped Act Amendments of 

1990; 

Handicapped Children’s Protection Act of 1986; 

Older Workers Benefit Protection Act of 1990; and 

Voting Rights Act Amendments of 1982 (see nble 

w 

rn 

rn 

rn 

rn 

rn 

4-1). 

Traditional Grant Conditions in the 1980s 

For most state and local officials, any discussion of 

federal mandates would be incomplete without consideration of requirements that have been added recently to 

Medicaid and AFDC. These requirements are not included in nble 4-1, nor were they addressed in ACIR’s 

U.S. Advisory Commission on Intergovernmental Relations 47 
earlier catalog of regulatory statutes, because they do not 

employ one of the newer, more coercive techniques of 

regulation that have been the focus of this research. Rather, they are conditions attached to grant-in-aid programs. 

Grant-in-aid conditions have long been considered by 

the courts to be voluntary contractual obligations. If a 

state or local government objects to the conditions attached to such a program, the courts have reasoned that it 

is free to avoid them by refusing to accept the federal gov- ernment's offer of financial as~istance.~ Although the 

courts have not acknowledged this distinction, the newer 

forms of regulatory federalism are more difficult to avoid, 

either because they apply across the board to all or to mul- tiple federal aid programs, or because they derive their le- gal authority from some constitutional provision besides 

the conditional spending power. 

Nevertheless, in programs such as AFDC and Medicaid, which are integral to the delivery of basic social bene- fits in the United States, neither legal nor analytical 

distinctions about the degree of compulsion imposed by different regulatory instruments seem significant. In contrast to 

small or modestly sized federal project grants, no state could 

opt out of multi-billion dollar programs like Medicaid be- cause it objected to expanded federal requirements. Yet, 

during the late 198Os, mandated Medicaid benefit expansions were estimated to cost states an additional $2.56 billion 

annually by 1992.6These and other costly grant-in-aid service 

requirements are briefly reviewed below. 

Medicaid 

The FY 1991 federal budget mandated that, over the 

next 12years, states must extend Medicaid coverage to all 

poor children between the ages of 6 and 18. (Previously, most 

states set the eligibility cutoff for individuals at income levels 

below the official poverty line.) By 1995, the new requirement is estimated to add approximately 700,000 children to 

the program, at a five-year cost of about $1 billion to both the 

federal government and the states.' 

An additional mandate in the Budget Enforcement Act 

requires that states cover the Medicare expenses of elder- ly beneficiaries living below the poverty line-at a 

five-year cost of several hundred million dollars. On the 

other hand, federal and state Medicaid programs are expected to save more than $2 billion during this same period because pharmaceutical companies are now required 

to give the Medicaid program discounts on commonly 

used prescription drugs. 

These new Medicaid requirements are part of a 

broader pattern of mandated coverage that emerged from 

the Congress during the late 1980s: In 1989, the Congress 

required coverage of poor children up to age 6 from families with incomes below 133 percent of the poverty threshold. Additional mandates were enacted the year before as 

part of the Medicare Catastrophic Coverage Act, which required coverage of the elderly poor and individuals threatened by spousal impoverishment? Initially, the added 

costs of these provisions were to be offset by state savings 

from expanded Medicare coverage. But when the Congress subsequently repealed the catastrophic health insur- ance program, it left the Medicaid mandates in place. 

The new requirements, combined with the rapidinflation of overall health care costs, increased the proportion 

of state spending budgeted for Medicaid from 9 percent in 

1980 to 14 percent, or $32.4 billion, in 1990.'O 

Aid to Families with Dependent Children (AFDC) 

In 1988, the Congress launched a comprehensive 

overhaul of the nation's welfare system by enacting the 

Family Support Act (FSA), EL. 100-485. Although it was 

initially promoted and strongly supported by the nation's 

governors, this legislation imposed a wide variety of new 

mandates and seMce requirements on states and those local 

governments that provide and finance welfare benefits." 

Specifically, the Family Support Act requires that all states: 

8 

8 

8 

8 

8 

Enact laws requiring employers to withhold automatically all court-ordered child support pay- ments from the paychecks of absent parents; 

Follow federal guidelines when determining the 

size of court-ordered child support payments; 

Expand their efforts to determine the paternity of 

children who receive public assistance benefits; 

Provide transitional health and child care benefits to welfare recipients who obtain low-paying, 

full-time employment, with sliding scale fees for 

such services based on ability to pay; 

Participate in the AFDC-UP program, which allows 

two-parent families to quallfy for welfare benefits if 

the principal wage earner is unemployed; 

Require one parent to compensate the government for AFDC-UP benefits by working at least 

16 hours per week in approved public or community service employment; and 

Establish federally approved workfare programs 

that provide education, training, transportation, 

and child care services to specific categories of 

welfare recipients; and 

Gradually enroll expanding percentages of their 

welfare recipients in approved workfare programs. 

Some of these provisions imposed substantial costs on 

state and local governments. For example, the mandatory 

extension of AFDC-UP programs to the 24 states that did 

not provide such benefits was estimated to cost the affected governments an additional $674 million in AFDC 

and Medicaid expenses over five years.'* Provision of transitional health and child care benefits to AFDC recipients 

who obtain employment was estimated to cost states and 

localities $640 million over five years.13 

On the other hand, some provisions of the act, such as 

the child support and workfare requirements, were estimated to save states hundreds of millions of dollars by reducing the size of the welfare population, although the 

stringent and specific requirements substantially reduced 

state and local flexibility in the provision of such services. 

Overall, the act was estimated to impose net costs of $99 

million on states and localities over five years.I4 

48 U.S. Advisory Commission on Intergovernmental Relations 
Immigration Reform 

Another piece of legislation that imposed substantial 

service obligations on state and local governments, but also 

provided substantial resources to defray the initial costs, was 

the Immigration Reform and ControcAct of 1986 (P.L. 99-603). 

Under this legislation, states were required to verify 

the legal status of immigrants who applied for public assis- tance benefits. The federal government, however, would 

reimburse them for the costs of implementing this requirement. In addition, the legislation established a 

capped entitlement of $4 billion to compensate states for 

the increased costs of providing welfare, health, and education services to newly legalized immigrants. States also 

would be reimbursed for the expense of incarcerating illegal aliens who are convicted of criminal offenses. 

Because states previously were obligated to educate 

the children of illegal aliens and because they were providing welfare benefits to many of the newly legalized aliens, 

the Congressional Budget Office estimated that states and 

localities initially would experience net budgetary savings 

under this legislation. These savings were estimated at $2.3 

billion over the first five years of the program. States, howev- er, would subsequently experience increased costs when the 

federal reimbursement provisions expired.15 

Water Resources Development Act of 7986 

The Congress also enacted a major reform of the fed- eral government’s procedures for financing flood control, 

dam, and harbor projects during the 1980s. These reforms 

substantially increased the share of water project costs to 

be paid by local governments, port authorities, and private 

users and beneficiaries of such projects. Although the 

nonfederal share varies depending on the size and nature 

of the specific project, approximately 25 percent of the 

costs of new projects must be assumed by users and local 

governmental entities. This contrasts with local shares of 

5-10 percent in prior years.16 The legislation also imposed 

new fees on the users of these facilities to help finance the 

federal government’s $12 billion share of the projects au- thorized in the measure. Furthermore, it allowed local authorities to assess their own fees and tolls to finance their 

increased share of project costs and maintenance. 

The Congressional Budget Office estimated that 

overall state and local costs for the projects authorized in 

the bill would exceed $900 million for the first five years of 

the program and $4.9 billion for the period between 1991 

and 1998. Subsequent annual operating and maintenance 

costs were estimated to be about $300 million.” 

The Uneven Pace 

of Regulation and Reform 

Not all intergovernmental regulatory statutes enacted 

during the 1980s imposed additional costs or regulations on 

state and local governments. Complementing the Reagan 

administration’s deregulation efforts, a number of laws 

granted a degree of regulatory relief to states and localities. 

These statutes affected the newer instruments of regulatory 

federalism and more traditional grant-in-aid programs. 

Concerted regulatoy relief activity comprised an important new dimension in the evolution of regulatoryfederalism. Nevertheless, the relief statutes were neither as 

numerous nor as significant as the enactments that increased 

regulation. Moreover, as the 1980s progressed, the political 

momentum favoring regulatory reform appeared to wane, 

while the adoption of new requirements accelerated. 

In grant consolidation, for example, the greatest accomplishments in regulatory reform occurred in the first 

year of the Reagan administration. Later proposals had 

far less legislative success. In contrast, 70 percent of the 

new regulations passed during the prior decade were enacted after 1985 (see Figure 4-4). 

Regulatory Relief Statutes Enacted in the 1980s 

Nine statutes that provided some degree of regulatory 

relief to states and local governments are described in 

lhble 4-2. Some of these relief measures were extremely 

modest in their effects. The Tandem Truck Safety Act of 

1984, for example, allowed states to request changes in 

the Department of Transportation’s (DOT) designations 

of highways required to provide access to larger and heavi- er trucks as mandated under the 1982 Surface Eansportation Act. There were no guarantees that such requests 

would be granted. 

figure 4-4 

Federal Mandates Enacted 

per Session of Congress, 1981 -1 990 

Curnmulative 20 

15 

10 / 

v- __ 

1981-82 1983-84 1985-86 1987-88 1989-90 

Source: Table 4-1. 

U.S. Advisory Commission on Intergovernmental Relations 49 
Table 4-2 

Congressional Enactments Providing Regulatory Relief to State and Local Governments, 

1981 -1 990 

Title Public Law me* 

Endangered Species Act Amendments of 1982 

Revised act to speed up the process for adding and removing species from endangered classification and for resolving environmental and developmental conflicts; 

did not include administration proposal to require cost-benefit analysis. 

Recognized alternative forms of instruction for teaching children whose primary 

language is other than English, and authorized the spending of 4 to 10 percent of 

bilingual education grants on specified alternative instructional programs. 

Overturned Supreme Court ruling in Community Communications Inc. v. City of 

Boulder, which held local governments liable for treble damage antitrust awards; restored the Federal Communication commission’s authority to seek injunctions 

against local governments for anti-competitive practices. 

Amended the 1982 Surface Transportation Act, which established uniform national 

truck size and weight requirements on major highways, to permit states to request 

that the Department of Transportation exempt certain segments of the Interstate 

and primary highway systems from the uniform requirements for safety reasons. 

Restricted the impact of the Supreme Court’s ruling in Garcia v. Sun Antonio Metropolitan Transit Authority by modifying provisions of the Fair Labor Standards Act to 

permit the use and substitution of compensation time for overtime work by state and 

local government employees; to allow the use of volunteers and special detail assignments; and to grant a one-year extension in the date for compliance. 

Abolished the health planning system established under the National Health Planning and Resources Development Act of 1974. 

Authorized states to raise the legal speed limit from 55 mph to 65 mph on rural interstate highways. 

Amended the Asbestos Hazard Emergency Response Act of 1986 to grant a six-month 

extension in the statutory deadline for submission of local school asbestos management plans to state authorities, due to delays in training of certified inspectors and 

planners. 

Hawkins-Stafford Elementary and Secondary School Improvement Amendments of 1988 

Provided flexibility in bilingual education programs and authorized additional funding for alternative instructional approaches. 

Education Amendments of 1984 

Local Government Anti-lhst Act of 1984 

Tandem ’kuck Safety Act (1984) 

Fair Labor Standards Act Amendments of 1985 

Omnibus Health Programs (1986) 

Surface hnsportation and Uniform Relocation Assistance Act (1987) 

School Asbestos Management Plans (1988) 

97-304 

98-511 

98-544 

98-554 

99-150 

99-660 

100- 17 

100-368 

100-297 

cc 

co 

DO 

co 

DO 

co 

co 

DO 

co 

Key: 

CC-Crosscutting Requirement 

CO-Crossover Sanction 

DO -Direct Order 

PP-Partial Preemption 

50 U.S. Advisory Commission on intergovernmental Relations 
Indeed, DOT’S initial regulations permitted large 

trucks to use 38,000 miles of primary and access roads that 

state highway departments had deemed unsafe or unsuitable for such use. Although states eventually succeeded in 

removing 17,000 miles of highways from the initial designation, the Federal Highway Administration subsequently 

added 19,000 miles to its original list.18 Similarly, the 

School Asbestos Management Plans Act of 1988 granted local school districts a brief extension in the deadline for 

submitting asbestos cleanup plans to state authorities, largely because there were not enough inspectors trained by the 

Environmental Protection Agency to assist them, as the law 

required. But the act did nothing to ameliorate the often 

substantial costs imposed by the original cleanup mandate. 

Other relief statutes provided greater benefits, but still 

fell short of the changes advocated by many regulatory reformers. For example, the 1982 amendments to the Endan- gered Species Act simplified and accelerated procedures for 

listing endangered species, but the Congress speclfimlly re- jected far more sweeping proposals by the Reagan administration to require cost-benefit analysis. Similarly, the federal 

bilingual education program was amended twice during the 

1980s to allow more flexibility and funding of alternative approaches for instructing children from non-English speaking 

backgrounds. Yet, these alternative approaches, which were 

favored by many educators and local school districts, re- mained a relatively small element of the program. 

However, some of these statutes did provide substantial regulatory relief to state and local governments. The 

1987 Sugace Transportation Act permitted states to raise 

the legal speed limit to 65 mph on rural interstate highways without suffering previously required cutbacks in 

federal funding. 

In two other important cases, the Congress granted 

relief from regulatory obligations imposed by judicial interpretations of statutes. One was the Local Government 

Anti-Trust Act of 1984, which overturned the Supreme 

Court’s ruling in Community Comnicationslnc. v. City of 

Bouldex This legislation restored the status quo ante by ex- empting local governments from liability for triple damage awards in antitrust lawsuits. 

The following year, the Congress passed the Fair Labor Standards Act Amendments of 1985 (FLSA), which modified the Supreme Court’s ruling in Garcia v. San Antonio 

Metropolitan Fansit Authority (see Chapter 6). The amendments redefined the FLSA application of minimum wage 

and overtime provisions to state and local governments. 

Specifically, it: 

1. Altered the overtime provisions to make compensation time available to state and local employees in lieu of overtime pay under specified 

conditions; 

2. Exempted from coverage as employees local government volunteers who receive modest compensation for their services; and 

3. Eliminated retroactive liability for compliance 

with FLSA requirements and deferred application of the new requirements for one year. 

Overall, the Congressional Budget Office (CBO) estimated that these legislative changes would “significantly 

reduce the budgetary impact of extending FLSA to state 

and local governments,” although the precise savings 

were considered-highly variable and ~ncertain.’~ CBO’s 

preliminary estimates of the cost of extending application 

of the FLSA to states and localities ranged from $0.5 bil- lion to $1.5 billion, depending on local collective bargain- ing agreements in force and variations in the use of 

volunteers, scheduling, and personnel management prac- tices. Subsequent analysis by the U.S. Department of Labor estimated that the amended FLSA would still affect 

some 7.7 million state and local government employees at 

an added cost of about $612 million annually.2O 

Regulatory Relief through Grant Consolidation 

Due to the efforts of the Reagan administration, the 

Congress also created a net total of 12 new block grants 

between 1981 and 1990. Many of these grants substantially 

expanded state and local flexibility in the use of federal 

funds and significantly reduced traditional administrative 

and reporting requirements. 

Most of the new block grants, however, were passed 

very early in President Reagan’s first term. Although 24 

additional block grants were recommended throughout 

the 198Os, the Congress rejected most of these proposals. 

Furthermore, several earlier block grants were either terminated or partially transformed into categorical grants. 

The most striking success occurred in 1981, when the 

Congress consolidated 77 separate categorical programs 

into nine new or modified block grants as part of the Om- nibus Budget Reconciliation Act of 1981. Originally, President Reagan recommended an even more sweeping set of 

consolidations, combining 85 federal programs into seven 

broad block grants. Although the Congress modified the 

president’s proposals-particularly in health care-by 

consolidating fewer programs and retaining greater federal oversight and reporting requirements, this single effort 

combined more federal programs into block grants than 

all previous grant consolidations. 

Establishment of these block grants allowed administration officials to condense and simplify the requirements attached to the 77 consolidated programs. In 

education, for example, the merger of 33 separately authorized programs into a single block grant allowed administrators to replace 667 pages of regulations governing 

the old programs with a single 20-page set of requirements.21 Reductions in other block grant regulations were 

equally dramatic. For example, the new health care block 

grants regulations totaled just six pages each and did little 

more than restate the limited statutory conditions on the 

use of the funds. 

OMB estimated that the 1981 block grants reduced 

overall paperwork requirements by 5.9 million work 

hours, or 91 percent.?2 The seven block grants under the 

jurisdiction of the Department of Health and Human Services were estimated by the administration to have saved 

states $52 million alone in paperwork costs. 

U.S. Advisorv Commission on Intergovernmental Relations 51 
Table 4-3 

Categorical and Block Grant Programs and Federal Outlays for Broad-Based and Other Grants 

Selected Years FY 1975-1 991 

Number of Grant Programs 

me of Grant 1975 1978 1981 1984 1987 1989 1991e 

Block Grant 4 4 4 12 13 14 14 

Categorical 422 492 534 392 422 478 543 

Total 426 496 538 404 435 492 557 

Outlays for General Purpose, Broad-Based, and Categorical Grants 

Billions of Dollars 

General Purpose $7.0 $9.6 $6.8 $6.8 $2.1 $2.3 $2.4 

Broad-Based 4.6 11.5 10.0 13.0 13.1 12.7 14.5 

Categorical 38.2 56.8 77.9 77.8 93.2 106.9 141.7 

Total 49.8 77.9 94.7 97.6 108.4 122.0 158.6 

Outlays for General Purpose, Broad-Based, and Categorical Grants 

Percentage of Total 

General Purpose 14.1% 12.3 % 7.2% 7.0 % 1.9% 1.8% 1.5% 

Broad-Based 9.2 14.7 10.6 13.3 12.1 10.4 9.2 

Categorical 76.7 73.0 82.2 79.7 86.0 87.6 89.4 

e-estimate 

Source: U.S. Advisory Commission on Intergovernmental Relations, Chamcte*icsofFedemI Gmnt-in-Aid Pmgmms to State and Local 

Governments: Gmnts Funded FY 1991 (Washington, DC, 1992), pp. 1 and 5. 

These successes proved difficult to repeat. Over the 

next nine years, the Reagan and Bush administrations recommended that the Congress create an additional 26 

block grants.u Yet, after 1981, only seven block grants 

were created, including: theJob TrainingPmnership Act of 

1982, which revised and restructured the Comprehensive 

Employment and Training Act (CETA) block grant; the 

HOME Investment Partnerships program, which restructured low-income housing programs to provide state and 

local block grants for construction, rehabilitation, and 

rental assistance; and a child care block grant created under Title rV of the Social Security Act. 

These achievements were partially counterbalanced 

by the repeal in 1985 of the Primary Care Block Grant. 

That action eliminated the little-used block grant option 

provided to states under the community health centers 

program. The federal government also terminated the Al- cohol and Drug Abuse aeatment Block Grant in 1988. In 

a related departure from providing flexible funding to 

states and localities, the Congress eliminated the General 

Revenue Sharing program in 1986. 

As a result, the proportion of federal aid devoted to 

block grants and other broad-based assistance declined 

from a high of 13.3 percent in 1984 to 10.5 percent in 1989 

(see lible 4-3). Although this proportion may increase 

again, depending on appropriations for the newly created 

housing and child care block grants, block grant funding 

constituted a smaller proportion of federal aid when President Reagan left office than when he entered in 1981.24 

52 US. Advisory Commission on Intergovernmental Relations 

Statutory Regulation in Perspective 

Between 1981 and 1990, the Congress enacted 27 statutes that utilized or significantly expanded one of the new 

instruments of regulatory federalism. As illustrated in 

Figure 4-4, this record of regulatory expansion was comparable to the energetic pace of intergovernmental regulation in the 1970s. The regulatory relief legislation of the 

1980s was outweighed by the number and scope of regulatory expansions. They were further counterbalanced by 

expensive and intrusive conditions attached to traditional 

grant-in-aid programs. 

Given the amount of attention devoted to regulatoryrelief and reform efforts during the 1980s both statutory and 

adrmtllstrative, this record of regulatory expansion may seem 

surprising. Yet, it is consistent with the record established in 

federal preemption of state and local authority during the 

same period. As shown in Figure 4-5, almost as many 

preemptive statutes were enacted between 1980 and 1988 as 

in the 1!?70~.~ For these reasons, the 1970s and 1980s stand 

out from prior decades as periods of legislative activism. 

Reasons for Legislative Activism 

The factors contributing to this continued activism are 

many and complex Constraints imposed on new federal 

spending programs by large and chronic budget deficits 

throughout the 1980s were important. Because regulatory 

.. 
figure 4-5 

Number of Federal Preemption Statutes Enacted per Decade: 1790-1 991 

(by date of enactment and purpose) 

nber 

I- I 

1- 

I0- 

Q10 - 

10- 

60- 

50- 

40- 

30- 

20- 

10 - 

Civil Rights and Other 

0 Health, Safety, and Environment 

69 Commerce and Transportation 

Banking, Finance, and Taxation 

Before 

1900 

1900- 

1909 

1910- 

1919 

1920- 

1929 

1930- 

1939 

1940- 

1949 

1950- 

1959 

1960- 1970- 

1969 1979 

1980- 

1989 

I 

I 

I 

1 

I 

I 

I 

I 

I 

I 

I 

I 

I 

1990- 

1999 

Year 

*The 1990-1991 rate was multiplied by 5 to estimate how many preemptions might be enacted during 1990-1999. 

Source: U.S. Advisory Commission on Intergovernmental Relations, Fedeml Statutory Preemption of State and Local Author 

ity: History, Inventory, and Issues (Washington, DC, 1992), p. 7. 

US. Advisory Commission on Intergovernmental Relations 53 
and preemption programs generally impose greater costs 

on regulated third parties than on the federal government, they represent, in federal budgetary terms, a relatively low-cost method of responding to issues and 

problems. 

This also was an important factor contributing to the 

rapid growth of regulation in the economically troubled 

1970s. As one former member of the Johnson administra- tion observed in the mid-1970s: 

Congressmen see themselves as having been 

elected to legislate. Confronted with a problem . . . their strong tendency is to pass a law. Ten years 

ago, money was Washington’s antidote for problems. Now, the new fiscal realities. . . mean that 

Congress provides fewer dollars. Still determined 

to legislate against problems, Congress uses 

sticks instead of carrots.% 

Continued legislative activism also has been sustained 

by the erosion of once powerful barriers to federal regula- tory action. Historically, opposition to initial federal in- volvement in a new field of policy activity was very strong. 

Once this opposition was overcome, through the enactment of landmark legislation, it typically proved to be 

much easier to enact subsequent program expansions?’ 

This pattern of “breakthrough politics” was an important 

element in the expansion of federal aid and regulatory 

programs in the 1960s and 1970s, and its legacy continued 

to shape politics in the 1980~.~ 

Regulatory Federalism Becomes Commonplace 

Although various regulations came under renewed 

scrutiny in the 1980s, the techniques of regulatoryfederalism had become commonplace and widely accepted. As 

noted earlier, many of the new requirements were expansions of regulatory programs and missions. Although they 

were significant expansions-imposing new costs and responsibilities on affected states and localities-they were 

clearly built on an established regulatory foundation. 

Moreover, their legitimacy was further enhanced by the 

strength and breadth of their political acceptance. 

For instance, the sweeping Clean Air Act Amendments 

of I990 were supported strongly by the governors and state 

air pollution officials despite, and in some cases because 

of, their expanded federal controls. The public also has 

demonstrated strong support for tougher air pollution requirements. One recent survey found that 80 percent of 

respondents agreed with the strongly worded statement 

that, “Protecting the environment is so important that requirements and standards cannot be too high, and continuing environmental improvements must be made 

regardless of cost.”29 

In some respects, the record of regulatory activity in 

the 1980s was all the more significant given the overall decline of substantive legislative activity. On average, the 

Congress passed 21 percent fewer public bills per legislative session during the 1980s compared to the 1960~.~ 

Although the decline in total bills enacted averaged 

only 5 percent from the 1970s to the 1980s, the reduction 

in substantive legislation was even more dramatic. Whereas approximately 10 percent of all legislation passed in the 

mid-1970s was commemorative in nature, that proportion 

grew to nearly 50 percent a decade later.” Thus, the 27 intergovernmental regulations adopted in the 1980s not only 

comprised an overall level of activity comparable to the 22 

statutes enacted in the 1970% they represented a far larger 

proportion of a diminished substantive legislative agenda. 

To be sure, such comparisons overlook other important changes in the legislative process. Although the number of substantive enactments declined in the 198Os, the 

average length and complexity of the bills that were enacted increased considerably. The 1980s became notorious 

for the enactment of enormousbudget reconcTition and 

omnibus appropriations bills, often rolling into one mea- sure proposals that previously might have been enacted in 

dozens of separate bills. 

Major Legislation Regulates Heavily 

One way to account for this change is to focus solely 

on trends involving “major” legislation. Although judgments about what constitutes important or significant 

legislation are somewhat subjective, a defensible and validated set of prominent enactments has been compiled by 

one leading congressional scholar. It can be adapted to 

provide an additional perspective on the regulatory record 

of the past decade. 

David Mayhew developed an inventory of major legislative enactments since World War I1 by combining assess- ments of the most notable legislative achievements at the 

conclusion of each session of the Congress with subsequent judgments by historians and policy specialist^.^^ He 

compiled 267 significant laws enacted between 1947 and 

1988. The list includes all major policy fields, as well as intergovernmental grants and regulations. Among the latter, it 

includes some of the intergovernmental regulatory statutes 

compiled in Dble 4-1, as well as many of the regulations ex- amined earlier by ACIR. Prominent examples include the 

Clean Air Act of 1970, the Clean Wder Act, the Occupational 

Safety and Health Act, and the Civil Rights Act of 1964. 

To make Mayhew’s inventory comparable with the 

time periods used in earlier sections of this chapter, the 22 

laws enacted from 1947 to 1950 were deleted. Of the 245 

significant laws enacted between 1951 and 1990, almost 

one-third were intergovernmental in nature. Thirty statutes (12 percent) were classified as intergovernmental 

regulations under ACIR’s definition, and 45 statutes (18 

percent) were intergovernmental grants (see Figure 4-6). 

The remainder addressed defense or foreign affairs or 

another aspect of domestic policy. 

Eight of the 30 intergovernmental regulations (26 

percent) were adopted in the 1980s. This is roughlycomparable to the number enacted during the 1970s, but it is less 

than the 12 major regulations (39 percent) enacted be- tween 1961 and 1970. 

As noted earlier, however, less substantive legislative 

activity of all kinds occurred during the 1980s. Eighty54 U.S. Advisory Commission on Intergovernmental Relations 
Figure 4-6 

Functional Makeup of Major Federal Legislation, 1951 -1 990 

Foreign 

30 Grants 

All Legislation 

195 1-1990 

c 

IGR 

Regulations 

30 

IGR Regulations 

Percenta e Enacted 

per % ecade 

195 1-1990 

1980s 

1970s 

1960s 

1950s 

Source: David R. Mayhew, Divided We Govern: Party Control, Lawmaking, and Investigations, 1946-1990 (New Haven: Yale University Press, 1991), Table 4.1., and author’s tabulations. 

Figure 4-7 

The Growing Proportion 

of Intergovernmental Regulation, 1951 -1 990 

(Percentage of All Major Laws) 

1951-60 1961-70 1971-80 1981-90 

Source: David R. Mayhew, Divided We Govern: Parfy Control, Lawmaking, and Investigations, 1946-1990 

(New Haven: Yale University Press, 1991). Table 

4.1., and author’s tabulations. 

seven major statutes were enacted in the 1960s, compared 

with 73 during the 1970s and 46 during the 1980s. Thus, as 

a proportion of all significant legislative activity, the percentage of major statutes that were both intergovernmental and regulatory in nature was larger during the past 

decade than in any previous ten-year period (see Figure 4-7). 

Analyzed in another way, these data reaffirm that the 

1970s and 1980s stand out from earlier decades in their reliance on regulating state and local governments, rather 

than providing financial subsidies to these entities, to influence their actions. Whereas intergovernmental grants 

outnumbered intergovernmental regulations nearly two 

to one during the 1950s and 1960s, grants and regulations 

were employed with almost equal frequency during the 

past two decades (see Figure 4-8). 

Conclusion 

Whether one examines total intergovernmental regu- lations over time, federal preemption of state and local 

authority, or major federal legislation, the 1980s was a decade of continued legislative activity in regulatory federal- ism. This sustained level of regulatory activism appearsall 

the more significant given the efforts devoted to regulatory 

relief during the decade and the oved reduction in legislative outputs. As with the findings concerning administrative 

rulemaking in Chapter 2, this conclusion demonstrates that 

regulatory federalism has become a permanent and promi- nent feature of contempomy intergovernmental relations. 

U.S. Advisory Commission on Intergovernmental Relations 55 
Figure 4-8 

The Changing Mix of Intergovernmental 

Grants and Regulation, 1951 -1 990 

-- I 

mi 

01 

1951-60 1961-70 1971-80 1981-91 

Source: David R. Mayhew, Divided We Govern: Party Control, Lawmaking, and Investigations, 1946-1 990 

(New Haven: Yale University Press, 1991), Table 

4.1., and author’s tabulations. 

This finding assumes even greater importance given recent changes-and overall declines-in the significance of federal grant-in-aid programs. Assessing the 

cumulative financial costs of these new regulations for 

state and local governments, and placing them into the 

context of broader changes in fiscal federalism, is the 

subject of the next chapter. 

Notes 

‘As explained in more detail in Chapter 1, crosscutting requirements are applied to many or all grants-in-aid across the board 

to advance national social and economic goals. Crossover sanc- tions are grant conditions that impose federal fiscal sanctions in 

one program area for failure to comply with federal require- ments under another, separately authorized, program. Partial 

preemption programs entail minimum national regulatory 

standards under which administrative responsibilities may be 

delegated to states or localities provided they meet certain fed- eral criteria. Direct order mandates are legal requirements imposed by the federal government on states and localities, 

enforced by civil or criminal penalties. 

ZSee Arnold M. Kuzmack, “The Safe Drinking Water Act: A 

Case Study,” in Michael Fix and Daphne A. Kenyon, eds., Coping with Mandates: What Are the Alternatives? (Washington, DC 

Urban Institute Press, 1990), p. 73. 

US. General Accounting Office, Legklative Mandates: State 

Experiences Offer Insights for Federal Action (Washington, DC, 

’Federal Register, October 30, 1987, p. 41826. 

1988). p. 48. 

See, for example, Massachusetts v. Mellon, 262 U.S. 447 (1923). 

For a more thorough discussion of judicial doctrines concern- ing regulatory federalism, see Chapter 6. 

‘Julie Rovner, “Governors Ask Congress for Relief from Bur- densome Medicaid Mandates,” Congressional Quarterly Weekly 

Report, February 16, 1991, p. 417. 

’Spencer Rich, “Benefits Grow among Budget Cuts: DeficitReduction Bill Expands Health Aid for Poor Children,” Wahington Post, November 3, 1990. 

‘See U.S. Advisory Commission on Intergovernmental Rela- tions (ACIR), Medicaid: Intergovernmental Trends and Options 

(Washington, DC, 1992). 

A condition whereby a spouse is required to exhaust virtually all 

financial assets in order to qualify the ill person for the federal 

Medicaid program. 

“National Governors’ Association, “States Feeling the Pressure 

for Increased Spending for Health, Transportation, Education, 

and Corrections,” News Release, April 6, 1990, p. 1. 

“These provisions are summarized and reviewed in Mark Rom, 

“The Family Support Act of 1988: Federalism, Developmental 

Policy, and Welfare Reform,” Publius: The Journal OfFederalism 

19 (Summer 1989): 57-73; and Julie Rovner, “Congress Ap- proves Overhaul of Welfare System,” Congmm*onal Qumerly 

Weekly Report, October 8,1988, pp. 2825-2831. 

”Congressional Budget Office estimate contained in U.S. Con- gress, Senate Committee on Finance, “Family Support Act of 

1988,” Senate Report 100-377, to accompany S. 1511, 100th 

Cong. 26. sess., May 27, 1988, pp. 92-93. 

l3 Ibid. 

l4 bid. 

”U.S. Congress, House of Representatives, Committee on Judicia- ry, “Refugee Assistance Extension Act of 1986,” Report to Ae 

company RR. 145799th Con& 26. sas., May 15,1983, p. D3L 

“1986 Congressional Quarterly Almanac (Washington, DC, 1987), 

p. 127. 

17U.S. Congress, Senate, Committee on Environment and Public 

Works, “Water Resources Development Act of 1986,” Report to’ 

hmpany S. l567,99th Cong, 26. sess., August 1,1985, p. 126 

l8 Barbara Harsha, “DOT Sets Final Routes for Large Trucks,” 

Nation’s Cities Weekly, June 19, 1984, p.2 

19U.S. Congress, Senate, Committee on Labor and Human Re 

sources, “Fair Labor Standards Act Amendments of 1985,’ 

Senate Report 99-159, to Accompany S. l570,99th Cong., 2nd 

sess., p. 16. 

2029 CFR part 553. See Chapter 2 of this report for a more exten- sive discussion of FLSA’s effects on states and localities. 

21Richard S. Williamson, ‘A New Federalism: Proposals and 

Achievements of President Reagan’s First Three Yean,” Publius: 

The Journal of FedemIism 16 (Winter 1986): 25. 

22bid. 

23 See Sandra Osbourn, Block Gmnts: Inventory and Funding His- tory (Washington, DC Library of Congress, Congressional Re- search Service, November 21, 1986); and The Budget of the 

United States Government, various years. 

24 U.S. Office of Management and Budget, Special Anulyses: Eudget ofthe United States (Washington, DC, various years), Special 

AnalFis H. 

=ACIR, Fedeml Statutory Preemption of State and Local Author- ity: History, Inventov, and Issues (Washington, DC, 1992) p. 9. 

See also Joseph E Zimmerman, Fedeml Preemption: The Silent 

Revolution (Ames: Iowa State University Press, 1991). A nurn56 U.S. Advisory Commission on Intergovernmental Relations 
ber of statutes, particularly partial preemptions and direct order 

mandates such as The Safe Drinking Water Act Amendments of 

1986 and the Asbestos Hatard Emergency hponse Act of 1986, 

are counted as intergovernmental regulations in the current 

study and as preemptions in Figure 4-5. Federal statutes that 

preempt state regulation of the private sector but do not otherwise enlist or regulate state governments are not counted as in- tergovernmental regulations. By the same token, crosscutting 

requirements applied to federal grants are generally not included in the inventory of preemptions. 

26Samuel Halperin, “Federal Takeover, State Default, or Family 

Problem,” in Samuel Halperin, ed., Federalism at the Crossma&: Improving Educational Policymaking (Washington, DC: 

Institute for Educational Leadership, 1976), p. 19. 

27See James Q. Wilson, ‘American Politics: Then and Now,” 

Commentary (February 1979). 

ACIR, The Condition of Contempomry Federalh: Conflict- ing Theories and Collapsing Comtmints, Volume II of The Federal 

Role in the Federal System: The Dynamics of Growth (Washington, 

DC, 1981) ch. 3; and Regulatory Federalism Policy, Pmm, Im- pact, and Reform (Washington, DC, 1984) ch. 3. 

29 Quoted in Stephen Klaidman, “Muddling Through,” The Wil- son Quartedy 16 (Spring 1991): 73. 

30Calculated from Table 6-4, “Congressional Workload,” in Nor- man J. Ornstein, Thomas E. Mann, and Michael Malbin, Vital 

Statistics on Congress, 1987-1988 (Washington, DC: Congres- sional Quarterly, 1987). 

31Roger Davidson, “The Presidency and Three Eras of the Mod- ern Congress,’’ in James Thurber, ed., Divided Democmcy: 

Coopemtion and Conflict between the President and Congress 

(Washington, DC Congressional Quarterly, lWl), p. 65. 

32David R. Mayhew, Divided We Govern: Party Contml, Lmvmaking, and Znvestigafions, 1946-1 990 (New Haven: Yale University 

Press, 1991), Table 4.1. 

U.S. Advisory Commission on Intergovernmental Relations 57 
58 U.S. Advisory Commission on Intergovernmental Relations 
The Monetary Costs of Intergovernmental 

Regulatory Enactments in the 1980s 

The number of regulatory statutes grew substantially 

during the 1980s. Such regulatory growth raises a number 

of intergovernmental issues, including concerns about: 

Federal prescription of policy direction in areas 

of traditional state and local policymaking responsibility; 

Erosion of state and local institutional integrity 

by statutes governing essential features of personnel management, administrative structure, 

and governmental finance; 

Inefficiencies that result from the application of 

uniform national approaches to problems with 

varied geographic effects and public preferences; 

Dilution of public accountability resulting from 

multiple layers of governmental responsibility; 

Administrative costs imposed by detailed federal 

requirements; and 

Financial burdens of complying with federal laws 

and regulations. 

Clearly, the monetary costs of federal statutes are not 

the only issue of intergovernmental concern. In many 

cases, such costs are not even the principal source of intergovernmental friction, but they do represent the most vis- ible dimension of the mandate problem for many state and 

local officials. 

How expensive were the regulatory accretions of the 

1980s, both in absolute terms and relative to other fiscal 

trends? Did the financial requirements imposed during the 

1980s grow in proportion to the number of new statutes, or 

were the most costly requirements targeted for deregulation? Are there reliable sowces of information about the cu- mulative costs of federal intergovernmental regulation? 

This chapter contains a summary of several efforts to 

estimate the costs of federal mandates and utilizes the 

Congressional Budget Office estimates to develop a 

rough but conservative estimate of the fiscal costs of federal regulations to state and local governments. 

Research on the Cumulative Costs 

of Federal Mandates 

Remarkably little data are available on the cumulative costs of federal mandates, despite the sigdhnce of the 

issue for state and local government officials. In part, 

this is due to the difficulties and the costs of measuring 

such expenses. 

Measuring Mandate Costs 

Conceptually, mandate costs may include direct and 

indirect expenditures. In either case, only incremental 

costs are properly attributed to federal mandates; that is, 

only the portion of a mandated activity that is attributable 

to federal prescription rather than state or local option is 

counted. If a jurisdiction is engaged in a mandated activity 

prior to the federal requirement, for example, the costs 

should not be attributed to the mandate unless the jurisdiction would have chosen to stop providing the service 

without the federal prescription. The costs of a mandated 

activity also are not included in this estimate if a jurisdiction would have provided the service regardless of the federal requirement.l 

Obviously, determining what a jurisdiction might 

have done in the absence of federal activity can be highly 

subjective. The effort raises a host of methodological and 

conceptual problems. In some cases, existing trends in 

state and local activity and expenditures may be projected 

into the future, but this technique assumes that there will 

be no change in the pattern or behavior. Moreover, such 

information must be collected or estimated for a large 

number of laws and regulations across a broad spectrum of 

U.S. Advisorv Commission on Intergovernmental Relations 59 
jurisdictions, because the impacts of federal mandates 

have been shown to vary widely, depending on the nature 

and geographical scope of a problem, jurisdictional size, 

prior levels of activity, and varying patterns of state-local 

functional responsibility. 

Such considerations led the authors of one pioneering 

study of the fiscal impacts of state and federal mandates to 

refrain from reporting any dollar figures because they 

found “a wide gap between . . . data needs . . . and data 

availability.” This caused them to be “uncomfortable 

about [the] accuracy” of their findings? 

The Urban Institute Study. One influential study that 

addressed these methodological difficulties successfully was 

prepared by Thomas Muller and Michael Fix of the Urban 

Institute in 1980. Their research on ‘The Impact of Selected 

Federal Actions on Municipal Outlays” measured the individual and cumulative financial costs of six federal regdations in seven different jurisdictions nationwide as of 1978. 

They found that these requirements imposed “substantial” costs on local governments, averaging about $25 

per capita in 1978,3 a level corresponding to the funds received by these jurisdictions under General Revenue 

Sharing. Comparing mandate costs to the total amounts of 

federal aid received, this study estimated that the local 

costs of federal requirements averaged about 19 percent 

of all federal aid received (see lhble 5-1). 

Equally important, the study found that mandate 

costs varied widely between jurisdictions. Overall, the 

Clean Water Act was the most expensive requirement 

(see Table 5-2). Its annual costs ranged from a high of 

$36.86per capita in Newark, New Jersey, to a low of $0 in 

Burlington, Verrn~nt.~ Similarly, estimates of the per 

capita costs of complying with the Education forAll Handicapped Children Act varied from $24.82 in Fairfax, Vir- ginia to $0 in Cincinnati, Ohio. 

The EPA Municipal Sector Study. In a study prepared 

for the U.S. Environmental Protection Agency @PA) in 

1988, Policy Planning and Evaluation, Inc., attempted to 

measure the cumulative costs of laws and regulations im 

Table 5-1 

Federal Mandates as a Percentage 

of Total Federal Aid Received 

by Various Jurisdictions 

City Percentage of Federal Aid 

Mandate Costs as a 

~- 

Alexandria, Virginia 

Burlington, Vermont 

Cincinnati, Ohio 

Dallas, Texas 

Fairfax, Virginia 

Newark, New Jersey 

Seattle, Washington 

Mean 

11.3% 

9.0 

8.8 

15.4 

46.0 

32.2 

15.2 

18.9 

Source: US. Congress, Joint Economic Committee, “The Im- pact of Selected Federal Actions on Municipal Outlays,” 

by Thomas Muller and Michael Fix, Government Regulation:Achieving Social and Economic Balance, Vol. 5, Spe- cial Study on Economic Change (Washington, DC, 1980), 

p. 368. 

posed during the 1980s: They examined the fiscal effects 

of 22 recent and pending environmental regulations on 

asample of 270 local governments,6 covering several of the 

most costly provisions. 

Since the promulgation of Executive Order 12291 in 

1981, the fiscal effects of significant regulations generally 

must be estimated and considered in conjunction with the 

review of proposed regulations. Such analyses, however, 

are performed on a case-by-case basis. 

EPAs Municipal Sector Study sought to analyze the 

combined effects of multiple regulations and to examine 

the ability of affected jurisdictions to finance compliance. 

While the researchers identified 39 major new requirements 

expected to affect local governments, they considered the 

fiscal effects of only the 22 for which detailed estimates of 

capital, operating, and administrative costs were available.’ 

Table 5-2 

Annual Local Costs of Meeting Selected Mandates 

(in millions) 

Operating Cost Capital Costs Total Costs 

Clean Water Act 

Education of the Handicapped 

Unemployment Compensation 

Access for the Handicapped 

Bilingual Education 

Total 

$27.5 $8.3 $35.8 

18.7 0.5 19.2 

0.9 0.0 0.9 

0.5 1.1 1.6 

4.1 0.0 4.1 

51.7 9.9 61.6 

Source: U.S. Congress, Joint Economic Committee, “The Impact of Selected Federal Actions on Municipal Outlays,” by Thomas MU! 

ler and Michael Fix, Government Regulation:Achieving Social and Economic Balance, Vol. 5, Special Study on Economic Chang 

(Washington, DC, 1980), p. 368. 

60 U.S. Advisory Commission on Intergovernmental Relations 
Despite these limitations, it was estimated, as shown 

in Bible 5-3, that local governments would have to expect 

to spend approximately $22 billion on capital expenditures 

to comply with pending and recently promulgated rules, 

along with $2.8 billion in annual expenses for operations 

and maintenance. 73 finance such expenditures, it was es- timated that 15 percent of local jurisdictions-all of them 

with populations of 2,500 or less-would at least have to 

double their fees for environmental services.8 Another 29 

percent of local governments may need to raise fees for 

water, sewer, and solid waste disposal by 50-100 percent. 

Given the magnitude of these costs, it was estimated that 

as many as 21 percent of the nation's water and sewer systems may find it difficult to issue revenue bonds or obtain 

bank loans to finance the required capital improvements. 

Again, this was particularly true of smaller jurisdictions? 

As with the Urban Institute study, this research indicated that the costs of environmental regulations were 

likely to vary widely. Variations reflect differences in jurisdictional size, the quality and capacity of existing facilities, 

demographics, and geographical location. Most communities, according to the authors, would be affected by only 

five or six of the 22 requirements. In terms of overall costs, 

the greatest impacts were likely to be felt by the smallest 

communities, some of which may have to invest in basic 

environmental controls for the first time, and the largest 

jurisdictions, many of which will be affected by the most 

costly requirements (see nble 5-4, page 62). 

Estimating the Cost 

of Recent Federal Mandates 

Using the Congressional Budget Office Data 

In 1981, the Congress enacted the State and Local 

Government Cost Estimate Act. This statute requires the 

Congressional Budget Office (CBO) to prepare estimates 

of the anticipated costs to be imposed on state and local 

governments by "significant" bills that are approved by 

congressional committees. Cost estimates are intended to 

be available to members of the House and Senate prior to 

floor consideration of such legislation, and they are gener- ally included in committee reports. 

The supporters of this "fiscal note" process believed 

that one cause of excessive regulatory costs was inade- quate information. For example, one of the most costly in- tergovernmental statutes enacted during the 1970s was 

Section 504 of the Rehabilitation Act of 1973, which prohib- ited discrimination against handicapped persons in feder- ally assisted programs. For public transportation programs 

alone, CBO estimated in the late 1970s that Section 504 

would require $6.8 billion over 30years to equip buses with 

wheelchair lifts, to install elevators in subway systems, and 

to take other measures to expand access to public transit 

systems for the physically disabled.'O Rep. Charles Vanik, 

the original author of the provision, said that neither he 

nor anyone in the Congress "had any concept that it would 

U.S. Advisory Commission on Intergovernmental Relations E 
Table 5-4 

Potential Increase in Annual User Charges Due 

to Environmental Regulations 

(dollars per household) 

1Spes of Regulations 

Waste Drinking Solid MiscelPopulation Water Water Waste laneous* Total 

0-2,500 $45 $40 $26 $59 $170 

2,500-10,000 20 15 23 32 90 

10,000-50,000 20 5 32 23 80 

50,OOO-250,000 20 10 28 12 70 

Over 250,OOO 60 15 51 34 160 

* Includes school asbestos removal and underground storage 

Source: Jasbinder Singh, Raffael Stein, Sanjay Chandra, and 

Brett Snyder, Municipal Sector Study: Impacts of Environmental Regdotions on Municipalities, prepared for the 

Sector Study Steering Committee (Washington, DC. Envi- ronmental Promion Agency, September 1988) p. v. 

tank requirements. 

involve such tremendous costs.”ll To avoid such costly, 

unintended consequences in the future, the Congress subsequently required CBO to prepare “fiscal notes” for legislation with anticipated costs of $200 million or more. 

Cost Estimate Overview 

The Congressional Budget Office began preparing 

such state and local cost estimates in November 1982. Between 1983 and 1988, it generated 3,554 cost estimates on 

2,821 bills approved by House and Senate committees (see 

able 5-5).12 Although CBO is required to produce cost estimates only for bills with anticipated fml impacts of $200 

million or more, the agency prepares estimates for most bills 

affecting state and local governments, in part because much 

of the work is already completed in the process of ascertain- ing whether legislation exceeds this dollar threshold. 

CBO’s analysis of its cost estimates for the first six 

years of the program indicates that most of the legislation 

considered by the Congress and approved by committee 

imposed no financial costs on state and localgovernments. 

Eighty-nine percent of the estimates prepared by the bud- get office between 1983 and 1988 showed no intergovernmental fiscal impact (see nble 5-5). Only 382 of the fiscal 

notes prepared (11 percent), indicated a positive or negative financial impact on states and localities. The number 

of bills estimated to impose substantial costs of $200 mil- lion or more was even smaller. By CBO’s estimates, only 89 

bills would have produced such large financial impacts. This 

was a mere 3 percent of all bills analyzed, although it constituted about onequarter (23 percent) of the bills estimated to 

have some impact on state and local governments. 

Problems and limitations 

Although CBO generally provides the Congress with 

useful information that is not readily available from other 

sources, the cost estimating process has a number of problems and limitations. These problems can affect the timeliness and the quality of the fiscal information provided to 

the Congress.13 

First, the estimates are often developed hurriedly at a 

relatively late stage in the legislative process. The law requires CBO to prepare cost estimates only for bills that 

are reported from committee for floor consideration, although the agency will prepare a fiscal note earlier on request. This provision reduces the agency’s workload to 

more manageable proportions, and it targets only those 

proposals most likely to be enacted. It also means, however, that information about regulatory costs and potential 

options may not be available to the members of Congress 

during subcommittee and committee deliberations when 

most important legislative decisions are made. Especially 

Table 5-5 

State and local Cost Estimates Prepared by CBO, 1983-1 988 

Estimates Prepared 1983 1984 1985 1986 1987 1988 Total Average 

For bills approved by committee 

Other 

Total 

Estimates with no state/local cost 

Percent 

Estimates with some cost 

Percent 

Estimates with impact above $wo million 

Percent of Total 

Percent of Bills with Some Cost 

483 554 367 465 393 

90 87 166 125 138 

573 641 533 590 53 1 

496 584 488 543 448 

87% 91 % 92 % 92 % 84 % 

77 57 45 47 83 

13 % 9% 8% 8% 16 % 

2.4 6 14 8 22 

4% 1% 3% 1% 4% 

31% 11% 31% 17% 26 9% 

559 

127 

686 

598 

87% 

73 

11% 

15 

2% 

21% 

2,821 

733 

3,554 

3,157 

89 % 

382 

11% 

89 

3% 

23 % 

470 

122 

592 

526 

89 % 

64 

11% 

15 

3% 

23 % 

Source: Congressional Budget Office Bill Estimates Tracking System, in Theresa A. Gullo, “Estimating the Impact of Federal Legislation on State and Local Governments,” in Michael Fix and Daphne A. Kenyon, eds., Copingwith Mandates: WlzatAre tlieAlternatives? (Washington, DC Urban Institute Press, 1990), p. 43. 

62 U.S. Advisoly Commission on Intergovernmental Relations 
in the House, relatively few bills are subject to floor 

amendment, and a broad degree of deference is usually 

granted to decisions rendered in committee. CBO often 

has only a few days in which to prepare cost estimates for 

inclusion in the committee report prior to floor consider- ation. Such timing also means that cost estimates do not 

necessarily reflect final legislation as it is passed. Fiscal 

notes are not generally prepared for, and do not reflect 

the effects of, substantive floor amendments that may significantly raise or lower state and local government costs. 

Thus, congressional consideration of Section 504 of the 

Rehabilitation Act of 1973 might not have been altered had 

the fiscal notes process been in effect in 1973 because the 

provision was added as a floor amendment in the House. 

CBO’s cost estimating also is less systematic than its 

creators anticipated. Initially, CBO analysts hoped to 

create a substantial data base of state and local fiscal contacts and budgetary information over time. This, they 

hoped, would gradually create an increasingly detailed 

and reliable source of cost information. Unfortunately, 

the broad range of issues and the large number of govern- ments affected have forced the process to remain essentially ad hoc in nature. As one CBO analyst noted: 

The diversity of the data required [was] simply 

too great to allow the creation of one comprehensive database or network of contacts that could be 

tapped routinely for all state and local estimates. 

For example, in the past few years, CBO has had 

to analyze the potential effects of immigration reform, safe drinking-water requirements, prohibitions against sex discrimination in pension plans, 

and requirements for handicapped access to voting facilitie~.’~ 

CBO’s cost estimates, therefore, are often based on 

data provided by a relatively few state and local officials. 

This encourages analysts to focus on legislative provisions 

that are not strictly regulatory but for which fiscal information is quickly and readily available, such as the requirements for state and local governments to match 

federal funds in a given program area. On the other hand, 

despite wide geographic variations in the effects of regulations, the agency does not provide state-by-state estimates 

of costs because of the obstacles to compiling such detailed information in the time available. 

Due to these limitations on time and information, 

CBO cost estimates are not always completed or made 

available for inclusion in committee reports. For example, 

no state and local cost estimates were provided for several 

of the new regulations identified in Chapter 4. Such exceptions included some requirements that ultimately 

proved to be very costly, such as thehbestos Hazard Emer- 

~ReJponse A& of 1986 and the Wder Qudty Act of 1987. 

In addition, some bills are excluded from the act’s coverage, even though they may impose significant costs. 

CBO does not produce cost estimatesfor the effects of tax 

legislation or appropriations bills, in large part because 

such legislation is exempt from the agency’s federal bud- get estimating responsibilities. 

Estimating the Costs of New Federal Legislation 

Most observers believe that, despite their limitations, 

CBO cost estimates make a valuable contribution to the 

legislative process. They provides useful information that 

would otherwise be lacking from congressional decisionmaking, and they comprise the most complete data base 

available for estimating the cumulative costs of intergov- ernmental regulatory legislation enacted since 1981. A 

longitudinal analysis of these estimates can provide a partial, and generally conservative, estimate of thecosts of re- cently enacted federal mandates. 

Such an analysis begins by isolating state and local cost 

estimates for bills enacted into law. CBO estimates were 

prepared and published in committee reports for 504 out 

of a total of 690 statutes enacted between 1983 and 1990 

(see l’hble 5-6).15 

Eighty of these analyses estimated that state or local 

governments would experience costs or savings, while 424 

anticipated no state or local cost or fiscal impact. The remaining 186 statutes had no cost estimates included in the 

committee report. Most of these were foreign policy and 

defense bills with little state or local impact, or taxand appropriations bills. Some of the statutes without estimates 

were significant intergovernmental regulatory measures, 

however, for which CBO lacked sufficient time or information to prepare a reliable cost estimate. 

Of the 27 regulatory statutes discussed in Chapter 4, 

eight could not be included for technical reasons. Two of 

these were enacted prior to the implementation of the fiscal notes act, while the remainder were enacted in 1990 

Table 5-6 

CBO Analyses of State and Local Costs for Substantive Enactments, 1983-1990 

me of Impact Anticipated 1983 1984 1985 1986 1987 1988 1989 1990 Total 

Number of laws with estimated cost or savinp 4 27 6 15 5 11 1 11 80 

or statellocal impact 39 71 30 n 30 1l3 26 38 424 

in committee report 18 29 11 26 l3 35 30 24 186 

Number of lam with no cost 

Number of laws with no mt estimate 

Total number of substantive statutes 61 127 47 118 48 159 57 73 690 

Source: Author’s tabulations, derived from US. Code, Congmsional and Administmtive News, various years. 

US. Advisoty Commission on Intergovernmental Relations 63 
and the costs associated with them did not accrue during 

the period being examined in this study. Full or partial cost 

estimates were prepared for 12 of the remaining 19 stat- utes. Six of these contained detailed annual cost estimates; 

two contained estimates of some, but not all, costs of theregulatory provisions; and four were judged to have no signifi- cant fiscal impact (see Bble 5-7). Finally and signrficantly, 

CBO failed to produce usable cost estimates for seven statutes, including several that were costly and important. 

For instance, CBO was unable to develop a reliable 

cost estimate for the VotingAccessibility Act of 1984, which 

required that state and local polling places be accessible to 

handicapped individuals. Agency officials informed the 

Senate Rules Committee that “the impact of this bill 

would vary widely among states and localities. . . and we do 

not have sufficient data to estimate total cost.”16 Similarly, 

no cost estimate was prepared for the Water QuaZity Act of 

1987, although the cost of pending waste water requirements was put at $12 billion by EPA’s Municipal Sector 

Study.” 

Even in cases for which cost estimates were prepared, 

the size and complexity of the legislation, and uncertainties 

concerning agency interpretation and implementation, 

sometimes prevented CBO from developing complete or 

adequate cost projections. CBO’s estimate for the RFbestos Hazard Emergency Response Act, for example, included 

only costs associated with state administration, training, 

and management. The far higher costs of developing local 

asbestos management plans and removing the material 

from local schools were not included. Similarly, CBO’s 

cost estimates for the Hazardous and Solid Wmte Amendments of 1984 did not include underground storage tank 

Table 5-7 

Availability of CBO State and local Cost Estimates for Recently Enacted Regulations 

MONETARY COST ESTIMATES 

Social Security Amendments of 1983 

Consolidated Budget Reconciliation Act of 1985 

Education of All Handicapped Children Act Amendments of 1986 

Safe Drinking Water Amendments of 1986* 

Ocean Dumping Ban Act of 1988* 

Lead Contamination Control Act of 1988 

PARTIAL COST ESTIMATE 

Hazardous and Solid Waste Amendments of 1984 

Asbestos Hazard Emergency Response Act of 19%* 

NO COST OR MONETARY IMPACT ANTICIPATED 

Age Discrimination in Employment Act Amendments of 1 

Handicapped Children’s Protection Act of 1986 

Civil Rights Restoration Act of 1987 

Fair Housing Act Amendments of 1988 

1986 

NO ESTIMATE OF REGULATORY PROVISION(S) 

Highway Safety Amendments of 1984** 

Child Abuse Amendments of 1984 

Voting Accessibility for the Elderly and Handicapped Act 

Emergency Planning and Community Right to Know Act of 1986 

Commercial Motor Vehicle Safety Act of 1986** 

Water Quality Act of 1987 

Drug-Free Workplace Act of 1988** 

REGULATIONS EXCLUDED FROM ANALYSIS 

Surface Transportation Assistance Act of 1982 

Voting Rights Act Amendments of 1982 

Americans with Disabilities Act (1990) 

Clean Air Act Amendments of 1990 

Education of All Handicapped Children’s Act Amendments of 1990 

Fiscal 1991 Budget Reconciliation Act 

*Cost estimate not included in committee report; filed subsequently or attached to a comparable piece of legislation. 

**NO committee report filed, or regulatory provision was added subsequent to committee action. 

64 U.S. Advisory Commission on Intergovernmental Relations 
requirements. EPA subsequently estimated the costs of 

complying with these provisions in the billions of dollars.18 

Given these exceptions and limitations, CBO's state 

and local cost estimates provide only a partial and a gener- ally conservative portrait of the incremental costs imposed 

by intergovernmental mandates in the 1980s. The following 

data should be interpreted not as precise cost estimates but 

as approximate indicators of the magnitude of the costs. 

The eight statutes for which full or partial state and 

local cost estimates were prepared by CBO, along with 

their anticipated effects, are listed in Thble 5-8. Thecumulative costs of these regulations between fiscal years 1984 

and 1991 were nearly $9 billion, over half imposed by the 

expansion of Social Security coverage and the acceleration of 

state and local government Social Security payments in 1983. 

Only regulatory measures that conform to ACIR's criteria of new regulatory methods, and for which detailed 

cost estimates were available, are shown in 72ble 5-8. As 

discussed in the previous chapter, however, certain federal grant conditions also are considered frequently to be 

mandates, and CBO provided detailed cost estimates for a 

number of these statutory requirements. 

A more expansive definition of federal regulatory instruments would add 11 statutes to 72ble 5-8, eight of 

which imposed net costs on states and localities and three 

that were predicted to result in net budgetary gains (see 

lible 5-9, page 66). The cumulative total of those requirements imposing costs on state and local governments was 

estimated to exceed $12.6 billion for the eight fiscal years 

examined. 

By 1991, this was equal to the combined annual fund- ing of federal grants for impact aid, vocational education, 

economic development (EDA), highway safety, and the 

block grants for community service, preventive health, 

and local education. These mandated costs were partially 

balanced by estimated savings of $2.7 billion from Medicare provisions included in the Deficit Reduction Act of 

1984, child support enforcement legislation, and immigration reform.l9 The cumulative net impact of all of these 

regulatory requirements was approximately $10 billion between fiscal years 1984 and 1991. 

Data Limitations 

These data have limitations. Many of the estimates 

were rough approximations to begin with, and their reliability decreases as costs are projected into the future. All 

of the estimates were prepared on the basis of general and 

sometimes vague statutory language rather than on specific administrative rules and regulations. Later estimates 

generated during the rulemaking process have often been 

different, and generally higher. 

An example of this may be found in the safe drinking 

water program. CBO estimated the capital costs of complying with the Safe Drinking Water- of 1986 to range 

between $25 billion and $3.5 billion for public water systems. 

Subsequent EPA estimates of $6 billion approximately 

doubled the capital costs for community water systems, 

which include some private as well as public systems." 

WbCornWO 10 Odrnrn 0 m rnb -c1 

c1- 

3- 

3 

3 

U.S. Advisory Commission on Intergovernmental Relations 65 
Table 5-9 

Fy 1984-1 991 

Congressional Budget Office Cost Estimates of New Regulations and Grant Conditions, 

Regulation 1984 1985 1986 1987 1988 1989 1990 1991 Total 

Social Security Amendments of 1983 (P.L. 98-21) 

Hazardous and Solid Waste Amendments of 1984 (P.L. 98-616) 

Medicare Coverage for New State and Local Employees 

Pipeline Safety Authorization (P.L. 99-516) 

Water and Reclamation Projects (P.L. 99-546) 

Lead Contamination Control Act of 1988 (P.L. 100-572) 

Veterans Benefits and Health Care (P.L. 99-576) 

Education of the Handicapped Amendments of 1986 (P.L. 99-457) 

Employment for the Disabled Act (P.L. 99-643) 

Water Resources Development Act (P.L. 99-662) 

Medicare Catastrophic Coverage Act (EL. 100-105) 

Medicare Catastrophic Act Repeal (P.L. 101-234) 

Asbestos Hazard Emergency Response Act (P.L. 99-519) 

Safe Drinking Water Act Amendments (P.L. 99-339) 

Ocean Dumping Ban Act of 1988 (P.L. 100-688) 

Family Support Act (P.L. 100-485) 

Subtotal 

State Medicaid Savings Due to Changes in Medicare 

Child Support Enforcement (P.L. 98-378) 

Immigration Reform and Control Act (P.L. 99-603) 

Subtotal 

Grand Total 

(COBRA, RL. 99-272) 

(DEFRA, RL. 98-369) 

1,238 

9 

26 

50 

3 

2 

2 

575 

2 

15 

140 

270 

15 

422 

32 

-2 

1,247 

2 

7 

-71 

2 

1,249 

443 

8 

21 1 

52 

2 

6 

2 

600 

4 

45 

260 

385 

12 

438 

33 

-22 

451 

-12 

-59 

-153 

-5 

446 

258 

6 

290 

54 

3 

6 

2 

1,175 

6 

79 

190 

460 

13 

860 

65 

160 

305 

-21 

-44 

242 

4 

256 

57 

6 

14 

2 

7 

247 

190 

,115 

14 

136 

522 

-29 

-39 

-518 -753 

-80 -144 

225 378 

74 1 

3 

293 

213 

9 

2 

19 

524 

780 

14 

1,321 

-39 

-30 

-817 

-231 

1,090 

771 

2 

306 

a 

23 

10 

548 

68 

1,880 

-47 

-20 

-2,312 

-595 

1,285 

803 838 5,334" 

1 0 33" 

1,382" 

1,458" 

3,291 3,668 12,685 

-56 -65 -267" 

-11 -196 " 

-829 -893 -2,775 

2,462 ,775 9,910 

"The cost estimate has been extrapolated beyond the Congressional Budget Office's five-year projection. Where a clear trend is present in CBO's five-year estimate, regression is 

Source: Congressional Budget Office cost estimates, various years. 

used to project future costs. Where no clear trend is evident, the final year estimate has been adjusted for inflation. 
Moreover, these data omit several important and costly 

requirements for which detailed CBO cost estimates were 

not available. As noted earlier, CBO does not prepare cost 

estimates for revenue and tax legislation. Although no comparable estimates are available from other sources, Table 

5-10 contains a list of major tax laws enacted in the 1980s that 

significantly affected state and local governments. 

Also missing from Table 5-9 are several important 

statutes enacted in 1990, the effects of which will be felt in 

subsequent years. The National Conference of State Legislatures estimated that 20 additional mandates were enacted during the 10lst Congress, imposing costs totaling 

$15 billion on states over the next five years.2' Several of 

these laws are listed in Table 5-11, along with estimates of 

their potential fiscal impacts. 

Finally, CBO's cost estimates generally assume that 

all funds authorized by the Congress will be appropriated. 

This assumption is particularly important for the statutes 

that were estimated to produce cost savings for states and 

localities, such as immigration and welfare reform legislation. Yet, the Congress rarely provides full funding for discretionary programs. ACIR's research into funding for 

federal aid programs, for example, found that appropriations in 1970 averaged only 65 percent of authorized levekZ2 Although this research is dated, subsequent 

investigations of this topic found similar results.23 

1982 

1984 

1986 

1990 

Table 5-10 

Major Tax legislation Restricting 

State and local Government Revenues 

Tax Equity and Fiscal Responsibility Act RL. 97.248 

Limited use of proceeds and increased reporting require- ments on industrial revenue bonds (IDBs). 

Deficit Reduction Act of 1984 RL. 98-369 

Imposed volume limitations on private activity bonds; additional restrictions placed on use ofproceeds from IDBs. 

Tax Reform Act RL. 99.514 

Eliminated the income tax deduction for state and local 

sales taxes. 

Imposed stringent limitations on the use of bond pro- ceeds; further restricted the volume of new bonds per- mitted; broadened and increased reporting requirements; 

and subjected interest earned on private activity bonds to 

alternative minimum tax. 

Omnibus Budget Reconciliation Act P.L. 101-508 

Raised the alternative minimum tax on interest from 

tax-exempt bonds. 

Restrictions placed on deductions for state and local taxes 

for high-income taxpayers. 

Required mandatory Social Security coverage for all state 

and local government employees not participating in 

public retirement plans. 

Source: Government Finance Officers Association. 

Table 5-7 1 

Estimated Costs Associated 

with Other Federal Regulations 

Asbestos Hazard Emergency Response Act 

$3.145 billion over 30 years' 

Leaking Underground Storage Tank Requirements 

$428 million capital costs; $128 million annually for operations and maintenance2 

Waste Water lkeatment 

$12.3 billion capital costs; $518 million annually for oper- ations and maintenance3 

Americans with Disabilities Act 

Less than $1.0 billion4 

Clean Air Act Amendments of 1990 

$250-300 million annually4 

Medicaid Expansions in 1990 Budget Agreement 

$870 million over 5 years4 

Estimated State-Local Savings 

Fair Labor Standards Act Amendments of 1985 

$1.0-1.5 billion4 

Sources: 'Federal Register, October 30, 1987, p. 41845; 'Municipal 

Sector Study, pp. B-40,41; 3Municipal Sector Study, Table 

111-2; 4CB0 cost estimates, various years. 

Conclusion 

Estimating the financial costs imposed on state and 

local governments by federal laws and regulations is a difficult and imperfect task. There is relatively little systematic data available about the costs of legislation enacted 

prior to the 198Os, although limited information about selective statutes in specific jurisdictions has indicated that 

the costs of federal mandates could be quite high. Similarly, most of the costly rulemaking initiatives reviewed in the 

case studies in Chapter 2 were regulatory products of earlier enactments. Only since 1983 have the Congressional 

Budget Office cost estimates been prepared for most proposed federal legislation with potential fiscal implications 

for state and local governments. 

A review of these state and local cost estimates for enacted legislation indicates that the cumulative costs of 

recently adopted intergovernmental regulations are considerable and growing. Although lapses and limitations in 

the data make it impossible to be precise, a conservative 

estimate would place the costs of complying with federal 

requirements at between $2.2 and $3.6 billion in 1990, depending on the definition of mandate that is used. Since 

1983, the cumulative costs of such regulatory provisions 

are estimated to range between $9 billion and $12 billion, 

not including the costs of requirements scheduled to take 

U.S. Advisory Commission on Intergovernmental Relations 67 
Figure 5- I 

Trends in Federal Aid and Mandate Burdens, 1984-1 991 

$4 

$3 

$2 

$1 

$0 

r--- 

I 1984 

- Total Federal Aid 

P 

Federal Aid to Governments 

1985 1986 1987 1988 

r 1989 

1990 199 1 

$160 

*Mandate costs include only those laws passed between 1983 and 1989 with Congressional Budget Office cost estimates. 

Source: ACIR computation from Table 5-9 

effect in the years ahead. Overall, as shown in Figure 5-1, 

the financial burdens imposed by federal laws and regulations have been increasing faster than the growth of federal 

aid since 1986. By fiscal 1990, the combined costs of these 

regulations were approximately equal to the amount of 

funding provided by the Preventive Health, Health Services, 

State Education, and the Community Services block grants. 

It also is clear that federal requirements vary considerably in their fiscal effects. Some impose heavy financial 

burdens on certain states and localities, whiIe others restrict 

policymaking options or limit administrative discretion 

without substantial fiscal implications. Both forms of federal 

governmental intervention, financial and nonfinancial, have 

remained lingering sources of intergovernmental concern 

throughout the 1980s and have provoked continuing legal 

challenges in the courts. The evolving judicial doctrines 

that have permitted the development and expansion of 

such regulations are examined in Part I11 of this report. 

Notes 

‘A thorough discussion of these and other factors involved in 

conceptualizing and measuring the fiscal impacts of mandates 

can be found in Catherine H. Love11 et al., Federal and State 

Mandating on Local Governments: An Exploration ofhuesand 

Impacts (Riverside: University of California, Graduate School 

of Administration, 1979). 

21bid., pp. 150-151. 

U.S. Congress, Joint Economic Committee, “The Impact of 

Selected Federal Actions on Municipal Outlays,” by Thomas 

Muller and Michael Fix, Government Regulation: Achieving Social and Economic Balance, Vol. 5 of Special Study on Econom- ic Change, 1980, p. 327. 

Ibid., p. 368. 

Jasbinder Singh, Raffael Stein, Sanjay Chandra, and Brett 

Snyder, Municipal Sector Study: Itnpactsof Environmental Reg- ulations on Municipalities, prepared for the Sector Study Steering Committee (Washington, DC: Environmental Protection 

Agency, September 1988). 

6Despite the title, the study examined impacts on townships, 

school districts, counties, and other local governments, as well 

as municipalities, as appropriate. 

There was insufficient information about local government 

costs for the remaining 17 requirements. In some of these 

cases, EPA was still considering alternative rulemaking options with widely varying cost implications for local governments. In other cases, the effects on local governments were 

considered too uncertain to generate reliable estimates. 

‘Singh et al., Municipal Sector Study, p. iii. 

Ibid., p. vi. 

lo Congressional Budget Office, Urban Tmnsportation forHarzdicapped Persons: Alternative Federal Approaches (Washington, 

DC, 1979), p. xi. 

l1 Quoted in Timothy Clark, ‘‘Access for the Handicapped,” Nutional Journal, October 21, 1978, p. 1673. 

I2In some instances, more than one estimate is prepared for a 

single piece of legislation, due to differences between House 

and Senate bills and because of requests for estimates at other 

stages in the legislative process. 

l3 Many of the following issues are discussed in more detail in: 

Theresa A. Gullo, “Estimating the Impact of Federal Legislation on State and Local Governments,” and Ann Calvaresi 

Barr, “Cost Estimation as an Anti-Mandate Strategy,” in Michael Fix and Daphne A. Kenyon, eds., Coping with Mandates: 

What Are the Alternatives? (Washington, DC Urban Institute 

Press, 1990), pp. 41-56; and U.S. Congress, Senate, Govern- mental Affairs Subcommittee on Government Efficiency, 

Federalism, and the District of Columbia, Reauthorization of 

the State and Local Cost Estimate Act of 1981, Hearing on S. 

1530, Senate Hearing 100-192, 100th Cong., 1st sess., 1987. 

68 U.S. Advisory Commission on Intergovernmental Relations 
14Gullo, p. 44. 

”These statistics differ from those in Table 5-5 because they 

deal entirely with enacted legislation. Although CBO pro- duced more than 3,500 intergovernmental cost estimates dur- ing this same period, this number includes duplicate estimates 

for companion House and Senate bills, estimates for bills that 

were not enacted into law, and estimates for particular amend- ments and bills at other stages of the legislative process. 

16U.S. Congress, Senate, Committee on Rules and Administra- tion, “Voter Accessibility for the Elderly and Handicapped,” 

Senate Report 98-590 to Accompany H.R. 1250,98th Cong., 

2d sess., August 9, 1984, p. 8. 

”Singh et al., Municipal Secfor Sturfy, p. 111-113. 

“Federal Register; October 30, 1987, p. 41845. 

l9 Child support enforcement illustrates the limitations of relying on cost alone as an indicator of the effects of federal regulations. In this case, the Congress enacted highly prescriptive 

legislation that specified in great detail state procedures for 

collecting child support payments under specified circumstances. Although these conditions were highly intrusive, fol- lowing them would result in considerable savings in welfare 

payments for both states and the federal government. 

2o Arnold M. Kuzmack, “The Safe Drinking Water Act: A Case 

Study,” in Fix and Kenyon, eds., Coping with Mandates, p. 73. 

21 Martha A. Fabricius, “Fiscal Impact of Proposed Mandates 

from the 102nd Congress,” State-Federal Issue Brief 4 (November 1991): 1. 

22 US. Advisory Commission on Intergovernmental Relations, 

T?ie Gap behoeen FederalAid Authorizations and Appropriations 

(Washington, DC, 1970). 

23Allen Schick, Congress and Mong (Washington, DC: Urban 

Institute Press, 1980), p. 176. 

U.S. Advisory Commission on Intergovernmental Relations 69 
70 U.S. Advisory Commission on Intergovernmental Relations 
Part 111 

The Judiciary and 

Regulation in the 1980s 

The 1980s were judicially momentous years for federalism. The most significant U.S. Supreme Court opinions 

were Garcia v. San Antonio Metropolitan Transit Authority 

(1895), South Dakota v. Dole (1987), and South Carolina v. 

Baker (1988). It was these decisions that led ACIR to ex- amine the judicial aspects of federalism more closely and 

to explore ways of rebalancing the federal system through 

constitutional reform. During the 1980s, therefore, the 

Commission issued a number of reports addressing these 

issues, including Reflections on Garcia and Its Implications 

for Federalism (1986), A Framework for Studying the Controversy Concerning the Federal Courts and Federalism (1986), 

Federalism and the Constitution: A Symposium on Garcia 

(1987), Is Constitutional Reform Necessary to Reinvigorate 

Federalism (1987), and Hearings on Constitutional Reform of 

Federalism: Statements by State and Local Government Asso- ciation Representatives (1989). 

In addition to these reports, the Commission adopted 

two recommendations on constitutional balance in March 

1988 (see page 5 and 'Bble 8-4). 

U.S. Advisory Commission on Intergovernmental Relations 71 
72 U.S. Advisory Commission on intergovernmental Relations 
Regulatory Consequences 

of a New Judicial Philosophy 

There is no theme more famiIiar to constitutional Iaw than the clash between federalpower and state autonomy. The history of that 

struggle reveals, by and Iarge, a long losing 

battle by the sfnfes.1 

The Short Life of NLC 

If not the most important, then at least the most noted 

intergovernmental constitutional development of the 1980s 

was the U.S. Supreme Court’s repudiation of its 1976 decision in National League of Citics (NLC) v. Usety.2 

At issue in NLC were 1974 amendments to the Fair 

Labor Standards Act (FLSA) extending national minimum 

wage and maximum hour requirements to most state and 

local employees, an action alleged by numerous state and 

local interests to be an unconstitutional encroachment on 

state aut~nomy.~ The Supreme Court agreed, ruling: 

Insofar as the 1974 amendments operate directly 

to displace the states’ abilities to structure employer-employee relationships in areas of traditional governmental functions . . . they are not 

within the authority granted Congress by the 

Commerce Clause. . . . Congress may not exercise 

its power to regulate commerce so as to force directly upon the states its choices as to how essential decisions regarding the conduct of integral 

governmental functions are to be made.4 (Emphasis added.) 

Moreover, the Court went on to note that the federal government’s commerce power, as applied to the states and 

their political subdivisions, encountered an affirmative 

barrier in another portion of the Constitution, namely, the 

Tenth Amendment. 

Court’s Holding Lacks Staying Power 

Despite the initial euphoria that NLC engendered 

among state and local officials, the Court’s narrow holding,’ achieved by a tenuous concurrence, boded ill for the 

doctrine’s longevity. According to Bruce La Pierre, “Justice Rehnquist’s opinion, coupled with Justice Blackmun’s 

separate concurrence, invited at least three different tests 

of state immunity from national regulation.”6 

The district court, on remand, took the view that traditional state activity enjoyed absolute immunity from federal 

reg~lation.~ The absolute immunity position, however, 

was cast in considerable doubt by Rehnquist’s own disclaimers regarding the relatively narrow parameters of 

NLC, which were inclusive of activities related to the commerce clause but presumably exclusive of numerous additional constitutional provisions, including the spending 

power, the Fourteenth Amendment, and the war power.8 

Further complicating NLC‘s subsequent explication 

was Blackmun’s concurrence, predicated on his understanding that the Court had, in fact, applied a balancing 

test to the outcome of the case, “permitting . . . national 

regulations to the states when the national interest was 

‘demonstrably greater’. . . .”g 

The results of these interpretive difficulties were apparent almost immediately. Far from bringing uniformity 

to the interpretations of the circuit courts, NLC appeared to 

breed a virtual cottage industry of interpretation of the various legal actions, each accompanied by lower court rulings 

indicative of doctrinal confusion, dissatsfaction, or both.1° 

Five years of such chaos found the Supreme Court revisiting NLC in what would ultimately be a vain attempt to 

clarify constitutionally protected areas of state sovereignty. In Hodel v. Surface Mining and Reclamation Association, 

the Court endeavored to explain its position by constructing a “Tenth Amendment test”: 

First, there must be a showing that the challenged statute regulates the “States as States.” 

Second, the federal regulation must address matU.S. Advisory Commission on Intergovernmental Relations 73 
ters that are indisputably “attributes of state sovereignty.” And third, it must be apparent that the 

States’ compliance with the federal law would directly impair their ability “to structure integral 

operations in areas of traditional functions.” 

However, the Hodel criteria did little to quell mounting 

disquietude over what increasingly was seen as a “rule of 

state immunity. . . unsound in principle and unworkable in 

practice. . . .”12 

From Constitutional Protection 

to Political Safeguards: 

Garcia v. San Antonio 

Metropolitan Transit Authority 

The attempt to draw the lines of state regulatory im- munity in terms of “traditional governmental fitnctions” is not only unworkable but is also inconsistent 

with establishedprinciples offederalism and, indeed, 

with those very federalism principles on which National League of Cities purported to rest.13 

In 1985, after less than a decade of wrestling with 

seemingly intractable doctrinal demarcations, particularly 

the identification of so-called “traditional governmental 

 function^,"'^ a sharply divided Supreme Court15 overturned NLC, virtually abandoning any specific constitutional defenses against federal regulation of state 

functions. Rather, a five-member majority suggested in 

Garcia v. Sun Antonio Metropolitan Transit Authoritylb that 

“if there are to be limits on the Federal Government’s 

power to interfere with state functions-as undoubtedly 

there are-we must look elsewhere to find them.”17 That 

“elsewhere,” according to Justice Harry A. Blackmun, was 

not to be discovered in specific constitutional limitations, 

but in the national political process. 

Presumably relying heavily on such treatises as Herbert Wechsler’s “Political Safeguards of Federalism”18 and 

Jesse Choper’s Judicial Review and the National Political 

Process,1g Blackmun asserted that 

the Framers chose to rely on a federal system in 

which special restraints on federal power over the 

States inhered principally in the workings of the 

National Government itself, rather than in discrete limitations on the objects of federal authority. 

State sovereign interests, then, are more properly 

protected by procedural safeguards inherent in 

the structure of the federal system than by judicially created limitations on federal power.*O 

Blackmun’s Garcia analysis invited sharp rebuttals 

from three of the four dissenters. Justice Lewis E Powell, 

Jr., citing a previous ACIR report, condemned the Court’s 

premise that states, in the latter twentieth century, could 

find adequate protection in the national political forum. 

On the contrary, he asserted that the Court’s view was 

“clearly at odds with the proliferation of national legislation over the past 30years, . . . [because] ‘avariety of structural and political changes occurring in this century . . . combined to make Congress particularly insensitive to 

state and local values’.”21 Moreover, in a statement reminiscent of the Court’s pre-NLC relegation of the Tenth 

Amendment to a mere “truism,”22 Powell accused the majority of once again reducing that amendment “to meaningless rhetoric when Congress acts pursuant to the 

Commerce Clause.”23 

Equally disturbed by the abdication of precedent, Justice Sandra Day O’Connor accused the Court of reducing 

federalism to a “weak ‘es~ence’,”~~ while Justice William 

H. Rehnquist maintained confidently that NLC’s principles would “once again command the support of a majority 

of this 

Outright rejection of precedent being rare, especially 

within a decade after the initial decision, Garcia generated 

considerable analytical and critical literature.26 Although 

commentators disagree about the broader consequences 

of the case, it seems that the Court has decided “that protecting the states from . . . exertions of federal regulatory 

authority is no longer a judicial That conclusion has both constitutional and structural implications. 

States in the Founders’ Vision 

Among the by-products of Garcia was a renewal of interest in the Founders’ vision of a federal balance. Justice 

Blackmun, for instance, cited considerable evidence for 

the proposition that the Founders believed the political 

process to be the appropriate and sufficient forum for protecting the “residuary and inviolable sovereignty” of the 

states.28 In Federalist No. 46, Madison explained that the 

federal government “will partake sufficiently of the spirit 

[of the States], to be disinclined to invade the rights of the 

individual states, or the prerogatives of their government~.”~~ Madison added, “James Wilson observed that, 

‘it was a favorite object in the Convention’ to provide for 

the security of the States against federal encroachment 

and that the structure of the Federal Government itself 

served that end.”30 

In contrast, Justice Powell noted that decisive legal 

restraints, including the Tenth Amendment, were added to 

the Constitution specifically to allay Anti-Federalist fears 

that the national political system would overwhelm state aut~nomy.~~ Moreover, in Federalist No. 45, Madison speaks of 

separate constitutional “spheres of so~ereignty”:~~ 

The powers delegated by the proposed Constitution to the Federal Government, are few and defined. Those which are to remain to the State 

Governments are numerous and indefinite. The 

former will be exercised principally on such external objects, as war, peace, negotiation, and foreign commerce. . . . The powers reserved to the 

States will extend to all the objects, which, in the 

ordinary course of affairs, concern the lives, liber74 U.S. Advisory Commission on Intergovernmental Relations 
ties and properties of the people; and the internal 

order, improvement, and prosperity of the State.33 

While both sides appear to have fallen prey to “quote 

mongering” from the Federalist, this is understandable 

when dealing with constitutional federalism. Most observers 

agree that the federal principle is a, if not the, core underpinning of the American political structure, yet, determining its parameters from the text of the Constitution canbe 

a daunting task.34 Thus, both the Garcia majority and its 

dissent were forced to rely more on the “spirit of the Con- 

~titution”~~ and on historical developments since its ratification than on any explicit legal instructions. 

The Court, however, placed itself in the difficult position of determining its own role in the resolution of federal questions, deciding whether it would avoid such 

challenges or continue to act as “the balance wheel of the 

federal Its holding in Garcia, of course, was for 

the former. 

According to Martha Field, a proponent of the Garcia 

logic, judicial restraint is supported by constitutional 

vagueness and historical ev01ution.~’ After all, 200 years of 

commerce clause development have seen the steady accumulation of federal power, generally attained with the full 

acquiescence of the Court, at the expense of state autonomy. 

Nor has the legal-political amplification of the commerce 

power occurred in a constitutional vacuum: the forces of nationalism were similarly abetted by expansive interpretations 

of non-commerce related Article I, Section 8 provisions as 

well as by the additions of the Sixteenth, Seventeenth, and, 

most important, Fourteenth Amendments. 

In addition, the Tenth Amendment provides little 

constitutional solace for defenders of an NLC-style judiciary. Even the Garcia dissent was forced to conclude that 

the amendment, at its inception, lacked affirmative content. Thus, Justice O’Connor notes that: 

The text of the Constitution does not define the 

precise scope of state authority other than to 

specify, in the Tenth Amendment, that the powers not delegated to the United States by the 

Constitution are reserved to the States.38 

The march of time and the impervious nature of the 

Tenth Amendment notwithstanding, several commentators view Garcia’s constitutional bequest as disturbing at 

best. “Even if the Constitution is inconsistent with the notion of state sovereignty, there is no doubt that our federalism is based on the continuance of the states as fully 

independent and autonomous government^."^^ According 

to A.E. Dick Howard, the Court’s decision to withdraw 

from the federalism fray breaches 

a basic tenet of Anglo-American constitutionalism 

[that] . . . no branch of government should be the 

ultimate judge of its own powers . . . [and that] 

principle is especially important in a system that, 

in addition to being federal, looks to checks and 

balances and the separation of powers to restrain 

arbitrary g~vernment.~~ 

States in the Political Process 

The Court’s determination to disengage itself hinges 

on its belief that “the internal safeguards of the political 

process” act as adequate informal checks and balances on 

the possibility that unduly burdensome congressional actions will be pr~mulgated.~~ As mentioned previously, the 

Court found theoretical support for this position in the 

work of Herbert Wechsler and, more recently, that of 

Jesse Choper. 

In what he calls his “Federalism Proposal,” Choper 

maintains that: 

The federal judiciary should not decide constitutional questions respecting the ultimate power of 

the national government vis-a-vis the states; rather, the constitutional issue of whether federal action is beyond the authority of the central 

government and thus violates “states’ rights” 

should be treated as nonjustifiable, final resolution being relegated to the political branchesi.e., Congress and the President.42 

Choper’s argument is basically a defensive one. Responding to the debate over the legitimacy and proper 

bounds of judicial review, Choper seeks to salvage the judiciary’s constitutional function by confining it to questions of individual lberties-presumably, that aspect of 

constitutional guarantee most in need of protection 

against the majoritarian political process. 

Thus, Choper draws a fundamental distinction between individual liberties and states’ rights, asserting that 

while individual liberties involve issues of principle, states’ 

rights involve questions of practicality: 

When government action abridges constitutionally ordained personal liberties, it seems likely 

that, at least in view of short-run concerns for efficient public administration and businesslike accomplishment of laudable public objectives, the 

commonweal would usually better be served by 

compromising the interests seeking judicial protection. Thus, one of the major reasons for Federalist opposition to a bill of rights was the fear that 

it would inhibit effective government. . . . Constitutional issues of federalism, on the other hand, 

are a distinguishable species. One of the principal 

purposes behind the abandonment of the Articles 

of Confederation and the adoption of the Constitution-if not the major purpose-was to establish a workable central government, one whose 

authority was unquestionably limited but one 

nonetheless with sufficient power to cope with 

problems which prior experience had shown the 

states incompetent to resolve separately and for 

which national action was desperately needed.43 

As a result, because courts are less suited to the resolution 

of pragmatic issues than the Congress and the President, 

federalism questions are more properly the preserve of 

the latter two branches. Presumably, the judiciary husU.S. Advisory Commission on Intergovernmental Relations 75 
bands its scarce political resources for the individual rights 

battles to which it is institutionally most suited. 

Moreover, Choper notes numerous points of institutional intersection between states’ rights and national political interests, sufficient, supposedly, to preserve essential 

aspects of state go~ernance.~~ That, it will be recalled, was 

the basis of the majority’s holding in Garcia. 

Choper’s argument concerning the relationship between individual liberties and judicial solicitude has considerable philosophical and historical merit.45 Several 

commentators, however, have taken issue with his now 

virtually Court-sanctioned “Federalism Proposal,” arguing, in effect, “that the political process is not necessarilya 

reliable mechanism for protecting state autonomy, and to 

that extent is an insufficient restraint on federal commerce power.”46 

Howard, for example, contends that the Court’s Garcia abnegation rests on two “erroneous suppositions,” one 

institutional, the other politi~al.~’ Institutionally, the 

Court, along with academic supporters like Choper, assumes “that the states play a major role in structuring the 

national g~vernment.”~’ Under an older set of rules, that 

assumption had considerable validity: state legislators selected senators, states largely controlled electoral mechanisms and determined the franchise, and the drawing of 

congressional districts was a state re~ponsibility.~~ 

The old rules, however, no longer apply. The Senate 

has long since become a popularly elected body. Numerous judicial holdings and U.S. laws virtually have federalized the franchise and national election standards, and the 

Supreme Court has circumscribed state redistricting power~.~~ The result has been a severe truncation of the states’ 

ability to shape and influence national institutions and 

processes. 

Moreover, the states have suffered a corresponding 

decline vis-a-vis supposed national “ ‘political‘ safeguards.”51 

For instance, state political parties “do face a difficult and 

very different political environment today.”52 Gone are 

the days of the powerful state “kingmakers.” In addition, 

the nationalization of campaign finance has served to 

“strengthen the financial bond between candidates and 

national party committees and encourage state and local 

parties to defer to the fiscal and organizational superiority 

of their federal counterparts. . . .”53 

Finally, the intricate web of financial and regulatory 

relationships characteristic of modern intergovernmental 

relations is largely of federal design and dictate, the result, 

in part, of broad interpretations not only of the commerce 

clause, but of the spending, taxing, and war powers, and of 

the Fourteenth Amendment. The result is often a sense of 

“top-downness” with the states cast in the unenviable role 

of fiscal supplicants and regulatory enforcers. 

Given such a scenario, Howard, among other legal 

analysts,54 has concluded that “it is no less legitimate and 

proper for the Supreme Court to concern itself with assuring the health of federalism than it is for the Court to 

uphold individual liberties as 

76 U.S. Advisory Commission on Intergovernmental Relations 

Exploring the “Weak Essence” of Federalism: 

South Carolina v. Baker 

If Garcia was “the new and clean slate on which to 

inscribe the fitture juripudence of state-national relations, ”the Court’s first markings on that slate leave a 

dangerous message.56 

Any assumptions that the doctrinal reversal in Garcia 

would itself be overturned in the wake of personnel 

changes on the Court or would affect only issues related to 

the commerce clause were overturned within threeyead7 

with the Court’s decision in South Carolina v. Baker.58 

At issue was the constitutionality of the TmEquity and 

Fiscal Responsibility Act of 1982 (TEFRA).59 In relevant 

part, the act withholds the federal income tax exemption 

on long-term bonds issued by state and local governments 

unless the bonds are in registered form.60 South Carolina, 

supported by the National Governors’ Association 

(NGA), filed suit, charging that the act abrogated Tenth 

Amendment principles and violated the doctrine of intergovernmental tax immunity.61 The Supreme Court, in a 

7-1 holding, disagreed with the state on both counts.62 

Tenth Amendment Arguments Rejected 

In support of its Tenth Amendment claim, South Carolina contended that TEFRA forced states to issue bonds 

in registered form only, effectively banning the issuance of 

unregistered or bearer Defemng to the Court’s 

reasoning in Garcia, the state argued that the political process had failed to protect state interests because relevant 

portions of TEFRA were “imposed by the vote of an uninformed Congress relying upon incomplete inf~rmation.”~~ 

Be that as it may, the Court rejoined that “nothing in Garcia 

or the Tenth Amendment authorizes courts to second-guess 

the substantive basis for congressional legislati~n.”~~ 

Intervening on behalf of South Carolina, NGA further questioned the Tenth Amendment validity of the act, 

arguing that resultant legislative, administrative transition, transaction, and interest rate differential costs diminished state sovereignty by “commandeering . . . state 

legislative processes.”66 Once again, however, the Court 

demurred to the Tenth Amendment thrust of the complaint, suggesting that 

“commandeering” is . . . an inevitable consequence of regulating a state activity. . . . That a 

State wishing to engage in certain activity must 

take administrative and sometimes legislative action to comply with federal standards regulating 

that activity is a commonplace that presents no 

constitutional directive!’ 

Moreover, the Court found “NGA’s theory of ‘commandeering’ ” disturbing and, finally, insupportable because it 

“would not only render Garcia a nullity, but would also re- 
strict congressional regulation of state activities even 

more tightly than it was restricted under the now overruled National League of Cities line of cases.”68 

Court will automatically find that the political 

process provided it with sufficient pr~tection.~~ 

This analytical posture calls into serious question 

Intergovernmental Tax Immunity Not Accepted 

Nor was the Court more sympathetic to the plaintiffs’ 

contention that TEFRA unconstitutionally violated the 

doctrine of intergovernmental tax immunity.69 Treating 

the doctrine in its narrowest sense, Justice William J. 

Brennan, Jr., writing for the majority, concluded that the 

doctrine only prevents the federal government from directly imposing certain taxes on the states. Finding “no 

constitutional reason for treating persons who receive interest on government bonds any differently than persons 

who receive income from other types of contracts with the 

government,” the Court held that intergovernmental tax 

immunity did not reach state bond income.70 

Baker’s Impact 

overstated. According to one observer: 

The constitutional importance of Baker can hardly be 

Baker has all the indicia of a landmark decision. 

First, it is the Court’s most extensive treatment of 

state sovereignty and the tenth amendment since 

Garcia. Because it answers questions that Garcia 

left open and generally extends Garcia’s rationale, Baker is likely to overtake Garcia as the 

leading case on American federalism. Second, 

Baker addresses a matter of acute political interest. The Court’s decision upholds congressional 

regulation of one of the most significant sources 

of state and local revenue and does so in terms 

that will permit even more extensive regulation 

in the future. The importance of Baker makes the 

decision’s doctrinal, substantive, and jurisprudential shortcomings especially di~appointing.~~ 

If Baker was the opening salvo in the post-Garcia intergovernmental contest for power, the Court would appear to have severely weakened the constitutional reserve 

of the states. First, Baker appears to signalan even further 

retreat on the part of the Court away from principled 

questions of federalism. Thus, while the Garcia Court left 

the states largely to the mercy of the national political process, it did so only after some analysis of the costs and benefits of that process.72 Moreover, Garcia “did take care to 

leave open some possibility [albeit a narrow one] of a state 

sovereignty limitation on congressional powers. . . .”73 

Baker, on the other hand, treats the need for such 

analysis ca~ually,’~ saying that if a state is represented in 

the national political process, any examination of the outcome of that process would amount to an inappropriate 

second-guessing of congressional intent and method.75 On 

one reading, Baker 

reduces the tenth amendment to a vacuous procedural presumption: unless a state can show it 

was denied participation in national politics, the 

what act would be sufficient to warrant Court action onbehalf of the states. However, like the Garcia majority before it, the Baker majority did not “attempt any definitive 

articulation. . . [of] the defects that might lead toinvalidation” of a congressional except to suggest that a 

state would have to prove the unlikely possibility “that it 

was deprived of any right to participate in the national political process or that it was singled out in a way that left it 

politically isolated and powerle~s.”~~ (Emphasis added.) 

Additionally, Baker seems unconcerned with arguments placing “the power of the states to raise revenue 

[among] the core substantive guarantee[s] of the American federal system. . . .”79 Instead, any such discussion was 

left to Justice O’Connor in her lone dissent. O’Connor 

criticized the Court for “never expressly consider[ing] 

whether federal taxation of state and local bond interest 

violates the Constitution.”so Moreover, she not only suggested a breach of Tenth Amendment principles but argued “that the States’ autonomy [may be] protected from 

substantial federal intrusions by virtue of the Guarantee 

Clause of the Constitution.”s1 

While the revenue-raising effects of the contested 

portions of TEFRA may indeed be “de minimis,”s2 the 

Court’s reasoning in Baker may give “Congress free rein to 

tax bond interest income uncor~ditionally,”~~ a possibility 

that could have a major impact on the fundraising capacities of the Thus, “if there is any danger [in dccisions like Baker], it lies in the tyranny of small 

decisions-in the prospect that Congress will nibble away 

at state sovereignty, bit by bit, until someday essentially 

nothing is left but a gutted shell.”s5 

The Spending Power in the Courts 

The countervailing maelstroms created first by NLC 

and then by Garcia barely brushed long-standing (but unsett1ed)jurisprudence in the area of conditioned spending 

under Article I, Section 8. As mentioned above, NLC sidestepped the issue when Justice Rehnquist declined to “express . . . [any] . . . view as to whether different results 

might obtain if Congress [sought] to affect integral . . . state.. . operations.. . undcr . . . the spendingpower.. . .”s6 

Despite massive changes in the fiscal and regulatory 

configurations of grants-in-aid, the federal judiciary has 

remained generally consistent in its view of conditional 

spending over a span of nearly seven decades.s7 The federal courts have uniformly maintained that the decision to 

enter into a financial contract, being voluntary as to both 

parties, allows the grantor considerable discretion to attach conditions as long as the grantee “knowingly accepts 

the terms of the ‘contract’.”s8 As a result, state parties to 

fedcral financial assistance have been denied relief from 

U.S. Advisory Commission on Intergovernmental Relations 77 

i 
allegedly unconstitutional conditions because they “voluntarily submitted to federal laW”,sg because the “participation 

[was] purely at their option”;g0 and because the acceptance 

of the grant was “not compulsory on the state. . . .”gl 

In many respects, therefore, the spending power is 

more far-reaching and less subject to limits than any other 

Article I, Section 8 power of the Congress. According to 

Albert J. Rosenthal, 

the validity of an exercise of the commercepower 

(traditionally the most important vehicle for federal regulation) requires not only that there be 

the necessary relationship between the legislation and interstate or foreign commerce but also 

that such constitutional limitations as those protecting civil liberties and the autonomy of state 

and local government not be breached. . . . Similarly in the case of the taxing power even though a 

tax satisfies the comparatively few express constitutional requirements it still will fail if it impinges 

too greatly upon first or fifth amendment rights 

or perhaps if it encroaches too far into the autonomy of the states?* 

By contrast, “it is much less clear that conditional spending is invalid even when it invites forfeiture of individual 

liberties or intrudes deeply into state autonomy.”93 

The Doctrine of Unconstitutional Conditions 

In part, the problem of conditions attached to federal 

spending is related to the much larger subject of so-called 

“unconstitutional condition^."^^ The idea is that government, having the power to deny privileges, also has the 

power to grant certain favors on its own terms, “including 

the surrender of otherwise applicable constitutional 

right.”95 Thus, in the 19th century, the Supreme Court 

ruled that part of a state’s power to exclude foreign companies from engaging in local commerce included the authority to grant such a privilege conditioned on the alien 

corporation’s surrender of its right to press legal claims in 

federal c0urt.9~ 

Such a tolerant approach to governmental power was 

relatively short lived h0wever.9~ Beginning in the 20th 

century, the Court ostensibly took quite the opposite approach, holding that government may not “condition its 

largess upon the willingness of the [recipient] to surrender 

a right he would otherwise be entitled to exercise.”98 The 

term ostensibly is key here, for while this approach hasfrequently been followed in dealing with individual rights,w it 

has not held the same sway in dealing with states’ rights. 

To date, the Court has found no area in which Congress 

might not spend its way around what would otherwise be 

the constitutional prerogatives of state power. 

South Dakota v. Dole. Illustrative is the Court’s 1987 

holding in South Dakota v. DoZe.’O0 At issue in that case 

were amendments to the Surface Transportation Assistance 

Act designed to encourage states to raise their minimum 

drinking age to 21. The 1984 amendments, titled the National Minimum Drinking Age Act,lol contained a threat to 

withhold 5 percent of federal highway funds from states 

that failed to impose the higher drinking age within the 

first year after enactment and another 10 percent if compliance was not achieved by the second year.lo2 

In challenging the act, South Dakota relied partly on 

the now familiar argument that the Congress may not 

achieve indirectly through conditioned spending what it 

cannot achieve directly through the other enumerated 

powers. Not surprisingly, the Court rejected the state 

claim, as it has done consistently in the past, countering 

that Congress may use its spending prerogative to achieve 

local goals as long as its activities are “in pursuit of the 

general welfare,”lo3 unambiguous so that states are “cognizant of the consequences of their parti~ipation,”’~~ related to “the federal interest in particular national 

projects or and separate from “constitutional provisions [that] may provide an independent bar to the 

conditional grant of federal funds.”lo6 

The Court’s fourth point is especially important because it was proffered in response to the second part of 

South Dakota’s contention, that is, that relevant provisions of the act, in essence, constituted an unconstitutional 

condition. Hence, inasmuch as the 21st Amendment appears 

to place the “regulation. . . of liquor. . . squarely within the 

ambit of those powers reserved to the States . . . ,”lo’ the 

Congress, in implementing a minimum age, would seem 

to “condition its largess upon the willingness of the 

[states] to surrender a right which [they] would otherwise 

be entitled to exercise. . . .”lo8 

Not only did the Court reject the state’s argument, it 

used the opportunity to reformulate the doctrine of unconstitutional conditions, stating now that the 

“independent constitutional bar” limitation on 

the spending power is not, as petitioner suggests, 

a prohibition on the indirect achievement of objectives which Congress is not empowered to 

achieve directly. Instead, we think that the language in our earlier opinions stands for the unexceptional proposition that the power may not be 

used to induce the states to engage in activities 

that would themselves be unconstitutional.lW 

Put another way, by virtue of conditioning the receipt of 

highway money on the states’ willingness to set the drinking age at the national minimum, the Congress “induced 

the states to engage in a constitutional activity, and, therefore, its exercise of the spending power was legitimate.”110 

This newly reframed doctrine of unconstitutional 

conditions unsettled several commentators, including 

dissenting Justices Brennan and O’Connor. Reasserting 

the doctrine in more familiar terms, Brennan contended 

that “since States possess [the] constitutional power [to 

regulate liquor under the Twenty-First Amendment], the 

Congress cannot condition a federal grant in a manner 

that abridges this right.””’ 

Similarly, Richard Epstein, branding Dole “a statutory 

end run around the twenty-first amendment,”112 found the 

Court’s opinion to be theoretically “un~ati~factory”:”~ 

78 U.S. Advisory Commission on Intergovernmental Relations 
Where conditions involve powers reserved to the 

states under the tenth amendment, the Court has 

traditionally required that the federal government show a sufficiently compelling interest to 

override the state interest. The danger that Congress will leverage its broad spending powers to 

subvert the twenty-first amendment is as great as 

the danger that it will leverage its power to subvert the tenth amendment, and should be met 

with the same judicial response. The state, in its 

effort to decide whether or not to accept the condition, has to decide whether it values the loss in 

federal revenue more than it values its own independence in setting the minimum age for liquor 

consumption. In principle, if Congress has the 

power to reduce highway revenues to the states 

by five or ten percent, there is no reason why it 

could not exclude any state from participation in 

the program by cutting off its revenues entirely. 

The power of discretion therefore allows the federal government to redistribute revenues, raised 

by taxes across the nation, from those states that 

wish to assert their independence under the 

twenty-first amendment to those that do 

According to James Corbelli, the result of Dole is to extend 

even further Congress’ already considerable spending reach 

because “the Constitution only restricts congressional 

power to place conditions on federal grants if those conditions induce states to act unconstitutionally.’’11s 

Nevada v. Skinner. Corbelli’s conclusion was supported in a 1989 ruling by the Ninth Circuit in Nevada v. 

Skinner.’16 The case involved the first challenge to the national 55-65 mile per hour (mph) speed limit. Not unlike 

the minimum drinking age requirements that were the impetus for Dole, the maximum federal speed regulations of 

55 mph (in 1987, the speed limit was increased to 65 mph 

on certain low-density roads) were added by amendment 

to a long-since promulgated highway funding agreement. 

Failure to comply would result in denial of all future fed- eral highway aid to the non-complying state.”’ 

At issue in Skinner was a 1986 Nevada statute allowing 

the state Department of Transportation to post speed limits as high as 70 mph. The regulations contained a provision requiring the speed limit to be lowered at such time 

that Nevada was threatened with the loss of highway aid. 

Federal highway officials, responding within one minute 

of the establishment of the first 70 mph stretch of road, 

advised the state transportation department that all funds 

would be withheld unless the speed limit was reduced. 

Nevada sued against enforcement of the federal 

speed provision, arguing that “the national limit violated 

the ‘coercion’ limitation on the Federal Government’s 

Spending Power.”l18 At least theoretically, “in some circumstances the financial inducement offered by the Congress might be so coercive as to pass the point at which 

‘pressure turns into compulsion.”’11g 

Relying heavily on the Supreme Court’s ruling in 

Dole, and noting that “the coercion theory has been much 

discussed but infrequently applied in federal case law and 

never in favor of the challenging party,” the circuit court 

decided for the national government, upholding the federal speed limit.120 Judge Reinhardt’s opinion dismissed 

the state’s claim in an early footnote: 

Almost all the reservations about the permissible 

scope of the federal spending authority have come 

not from courts, but from commentators. In fact, 

the parties have cited to us only one case-the generally discredited Supreme Court opinion in United 

States v. Butler. . .-which declined to interpret expansively the congressional spending power.121 

Implied Preemption 

and the Dormant Commerce Clause 

[Clongress has a wonderful power that only 

judges and lawyers know about. Congress has the 

power to keep silent. Congress can regulate interstate commerce just by not doing anything 

about it. Of course when congress keeps silent, it 

takes an expert to know what it means. But the 

judges are experts. They say that congress by 

keeping silent sometimes means that it is keeping 

silent and sometimes means that it is speaking. If 

congress keeps silent about the interstate commerce that is not national in character and that 

may just as well be regulated by the states, then 

congress is silently silent, and the states may regulate. But if congress keeps silent about the kind 

of commerce that is national in character and 

ought to be regulated only by congress, then congress is silently vocal and says that commerce 

must be free from state regulation.122 

Garcia, Baker, and Dole were about national legislative power and what, from a certain state perspective, 

appears to be an inexorable congressional expansion of 

regulatory terrain. There is, however, another side to regulatory activity, one in which the congressional role is 

merely implied or altogether nonexistent and in which the 

judiciary, rather than playing the role of facilitator, takes 

the lead.123 This has been the case in the increasingly arcane doctrinal thicket of preemption. 

Generally speaking, preemption doctrine rests on the 

long-standing authority of the federal government to preclude state and local activities under the supremacy clause of 

the Constitution (Article VI, clause 2). Under that provision, 

federal power, in some areas of regulation, must be exclusive 

of state power on “the theory that the peoples of the several 

states must sink or swim together, and that in the long run 

prosperity and salvation are in union and not division.”124 

Simple on its face, the doctrine of preemption has 

nonetheless been the constitutional progenitor of legal 

claims and counterclaims dating almost to the nation’s 

founding.125 The result today is a confusing array of 

U.S. Advisory Commission on Intergovernmental Relations 79 
court-inspired principles which, in large part, place 

preemption decisions in the hands of the federal judiciary. 

Of particular note in this regard are the doctrine of implied preemption or supersession and the so-called dormant or negative commerce clause.126 

Judicial Power and implied Preemption 

Unlike the dormant commerce clause, which springs 

from a direct, though unstated, constitutional lineage,lZ7 

judicial preemption is initially rooted in statutory interpretation. A preemption occurs when the Congress ovemdes a 

state statute. In many instances, the success or failure of such 

an appropriation depends on the judiciary assuming the 

character of constitutional umpire, balancing the intent of 

the Congress against an alleged state interest. 

Although preemptive intent is most clearly discerned 

from “express” congressional declarations,128 the courts 

have typically sanctioned two additional forms of preemption, “implied” and “conflict”: 

Absent explicit pre-emptive language, Congress’ 

intent to supersede state law altogether may be 

found from “ ‘a scheme of federal regulation . . . so pervasive as to make reasonable the inference 

that Congress left no room for the States to supplement it,’ because ‘the Act of Congress may 

touch a field in which the federal interest is so 

dominant that the federal system will be assumed 

to preclude enforcement of state laws on the 

same subject,’ or because ‘the object sought to be 

obtained by the federal law and the character of 

obligations imposed by it may reveal the same 

purpose.’ ” Even where Congress has not entirely 

displaced state regulation in a specific area, state 

law is pre-empted to the extent that it actually 

conflicts with federal law. Such a conflict arises 

when “compliance with both federal and state 

regulations is a physical impossibility.”129 

Regardless of form, the actual preemptive order is based 

on judicial analysis of federal legislative intent. 

In its earliest applications, the Supreme Court tended 

to perceive “broad preemptive intent in virtually all federal legi~lation.”’~~ Such complete deference to federal regulatory authority, however, was replaced, during the 

1930s, with an approach more solicitous of state interests. 

Thus, the Court required that “preemptive intent be 

‘clearly indicated’ and ‘definitely expressed’ within . . . statutory language.”131 In the absence of clear delineation 

of congressional purpose, state law stood. 

The 1940s saw yet another change in the judicial attitude. Thus, in Hines v. Davido~itz,’~~ the Supreme Court 

asserted: 

There is not . . . any rigid formula or rule which 

can be used as a universal pattern to determine 

the meaning and purpose of every act of Congress. . . . [The judiciary’s] primary function is to 

determine whether, under the circumstances of 

[a] particular case, [a state] law stands as an obstacle to the accomplishment and execution of 

the full purposes and objectives of Congress.133 

In fact, the Hines standard was “so broadly phrased and inherently adaptable that congressional intent to preempt 

could be found in virtually any area of comprehensive federal legi~lation.”’~~ 

Although Hines remains controlling in many respects, 

the Court has sought, in recent years, to narrow the standards by which a federal preemption may be presupposed, 

exhibiting a general unwillingness to supersede state action under the ambiguous circumstances of vague congressional intent.13s As early as 1963, the Court began to 

espouse the position 

that federal regulation of a field of commerce 

should not be deemed preemptive of state regulatory power in the absence of persuasive reasonseither that the nature of the regulated subject 

matter permits no other conclusion, or that Congress has unmistakably so 

Moreover, the Court has relied increasingly on the relatively simple “dual compliance” mode of preemptive analysis, inquiring less whether a state action frustrates some 

broad congressional purpose and more whether conformity with both federal and state law is literally impo~sible.’~’ 

Recent case law in the field of nuclear regulation is illustrative of contemporary Court doctrine. 

In English v. General Electric Company,13s a unanimous 

Court held that a nuclear facility employee may sue for 

state tort relief despite federal preemption of the “entire 

field of nuclear safety concerns.”139 Although Section 210 

of the Energy Reorganization Act of 1974 grants a federal 

administrative remedy to aggrieved nuclear employees, 

the Court refused to rule that the section preempted state 

remedies, noting that the fact that “every subject that 

merits congressional legislation is, by definition, a subject 

of national concern . . . cannot mean . . . that every federal 

statute ousts all related state law. . . .”140 

To a considerable extent, the English decision followed the logic espoused in two earlier cases of nuclear-related litigation: Silkwood v. Kerr-McGeet41 and 

Pacific Gas & Electric Company v. State Energy Resources 

Conservation and Development Comrni~sion.’~~ The former 

case revolved around the decedent claim of Karen Silkwood, who was allegedly contaminated by plutonium 

while a Kerr-McGee employee. Specifically before the 

Court was Kerr-McGee’s contention that federal law 

preempted the state-authorized award of punitive damages for conduct related to radiation hazards. Given that 

the Court had previously recognized congressional occupation of the field of nuclear safety,143 Silkwood required a 

deft judicial balance between “the States’ traditional authority to provide tort remedies to their citizens and the Federal 

Government’s express desire to maintain exclusive regulatory authority over the safety aspects of nuclear power.”144 

In Silkwood, the Court tipped the scales toward 

long-standing state prerogatives. Despite near-exclusive 

federal guardianship over the nuclear industry, the Court 

80 U.S. Advisory Commission on Intergovernmental Relations 
interpreted congressional silence on remedies for radiation injuries, together with a failure to provide federal 

remedies to persons injured by corporate nuclear misconduct, as sufficient sanction for state-authorized redress. 

The upshot of both Silkwood and EngZish is that “even con- gressional goals that are tightly-stated will be interpreted 

narrowly when testing traditional forms of state action for 

conflict with those goals.”145 

At issue in Pacific Gas was a California moratorium on 

certification of new nuclear plants pending development 

of means to dispose of high-level radioactive waste. 

Preemptive conflict in the case emerged “from the inter- section of the Federal Government’s efforts to ensure 

that nuclear power is safe with the exercise of the historic 

state authority over the generation and sale of electricit~.”l~~ Again, a unanimous Court deferred to traditional 

state authority, noting that although federal preemption 

of the field of nuclear safety is complete, the state’s eco- nomic rationale for the plant stoppage lay outside the fed- erally occupied field. Moreover, the justices declined to 

give a broadly preemptive reading to the Atomic Energy 

Act’s implied purpose of promoting the nationwide use of 

nuclear power. Rather, the Court asserted that had the 

Congress intended to develop nuclear generation “at all 

it would have specifically barred state actions 

prohibiting its utilization. 

Whatever current Court doctrine, preemption re- mains a mine field of shifting standards, difficult for even 

the most astute constitutional scholars to pinpoint with 

unerring accuracy or to “reduce . . . [to] general formula~.’’~~~ One commentator places preemptive decisions within the general judicial ambit of balancing essential interests, 

noting that the courts will infer a “heavy presumption against 

preemption” where state law is seen as safeguarding the “vital interests of state citizens.”149 Another places supersession 

doctrine within a broadly historical/ideological context, arguing that preemption is far more likely to be deduced when 

the Court adheres to a generally nationalistic philosophy 

than when its prevailing tendency is to view “state and feder- al governments as partners.”15o 

It is at least possible to assume that the Supreme 

Court’s present inclination to defer to traditional state in- terests is a politically appropriate and philosophically accountable response to Garcia. Hence, 

By declining to infer preemption in the face of 

congressional ambiguity, the Court is not interposing a judicial barrier to Congress’ will in order 

to protect state sovereignty-an interposition 

that would violate Garcia-but is instead furthering the spirit of Garcia by requiring that decisions 

restricting state sovereignty be made in a deliberate manner by Congress, through the explicit exercise of its lawmaking power to that end. . . . [T]o 

give the state-displacing weight of federal law to 

mere congressional ambiguity would evade the 

very procedure for lawmaking on which Garcia 

relied to protect state 

Viewed another way, to make the judiciary-“the organ of the federal government most insulated from state 

influence and the organ traditionally most feared by the 

states”lS2-the primary locus of preemptive decisions 

would seem to be at the least inconsistent with the prernise of Garcia, at the most, a rather cynical and draconian 

judicial ploy. On such an understanding, the Court’s current approach to preemption may be seen as ideologically 

consistent with Garcia’s assumptions of national political 

aegis. Indeed, in the post-Garcia climate, of potentially 

greater philosophical concern than preemption, with its 

basic congressional and thus “political” foundation, may 

be the wholly court-centered dormant commerce clause. 

Judicial Power 

and the Dormant Commerce Clause 

[Tlhe nature and scope of the negative function 

of the commerce clause . . . is not the simple, 

clean-cutting tool supposed. Nor is its swath always correlative with that cut by the affirmative 

edge, as seems to be assumed. For clearly as the 

commerce clause has worked affirmatively on the 

whole, its implied negative operation on state 

power has been uneven, at times highly variable. 

More often than not, in matters more governable 

by logic and less by experience, the business of 

negative implication is slippery. . . . [Tlhe history 

of the [dormant] commerce clause has been one 

of considerable judicial oscillation. 153 

Although dormant commerce clause theorylS4 is not, 

strictly speaking, a doctrinal offshoot of preemption, it often 

is considered a constitutional kissin’ cousin. Hence, while 

preemption challenge[s] involve . . . questions of 

congressional intent in light of the delicate interrelationships between federal and state power, . . . dormant commerce clause challenge[s] involve . . . state regulation[s] alleged to be repugnant to the 

federal government’s enumerated powers. . . .lS5 

In either case, the outcome may diminish state activity 

by virtue of federal judicial order. Where the judicial role 

in preemption cases may be that of mediating congressional intent, in dormant commerce clause litigation, it rises 

to the status of constitutional conductor, for the dormant 

commerce clause assumes no particular congressional role, 

inferring, rather, that “the commerce clause, by its own 

force, prohibits discrimination against interstate commerce, 

whatever its form or method. . . .”lS6 (Emphasis added.) 

Specifically, dormant commerce clause theory prcsumes to avert the “economic balkanization of the United 

States . . . , ”lS7 by virtue of the self-bestowed court power 

to determine whether a state regulation, in the absence of 

any congressional action in the area, impedes the flow of 

interstate commerce.158 In such cases, the courts look to 

“the nature of the state regulation involved, the objective 

of the state, and the effect of the regulation on the nation- al interest in Thus, “the courts. . . make. . . what amount to . . . intrinsically legislative determination[~] as to whether a particular type of commerce requires exclusive regulation.’7160 Thebottom line, according 

to Laurence Tribe, appears to be: 

U.S. Advisory Commission on Intergovernmental Relations 81 
Even judges.. . ordinarily hesitant about federal judicial intervention into legislative choice 

tend to support a relatively active role for the 

federal judiciary “when the centrifugal, isolating or hostile forces of localism are manifested 

in state legislation.”’61 

Sample Cases. Illustrative of the Supreme Court’s 

contemporary approach to dormant commerce clause issues is Tyler Pipe v. Washington.162 At issue in Tyler was a 

state manufacturing tax that partially exempted local 

manufacturers selling intrastate. That exemption was 

found to discriminate against manufacturers engaged in 

interstate commerce.163 Significantly, the Court overruled 

a previous decision upholding the same state tax,164 now 

applying to state taxation schemes generally “ ‘what might 

be called internal consistency-that is the taxmust be such 

that, if applied by every jurisdiction,’ there would be no 

impermissible interference with free trade.”’65 

Although dormant commerce clause analyses contain 

a strong presumption against discriminatory activity, 

courts have not been entirely unsympathetic to local preference schemes. Indeed, starting in 1976, the Court began 

fashioning a “market participant” exception to the dormant commerce clause. In Hughes v. Alexandria Scrap,la 

for instance, the Court ruled that where a state acts not as 

a regulator, but as a “purchaser, in effect,”16’ it frees itself 

from dormant commerce clause scrutiny, for “nothing in 

the purposes animating the Commerce Clause prohibits a 

State, in the absence of congressional action, from participating in the market and exercising the right to favor its 

own citizens over 

In Reeves, Inc. v. Stake16q and White v. Massachusetts 

Council of Construction Employers,17Q the Court further expanded its discussion of market participant immunity, reiterating and attempting to clarify the two prongs of 

Alexandria Scrap. First, a state seeking immunization must 

be analogous to a private trader, that is, it must be engaged in 

the enterprise as opposed to the regulation of commerce. 

Second, the Court again recognized the right of a state 

to act “as guardian and trustee for [its] people.”’71 Moreover, the Court acknowledged the importance of state 

“experimentation in things social and economic.”172 

Notwithstanding the above, the Court’s foray into 

market-participant immunity has proved an uneasy and 

“erratic” journey.’73 Its most recent decisions suggest possible dissatisfaction with the rule.174 Hence, in South Central Timber Development v. W~nnicke,’~~ the Court 

expressed some disquietude over its inability theretofore 

to establish “the precise contours of the market-participant doctrine. . . A plurality refused to grant an exemption to Alaska’s requirement that timber produced in 

the state (including that destined for foreign markets) be 

processed in the state. In rejecting Alaska’s claim, the 

Court noted “the presence of ‘foreign commerce, a natural resource, and restrictions on resale, . . .7 ” further asserting that the market participant “doctrine is not carte 

blanche to impose any conditions that the State has the 

economic power to dictate. . . .”177 

In New Energy Company of Indiana v. Limbach,’78 the 

Court refused to entertain Ohio’s contention that its 

award of a tax credit for ethanol manufactured in Ohio (or 

in any other state granting reciprocal credits to Ohio producers) placed it beyond commerce clause scrutiny as a 

market participant. Indeed, in a unanimous holding, the 

Court declared that the “Ohio action ultimately at issue is 

neither its purchase nor its sale of ethanol, but its assessment and computation of taxes-aprimevalgovemmental 

(Emphasis added.) Thus, a state seeking market participant immunity must be able to demonstrate a 

clear analogy “to the activity of a private purchaser.”180 

Nor were the justices sympathetic to Ohio’s claim that 

the discrimination in question was implemented on the 

basis of the state’s traditional duty to guard the health of its 

citizens. On the contrary, the Court remarked that while 

the protection of health is a legitimate state goal, 

. . . there is no reason to suppose that ethanol 

produced in a State that does not offer tax advantages to ethanol produced in Ohio is less healthy, 

and thus should have its importation into Ohio 

suppressed by denial of the otherwise standard 

tax credit.18’ 

Critics’ Questions. Market-participant exemption or 

no, the dormant commerce clause remains a theoretically 

uncertain basis for judicial regulation of state action. The 

Court itself has not infrequently acknowledged its own 

tendency to oscillate where the negative implications of 

the commerce clause are asserted. 

Its more severe critics attribute such vacillation to 

the obscure, if not nonexistent, constitutional foundations of the doctrine. For instance, Martin Redish and 

Shane Nugent maintain that “there is no dormant commerce clause to be found within the text or textual structure of the Constitution”:’82 

Ultimately, we conclude that the dormant commerce clause is invalid because it reverses the political inertia established by the Constitution. 

Under the dormant commerce clause, the federal 

judiciary . . , makes the initial legislative judgment 

whether state regulation of interstate commerce 

is reasonable. If the Court strikes down economic 

regulations, the states must somehow force Congress to reverse the decision of the Court through 

legislation-a process made difficult because of 

Congress’s inherent political inertia. Our historical and textual analyses lead us to conclude that 

this is clearly not the plan of the Con~titution.”~ 

More significant, in a recent and vigorous dissent, Justice Scalia called into question the clause’s jurisprudential 

logic, constitutional validity, and practical outcomes: 

It takes no more than our opinions this Term. . . to demonstrate that the practical results we have 

educed from the so-called “negative” Commerce 

Clause form not a rock but a “quagmire.” Nor is 

this a recent liquefaction. The fact is that in the 

82 U.S. Advisory Commission on Intergovernmental Relations 
114 years since the doctrine of the negative Com- merce Clause was formally adopted as holding of 

this Court, and in the 50 years prior to that in 

which it was alluded to in various dicta of the 

Court, our applications of the doctrine have, not 

to put too fine a point on the matter, made no 

sense. . . . The historical record provides no 

grounds for reading the Commerce Clause to be 

other than what it says-an authorization for Congress to regulate commerce. . . . [TI0 the extent that 

[the Court has] gone beyond guarding against 

rank discrimination against citizens of other Sta- tes-which is regulated not by the Commerce 

Clause but by the Privileges and Immunities 

Clause-the Court for over a century has engaged in an enterprise that it has been unable to 

justify by textual support or even coherent nontextual theory, that it was almost certainly not 

intended to undertake, and that it has not under- taken very well.184 (Emphasis added.) 

Despite Justice Scalia’s admonition that original judi- cial regulation of state activity under a congressional grant 

of power maybe constitutionally dubious, it is unlikely that 

the Court will soon reject (nor is it by any means universally conceded that the Court should reject)its dormant commerce clause jurisdiction. 

Granted, the market participant exemption may reflect “a conscious choice by the Court to limit the reach of 

the dormant commerce clause in order to protect important state however, the doctrine remains relatively nascent and untested. Moreover, the “mix of 

justifications” employed for its application-“the sensed 

rightness that citizens comprising political units may dispense their own property as they see fit; the values in a 

federalist system of facilitating local experimentation and 

differentiated responses to different local needs; the reduced risk that marketplace preferences pose to the dormant commerce clause’s goal of economic nationalism; 

and formal and institutional considerations counseling ju- dicial restraint in this distinctive setting”186-may signal a 

particular instance of the sort of general dormant commerce clause confusion that has so dogged Court and commentators alike. Hence, while market participant immUnity 

may allow the post-Garcia Court to extricate itself somewhat 

from the problems that the dormant commerce clause presents for the “political safeguard” theory of federalism, its 

practical manifestations remain to be seen.”’ 

The Negative Impact 

of the Fourteenth Amendment 

The federal courts have long employed the Fourteenth Amendmentla and its derivative legislationlW as a 

means to implement equal protection and due process 

claims against state and local Ironically, in 

recent years, they have not been averse to using the same 

constitutional foundation to strike down local raceconscious 

rernedies.lg1 Of particular interest in this regard is the 

Court’s ruling in City of Richmond v. LA. Cro~on.~~* 

At issue in Croson was a 1983 Richmond city ordinance 

requiring prime contractors to whom the city awarded construction contracts to subcontract at least 30 percent of the 

dollar amount of the contract to one or more minority busi- ness enterprises (MBEs). It is important to note that the 

city’s plan was not unique. Richmond, like numerous juris- dictions across the country, had been encouraged to imple- ment such programs when the Supreme Court upheld a 

similar congressional plan in 1980.193 

Although Croson is difficult to unravel, due in large 

part to the multiple opinions, it is significant because of 

the Court’s distinction between federal and state remedial 

powers. Hence, the Court had upheld the earlier congres- sional plan, despite any findings of specific discrimination, 

because it approached its decisional task “with appropriate deference to Congress [as] a co-equal branch. . .”lg4 

and because it found the Congress to have “unique remedial powers under Section 5 of the 14th Amendment”:19s 

(emphasis added) 

Here we deal . . . not with the limited remedial 

powers of a federal court, for example, but with 

the broad remedial powers of Congress. It is fundamental that in no organ of government, state or 

federal, does there repose a more comprehensive remedial power than in the Congress. . . .Ig6 

Nevertheless, the city and its supporting arnici,l9’ 

asked the Court to treat Richmond’s plan with the same 

respect it had accorded the congressional set-aside, argu- ing that, “It would be a perversion of federalism to hold 

that the federal government has a compelling interest in 

remedying the effects of racial discrimination in its own 

public works program, but a city government does 

Because the [fourth circuit] court of appeals in 

this case has imposed on state and local governments more exacting requirements than Fullilove 

applied to the federal government, state and local 

governments face an unjustified double standard. 

The federal government, in the exercise of its 

spending power, is permitted to prescribe remedies for past discrimination that apply in every 

state and every municipality. But in identical circumstances, state and local governments-with 

their vastly greater familiarity with local history 

and conditions-are disabled from acting shnilarly to remedy discrimination.1w 

In her opinion, Justice O’Connor rejected the municipal claim, pointedly reminding states and localities that: 

The Civil War Amendments. . . worked a dramatic 

change in the balance between congressional and 

state power over matters of race. . . . That Con- gress may identify and redress the effects of miU.S. Advisory Commission on intergovernmental Relations 83 
ety-wide discrimination does not mean that, a 

fortiori, the State[s] and their political subdivisions 

are free to decide that such remedies are appropri- ate. Section 1 of the Fourteenth Amendment is an 

explicit constraint on state power, and the States 

must undertake any remedial efforts in accordance with that provision. To hold otherwise 

would be to cede control over the content of the 

Equal Protection Clause to the 50 state legisla- tures and their myriad political subdivisions.200 

Despite the Court’s continuing ambivalence on the 

subject of affirmative action, Croson would appear toplace 

significant hurdles in the way of state and local jurisdictions hoping to implement remedial programs. The opin- ion strongly suggests that these governmentsback up such 

plans with very specific documentation of past de jure discrimination.2°1 Such rigorous documentation, however, 

may prove a perilous undertaking because “specific admission of past discrimination could expose a state or local 

government to liability in damages. . . .”M2 Ironically, “re- quiring such an admission [may] . . . deter voluntary efforts to eradicate the effects of past di~crimination.”~~~ 

In the absence of demonstrable proof, the Court will 

probably sanction only set-aside programs employing 

race-neutral criteria such as those aimed at “economically 

and socially disadvantaged persons.”m4 Apparently, even 

if such race-neutral plans “disproportionately aid a particular minority group, they do not violate the equal protection clause unless a plaintiff can prove that they were 

adopted with the intent to discriminate against a particular 

racial or ethnic group.”2os (Emphasis added.) 

Finally, it is possible, though by no means certain, that 

state and local jurisdictions may still be able to implement 

somewhat attenuated race-conscious remedies if such 

programs do not employ criteria that the Court might interpret as “rigid numerical q~ota[s],”~~ but rather only require “special efforts to contact minority group~.”~~~ 

Conclusion 

Whether as legislative facilitator or constitutional 

bellwether, the federal judiciary can have a profound im- pact on independent state action, limiting state and local 

power under the imperatives of Article I, Section 8 and the 

Fourteenth Amendment. There is, however, an affirmative regulatory side to the long-standing relationship be- tween the federal courts and the state political branches. 

That concept will be explored in detail in the next chapter. 

NOTES 

Dan T. Coenen, “Untangling the Market Participant Exemp 

tion to the Dormant Commerce Clause,” Michigun Law Re- view 88 (1989): 395-396. 

426 U.S. 833 (1976). 

See also John Kincaid, “Constitutional Federalism: Labor’s 

Role in Displacing Places to Benefit Persons,” PS: Political Sci- ence and Politics 26 (June 1993): 172. 

bid. 

Justice Rehnquist was joined in his opinion by Chief Justice 

Burger and Justices Blackmun, Powell, and Stewart. Justice 

Blackmun filed a separate concumng opinion. 

6Bruce La Pierre, “Political Accountability in the National Po- litical Process: The Alternative to Judicial Review of Federalism Issues,” Northwestern University Law Review 80 (1985): 587. 

7National League of Cities v. Marshall, 429 E Supp. 703 (1977). 

‘The majority thus asserted: “[we express no view as to whether different results might obtain if Congress seeks to affect in- tegral operations of state governments by exercising authority 

granted it under other sections of the Constitution such as the 

spending power, Art. I, sec. 8, cl. 1, or sec. 5 of the Fourteenth 

Amendment. . . [or] under its war power.” National League of 

Cities v. Usery, 426 US. 833 at 852, n. 17 and 18. 

La Pierre, “Political Accountability,” p. 588, citing426 U.S. 833 

at 856 (Blackmun, J., concumng). 

lo For instance, in 1979, the Department of Labor issued FLSA 

regulations extending wage and hour requirements to certain 

“nontraditional“ state and local functions, including local 

mass transit systems. Indicative of the legal confusion engendered byNationalLeagueofCitieswas the fact that theregulations were upheld in Georgia (Joiner v. Macon, 699 E 2d. 1060, 

11th Cir., 1983 and Alewine v. Augusta, 699 E 2d 1060, 11th 

Cir., 1983), Delaware (Kramer v. New Castle Transit Authority, 677 E 2d 308,3rd Cir., 1982), and Tennessee (Dove v. Chattanooga Transit Authority, 701 E 2d 50, 6th Cir., 1983); but 

were found unconstitutional in Texas (San Antonio v. Donovan, 557 E Supp. 445, D.C.W.D. TX, 1983) and Puerto Rim 

(Molina-Estrada v. Puerto Rico Highway Authority, 680 E 2d 

841, lst Cir., 1982). Moreover, La Pierre notes that in a “survey 

of the 200 cases decided between 1976 and 1982. . . , apart from 

cases holding the FLSA unconstitutional. . . , only a handful of 

courts ever held a national statute unconstitutional under 

NLC. Most of these judgments were subsequently reversed or 

discredited. As of June 1, 1982, there were only two reported, 

outstanding judgments that a national statute was unconstitutional under NLC.” La Pierre, “Political Accountability,” p. 

581. 

“452 US. 264 (1981). 

l2 Garcia v. San Antonio Metropolitan Transit Authority, 469 

l3 Ibid., p. 528. 

l4 Prior to 1985, lower courts had held that the following were 

protected under NLC: regulating ambulance services (Gold 

Cross Ambulance v. Kansas City, 538 E Supp. 956, WD Mo., 

1982), licensing automobile drivers (US. v. Best, 573 E 2d 

1095, CA9,1978), operating a municipal airport (Amersbach v. 

Cleveland, 598 E 2d 1033, CA6, 1979), performing solid waste 

disposal (Hybud Equipment v. Akron, 654 E 2d 1187, CA6, 

1981) and operating a highway authority (Molina-Estrada v. 

Puerto Rim Highway Authority, 680 E 2d 841, CA1, 1982). 

However, the courts found that the following activities were 

not entitled to NLC protection: issuance of industrial develop 

ment bonds (Woods v. Homes and Structures of Pittsburg, 

Kansas, 489 E Supp. 1270, Kan., 1980), regulation of intrastate 

natural gas sales (Oklahoma ex rel. Derryberry v. Federal En- ergy Regulatory Commission, 494 E Supp. 636, WD Okla, 

1980), regulation of traffic on public roads (Friends of the 

Earth v. Carey, 552 E 26 25, CA2,1975), regulation of air trans- portation (Hughes Air Corp. v. Public Utilities Commission of 

California, 644 E 2d 1334, CA9, 1981), operation of a teleU.S. 528 at 546 (1985). 

84 U.S. Advisory Commission on Intergovernmental Relations 
phone system (Puerto Rim Telephone Co. v. Federal Commu- nications Commission, 553 E 26 694, CA1,1977), leasing and 

sale of natural gas (Public Service Company of North Carolina 

v. Federal Energy Regulatory Commission, 587 E 2d 716, CA5, 

1979), operation of a mental health facility (Williams v. 

Eastside Mental Health Center, 699 E 26 671, CA11, 1982) 

and provision of domestic services for the elderly and handi- capped (Bonnette v. California Health and Welfare Agency, E 

26 1465, CA9, 1983). 

lS Justice Blackmun, whose concurrence in National League of 

Cities provided the majority in the earlier case, was joined in 

his Garcia opinion by Justices Brennan, White, Marshall, and 

Stevens. Justice Powell filed a dissenting opinion in which 

Chief Justice Burger and Justices Rehnquist and O’Connor 

joined. Justice Rehnquist filed a separate dissenting opinion, 

as did Justice O’Connor, in which Justices Powell and Rehnquist joined. 

l6 469 US. 528 (1985). 

I’Ibid., p. 547. 

“Columbia Law Review 54 (1954): 543. 

l9 Jesse Choper, Judiciul Review and the National Political Pmess 

(Chicago: University of Chicago Press, 1980.) 

469 U.S. 528 at 552. Specifically, Blackmun mentioned that: 

Apart from the limitation on federal authority inherent in the 

delegated nature of Congress’ Article 1 powers, the principle 

means chosen by the Framers to ensure the role of the States 

in the federal system lies in the structure of the Federal Government itself. . . . The Framers thus gave the States a role in 

the selection both of the Executive and Legislative Branches 

of the Federal Govemment.The States were vested with indirect influence over the House of Representatives and the Presidency by their control of electoral qualifications and their role 

in Presidential elections.. . . They were given more direct influ- ence in the Senate, where each state received equal representation and each Senator was to be selected by the legislature of 

his state. Ibid., pp. 550-551. Ironically, Blackmun cited as his 

main evidence for the continuing significant influence of the 

states their ability to extract substantial financial assistance 

from Congress (ibid., p. 552), neglecting to make note of regulations attached to such spending that have further contributed to congressional dominance over state functions during 

the latter twentieth century. For a discussion of the spending 

power, see “The Spending Power in the Courts,” pp. VI-10 to 

VI-u. 

21 Ibid., p. 565, footnote 9 (Powell, J., dissenting), citing U.S. Advisory Commission on Intergovernmental Relations, Regulatory 

Federalism Policy, Process, Impact and Reform (Washington, 

DC, 1984), p. 50. 

22U.S. v. Darby, 312 U.S. 100 (1941). 

23 469 U.S. 528 at 560 (1985). 

24 Ibid., p. 580 (O’Connor, J., dissenting). 

25 Ibid. (Rehnquist, J., dissenting). 

=For some examples, see Dorothy Lowe Boardman, “Com- ment: National League of Cities Overruled,” Florida State University Law Review 13 (1985): 277; Martha A. Field, “Garcia v. 

San Antonio Metropolitan Transit Authority: The Demise of a 

Misguided Doctrine,” Harvard Law Review 99 (1985): 84; A.E. 

Dick Howard, “Garcia and the Values of Federalism: On the 

Need for a Recurrence to Fundamental Principles,” University 

ofGeorgia Law Review 19 (1985): 788, and “Garcia: Of Federal- ism and Constitutional Values,” Publius: The Journal of Federalism 16 (Summer 1986):17; Lawrence A. Hunter and Ronald 

J. Oakerson, ‘an Intellectual Crisis in American Federalism,” 

Publiw: The Journal of Fedemlism 16 (Summer 1986): 33; La 

Pierre, “Political Accountability”; Bernard Schwartz, “Na- tional League of Cities Again: R.I.P. or a Ghost that Still 

Walks?” Fordham University Law Review 54 (1986): 141; Ste- phen L. Smith, “State Autonomy after Garcia: Will the PoIiticalProcess Protect States’Interests?”ZowaLawReview71 

(1985): 1527. 

27Schwartz, “National League of Cities Again,’’ p. 150. 

28 469 US. 528 at 550, citing Madison, Fedemlist No. 39, p. 285, 

Benjamin E Wright, ed. (Cambridge, Massachusetts: Belknap 

Press, Harvard University Press, 1961). 

Ibid., citing James Wilson, 2 Elliot 438-439. 

mIbid., p. 551, citing Madison, Fedemlist No. 46, p. 332 

31 Ibid., p. 568 (O’Connor, J., dissenting). 

321bid., p. 570. 

33 Ibid., p. 570-571, citing Madison, Fedemlist No. 45, p. 313. 

34As Justice Blackmun noted in his Garcia opinion, “to say that 

the Constitution assumes the continued role of the States is to 

say little about the nature of that role.” Ibid., p. 550. Recently, 

it has been suggested that the Court may be able to reconcile 

the inevitable tug-of-war between state autonomy and federal 

power by reference to the guarantee clause in Article IV, Sec- tion 4 of the Constitution. In relevant part, that section “guar- antee[~] to every State in this Union a Republican Form of 

Government.” It has been suggested that no state can maintain a 

republican government without sigruficant autonomy. Under 

such understanding, the Tenth Amendment simply reinforces the 

federal principle stated in the guarantee clause. See for example, 

Justice OConnor‘s dirsent in South Carolina v. Baker, 485 U.S. 

505 (page 76 and note 80, this chapter). See also Deborah J. Merritt, ‘The Guarantee Clause and State Autonomy Federalism for 

a Third Century,” Columbia Law Review 88 (1988): 1. 

35469 US. 528 at 585 (O’Connor, J., dissenting). 

36 Howard, “Garcia and the Values of Federalism,” p. 790. 

37 Field, “Garcia v. San Antonio Metropolitan Transit Authority.” 

38 469 U.S. 528 at 582 (O’Connor, J., dissenting). 

39 Schwartz, “National League of Cities Again,” p. 150. 

40 Howard, “Garcia and the Values of Federalism,” p. 791. On 

this point, see also Schwartz, “National League of Cities 

Again,” p. 157-158. 

41469 U.S. 528 at 556. 

42 Choper, Judicial Review and the National Political Process, p. 

43 Ibid., pp. 201-202. 

“Like the Court, Choper enumerates the structural features of 

the national political process likely to preserve state autonomy: the Senate, the House, electors, national representatives, 

the presidency, and the intergovernmental lobby. Ibid., pp. 

176-84. 

451n Fedemlist No. 78, Hamilton makes much of the vulnerable 

position of theindividual exposed to the “occasional ill humors 

of society” and the important role of the judiciary in tempering 

liberty endangering majoritarian passions. 

175. 

&Smith, “State Autonomy after Garcia,” p. 1528. 

47 Howard, “Garcia and the Values of Federalism,” p. 792. 

bid. 

49 Ibid., p. 792-793. 

Ibid. 

51 Ibid. 

US. Advisory Commission on Intergovernmental Relations 85 
52Timothy M. Conlan et al., “State Parties in the 198Os,” Znter53 Cynthia Cates Colella, “Intergovernmental Aspects of 

54See, for example, Schwartz, “National League of Cities 

55Ho~rd, “Garcia and the Values of Federalism,” p. 797. 

56 “The Supreme Court 1987 Term: Leading Cases: I. Constitu- tional Iaw,” Hmud Law Review 102 (1988): 232, Citing An-j 

Rapamski, “From Sovereignty to Process: The Jurisprudence of Federalism after Garcia,” 1985 Supreme Court Re- view, p. 419. 

57During that time, Justices Scalia and Kennedy were added to 

the Court’s membership. 

58485 U.S. 505 (1988). See also, Margaret T. Wrightson, “The 

Road to South Carolina: Intergovernmental Tax Immunity 

and the Constitutional Status of Federalism,” Publius: 777e 

Journal of Federalism 19 (Summer 1989): 39. 

governmental Penpective 10 (Fall 1984): 23. 

FECA,” Intergovernmental Perspective 10 (Fall 1984): 18. 

Again,” and Smith, “State Autonomy after Garcia” 

59 26 U.S.C. Section 103 (1982). 

60Section 310@)(1). Unregistered or so-called bearer bonds be- came the focus of congressional attention because they leave 

“no paper trail and thus facilitate. . . tax evasion.” 485 U.S. 505 

at 507. 

The doctrine restricts the power of state and federal govern- ments to tax one another. Pollock v. Farmers’ Loan & Trust 

Co., 157 U.S. 429 (1895). 

62 Justice Brennan delivered the opinion of the Court, in which 

Justices White, Marshall, Blackmun, and Stevens joined, and 

in which Justice Scalia joined except for Part 11. Justice Stevens 

filed a concumng opinion. Justice Scalia filed an opinion concumng in part and concurring in the judgment. Chief Justice 

Rehnquist filed anopinion concumngin the judgment. Justice 

OConnor filed a dissentingopinion. Justice Kennedy took no 

part in the case. 

63 The state argued that “even though almost all state bonds were 

issued in bearer form before [the law] became effective, since 

then no state has issued a bearer bond.” 485 U.S. 505 at 510. 

641bid, p. 515. 

6s bid. 

66Erceptions of the National Govemors’hociation to the Report 

of the Special Masterand Brief in Support ThewfNo. 94,Original, May 9, 1987. 

67485 U.S. 505 at 517. 

6s Ibid., p. 518. 

69 See note 60. 

485 U.S. 505 at 533. The Court thus explicitly overruled its previous understanding of intergovernmental tax immunity in 

Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429 (1895). 

71 “The Supreme Court 1987 Term,” p. 227. 

72 Hence, the Court asserted in Garcia that “the status of public 

mass transit simply underscores the extent to which the structural protections of the Constitution insulate the States from 

federally imposed burdens.” It went on to note that the federal 

government, in addition to imposing regulatory requirements, 

had provided billions of dollars in transit aid to the states. 469 

U.S. 528 at 555. 

73 Field, “Garcia v. San Antonio Metropolitan Transit Authority,” p. 89. 

74N~te that Justice Rehnquist, in his concurrence, simply accepts at face value the Special Master’s conclusion that Section 

310 (b)(l) of TEFRA would have “a de minimis impact on the 

States. . . .” 485 U.S. 505 at 539 (Rehnquist, C.J., concurring). 

”bid., p. 515. 

76 “The Supreme Court 1987 Term,” p. 228. 

77485 U.S. 505 at 513. 

78 Ibid., p. 514. 

79 Cf., Metcalf &Eddyv. Mitchell, 269 U.S 514 at 521 22(1926), in 

which the Court asserted that obligations sold to raise public 

funds. . . are all so intimately connected with the necessary 

functions of government, as to fall within the established exemption; and when the instrumentality& of that character, the 

immunity extends not only to the instrumentality itself but to 

income derived from it. . . .” Cited in Hmard Law hiew 102 

(1988): 230. 

8o 485 U.S. 505 at 542 (O’Connor, J., dissenting). 

81 Ibid. The guarantee clause in Article N, Section 4states: “The 

United States shall guarantee to every State in this Union a 

Republican Form of Government, and shall protect each of 

them against Invasion; and on application of the Legislature, 

or of the Executive. . . against domestic violence.” See note 33. 

82485 U.S. 505 at 539 (Rehnquist, C.J., concurring). 

83 Harvard Law Review 102 (1988): 23 1. 

84 Ibid. “The special master agreed with South Carolina that the 

forfeiture of tax-exempt status would require states and localities to increase the interest paid on their obligations significantly. . . . It has been estimated that the bond interest 

exemption reduced state borrowing costs by $4.713 billion in 

1985.” Ibid., citing Motion for Leave to file Complaint, Complaint, and Supporting Brief, South Carolina v. Regan, 466 

U.S. 948 (1984). 

85Laurence Tribe, American Constitutional Law (2d ed.) 

(Westbury, New York: Foundation Press, 1988), p. 381, cited in 

485 U.S. 505 at 546 (O’Connor, J., dissenting). 

86426 U.S. 833 at 852, n. 17 (1976). 

87M~~achu~ett~ v. Mellon, 262 US. 447(1923). The conditional 

spending power allows the Congress to attach qualifications 

and/or requirements to federal grants. 

Pennhurst State School and Hospital, 451 U.S. 1 at 17 (1981). 

For a more complete discussion see ACIR, Regulatory Fedemlism, pp. 30-31 and 40-44. 

Named Individuals of the San Antonio Conservation Society 

v. Texas Highway Department, 446 E 2d 1013 at 1028 (5th Cir. 

1971). 

Macon v. Marshall, 439 E Supp. 1209 at 1217 (M.D. Ga. 1977). 

91 North Carolina v. Califano, 445 E Supp. 532 at 535 (E.D.N.C. 

1977) aff’d. 435 US. 962 (1978). See also Fullilove v. Klutmick, 

448 U.S. 448 (1980); Lau v. Nichols, 414 US. 563 (1974); Ivanhoe Imgation District v. McCracken, 357 US. 275 (1958); 

Oklahoma v. Civil Service Commission, 330 U.S. 127 (1947); 

Steward Machine Co. v. Davis, 301 U.S. 548 (1937); and United 

States v. Butler, 297 U.S. 1 (1936). 

92 Albert J.Rosenthal, “Conditional Federal Spending and the 

Constitution,” Stanford Law Review 30 (1987): 1108. 

93 Ibid., p. 1108-09. 

94 The present text does not claim to do justice to this large and 

complex subject. See John D. French, “Unconstitutional Con- ditions: An Analysis,” Georgetown Law Journal 50 (1961): 234; 

Seth E Kreimer, “Allocational Sanctions: The Problem of 

Negative Rights in a Positive State,” University of Penmylvania 

86 U.S. Advisory Commission on Intergovernmental Relations 
Law Review 132 (1984): 1293; Rasenthal, “Conditional Federal 

Spending and the Constitution”; and William W. Van Alstyne, 

“The Demise of the Right Privilege Distinction in Constitutional Law,” Harvard Law Review 81 (1968): 1439. 

95 Rosenthal, “Conditional Federal Spending and the Constitu- tion,” p. 1120. 

96D~yle v. Continental Insurance Company, 94 U.S. 535 (1876), 

overturned in Terra1 v. Burke Construction Company, 257 

US. 529 (1922). 

97 See, for example, Frost & Frost Truckingv. Railroad Commis- sion, 271 U.S. 583 (1926). 

’‘Van Alstyne, “The Demise of the Right-Privilege Distinction 

in Constitutional Law,” p. 1446. See especially, Frost & Frost 

Truckingv. Railroad Commission, 271 U.S. 583 at 594(1926)in 

which the Court held that: If the state may compel the surren- der of one constitutional right as a condition of its favor it may 

in like manner compel a surrender of all. It is inconceivable 

that guaranties embedded in the Constitution of the United 

States may thus be manipulated out of existence. 

99 See, for example, Federal Communications Commission v. 

League of Women Voters, 468 U.S. 364 (1984) in which the 

Court held unconstitutional an editorial prohibition against 

broadcasters receiving funds from the Corporation for Public 

Broadcasting. 

loo 483 U.S. 203 (1987). 

“‘23 U.S.C. Section 158 (Supp. I1 1984). See also Sarah E Liebschutz, “The National Minimum Drinking Age Law,” Publius: 

The Journal of Fedendism 15 (Summer 1985): 39-51. 

‘‘’The National Minimum Drinking Age Act is an example of 

what ACIR termed a “crossover sanction,” one which threat- ens “the termination or reduction of aid provided under one or 

more specified programs unless the requirements of another 

program are satisfied.” ACIR, Regulatory Federalism, p. 8; see 

alsop. 43. Interestingly, the Dole majority found that the minimum age requirement was reasonably related to the purposes 

of the Surface Transportation Assistance Act (see text follow- ing), although the dissent demurred: “[Congress] is not entitled to insist as a condition of the use of highway funds that 

the State impose or change regulations in other areas of the 

State’s social and economic life because of an attenuated or 

tangential relationship to highway use or safety.” 483 U.S. 203 

at 215 (1987) (O’Connor, J., dissenting). 

lo3483 U.S. 203 at 207 citing U.S. v. Butler, 297 U.S. l(1936). 

lo4 Ibid., citing Pennhurst State School and Hospital v. HaldeIo5Ibid., citing Massachusetts v. Mellon, 262 U.S. 4-44 at 461 

IMIbid., p. 208 citing Lawrence County v. Lead Deadwood 

man, 451 U.S. 1 at 17 (1981). 

(1923). 

School District, 469 U.S. 256 at 269-270 (1985). 

Ibid., p. 212 (Brennan, J., dissenting). 

lo8 Van Alstyne, “Demise of the Right-Privilege Distinction in 

Constitutional Law,” p. 1446. 

483 U.S. 203 at 210. As examples of what would now constitute 

unconstitutional conditions, the Court offered the unlikely 

possibilities of “a grant of federal funds conditioned on invidi- ously discriminatory state action or the infliction of cruel and 

unusual punishment.” 

lo James Corbelli, “Tower of Power: South Dakota v. Dole and 

the Strength of the Spending Power,” University of Pittsburgh 

Law him 49 (1988): 1115. 

483 U.S. 203 at 212 (Brennan, J., dissenting). 

Richard A. Epstein, “The Supreme Court 1987 Term; Fore- word: Unconstitutional Conditions, State Power, and the Lim- its of Consent,” Harvard Law Review 102 (1988): 44. 

Ibid., pp. 45-46. 

Ii3 Ibid., p. 45. 

115Corbelli, “Tower of Power,” p. 1117. 

‘I6 884 E 2d 445 (1989). 

The Federal Aid Highway Act was originally passed in 1916 as 

a way of directly providing the states with highway mainte- nance funds. In 1973, the act was amended to include the 

Emergency Highway Energy Conservation Act which re- quired states to post a maximum speed limit of 55 mph on in- terstate and intrastate highways. Failure to comply would be 

attended by the threatened loss of all future highway aid. In 

1987, the act was amended to allow states to post speeds of up 

to 65 mph in low populationdensity areas. 

l18Nevada v. Skinner, 884 E 2d 445 at 446. 

11’ South Dakota v. Dole, 483 U.S. 203 at 211 (1987), citing Stew- 

”O884E2d445at448. 

I2l Ibid., p. 447, footnote 2. 

ard Machine Co. v. Davis, 301 U.S. 548 at 590 (1937). 

Thomas Reed Powell, “The Still Small Voice of the Commerce 

Clause,” in 3 Sdected Essays on Constitutional Law (1938), p. 

932, cited in Laurence Tribe, Constitutional Choices 

(Cambridge, Massachusetts: Harvard University Press, 1985), 

The theory is that given the press of legislative business, Con- gress simply lacks the capacity to review and “test for compati- bility with the federal system” every state statute that may 

conflict with the commercial design of the Constitution. It 

then falls to the Supreme Court to impede the forces of local- ism, ensuring that the “inertia of government. . . [is] on the 

side of the centralizing forces of nationhood and union.” 

Tribe,American ComtitutiodLaw, p. 401, citing, in part,Emest J. Brown, “The Open Economy Justice Frankfurter and 

the Position of the Judiciary,” Yale Law Journal 67 (1957): 222. 

Gibbons v. Ogden, 9 Wheat. l(1824). For background, see also 

ACIR, Regulatory Federalism, pp. 26-28; Joseph E Zimmerman, Fedeml Preemption: The Silent Revolution (Ames: Iowa 

State University Press, 1991); and ACIR, Fedeml Statutory 

Preemption of State and Local Authon’ty: History, Inventory, and 

 issue.^ (Washington, DC, 1992). 

126The following text cannot and does not claim to do justice to 

the whole field of preemption or to the numerous additional 

judicial doctrines surrounding its implementation. For a more 

thorough discussion of preemption generally, see ACIR, Fed- eml Preemption of State and Local Government Autllorily; and 

David E. Engdahl, “Preemptive Capability of Federal Power,” 

Univemity of Colorado Law Review 45 (1973): 5 1. 

p. 34. 

124Baldwin v. G.A.E Seelig, Inc, 294 U.S. 511 at 523 (1935). 

127 See subsequent text on the dormant commerce clause. 

128 Jones v. Rath Packing Co., 430 U.S. 519(1977). Even so-called 

“express” preemptions may not be entirely free of ambiguity. 

As Rothschild notes: The doctrine of express preemption is 

easily stated. Its application, hmver, is far more problematic, 

since before an express preemption clause can be applied to 

state action, one must inquire whether the clause is truly appli- cable to the particular state action. Since an express provision 

can bar all state action to which it applies, the dispositive factor 

in such cases is whether the express preemption provision is 

applicable, by its own terms, to the particular state action at 

issue in the case. David I! Rothschild, ‘Xhped ‘Tonic’ with 

Florida Lime to Celebrate Our New Federalism: How to Deal 

US. Advisow Commission on lntereovernmental Relations 87 
with the ‘Headache’ of Preemption,” University of Miami Law 

Review 38 (1984): 843-844. 

lr,Pacific Gas and Electric Co., v. State Energy Resources Con- servation and Development Commission, 461 U.S. 190 at 

203-04 (1983). 

13’Mark King, “Federal Preemption of the State Regulation of 

Nuclear Power: State Law Strikes Back,” Chicago-K;ent Law 

Review 60 (1984): 992. 

1311bid., p. 992, citing Mauer v. Hamilton, 309 U.S. 598 at 614 

(1940) and H.P. Welsh Co. v. New Hampshire, 306 U.S. 79 at 85 

(1939). 

13*312 U.S. 52 (1941). 

133 bid., p. 67. 

134 King, “Federal Preemption of the State Regulation of Nuclear 

13’See, for example, Maryland v. Louisiana, 451 U.S. 725 (1981). 

136Florida Lime and Avocado Growers v. Paul, 373 U.S. 132 at 

1371bid. See also Rothschild, (A Proposed ‘Tonic’ with Florida 

13’ 110 S.Ct. 2270 (1990). 

14’ Ibid., p. 2279, citing Hillsborough County v. Automated Medi14’464 U.S. 238 (1984). 

14’461 U.S. 190 (1983). 

143 461 U.S. 190 at 212. 

144 464 U.S. 238 at 248. 

14’ Tribe, American Constitutional Law, p. 489. 

Ia461 U.S. 190 at 194. 

14’ Tribe, American Constitutional Law, p. 479. 

149 “Note: A Framework for Preemption Analysis,” Yde Law Journal88 (1978): 379-380. 

Willliam W Bratton, Jr., “The Preemption Doctrine: Shifting 

Perspectives on Federalism and the Burger Court,” CoZumbiu 

Law Review 75 (1975): 653. 

Power,” p. 993. 

142 (1963). 

Lime to Celebrate Our New Federalism,” p. 854. 

bid. (citation omitted) 

cal Laboratories, 471 U.S. 707 at 719 (1985). 

Ibid., p. 222. 

lS1 Tribe, American Constitutional Law, p. 480. 

15* Martin H. Redish and Shane V. Nugent, “The Dormant Com- merce Clause and the Balance of Federalism,” Duke Law Jour- nal (1987): 573. 

lS3 Prudential Insurance Company v. Benjamin, 328 U.S. 408 at 

154 In recent years, the dormant commerce clause has been the 

subject of some scholarly interest. See, for example, Julian N. 

Eule, “Laying the Dormant Clause to Rest,” Yale Law Jomal 

91 (1982): 425; Daniel A. Farber, “State Regulation and the 

Dormant Commerce Clause,” Constitutional Commentary 395 

(1986): 395; Earl M. Maltz, “How Much Regulation Is Too 

Much?” George Wmhington Law Review 50 (1981): 41; Redish 

and Nugent, “The Dormant Commerce Clause and the Con- stitutional Balance of Federalism”; Donald H. Regan, “The 

Supreme Court and State Protectionism: Making Sense of the 

Dormant Commerce Clause,” Michigan Law Review 84(1986): 

1091; Robert A. Sedler, “The Negative Commerce Clause as a 

Restriction on State Regulation and Taxation,” Wayne Law Re- view 31 (1985): 885; and Mark V. nshnet, “Rethinking the 

418-20 (1946). 

Dormant Commerce Clause,” Wkcomin Law Review (1979): 

125. 

155 Rothschild, (P. Proposed ‘Tonic’ with Florida Lime to Cele- brate Our New Federalism,” p. 840. 

156 South Carolina State Highway Department v. Barnwell Broth- ers, 303 U.S. 177 at 185 (1938). 

lS7Tmjan Technologies, Inc. v. Pennsylvania, 916 E 2d 903 at 19 

(1990) phird Cir.) 

lS8 There is considerable disagreement among courts and com- mentators about the historical basis and precise constitutional 

rationale for the dormant commerce clause. As to the histori- cal location of the doctrine, the term was first employed by 

Chief Justice Marshall in Wilson v. Black Bird Creek Marsh 

Co., 27 U.S. 245 (1829)refening to the federal ‘(power to regu- late commerce in its dormant state. . . “ (p. 252). According to 

Redish and Nugent, however, Marshall failed to provide 

“guidance as to the nature of the ‘dormant state’ present with- in the eommerceclause.” Alternatively, Justice Scaliapoints to 

allusions to the doctrine in Gibbons v. Ogden, 9 Wheat. 1 at 

209 (1824) and Cooley v. Board of Wardens, 12 How. 299 at 319 

(1852) and formal adoption of the theory by the Court in Case 

of the State Freight Tax, 15 Wall. 232 (1873). [Tyler Pipe v. 

Washington, 483 U.S. 232 at 260 (1987) (Scalia, J., dissenting)] 

In any event, the result is that although the “Court has for 

many years simply assumed the dormant commerce clauses’s 

constitutional legitimacy, it is not as easy as one might think to 

discover the original constitutional theory behind the con- cept’s creation” (Redish and Nugent, “The Dormant Commerce Clause and the Constitutional Balance of Federalism,” 

pp. 577, 575). Moreover, the legal rationale for the clause is 

somewhat muddy. Obviously, the Congress is given the power 

to regulate interstate commerce. The Court, however, has in- terpreted the commerce clause as having a flipside: that is, it is 

presumed to limit state authority. Nevertheless, the economic/ 

philosophic basis for that limitation remains unclear. For in- stance, Maltz points to a “free location principle” flowing from 

the commerce clause, which infers generally that the move- ment of commerce should know no state boundaries (Maltz, 

“How Much Regulation is Too Much”); Tushnet infers a con- stitutional “efficiency” standard that argues for the nullifica- tion of state regulations which cause substantial price 

increases in other states Uushnet, “Rethinking the Dormant 

Commerce Clause”); and Monaghan views the dormant commerce clause as ‘‘a development of constitutional common law 

based on a national free trade philosophy embedded in the 

commerce clause” (Henry €? Monaghan, “The Supreme Court 

1974 Term; Forward: Constitutional Common Law,” Hwvard 

Law Review 89 (1975): 15-17, cited in Tribe, American ConstitulS9 Arkansas Electric Coop. Corp. v. Arkansas Public Commis- sion, 461 U.S. 375 (1983). (citation omitted) 

lwRedish and Nugent, “The Dormant Commerce Clause and 

the Constitutional Balance of Federalism,” p. 582. 

161 Tnbe,Ameticun Constitutional Law, p. 401, citing Brown, “The 

Open Economy: Justice Frankfurter and the Position of the 

Judiciary,” pp. 219-220. 

16*Tyler pipe Industries, Inc. v. Washington State Department of 

Revenue. 

163 The ruling follows a relatively long line of cases in which the 

Court has overruled taxes that exempt local activities where 

comparable interstate commerce is taxed. See, for example, 

Hale v. Bimco Trading Inc, 306 U.S. 375 (1939) and Armco v. 

Hardesty, 467 U.S. 638 (1984). 

tional Law, p. 402). 

164 General Motors Corp. v. Washington, 377 U.S. 436 (1964). 

165 483 U.S. 232 at 247 (footnotes omitted). 

88 U.S. Advisory Commission on Intergovernmental Relations 
‘“4245 US. 794 (1976). 

la7426 U.S. at 808. 

la Ibid., p. 810. 

169 447 U.S. 429 (1980). 

460 US. 204 (1983). 

17’ 447 US. 429, at 438. 

17’ Ibid., p. 441. 

173 Indeed, the justices appear to prefer an ad hoc, as opposed to a 

philosophically coherent, approach to the matter. For in- stance, Justice Powell wrote the Alexandria Scrap opinion, but 

was part of the Reeves dissent. Justice Marshall, conversely, 

was part of the Reeves majority, but an Alexandria Scrap dis- senter. Justice Stevens dissented in Reeves, but joined with the 

White majority. Justice Blackmun dissented in White but was 

part of the Reeves and Alexandria Scrap majorities. Justice 

Brennan, who generally demurred to the market-participant 

exception, joined the majority in White. See Coenen, “Untangling the Market-Participant Exemption to the Dormant 

Commerce Clause,” p. 405. 

174 Indeed, the exception has been roundly criticized in the legalacademic literature. For example, Tribe describes the “uneasy 

fit between the exempted state actions and their characteriza- tion as “market participation” rather than regulation. . . .” 

Tribe, Constitutional Choices, p. 144. But see Coenen, “Untan- gling the Market-Participant Exemption to the Dormant 

Commerce Clause.” 

175 467 U.S. 82 (1984). 

17‘ Ibid., p. 93. 

177 Ibid., pp. 96-97, cited in Coenen, “Untangling the Market-Participant Exemption to the Dormant Commerce Clause,” p. 

403. 

178 486 U.S. 269 (1988). 

179 Ibid., p. 277. 

180 Ibid., p. 278. 

Ibid., p. 279. 

182Redi~h and Nugent, “The Dormant Commerce Clause and 

the Constitutional Balance of Federalism,” p. 571. 

183 Ibid., p. 573. 

IB4483 US. 232, at 260, 2454-65 (Scalia, J., dissenting) (footnotes 

omitted). 

lSs Coenen, “Untangling the Market-Participant Exemption to 

the Dormant Commerce Clause,” pp. 487-488. 

lB6 hid. 

Of additional interest and possibly wide-ranging consequence, 

in 1991, the Supreme Court sanctioned the use of 42 U.S.C. 

Sec. 1983 as a cause of action for violations of the commerce 

clause. For further discussion, see Chapter 7. 

lg8 In relevant parts, the Fourteenth Amendment states: Section 

1. All persons born or naturalized in the United States, and 

subject to the jurisdiction thereof, are citizens of the United 

States and of the State wherein they reside. No State shall 

make or enforce any law which shall abridge the privileges or 

immunities of citizens of the United States; nor shall any State 

deprive any person of life, liberty, or property, without due 

process of law; nor deny to any person within its jurisdiction 

the equal protection of the laws. . . . Section 5. The Congress 

shall have the power to enforce, by appropriate legislation, the 

provisions of this article. The Fourteenth Amendment has a 

long and especially rich history. For a brief description of that 

history, see ACIR, Regulatory Federalism, pp. 28-30. For a more 

thorough discussion, see Jerold H. Israel, “Selective Incorpo- ration: Revisited,” Georgetown Law Journal 71 (1982): 253. 

lci9 Of particular importance to state and local governments over 

the past several decades has been judicial implementation of 

the Civil Rights Act of 1871,42 U.S.C. Section 1983: Every per- son who, underqlor of any statute, ordinance, regulation, custom, or usage, of any state or territory, subjects, or causes tobe 

subjected, any citizen of the United States or other person 

within the jurisdiction thereof to the deprivation of any rights, 

privileges, or immunities secured by the Constitution and laws, 

shall be liable to the party injured in an action at law, suit in 

equity, or other proper proceeding for redress. For additional 

discussion, see Chapter 7, the section on “Contemporary Con- struction of Section 1983: Status of Governmental Liability 

and Official Immunity.” For a brief earlier history of Section 

1983, see also Cynthia Cates Colella, “The Mayor, the Mandate, and the Menace of Liability,” Intergovernmental Perspective 7 (Fall 1981): 15. 

‘’‘A portion of Chapter 7 contains a discussion of positive judicial mandates on states and localities. 

Particularly problematic in the courts’ eyes have been affirmative 

action requirements. Such requirements, of course, began as judicial mandates on state and local governments in school desegre- gation cases. See ACIR, Regulatory Federalism, p. 44. When 

school districts, with a history of racial discrimination, have failed 

to make progress in desegregating, the Supreme Court has al- lowed lower federal courts to fashion affirmative remedies. See, 

for example, Swnn v. Charlotte-Mdenburg Board of Education, 402 U.S. 1 (1Wl). However, the high court has demurred at 

activities that appear aimed at achieving racial balance when past 

de jure discrimination has not been proved. See, for instance, Milliken v. Bradley, 418 US. 717 (1974) and Pasadena Board of Edu- cation v. Spangler, 427 U.S. 424 (1976). 

lg2 488 U.S. 469 (1989). 

lg3 Fullilove v. Klutmick, 448 U.S. 448 (1980) involved a challenge 

to a federal statute requiring that 10 percent of federal grants 

for local public works projects be used to purchase services or 

supplies from minority contractors. Although the Court was 

badly divided in Fullilove, it nonetheless upheld the congres- sional set-aside program. The 1983 Richmond ordinance in 

question in Croson followed most of the definitions and details 

of the federal act. As of January 1988, at least 32 states and 160 

local governments had set-aside programs in operation. See 

Brief of the National League of Cities, U.S. Conference of 

Mayors, National Association of Counties, and the Interna- tional City Management Association as Amid Curiae in Sup- port of Appellant, City of Richmond v. J.A. Croson, January 

15, 1988. 

lg4 Richmond v. Croson, 488 US. 469 at 487 citing Fullilove v. 

Klutmick, 448 U.S. 448 at 472 

195488 U.S. 469 at 488. 

lg61bid., citing 448 US. 448 at 483. 

lg7 See, for example, Briefs of the National League of Cities et al., 

198488 U.S. 469 at 489, citing Brief for Appellant 32. 

199 Brief of the National League of Cities et al., January 15,1988, 

2oo 488 US. 469 at 490. Chief Justice Rehnquist and Justice White 

concurred in this portion of Justice O’Connor‘s opinion. Apparently, Justice Scalia would place even tighter restrictions on 

the power of state and local governments to adopt affirmative 

action plans. 

201 “ ‘Constitutional Scholars’ Statement on Affirmative Action 

after City of Richmond v. J.A. Croson,” Yale Law Journal 98 

April 21, 1988, and January 15, 1988. 

p. 4. 

U.S. Advisory Commission on Intergovernmental Relations 89 
(1989) 1711, cited in Kenneth M. Murchison, “Local Govern- ment Law,” Louisima Law Review 50 (1989): 283-284. 

”*Brief of the National League of Cities et al., January 15,1988, 

p. 10, citing Johnson v. Transportation Agency, 480 U.S. 616 

(1987); Firefighters v. Cleveland, 478 US. 501 (1986); Steelworkersv. Weber, 443 US. 193 (1979); and Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). 

204Murchison, “Local Government Law,” p. 283. 

20’ bid. 

206 Justice ~’Chmor interpreted the Ridmond program aS 

drawing a very rigid line. See 488 U.S. 469 at 508 (note her referenw to ‘‘rigid numerical quota” and “rigid line drawn on 

the basis of a suspect classification”). 

’03 bid. 207Murchison, “Local Government Law,” p. 283. 

90 U.S. Advisory Commission on Intergovernmental Relations 
1 

Regu Jato ry Co nseq u ences 

of a New Public Law Model 

The types of cases discussed in the previous chapter 

involve federal courts telling state and local governments 

what they cannot do. Some of the nation’s most controver- sial judicial decisions, however, include directives telling 

those governments what they must do, in other words, “af- firmatively prescribing governmental policy.”’ During the 

nearly four decades since the Supreme Court held that the 

federal district courts’ “proximity to local conditions” 

made them uniquely qualified to manage school desegregation efforts,2 the federal judiciary has routinely engaged 

in the legislative- and executive-like enterprises of restructuring school districts, revamping prisons and jails, 

relocating public housing, reforming mental institutions, 

remediating environmental disputes, and rearranging 

union composition and pra~tice.~ 

Traditional vs. Public law litigation 

Federal judicial involvement in aspects of state and 

local government operations dates fromBrown II’s4 rather 

vague delegation to the trial courts of primary supervisory 

responsibilities in school desegregation cases.5 From that 

point on, the lower courts have been coping with the difficulties that inevitably arise when the judiciary turns “from 

dispute resolution to governance”6-in other words, the 

difficulties that arise when courts move from “traditional” 

to “public law” litigation. 

Abram Chayes, who in 1976 coined the term “public 

law litigati~n,”~ explains the distinctions in some detail: 

In the classical model . . . , litigation is bipolar: two parties are locked in a confrontational, 

winner-take-all controversy. Second, the process 

is retrospective, directed to determining the legal 

consequences of a closed set of past events. 

Third, right and remedy are linked in a close, mutually defining logical relationship. Fourth, the 

lawsuit is . . . bounded in time: judicial involvement ends with the determination of the disputed 

issues.. . . [And] the impact is limited to the (two) 

parties before the court. Finally, the whole process is party initiated and party controlled. The 

judge is a passive, a neutral umpire. . . ? 

In the contemporary model, the parties to the litigation and the matter in controversyare amorphous, defined 

as the proceedings unfold rather than determined by legal 

theories and concepts. Second, the lawsuit is prospective 

rather than historical. Third, because the relief sought 

looks to the future and is corrective rather than compensatory, it is not derived logically from the right asserted. 

Instead, it is fashioned ad hoc, usually by a quasi-negotiating 

process. Fourth, prospective relief implies continuing judicial involvement. Because the relief is directed at government or corporate policies, it will have a direct impact 

that extends far beyond the immediate parties to the lawsuit. All of these features press the trial judge into an active stance, with large responsibilities for organizing the 

case and supervising the implementation of relief? 

The distinction between the traditional negative injunction and the newer affirmative mandate, or so-called 

public law model, is important on at least two levels. An 

order to cease a discriminatory tax scheme, for instance, 

may result in the futureloss of staterevenue. Howeverpolitically unpalatable, that loss may be replaced with other 

revenue-raising schemes or business incentives. Affirmative judicial mandates, on the other hand, may call for an 

immediate (and sometimes substantial) expenditure of 

funds, requiring the reallocation of resources and legislative preferences, often for some unspecified future.1° 

In addition, the traditional negative judicial model 

and the so-called public law model differ considerably on 

jurisprudential grounds. In “traditional” litigation, a judicial decree usually signals the end of a legal battle: 

Money damages are preferred over equitable re- lief, and satisfaction of the judgment commonly k 

U.S. Advisory Commission on Intergovernmental Relations 91 
a one-time affair. Just the opposite is true in pub- lic law litigation: issuance of the decree likely begins a stage in the litigation at least as long if not 

longer than the trial that preceded it. Equitable 

remedies are favored over money damages. Relief is wide-ranging, typically requiring effort by 

many layers of government. Implementation 

frequently intimately involves judges-usually 

federal judges-in day-to-day operations of 

state government.” 

The differences between the two models, then, are 

both structural and philosophical. 

Moreover, recourse to this new public law model 

has been facilitated over several decades by broad interpretations of constitutional and statutory causes of action. In particular, the now sweeping scope of 42U.S.C. 

Sec. 1983 (Civil Rights Act of 1871)12 has allowed for 

countless public lawsuits against local government and 

state and local officials. 

Applauded by some as an effective remedy to institu- tional ~bstinacy,’~ the new public law litigation is believed 

by others to be at least constitutionally ambiguous; at 

most, a constitutionally illegitimate basis for the increasing tendency among federal district judges to act “as [the] 

day-to-day managers and implementors” of affairs traditionally in the purview of state elected 0fficia1s.l~ Yet, until 

recently, “the Supreme Court has maintained a near 

Sphinx-like ~ilence”’~ on the affirmative power of the lower federal courts.16 Its rather bewildering breach of that si- lence in 1990, by virtue of its opinion in Spallone v. United 

States, merits discussion. 

Spallone v. United States 

and the limits of Court Power 

At issue in Spallone v. United StatesI7 was the City of 

Yonkers long-standing litigation over segregation in public housing.ls Ultimately, the city was found liable for in- tentionally promoting racial segregation in public housing 

in violation of Title VIII of the Civil Rights Act ~$1968~~ 

and the equal protection clause of the Fourteenth 

Amendment. Following considerable discussion over the 

terms of a nonspecific court order to remedy the situation, 

parties to the suit agreed in 1988 to a consent decree setting forth “certain actions which the City of Yonkers 

[would] take in connection with a consensual implementation . . . of the housing remedy order.”*O The consent decree was approved by a 5-2 vote of the city council. 

Notwithstanding council approval, the city failed to 

fulfill its legal obligations, hoping first to exhaust all appellate remedies, even though the court had not granted a 

stay of execution. In response, the district court entered a 

more detailed Long-Term Plan Order, requiring the city to 

adopt a remedial legislative package or be held in contempt of court and subjecting it to escalating dailyfmes if it 

violated the court’s orders. Significantly, the court applied 

the threat of contempt and its attendant fines not only to 

the city but to individual council members as well?’ 

Despite the increasingly heavy hand of the district 

court, the city council defeated a resolution to adopt ap- propriate legislation in a timely manner, prompting the 

court to hold the city and four majority council members in 

contempt. On appeal, the finding of contempt and the 

application of fines was upheld by the court of appeals.22 

The U.S. Supreme Court accepted the case for review on 

the relatively narrow but important issue of “federal judicial power against individual [local] legislator^."^^ On consideration of that problem, a divided Court rever~ed.~~ 

In his opinion for the majority, Chief Justice William 

Rehnquist found a “significant difference” between fines 

imposed against a city and those levied against recalcitrant 

councilmen: 

Sanctions directed against the city for failure to 

take actions such as those required by the consent 

decree coerce the city legislators and, of course, 

restrict [their] freedom . . . to act in accordance 

with their current view of the city’s best interests. 

. . . But . . . imposition of sanctions on individual 

legislators is designed to cause them to vote, not 

with a view to the interests of their constituents or 

of the city, but with a view solely to their own personal interests. . . . Such fines thus encourage legislators, in effect, to declare that they favor an 

ordinance not in order to avoid bankrupting the 

city for which they legislate, but in order to avoid 

bankrupting themselves.“” 

Individual sanctions, according to the chief justice, 

cause “a much greater perversion” of the local democratic 

process than do coercive measures aimed at government 

as the offending entity.% 

Missouri v. Jenkins 

and the Breadth of Court Power 

Three months later, a different set of circumstances 

and a different configuration of justices were willing to tilt 

the constitutional balance away from local autonomy and 

toward the defense of Fourteenth Amendment rights in 

deciding Missouri v. Like Spallone, Jenkins involved protracted litigation, begun in 1977 when the Kansas City, Missouri, School District (KCMSD) and a group 

of students proved that KCMSD and the state operated a 

system of segregated schools.28 

As a result of the civil rights violation, a district court 

issued an order providing detailed remedies and setting 

forth the financing necessary to effect implementation.B 

Because Missouri’s constitution and statutory law limited 

the amount of money the school district could raise to 

meet its share of the financial obligation, the court assessed most of the costs to the 

For several reasons, the case was appealed. Although 

the court of appeals affirmed all findings of liability and 

much of the remedial order, it disagreed with the district 

court’s allocation of the financial burden, suggesting, instead, that the costs be divided equally between the state 

and the school district?’ Throughout the appeal, proceedings before the district court continued, with KCMSD pro92 U.S. Advisoty Commission on Intergovernmental Relations 
posing, and the court approving, an expensive magnet 

school plan. In the face of voter and legislative resistance, 

unfunded school district costs began increasing, even 

without the recommended 50-50 split. 

Meanwhile, the district court, still concerned about 

the relative abilities of the two parties to meet their escalating financial obligations, concluded that the state bore 

primary responsibility for the unconstitutional conditions 

that prompted the litigation in the first place and determined that costs should be distributed according to a75-25 

ratio, with the state bearing the major burden. It was obvious that KCMSD would be unable to finance its share. 

As a result, the court ordered that the school district property tax be raised beyond the limits imposed by the Missouri Constitution. 

On appeal to the 8th Circuit Court of Appeals, the action of the district court was upheld.32 The appeal court’s 

only objection to the ruling was that in the future the district court should not set tax rates itself, but rather “should 

authorize KCMSD ta submit a levy to the state tax collection authorities and should enjoin the operation of state 

laws hindering KCMSD from adequately funding the remed~.”~~ Thereafter, the state requested that the U.S. Supreme Court review its complaint, arguing that the 

property tax increase violated Article 111, the Tenth 

Amendment, and principles of federal-state comity. 

Although the Supreme Court reversed the district 

court’s direct imposition of a tax increase as “not only intrud[ing] on local authority but circumvent[ing] it altogether,”34 the majority nonetheless upheld, on principle, the 

appellate court’s strategy prohibiting the operation of state 

laws that prevent local jurisdictions from meeting court-imposed financial 0bligations.3~ In its ruling, the Court argued 

that “state policy must give way when it operates to hinder 

vindication of federal constitutional g~arantees.”~~ 

Subtle Distinctions and Mixed Messages 

In the end, both Spallone and Jenkins hinge on judicial 

nuance. The Supreme Court, for example, readily admits 

that whether fines are levied against governmental structures or governmental officials, they may be expected to 

alter a legislator’s view of the “public interest” artificially. 

Fines against governments apparentlywould force elected 

representatives to engage in the acceptable legislative 

task of balancing public good against public opinion, while 

fines against individuals would force them to abrogate legislative duty altogether in favor of naked economic 

~elf-interest.~’ Moreover, a federal judge may circumvent 

state policy, including state constitutional policy, but not 

via the direct imposition of a tax-at least not until all other avenues have been tried and 

If Spallone and Jenkins appear to tender onIy minimal, 

and at that somewhat oblique, guidance, it is because, as 

one observer noted, Spallone and Jenkins “offer little beyond the bland proposition that district court remedial 

powers are broad but ‘not Hence, the Jenkins majority suggested that federal courts may choose 

from a variety of corrective measures, including the indirect imposition of local taxes, to alleviate unconstitutional 

 condition^.^^ Conversely, the Spallone majority made its 

focal point “the doctrine that a court must exercise ‘the 

least possible power adequate to the end pr~posed’.”~’ 

The likely interpretation of the opinions in these 

cases is a fundamental philosophic disagreement within 

the Court’s ranks: 

Since Brown 11’s ambiguous charter to desegregate schools “with all deliberate speed,” the controversy over judicial intervention has often 

turned on the extent to which undeniably culpable local elected officials deserve the deference 

of appointed federal district court judges. One 

view, adopted by Spallone and elaborated upon in 

the Jenkins concurrence, emphasizes local autonomy, regards states as sovereign fortresses, and 

tends to equate popular sovereignty with majority 

rule. The alternative view, articulated by Jenkins 

and the Spallone dissent, is less certain of the legitimacy conferred by electoral majorities and offers a 

functional account of the constitutional division of 

authority, one which rejects the language of impregnable boundaries and separate 

The kinds of issues presented to the Court in Spallone 

and Jenkins implicate all of the related philosophic dichotomies that have plagued the nation since its inceptionnational power versus state autonomy, judicial review 

versus majoritarian preferences, individual rights versus 

democratic self-governance, and governmental interests 

versus private moral and legal claims. It is unlikely that the 

justices will soon develop any definitive answers to the 

questions surrounding the affirmative institutional powers of federal district courts. In the meantime, the constitutional and practical dilemmas of judicial remediation 

remain unsettled. 

Hard Constitutional Choices: 

Federalism, Separation of Powers, 

Individual Rights, and the Custodial Institution 

Almost from the start, the transformation of the district court role from supposedly neutral arbiter to explicitly political participant, as prompted by the public law 

model, has engendered controversy. In part, the contention arises from issues of practical competence. Are 

judges, by training, experience, institutional position, and 

administrative capacity, well suited to the task of managing 

political institutions on a long-term basis?43 The controversy also involves questions of constitutional legitimacy, 

relating to separation of powers and federalism princi- 

~les.4~ The fact that the debate remains far from resolved 

is illustrated by the Court’s ambivalent conclusions in 

Spallone and Jenkins, personified in portrayals of district 

court judges, who are variously lionized as heroes or derogated as villains.45 

U.S. Advisory Commission on Intergovernmental Relations 93 
Custodial Institutions 

From a constitutional perspective,& the so-called “in- stitution cases” often occur at the uncomfortable nexus 

between the rights of unpopular minorities and the auton- omy of state political institutions. This has been particu- larly true in cases involving conditions in custodial 

institutions such as prisons, jails, and mental hospitals. 

Although the means by which desegregation is accom- plished in particular local settings may remain controver- sial, the goal of racial equality is now widely supported, if 

not always in concrete terms, at least in the ab~tract.~’ 

That same statement probably cannot be made about the 

idea that prisons and jails should meet certain constitu- tional standards, particularly when those standards are articulated by outside judicial forces and involve the 

reallocation of existing resources or the generation of new 

ones. In other words, the public objects when federal 

judges tell local politicians where, how, and when to spend 

state money on unpopular causes and individuals. 

Moreover, the institution cases raise questions about 

the separation of powers and federalism, and interbranch 

and intergovernmental relations. Although seemingly re- lated by history and theoretical purpose, the Supreme 

Court has hinted that the separation of powers doctrine 

relates only to the “coordinate branches of the Federal 

Government, and not the federal judiciary‘s relationship to 

the states. . . .”& Nonetheless, Laurence Tribe notes that 

many disputes implicate . . . complex combinations of separation and federalism concerns. 

Thus, the limits on federal judicial intrusion into 

state and local governments reflect both notions 

about the role of federal courts vis-a-vis the other 

branches of the national government, and notions about the role of the national government in 

matters of intensely state and local con~ern.4~ 

Notwithstanding the ambiguous association between 

these two concepts, the following discussion will assume 

that when federal district judges order the upgrading of 

state custodial facilities on constitutional grounds, they 

tread the (not too brightly drawn) lines of federalism and 

separation of powers. 

Arguments for Far-Reac hi ng 

Federal Judicial Power 

By and large, advocates of far-reaching judicial power 

in cases of institutional reform’O place a lower premium on 

separation of powers and federalism concerns than on the 

protection of individual rights. Thus, they 

assume . . . that the federal government has ultimate responsibility for and a vital interest in all 

aspects of American life. Fey] accept. . . that 

state and local governments have important primary responsibilities in certain areas, but . . . generally oppose . . . limits on federal power that 

prohibit federal intervention in these areas. 

[They] contend that federal courts have an essen94 U.S. Advisory Commission on Intergovernmental Relations 

tial role in defining and protecting individual 

freedom and dignity and in structuring the relationship between the individual and government. 

[In short, they] favor federal court reform of state 

and local prisons and mental hospitals, even if 

that entails the erosion of state and local govern- ment authority.5l 

A more subtle version of this scenario views broad ju- dicial power as the best line of defense against the dehu- manizing effects of bureaucracies. Hence, 

it is more accurate or at least more helpful. . . to 

think of the courts in these cases as institutions 

exercising an oversight function on behalf of the 

interests and groups as well as the individuals af- fected by the challenged bureaucratic actions. In 

this oversight role, courts need not be seen to be 

in conflict with the legislature or the politically 

responsible elements of the executive branch. 

For in the contemporary administrative state, bureaucratic actions do not necessarily bear a stamp of 

legitimacy as outcomes of a democratic process. In- deed the political branches are also struggling to 

make the bureaucracy behave-not only in the 

traditional sense of preventing official imposition 

on the individual, but also in the newer and equal- ly important sense of trying to ensure that the bu- reaucracy carries out the positive programs 

assigned to it. The courts have been essential 

partners in this endeav~r.’~ 

Put another way, courts exist “to give meaning to constitu- tional values in the operation of large-scale organizati~ns.”~~ 

Arguments for limited Federal Judicial Power 

Commentators and jurists supporting a more limited 

federal judicial role in institutional reform cases tend to 

view broad decrees as unsettling on separation of powers 

and federalism grounds. They contend that, “Courts 

should act like courts, not like legislatures.”” According 

to Gerald E. Frug, the problem with such orders is that, 

rather than preventing the government from acting in an unconstitutional way, [they] mandate af- firmative action by the legislative and executive 

branches to correct a Constitutional violation. 

Moreover, the court orders involve a subject matter that is the very foundation of the discretion 

that is lodged in the other branches [as well as autonomous state governments]: the raising, allocation, and spending of government funds.ss 

Although constitutional violations demand constitu- tional remedies, it is entirely unclear to such observers 

that the ongoing, open-ended judicial management of 

state institutions is a legitimate constitutional antidote. At 

the very least, they believe the imposition of long-term 

and costly financial arrangements by the “life-tenured 

federal judiciaq” to be “a violation of both separation of 

powers and the principle of federalism.”” 
The Custodial Cases and the Supreme Court 

Notwithstanding its virtual silence until 1990 on the 

general subject of district court remediation, the Supreme 

Court has had several occasions to speak to the particular 

issue of conditions in custodial institutions. In important 

respects, “the Court’s prisoner cases play out an unresolved-and perhaps unresolvable-debate over the appropriate balance between [individual] rights and 

‘deference’ to. . . state legislature^."^^ 

Like the public law suit, cases involving custodial conditions in public institutions are a relatively new phenomenon. Historically, the circumstances of individuals who are 

involuntarily confined were treated as matters for admin- istrative discretion rather than for judicial Pris- ons and prison-like institutions were not viewed as grand 

repositories of constitutional rights, ripe for review and 

amelioration by court personnel. What has come to be 

known as the “hands-off” doctrine was premised on at 

least three rationales: 

Courts lacked expertise in prison matters. 

If they did intervene, courts could not secure 

compliance with their directives. 

Inmate lawsuits addressed privileges, not rights, 

and thus failed to state claims for which relief 

could be granted.59 

By the late 196Os, the hands-off policy began to give 

way under an alternative framework, which saw federal 

judges paying considerable attention to the constitutional 

claims of inmatesm The result today, two decades after 

Judge Frank Johnson began his attempts to reform Alabama’s custodial is a nationwide system of 

court orders seeking improvements in the prison systems 

of 41 states and the District of Columbia, together with 

scores of additional decrees aimed at local jails and mental 

health 

lower Courts Given little Guidance 

Although the Supreme Court has responded less than 

enthusiastically to the issue of custodial reform, it has attempted only indirectly to restrict the discretion of lower 

court judges in institutional suits. According to Alfred 

Mamlet, “These [haphazard] attempts to limit discretion 

. . . send confusing signals to lower courts, fail to control 

the courts, and distort substantive 

First, as with the public law suit in general, the Court 

has insisted that the institutional “remedy be tailored to 

the Violation.”64 As Mamlet points out, however, this mandate, based on the traditional model of litigation, “provides virtually no guidance to lower courts”6s involved in 

public law litigation. For example, 

many lower courts use a “totality of the circumstances” test for determining whether prison conditions violate the eighth amendment.66 Thus, 

district court judges are faced with the logically 

impossible task of showing that each specific part 

of a remedy is necessaq to cure the constitutional 

deficiencies revealed by the “totality of circumstances test. . . . It is not realistic to use [the Supreme Court’s] tailoring maxim to show that the 

Constitution prohibits solitary confinement for 

more than thirty days, when a number of prison 

practices are ~hallenged.6~ 

Generally, “the Supreme Court’s tailoring paradigm 

ignores the reality that district court judges fashion their 

decrees as policy makers rather than deduce them logically as traditional judges. Remedying institutional violations 

necessarily involves making discretionary public policy 

choices.”68 Thus, the Court’s insistence on employing the 

traditional remedial metaphor in the face of nontradi- tional legal battles offers little in the way of practical in- struction to judges on the front lines. 

Second, since the mid-l970s, the Supreme Court has 

attempted to impose more stringent justiciability require- ments on those seeking equitable relief.@ Indeed, the 

Court has moved recently to separate disputes about a 

plaintiff’s standing to sue into different categories, depending on the requested remedy.70 

This marks a “departure from traditional standing 

doctrine which focuses on the harm suffered by the plaintiff.’”ll (Emphasis added.) Ironically, the Court’s new 

standing requirements mark a clear departure from standing doctrine under the traditional laws~it.’~ 

Finally, the Court has tried to limit judicial discretion 

through narrow interpretation of substantive constitu- tional rights in institutional, particularly custodial, settings. As a result, patients committed to state mental 

hospitals have only a minimal right to training;73 convicted 

prisoners are not free from conditions that may be “restrictive and even harsh;”74 and even nonconvicted pretrial detainees lose substantial constitutional rights at the 

jailhouse 

For a number of possible reasons, the Supreme Court 

has been less sympathetic to the need for custodial institutional reform than, for instance, to that of school system 

reform. It has exhibited more deference to local prison 

and jail administrators than to others.76 Nonetheless, its 

message to the lower courts has been obscure at best. According to Barry Bell, the Court 

has discovered that “deference” [to state and local 

administrators] is a difficult jurisprudential horse to 

harness. As long as the Court explicitly or implicitly 

acknowledges that second-guessing prison officials 

is at least occasionally correct, some lower court 

judges will continue to intervene. . . . Although 

the. . . Court has opted for. . . exhortations to discourage excessive lower court intervention in the 

day-today operation of prisons, a majority of the 

Justices believes that intervention remains ap- propriate when the conditions of confinement 

pass the bounds of civilized standards. Although 

U.S. Advisory Commission on Intergovernmental Relations 95 
the Court has demonstrated that such cases arise 

infrequently, it has offered no clear guidelines for 

recognizing them when they do arise.77 

Perhaps, Bell notes, alluding to Justice Potter Stewart’s 

famous obscenity “doctrine,” the lower courts “will know 

them when they see them.”7s 

Perhaps, too, as Chayes insists, “the attributes of pub- lic law litigation are strongly resistant to conscious efforts 

[even conscious efforts by the Supreme Court] at reversa1.”79 Whatever the specific institutional setting or issue, 

in neither the standing area nor the realm of remedial discretion has the Court been able to cut 

back significantly on the developments that have 

accompanied the shift from the traditional to the 

public law model of litigation. . . . The Court has 

responded to the procedural problems generated 

by the new forms of adjudication with concepts 

and modes of thought derived from the old. The 

resulting doctrines neither guide lower courts 

and litigants nor illuminate and refine what 

should be dispositive issues. They do provide a 

convenient umbrella for whatever results commend themselves to a majority of the C0urt.8~ 

Suing for Constitutional 

and Statuto Compliance: 

The Scope o 7 Section 1983 

Among the means for attacking state actions, including custodial conditions, probably none has been as powerful over the past 30years as Section 1983 of the CivilRights 

Act of 1871 : 

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any 

state or territory, subjects, or causes to be subjected, any citizen of the United States or other 

person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities 

secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in 

equity, or other proper proceeding for redress.s1 

A statutory derivative of the Fourteenth Amendment, Section 1983 provides a direct federal remedy for 

official violations of federal law. Yet, throughout its first 

90 years, the act was notable primarily for its legal insignificance.82 Long-standing common law exemptions embodied 

in the Eleventh Amendment, shielding state and local of- ficials and municipalities on the basis of their “good faith” 

and the state immunity doctrine, rendered Section 1983 

suits virtually ineffective for the purposes of collecting 

damages. In the 1961 case of Monroe v. Pape, however, the 

Supreme Court opened the floodgates to litigation under 

the civil rights statute, as it found the actions of 13 Chicago 

police officers justiciable “under color of state law.”s3 With 

Monroe, the legal landscape was to change dramatically. 

Section 1983 and State Immunity: 

A Note on the Eleventh Amendment 

Before proceeding to a general discussion of the 

scope of Section 1983, it is necessary to mention briefly the 

status of the Eleventh An1endment.8~ It states: 

The Judicial power of the United States shall not 

be construed to extend to any suit in law or equity, 

commenced or prosecuted against one of the 

United States by Citizens of another State, or by 

Citizens or Subjects of any Foreign State. 

The amendment’s rather obscure fiat has given rise to nu- merous interpretationss5 variously embraced, rejected, 

and modified by the Court. Eleventh Amendment juris- prudence has been described as “replete with historical 

anomalies, internal inconsistencies, and senseless distinctions.”*‘j That critique, in turn, is founded at least in part 

on the line of decisions stemming from Ex Purte Y0ung.8~ 

The story of Ex Parte Young actually begins in 1890 

with the case of Hans v. Louisiunu,Bs which held that the 

state sovereign immunity principle embodied in the Eleventh Amendment restricted even suits arising under the 

U.S. Constitution and lawsg9 Given full girth, Hans may 

have proved a formidable, if not insurmountable, obstacle 

to future enforcement of federal rights against state actions?O With just such a possibility in mind, the Young doctrine was developed. 

At issue in Young was an injunction prohibiting a state 

attorney general from enforcing a state law alleged to be 

contrary to the Fourteenth Amendment. Presumably, under Huns, such a suit would have been proscribed. Tb decide the Young case, however, the Court employed the 

following logic: 

The [statute] to be enforced is alleged to be unconstitutional, and if it be so, the use of the name 

of the state to enforce an unconstitutional [statute] is a proceeding without the authority of and 

one which does not affect the statein its sovereign 

or governmental capacity. It is simply an illegal act 

upon the part of a state official in attempting by 

the use of the name of the state to enforce a legislative enactment which is void because it is unconstitutional. If the [statute] which the state 

Attorney General seeks to enforce be a violation 

of the federal Constitution, the officer in pro- ceeding under such enactment comes into conflict 

with the superior authority of the Constitution, 

and he is in that case stripped of his official orrepresentative character and is subjected in his person to the consequences of his individual 

conduct. The state has no power to impart to him 

any immunity from responsibility to the supreme 

authority of the United States?’ 

96 US. Advisory Commission on Intergovernmental Relations 
Hence, the Court salvaged the enforcement of national 

rights through a remarkable legal fiction: “although the 

actions of the Attorney General were those of the state for 

the purpose of the [Fourteenth] Amendment, they were 

not the actions of the state for the purposes of the [Eleventh].’*2 The result is that “states and state agencies cannot be named as parties to suits filed under Section 1983 or 

related Reconstruction-era civil rights legislation. [Rather,] suits directed against such entities must be styled as 

suits against responsible state official^.'^^ 

The same fiction does not apply to local governments. 

As early as 1890,94 the Court held that Eleventh Amendment immunity does not extend to localities and would 

present no bamer to Section 1983 suits filed against local 

governments as go~ernments.9~ The distinction is of vital 

wncem to localities, particularly since the Court does rec- ognize certain realms of personal immunity from liability 

for The result, according to Peter W. Low and 

John C. Jeffries, Jr., is a legal conundrum: 

Since the state cannot be sued directly, the 

successful assertion of personal immunity by a 

state official may prevent recovery of damages 

from any source for an admittedly unconstitutional state practice. By contrast, local government has no 11th amendment immunity. Thus, 

recovery may not be possible against the state or 

any governmental official in certain circumstances where a similar action against local government would succeed?’ 

Contemporary Construction of Section 1983: 

The Status of Governmental liability 

and Official Immunity 

Local Governmental Liability 

As mentioned above, the indemnification from Section 1983 liability enjoyed by state governments does not 

extend to local governments. Suggested as early as 1890, 

the possibility of bringing civil rights actions against municipalities became a clear and attractive reality in 1978 

when the Supreme Court, in Monell v. Department of Social Services, declared such units “persons” for Section 

1983 purposes,98 albeit “persons” who enjoyed a qualified 

good faith immunity. 

In 1980, however, even the “good faith” immunity of 

city government evaporated when the Court held that 

“municipalities have no immunity from damages liability 

flowing from their constitutional violations. . . .” That pronouncement came as part of the Court’s decision in Owen 

v. City of Independence,* a case revolving around the dismissal of the chief of police without formal written reason 

or hearing. According to the chief, the firing was in violation of his constitutional rights to procedural and substantive due process. The Supreme Court affirmed. As a 

result, the city, through the official acts of its city manager 

and council members, was deemed liable for damages, and 

was unable to assert the “good faith” of municipal functionaries in its defense.loO 

The extent of municipal susceptibility to damages was 

expanded further in 1986, when the Court decided that a 

single decision by a city officer might constitute “official 

policy” for purposes of Section 1983 liability. The leading 

case on this point, Pembaur v. Cincinnati,1o1 concerned a 

prosecutorial instruction to police to enter a medical clinic 

forcibly, in violation of the owner’s Fourth Amendment 

rights. Dismissing the city’s claim that “official policy” 

could refer only to the “formal rulings or understandings” 

promulgated by legislators, the Court instead found that 

if [a] decision to adopt [a] particular course of action is properly made by [a] government’s authorized decisionmakers, it surery represents an act 

of official government “policy” as that term is 

commonly understood. More importantly, where 

action is directed by those who establish governmental policy, the municipality is equally responsible whether that action is to be taken only once 

or to be taken repeatedly.’’’ 

In the years following Pembaur, the Supreme Court 

has struggled several times, with less than satisfying results, “to define the kinds of circumstances, relationships, 

and patterns of authority determinative of whether a municipality is liable for the misconduct of its employee^."'^^ 

Indeed, the Court itself recently noted that “thedefinition 

of municipal liability manifestly needs clarifi~ation.”’~~ 

To that end, it explored further the issue of “final 

policymaking authority” in St. Louis v. Prapr~tnik.’~~ In 

that case, the Court asserted, first, that “the identification 

of officials having [such] authority is a question of state 

(including local) law, rather than a question of fact for the 

jury.”lW Moreover, in attempting to limit the “legal standard for determining when isolated decisions by municipal 

officials or employees may expose [a] municipality to Section 1983 liability,” the Court determined that 

when a subordinate’s discretionary decisions are 

constrained or subject to review by authorized 

policymakers, they, and not the subordinate, have 

final policymaking authority. Positing a delegation based on their mere acquiescence in, or failure to investigate the basis of, the subordinate’s 

decisions does not serve Section 1983’s purpose 

where . . . the wrongfulness of those decisions 

arises from a [subordinate’s] retaliatory motive or 

other unstated rationale.”’ 

In this case, because the city subordinate in question did 

not possess delegated authority to deprive Praprotnik of 

his civil rights, the city avoided liability. 

Related to the issue of ultimate decisionmaking authority is the extent to which cities are liable for constitutional violations suffered at the hands of inadequately 

trained municipal employees. Following at least two disappointing attempts to resolve the question,lo* the Court 

held, in 1989, that municipalities may be liable for failure to 

US. Advisory Commission on Intergovernmental Relations 97 
sufficiently instruct employees, but “only where the failure 

to train in a relevant respect amounts to deliberate indifference to the constitutional rights of persons with whom [em- ployees] come into contact.”1o9 (Emphasis added.) 

While adding to the potential liability of cities, the 

Court was careful to circumscribe the conditions under 

which a plaintiff might seek damages for instructional defi- ciencies, noting that municipal responsibility may be inferred 

only where “the need for more or different training is so 

obvious, and the inadequacy so likely to result in viola- tion of constitutional rights, that the policymakers of 

the city can reasonably be said to have been deliberately 

indifferent to the need.”’1° Moreover, the Court added that 

even if such failure is evident, a “respondent must still 

prove that the deficiency in training actually caused. . . the ultimate injury.””’ 

Although cities have clearly borne the brunt of govern- mental liability claims, courts have considered the possibility 

that other jurisdictional entities may be considered “per- sons” for Section 1983 purposes. The record is a mixed one. 

In 1990, the Supreme Court decided that U.S. temtories cannot be held liable for damages as Section 1983 

“persons”;i12 however, a school board may not claim a 

“sovereign immunity” defense in Section 1983 actions, 

even when such actions are brought in state ~0urt.l~’ 

Of potentially major financial and regulatory significance is a recent ruling by the District Court for Western 

Kentucky considering county liability.l14 Although Judge 

Ronald E. Meredith could find no prior case law directly 

on point, he determined, employing Monell1ls and Will v. 

Michigan Department of State Police116 criteria, that under 

Kentucky law, counties more closely parallel municipal 

corporations than they do states. Consequently, they must 

‘%e considered persons for purposes of. . . Section 1983.”l17 

Clearly only the first legal round, the issue is likely to be 

revisited numerous times. 

Official Immunity 

Although municipalities and analogous local governments are included among the persons to whom Section 

1983 applies, numerous real people are not. Previously, 

the Supreme Court has determined that legislators engag- ing in legislative activities are absolutely immune from 

Section 1983 damages,’18 as are judges119 and prosecutors120 acting in their official capacities. At the same time, 

the Court has offered qualified immunity to both streetand decision-level executives; to police acting in good faith 

and with probable cause;’21 and “to officers of the executive branch,” depending on “the scope of discretion and 

responsibilities of the office. . . .”122 

In the 1989 case Will v. Michigan Department of State 

Police,l’ the Court extended Section 1983 immunity to the 

awarding of damages to state officials acting as state 

agents, reasoning that “a suit against a state official in his 

or her official capacity is not a suit against the official but 

rather is a suit against the official’s office. . . . As such, it is 

no different from a suit against the state itself,” and thus is 

barred by the Eleventh Amendment.’24 Though a victory 

98 U.S. Advisory Commission on Intergovernmental Relations 

€or state agencies, it is important to note that Will does not 

present a bamer to Section 1983 suits seeking injunctive 

Dr prospective relief from state officials acting in theiroffiial capacities, but rather, only to actions pursuing monetary damages.’= 

The Substantive Reach Expands 

While the Supreme Court has extended the range of 

official immunity and has moved to limit somewhat the 

conditions under which governments may be found liable 

for constitutional and statutory infractions, it has, ironically, broadened the substantive reach of Section 1983. Noteworthy in this regard are Golden State Transit COT. v. Los 

Angele~,’~~ Wilder v. Virginia Hospital and 

Dennis v. Higgins.128 

Traditionally, Section 1983 was thought to apply only 

to “interests secured by the Constitution”lr) in general, 

and the Fourteenth Amendment in particular. As a result, 

in its earlypost-Monroe utilizations, Section 1983 proved a 

relatively effective tool for redressing abrogations of basic 

civil rights and liberties. Beginning in 1980, the Court expanded the scope of the civil rights law to interests created 

by federal statutory provisions.’” It broadened that reach 

further in the cases mentioned above. 

Golden State. At issue in Golden State Transit (1989) 

were complex issues relating to collective bargaining, 

work stoppage, and the awarding of city franchises to taxicab companies. Specifically at issue was the City of Los 

Angeles’ denial of a franchise extension to Golden State, 

the city’s largest cab company, during a strike by the company’s workers. In a resulting legal action, Golden State 

alleged that the National Labor Relations Act (NLRA)131 

preempted the city’s franchising decision because it was in 

the midst of a labor dispute. Moreover, it asserted that the 

supremacy clause of the Constitution and NLRA give rise 

to rights enforceable by Section 1983. Although the cab 

company’s claim was denied by both the district 

and the Ninth it was vindicated in 1989 by the 

United States Supreme Court. 

The Court declared, 6-3, that NLRA creates rights 

against state interference in labor-management disputes. 

“Thus, if the state regulates conduct that is actually pro- tected by federal law, pre-emption follows as a matter of 

substantive right.”134 Speaking for the majority, Justice 

John Paul Stevens noted that participants to a collective 

bargaining agreement are afforded “the right to make use 

of ‘economic weapons’. . . free from . . . governmental interferen~e.””~ Because Los Angeles had violated that 

right, Golden State could employ the broad remedial 

scope of Section 1983. 

In dissent, Justice Arthur M. Kennedy, for himself, 

the chief justice, and Justice Sandra Day O’Connor, argued against an interpretation of Section 1983 allowing “a 

cause of action for damages when the only wrong committed by the State or its local entities is misapprehending 

the precise location of boundaries between state and federal power.”1J6 He went on to assert that Section 1983 “distinguishes secured rights, privileges, and immunities from 
those interests merely resulting from the allocation of 

power between State and federal Governments. . . .”13’ 

According to one observer, Golden State 

could significantly affect federal litigation. 

Preemption plaintiffs may now seek damages for 

prior injury under section 1983 as well as attorneys’ fees. In addition, because section 1983 was 

conceived as a powerful remedy for abuse by state 

officials, section 1983 suits embody exceptions to 

doctrines restricting federal jurisdiction. For example, section 1983 plaintiffs need not exhaust 

their remedies in state courts. In addition, section 

1983 is one of the few exceptions to the Anti-Injunction Act, which forbids federal court intervention in state judicial proceedings. Although 

the Court recently held that a federal court cannot enjoin a state court proceeding simply be- cause it infringes on an area preempted by federal 

law, Golden State creates an exception that almost swallows the rule.138 

Wilder v. Virginia Hospital Association. The year following Golden State, the Court added to the growing list of 

actionable deprivations with its ruling in Wilder v. Wginia 

Hospital Association (1990). At issue was the question of 

state reimbursement to health care providers for services 

rendered under Medicaid.139 In this case, the Virginia 

Hospital Association (VHA) contended that the provider 

reimbursement plan promulgated by the state and approved 

by the Secretary of the U.S. Department of Health and Human Services (HHS) violated the Medicaid Act because 

“rates are not reasonable and adequate to meet the econom- ically and efficiently incurred cost of providing care to Med- icaid patients. . . .”140 As a consequence, VHA sought to 

utilize Section 1983 as a cause of action to challenge Viginia’s compliance with the Medicaid Act. That challenge was 

subsequently upheld by the district court and affirmed by the 

Fourth Circuit on the grounds “that the language and legislative history of the Boren Amendment [to the Medicaid 

Act] demonstrate that it creates ‘enforceable rights’ and that 

Congress did not intend to foreclose a private remedy for the 

enforcement of those rights.”14i 

In his opinion for a narrowly divided (5-4) Court, Justice William J. Brennan, Jr., upheld the rulings of the lower courts, deciding that state Medicaid reimbursement 

rates can be challenged in Section 1983 suits. Speaking 

broadly to the relationship between statutorily conferred 

rights and Section 1983, Brennan asserted that a plaintiff 

alleging violation of a federal law may sue under the civil 

rights act “unless (1) ‘the statute [does] not create enforceable rights, privileges, or immunities within the 

meaning of [Section] 1983,’ or (2) ‘Congress has foreclosed such enforcement of the statute in the enactment 

substantive right to reasonable and adequate rates . . . enforceable by health care providers under Section 1983. . . .”143 

In dissent, Chief Justice Rehnquist rejected the 

Court’s reasoning, as much on his reading of congressional intent as on his solicitude for state autonomy in matters of Medicaid reimbursement. Citing relevant portions 

itself’ . 9,142 He concluded that the Medicaid Act “provides a 

of the Medicaid Act requiring states to compensate 

providers according to “methods and standards developed 

by the State. . (emphasis added), he concluded that the 

Court’s ruling would effectively reverse the policy dynamic contemplated by Congress: 

[Elvery Section 1983 action hereafter brought by 

providers to enforce [the Boren Amendment] 

will inevitably seek the substitution of a rate sys- tem preferred by the provider for the rate system 

chosen by the State. Thus, whenever a provider 

prevails in such an action, the defendant State 

will be enjoined to implement a system of rates 

other than the rates “determined in accordance 

with methods and standards developed by the 

State,” which the “State finds . . . are reasonable 

and adequate,” and with respect to which the State 

made assurances to the Secretary [of HHS] that the 

Secretary found “satisfactory.” The court orders 

entered in such actions therefore will require the 

States to adopt reimbursement rate systems different from those Congress expressly required 

them to adopt by the above-quoted language.145 

Dennis v. Higgins. Despite their potential ramifications, Golden State and Virginia Hospital Association simply 

extend the logic propounded a decade ago “that Section 

1983 generally . . . supplies the remedy for vindication of 

rights arising from federal The Court appeared to break entirely new ground in 1991, however, 

holding in Dennis v. Higghs that “suits for violation of the 

Commerce Clause may be brought under Section 1983.”14’ 

At issue in Dennis was a system of “retaliatory” taxes 

and fees imposed by the state of Nebraska on motor carriers operated in the state but registered in other states. In 

his complaint, petitioner Dennis claimed that the taxes 

and fees represented an unlawful burden on interstate 

commerce and that the state Department of Motor Vehicles and others were liable under Section 1983. 

The Nebraska Supreme Court denied the civil rights 

claim, holding that “despite the broad language of Section 

1983,” it does not create a cause of action “for violations of 

the commerce clause.”148 The state court, relying largely on 

a 1984 Eighth Circuit opinion,149 reasoned that such claims 

were not anticipated by Section 1983 because “among other 

things, ‘the Commerce Clause does not establish individual 

rights against government, but instead allocates power between the state and federal government^'."^^^ 

Finding that the Nebraska Supreme Court and the 

Eighth Circuit erred in construing the 1871 act too narrowly, the U.S. Supreme Court, in a 7-2 decision, asserted 

that “a broad construction of Section 1983 is compelled by 

statutory language that speaks of deprivations of “any 

rights, privileges, or immunities secured by the Constitution or 

laws.”1s1 (Emphasis in original.) Although the Court conceded that “the ‘prime focus’ of Section 1983 . . . was to 

ensure ‘a right of action to enforce the protections of the 

Fourteenth Amendment” and related ~tatutes,’~~ it nevertheless noted that its own rulings since 1980 had taken 

Section 1983 far beyond its original goal. 

U.S. Advisory Commission on Intergovernmental Relations 99 
Responding specifically to the commerce clause 

claim, the Court granted “that the. . . Clause is apowerallocating provision, giving Congress pre-emptive authority over the regulation of interstate However, 

it is also a substantive “restriction on permissible 

state regulation.” . . . [And] individuals injured by 

state action that violates this aspect of the Commerce Clause may sue and obtain injunctive and 

declaratory relief. . . . This combined restriction on 

state power and entitlements to relief under the 

Commerce Clause amounts to a “right, privilege, or 

immunity” under the ordinary meaning of those 

terms. . . . [Hence], the Commerce Clause of its 

own force imposes limitations on state regulation 

. . . , and is the source of a right of action of those 

injured by regulations that exceed such limitations. lS4 

Section 1983 and Expanded Immunities 

Recent Supreme Court rulings on Section 1983 have 

exhibited countervailing tendencies, expanding the substantive scope of the Act on the one hand, while, on the 

other, restricting its application through the use of immunities and other procedural devices.lS5 One obvious 

consequence is to leave municipalities (and municipal-like 

entities) especially vulnerable to liability for damages as 

well as the sort of open-ended prospective relief faced by 

cities and states alike. 

However, this strain on municipal budgets may not be 

the only result of the Court’s somewhat opposing stances 

in the realm of Section 1983. As one observer notes, the 

substantive expansion of the civil rights statute 

may. . . prove hollow for those plaintiffs most 

in need of section 1983’s special protection. 

Preemption plaintiffs are not among those whom 

section 1983 was intended to protect. At a practical level, many of these new plaintiffs can sustain 

litigation more easily and thus have less need of 

the incentives provided by section 1983 than civil 

rights plaintiffs generally do. Normatively, the 

rights generated by federal preemption do not 

have the same importance to individuals as the 

core concerns of section 1983-equal protection 

and due process. Extending section 1983 outside 

the core area weakens the argument that section 

1983 plaintiffs need special protections. By 

choosing the expansive “functional” vision of section 1983 rather than the narrower “historical” 

one, the Court may actually have diluted the ability of the statute to vindicate the rights that most 

concerned its framers. Bereft of its roots as a civil 

rights remedy, section 1983 loses much of itsjustification as a powerful remedy against abuses by 

state and local officials.156 

The Court’s expansion of Section 1983 causes of action, 

together with its “tendency to respond prophylactically” to 

that expansion via the route of official immunities and 

procedural roadblocks, while increasing the vulnerability 

of certain state and local governments, may, ironically, be 

decreasing the protection available to the intended beneficiaries of the Reconstruction ~tatute.’~’ 

Conclusion 

The increasing popularity of the public lawsuit, together with the Supreme Court’s apparent inability to 

speakbroadly or coherently to the subject, has had numerous fallouts for intergovernmental relations. No longer is 

the Court the umpire of the federal system in certain key 

respects. On the contrary, public law litigation has engendered the proliferation of multiple umpires in the form of 

575 federal district court judges. 

Moreover, in the absence of clear policy directives 

from the Supreme Court, these umpires possess considerable individual autonomy and power. Indeed, one result of 

Jenkins may be to add to that power in the future. As Justice Kennedy noted in concurrence, “This assertion of judicial power in one of the most sensitive policy areas, that 

involving taxation, begins a process that over time could 

threaten fundamental alteration of the form of government our Constitution embodie~.”’~” Possessed now of the 

power to tax, even where such taxation is hostile to state 

law, the district court potentially takes on a kind of supralegislative, supralocal aura. 

Nor would this potential necessarily be confined to 

the politically palatable realm of school desegregation. 

The Supreme Court itself has remarked that “desegregation case[s] do . . . not differ fundamentally from other 

cases involving the framing of equitable remedies to repair the denial of a constitutional right.”lS9 As one commentator has noted: 

The significance ofJenkins also lies in its potential 

application to other cases involving funding for 

constitutional violations where the equitable 

powers of the court also play a significant role, 

such as public housing, prisons, state apportionment schemes, and state mental health systems, 

among others.’@’ 

Jenkins, for all its nuance, injects another element of uncertainty into the intergovernmental landscape. This jurisprudential instability is evident as well in the evermutating doctrine of Section 1983 causes of action. Indeed, so dynamic has been interpretation of the now ancient civil rights statute that it has become a slippery legal 

slope for plaintiff and respondent alike. 

These realms of uncertainty, among other issues, are 

taken up in the next chapter. 

Notes 

Alfred M. Mamlet, “Reconsideration of Separation of Powers 

and the Bargaining Game,” Emory Law Journal 33 (1984): 685. 

100 US. Advisory Commission on Intergovernmental Relations 
Brown v. Board of Education, 349 U.S. 294 at 299 (1955). 

For background, see U.S. Advisory Commission on Intergov- ernmental Relations (ACIR), Regulatory Fedendism: Policy, 

Process, Impact, andReform (Washington, DC, 1984), pp. 4449. 

In what is apparently the first case of its kind, Judge Thomas E 

Hogan of the U.S. District Court for the District of Columbia 

found city officials liable for statutory and constitutional viola- tions in the operation of a foster care system. LaShawna A. v. 

Dixon, 762 E Supp. 959 (1991). 

Brown IT refers to Brown v. Board of Education, 349 US. 294 

(1955). This was the successor to Brown v. Board, 347 U.S. 483 

(1954). In Brown 11, the Supreme Court transferred to the appropriate U.S. district courts the responsibility for supervising 

the “transition to a system of public education freed of racial 

discrimination.” 349 U.S. 294 at 299. 

Ibid. In fact, Brown was the first in a series of judicial and legislative events which, in combination, worked to transform the 

judicial task. For example, Baker v. Carr, 369 US. 186 (1962), 

and subsequent redistricting controversies augured a more ac- tive role for the judiciary. During the late 1960s and 1970s, the 

Congress passed numerous acts (e.g., the various civil rights 

acts, the clean water and air acts, the Occupational Safety and 

Health Act, the Consumer Product Safety Act, and the Freedom of Information Act) requiring court enforcement. Class 

action rules were liberalized in 1966. In 1971, Judge Johnson 

ordered what was to become the prototypical institutional re- structuring in Wyatt v. Stickney, 334 E Supp. 1341 (M.D. Ala. 

1971). See Abram Chayes, “Public Law Litigation and the 

Burger Court,” Hmard Law Review 96 (1983-82): 6-7. See also, 

ACIR, Regulatory Federalism, pp. 44-49. 

Barry Friedman, “Book Review Right and Remedy,” Vanderbilt Law Review 43 (1990): 595. 

’ Abram Chayes, “The Role of the Judge in Public Law Litigation,” Hurvard Law Review 59 (1976): 1281. 

Chayes, “Public Law Litigation and the Burger Court,” p. 4-5. 

For further discussion, see sections following. 

Ibid. 

lo For further discussion, see sections following. 

l1 Friedman, “Book Review Right and Remedy,” p. 595-96. 

l2 See “Suing for Constitutional and Statutory Compliance: The 

Scope of Section 1983,” following. 

l3 See, for example, Chayes, The Role of the Judge in Public Law 

Litigation,” and Steven Flanders, “Blind Umpires, A Response to 

Professor Resnik,” Hastings Law Journal 35 (1984) 505. 

l4 Charles Fried, “Curbing the Judiciary,” New york Tiinas, No- vember 10,1981. See also, Gerald E. Fmg, “The Judicial Power 

of the Purse,” Universiv of Pennsylvania Law Review 126 (1978): 

715; Raoul Berger, Government by Judiciaiy: The Tmnsfoomation of the 14th Amendment (Cambridge, Massachusetts: Harvard University Press, 19% Donald L Horowitz, The Courts 

and SocidPoky (Mshingfon, DC The Bmkings Institution, 

l9lQ and Archibald Cox, l7ie Role of the Supreme Court in 

American Government (New York Word University Press, 

1976). 

l5 ‘The Supreme Court, 1989 Term: Leading Cases: II. Federal Ju- risdiction and procedure,” Hmard Law Review 104 (1990) 2%. 

161n general, the Court has declined to review the institutional 

restructuring programs of lower federal courts. See, for exam- ple, Liddel v. Missouri, 731 E 2d 1294 (8th Cir.) (ordering a tax 

increase to finance school desegregation), cert. denied, 469 

US. 816 (1984); Newman v. Alabama, 559 E 2d 283 (5th Cir.) 

(restructuring the state’s prisons), cert. denied, 438 U.S. 915 

(1978); U.S. v. Chicago, 549 E 2d 415 (7th Cir.) (prohibiting the 

disbursement of federal funds until minority police hiring and 

promotion goals were met), cert. denied, 434 US. 825 (1977). 

The Court has occasionally reprimanded lower court action, 

but only somewhat cryptically. See Rizzo v. Goode, 423 U.S. 

362 (1976) (hinting that constitutional comity principles may 

extend to the relationship between federal courts and local 

governments); Milliken v. Bradley, 418 US. 717 (1974) (on the 

inappropriateness of interdistrict desegregation absent proof 

of interdistrict de jure discrimination). Cases cited in Hatvurd 

Law Review 104 (1990): 297. 

110 S. Ct. 625 (1990). 

l8 The litigation began in 1980. 

1982 Stat. 81, as amended, 42 U.S.C. section 3601 (1982 ed.). 

2o 10 SCt. 625 at 629. 

21 The fines for the city were $100 the first day, to be doubled for 

each consecutive day of noncompliance; those for the council 

members were $500 a day. Ibid., p. 630. 

22U.S. v. Yonkers, 856 E 2d 444 (2d Cir. 1988). The appeals 

court limited fines against the city so they would not excecd 

$1 million a day. 

23 110 S. Ct. 625 at 631. The Court did not speak to the liability of 

the city, asserting instead that, “here can be no question about the 

liability of the city of Yonkers for racial discrimination. . . . Nor do 

me question . . . the District Court’s remedial order. . . .” Ibid. 

24Chief Justice Rehnquist was joined in his majority opinion by 

Justices White, O’Connor, Scalia, and Kennedy. Justice Bren- nan filed a dissenting opinion, in which he was joined by Justices Marshall, Blackmun, and Stevens. 

25 110 S. Ct. 625 at 634. 

26 Ibid. See also Joseph E Zimmerman, “Federal Judicial Remedial Power,” Publiiis: Tile Journal of Federalism 20 (Summer 

1990): 45-61. 

27 110 S. Ct. 1651 (1990). 

28 Jenkins v. Missouri, 593 E Supp. 1485 (WD Mo. 1984). During 

the year following the filing of the original complaint in 1977, 

the district court realigned KCMSD as a defendant in the litigation. School District of Kansas City v. Missouri, 460 E Supp. 

421 (WD Mo. 1978). 

Originally, the court estimated the cost of desegregation to be 

nearly $88 million over a three-year period. 

30 The court assessed the state $67,592,072 and the school district 

$20,140,472, Even this amount, however, was problematic for 

the school district. The Missouri Constitution limits local 

property taxes to $1.25 per $100 of assessed valuation unless 

voters approve a higher tax of up to $3.25. Further, the Constitution requires property tax rates to be rolled back when property is assessed at a higher valuation, presumably insuring that 

taxes won’t be increased purely as a result of reassessments. 

Statutory law further limits the financial discretion of the 

school district. 110 S. Ct. 1651 at 1656 165% 

31 Jenkins v. Missouri, 807 E 2d 657 (8th Cir. 1987), cert. denied, 

484 U.S. 816 (1987). 

32855 E 2d. 1295 (8th Cir. 1988). 

33 110 S. Ct. 1651 at 1658 9. 

34 Ibid., p. 1663. 

35 The Court largely avoided the constitutional issues, basing its 

decision primarily on comity principles. The Court was unani- mous in striking down the district court’s direct tax imposition, 

but divided sharply (White, Brennan, Marshall, Blackmun, 

and Stevens for the majority, and Kennedy, Rehnquist, 

U.S. Advisory Commission on Intergovernmental Relations 101 
O’Connor, and Scalia concumng in part and concumng in 

judgment) on the appeals court’s enjoinment strategy. 

36 110 S. Ct. 1651 at 1666. See also John Clayton Thomas and 

Dan H. Hoxworth, “The Limits of Judicial Desegregation 

Remedies after Missouri v. Jenkins,” Publius: The Journal of 

Federalism 21 (Summer 1991): 93 108. 

37Spallone v. U.S., 110 S. Ct. 625 (1990) at 634. 

38 110 S. Ct. 1651 (1990). 

39 HarvardLawReview 104(1990): 304, citing 110s. Ct. 625 at 653, 

quoting Whitcomb v. Chavis, 403 U.S. 124 at 161 (1970). 

40 Interestingly, the debate internal to Jenkins saw the Court dis- agreeing on highly nuanced understandings of previous case 

law. Thus, Justice White’s opinion interpreted Griffin v. 

County School Board, 377 U.S. 218 (1964), as authorizing dis- trict courts to order tax levies in school desegregation cases. 

Justice Kennedy, however, found the Griffin analogy to be 

badly flawed, contending, first, that where Griffin involved 

“an unrepentant and recalcitrant school board” that openly 

funded white schools while refusing even to operate black 

schools (110 S. Ct. 1651 at 1673), the KCMSD was entirely sym- pathetic and willing to implement any measures necessary toward alleviating the unconstitutional conditions. Moreover, 

the school board at issue in Griffin (Prince Edward County, 

Virginia)possessed the power to impose a higher tax, whereas 

KCMSD lacked any plenary taxing authority, so that even an 

indirect judicial taxing order amounts to the commandeering 

of state constitutional practice. (Ibid.) For a more thorough 

discussion, see Douglas J. Brocker, “Taxation without Representation: The Judicial Usurpation of the Power to Tax in Mis- souri. v. Jenkins,” North Carolina Law Review 69 (1991): 741. 

41 110 S. Ct. 625 at 632, quoting Anderson v. Dunn, 6 Wheat. 204 

at 231 (1821). 

42 Harvard Law Review 104 (1990): 304. 

43 For the most complete discussion of this issue and one that results in a negative response to the question of judicial compe- tency in the area of institutional management, see Horowitz, 

The Courts and Social Policy. 

44 See discussion which follows. 

4s See particularly, various accounts of the work of Judge Frank 

Johnson in Alabama, e.g., Tinsley E. Yarbrough, Judge Frank 

Johnson and Human Rights in Alabama (Tuscaloosa: University of Alabama Press, 1981) and Robert Francis Kennedy,Judge 

Frank Johnson, Jt: A Biography (New York: Putnam, 1978). For 

a masterful account of the travails of the first “managerial 

judges,” those charged with implementing school desegregation, see James W. Peltason, Fi’-Eight Lonely Men (New 

York Harcourt, Brace, and World, 1961). 

46An assessment of the managerial competence of the federal 

trial courts is beyond the scope of this chapter and the exper- tise of its author. However, see, among others, Larry W. 

Yackle, Reform and Regret: The Stov ofFederal Judiciallnvolvement in the Alabama Prison System (New York Oxford Univer- sity Press, 1989); Horowitz, 7he Courts and SocialPolicy; Susan 

Sturm, “Resolving the Remedial Dilemma: Strategies of Judi- cial Intervention in Prjsons,” University of Pennrylvania Law 

Review 138 (1990): 805; Flanders, “Blind Umpires, AResponse 

to Professor Resnik”; Donald L Horowitz, “Decreeing Orga- nizational Change: Judicial Supervision of Organizational 

Change,” Duke Law Journal 33 (1983): 1265; Judith A. Resnik, 

“Managerial Judges,” Harvard Law Review 96 (1982) 376; and 

Chayes, “The Role of the Judge in Public Law Litigation.” 

47See, for example, “Race in America,” Die Christian Science 

Monitor, January 17, 1989, citing recent polls suggesting that 

the public is increasingly committed to the goals of equality. 

48Elrod v. Burns, 427 U.S. 347 (1976) at 351, quoting Baker v. 

Cam, 369 U.S. 186 at 210. In each case, the Court was discuss- ing what constituted a so-called “political case.” “[Tlhe separation-of-powers principle, like the politicalquestion doctrine, 

has no applicability to the federal judiciary’s relationship to 

the States” (Elrod v. Bums at 349). As mentioned previously 

(see note 33), Baker v. Carr was a watershed event for the new 

public law. Its distinguishing separation of powers between the 

federal branchb as the stuff of “political questions” from rela- tions between nation and state as legal fodder was crucial. 

According to Horowitz, with the clearing of the “political 

thicket” that took place in legislative reapportionment, state 

administrative terrain began to look like mere underbrush. If 

courts could refashion state and federal legislatures, not to 

mention electoral rules under the Voting Rights Act and pa- tronage systems under the first amendment, why, then, could 

they not refashion schools, prisons, welfare administrations, 

mental hospitals, housing authorities, and all the rest? What 

was unthinkable before became litigable. Horowitz, “Decree- ing Organizational Change: Judicial Supervision of Organizational Change,” pp. 1280-1281 (footnotes omitted). 

49 Laurence Tribe, American Constitutional Law, 2d ed. (Westbury, New York The Foundation Press, 1988), p. 21. 

”In this section, an attempt will be made to avoid such highly 

charged terms as “activism” and “restraint” and “liberalism” 

and “conservativism” in describing the judicial response to institutional reform. In most cases, such terms are more obfus- cating than illuminating when describing the complexities of 

judicial decisionmaking and the often, at first blush, surprising 

judicial alignments in what might be called “federalism cases.” 

See the section on “Judicial Philosophy” below. 

David Rudenstine, “Judicially Ordered Social Reform: Ne6 

federalism and Neonationalism and the Debate over Political 

Structure,” Southern California Law Review 59 (1986): 455. 

52 Chayes, “Public Law Litigation and the Burger Court,” p. 59. 

530wen M. Fiss, “The Supreme Court 1978 Term; Foreword: 

The Forms of Justice,” Harvurd Law Review 93 (1979): 5. 

54Mamlet, “Reconsideration of Separation of Powers and the 

Bargaining Game,” p. 686. 

s5 Frug, “The Judicial Power of the Purse,” pp. 735-736. 

56 Brocker, “Taxation without Representation,” p. 741. 

s7Barry R. Bell, “Prisoners’ Rights, Institutional Needs, and the 

Burger Court,” Virginia Law Review 72 (1986): 161. 

”See, for example, Banning v. Looney, 213 E 26 771 (CA10, 

1954) (per anam); cert. denied, 348 U.S. 859 (1954): “Courts are 

without pwer to supervise prison administration or to interfere 

with the ordinary prison rules or regulations.” For a more thorough discussion of the historical relationship between courts and 

wtodial administration see ACIR, Jails: Intergovernmental Di- mensions of a Local Problem (Washington, DC, 1984). 

54 James R. Robertson, “The Constitution inProtective Custody: 

An Analysis of the Rights of Protective Custody Inmates,” 

University of Cincinnati Law Review 56 (1987): 94. 

6o Inmates went, in a decade, from possessing virtually no justiciable rights to being recognized as having at least the basic, if 

somewhat truncated, constitutional rights. See, for example, 

Battle v. Anderson, 564 E 26 388 (CAlO, 1977) (Eighth Amendment right to protection from degenerative prison conditions); 

Bonner v. Coughlin, 517 E 2d 1311 (CA7,1975), cert. denied, 

435 U.S. 932 (1978) (limited Fourth Amendment protection 

from search and seizure); Woodhous v. Virginia, 487 E 26 889 

(CA4, 1973) (per curiam) (reasonable protection from pervasive inmate violence); Sostre v. McGinnis, 442 E 2d 178 (CA2 

1971) (cert. denied 404 US. 1049 (1972) (limited right to freedom of speech); Jackson v. Bishop, 404 E 2d 571 (CA8,1968) 

102 U.S. Advisory Commission on intergovernmental Relations 
(corporal punishment prohibited); Hamilton v. Covington, 

445 E Supp. 195 (W.D. Ark. 1978) (protection from fire haz- ards); Wright v. Enomoto, 462 E Supp. 397 (N.D. Cal. 1976) 

(right to procedural due process before being placed in administrative segregation), aff‘d. 434 US. 1052 (1978); Teterud v. 

Gillman, 385 E Supp. 153 (S.D. Iowa 1974) (prisoners allowed 

freedom of religion), aff’d. sub nom. Teterud v. Burns, 522 E 

26 357 (8th, 1975); Carter v. McGinnis, 351 E Supp. 787 (WD. 

N.Y. 1972) (inmates have Fifth Amendment right against selfincrimination in disciplinary proceedings); and Sawyer v. Sigler, 

320 E Supp. 690 (D. Neb. 1970) (limited right to medical care), 

atrd. 445 E 26 818 (CM, 1971) (per curiam). See Robertson, p. 

94. Still, it should be noted that convicted prisoners and pretrial 

detainees do not retain all the rights available to the unincarcerated. See, for example, Bell v. Wolfish, 441 U.S. 520 (1979). 

61 See, for example, Wyatt v. Stickney, 344 E Supp. 373 (M.D. Ala 

1!l?2) (reforming mental institutions) and Pugh v. We, 406 E 

Supp. 318 (M.D. Ala 1976) (reforming prisons) See also note 43. 

“Reconsideration of Separation of Powers and the Bargaining 

Game,” p. 689. 

62 Wahington Post, June 18, 1991. 

64 Ibid. 

65 Ibid. 

6.5 See, for example, Rhoda v. Chapman, 452 US. 337 (1981). For a 

discussion of Rhoda, see ACIR, Regulatory Federalism, pp. 

4849. 

67 Mamlet, “Reconsideration of Separation of Powers and the 

Bargaining Game,” p. 691. 

Ibid. See also, Chayes, “Public Law Litigation and the Burger 

Court.” 

691bid., p. 692. See, for example, Rizzo v. Goode, 423 U.S. 362 

(1976) (injunction denied where “requisite personal stake in 

the outcome” is not demonstrated) and OShea v. littleton, 414 

U.S. 488 (1974) (injury cannot be ‘‘conjectural” or “hypothetical”) 

”See City of Los Angeles v. Lyons, 461 U.S. 95 (1983). 

71 Mamlet, “Reconsideration of Separation of Powers and the 

72 Ibid. 

73 Youngberg v. Romeo, 447 U.S. 307 (1982). 

74Rhode~ v. Chapman, 452 U.S. 337 (1981) at 347. 

75 Bell v. Wolfish, 441 U.S. 520 (1979). 

76For one thing, custodial inmates, by the nature of their con- finement, have a more truncated liberty interest than othersin 

society. In its 1991-1992 term, the Supreme Court decided to 

apply a more flexible standard to the implementation of consent decrees. While the ruling would appear to benefit state 

and local authorities, allowing them more easily to modify decrees, its full effects remain to be seen. Rufo v. Inmates of the 

Suffolk County Jail, 112 S. Ct. 748 (1992). 

77 “Prisoners’ Rights, Institutional Needs, and the Burger 

78 Ibid. 

79 Chayes, “Public Law Litigation and the Burger Court,” p. 56. 

8o Ibid., pp. 56-57. 

Hereafter referred to as Section 1983.42 U.S.C. Section 1983, 

originally, Section 1 of the Ku Klux Klan Act of 1871. The 30- year benchmark is derived from the Supreme Court’s decision 

in Monroe v. Pape, 365 U.S. 167 (1961). For a more thorough 

discussion of earlier Section 1983 case law, beginning with 

Monroe v. Pape, see Cynthia Cates Colella, “The Mandate, 

Bargaining Game,” p. 692. 

court,” p. 190. 

the Mayor, and the Menace of Liability,” Intergovernmental 

Peqective 7 (Fall 1981) 15. 

82 From 1871 to 1961, the Supreme Court cited the legislation just 

36 times. In contrast, from 1961 to April 1991, Section 1983 has 

been cited 431 times. 

83342 US. 117 (1961). 

84 In fact, the following discussion will be limited only to that 

Eleventh Amendment jurisprudence relevant to Section 1983 

litigation. For a more thorough discussion, see, among others, 

Vicki C. Jackson, “The Supreme Court, the Eleventh Amend- ment, and State Sovereign Immunity,” Yale Law Journal 98 

(1988): 1; and David Mason, “Slogan or Substance? Understanding ‘Our Federalism’ and the Younger Abstention,” Cornell Law Review 73 (1988): 852. 

”Two theories about the intent of the Eleventh Amendment 

have been particularly prominent. “Diversity interpretation” 

holds that the amendment’s prohibition was meant only to ap 

ply to suits “between a State and Citizens of another State,” 

(U.S. Constitution, Article 111) and was not constructed to pro- hibit any other federal jurisdiction. Such an interpretation 

would give wide latitude to federal courts in federal question 

cases. The second theory, the “immunity theory,” holds that 

the doctrine of sovereign immunity requires consent in order 

for suits to be lodged against state or federal governments. 

Such an understanding severely limits federal question cases. 

In fact, the Supreme Court has teetered between the two, never fully accepting one or the other. Peter W. Low and John C. 

Jeffries, Jr., Civil RiglttsActions: Section 1983 and Related Stat- utes (Mineola, New York Foundation Press, 198S), pp. 17-18. 

86 Welch v. Texas Dept. of Highways and Public Transportation, 

483 US. 468 (1987) at 521 (Brennan, J., dissenting), citing John 

V. Orth, The Judicial Power of the United States: Vie Eleventh 

Amendment in American History (New York Oxford Universi- ty Press, 1987). 

87 209 U.S. 123 (1908). 

134 U.S. 1 (1890). 

Tribe, American Constitutional Law, p. 176. 

Low and Jeffries, Civil Rights Actions, p. 18. 

91209 U.S. 123 at 159. 

92Low and Jeffries, Civil Rights Actions, p. 19. 

93 Ibid., p. 21. Moreover, such suits may be only for prospective 

relief and not for current monetary damages. See Will v. Michigan State Police, 491 U.S. 58 (1989). The Will case is discussed 

below under “Official Immunity.” 

94 Lincoln County v. hning, 133 U.S. 529 (1890). 

95M~nell v. Department of Social Services, 436 U.S. 658 (1978). 

96 See Tenney v. Brandhove, 341 US. 367 (1951), establishing the 

doctrine that persons engaging in legitimate legislative activities enjoy absolute immunity from civil liability; and Pierson v. 

Ray, 386 U.S. 547 (1967), extending immunity to judicial acts. 

97 Low and Jeffries, Civil Rights Actions, p. 21. 

98 436 US. 658. 

99 455 U.S. 622 (1980). 

loo Ironically, city officials had no definitive way of knowing they 

had acted unconstitutionally because Supreme Court deci- sions establishing a right to a hearing were issued weeks after 

Chief Owen’s firing. Not discussed in the text but of considerable significance to local governments facing liability suits, was 

the Supreme Court’s application, also in 1980, of the Civil 

Rights Attorney’s Fees Award Act (42 U.S.C. Section 1988) to 

Section 1983 claims. See Maine v. Thibotout, 448 U.S. l(1980) 

U.S. Advisory Commission on Intergovernmental Relations 103 
and Maher v. Gagne, 448 U.S. 122 (1980). Section 1988 allows 

the prevailing party in Section 1983 cases to collect attorney’s 

fees as part of the cost of litigation. It thus may increase consid- erably the expenditures of losing parties. 

‘01 475 U.S. 469 (1986). 

‘021bid., p. 481. The constitutional violation at issue in Pembaur, 

the Fourth Amendment prohibition on the warrantless search 

of a home or office (even to arrest a third party), was not firmly 

established until after the action had been culminated. Stea- gald v. U.S., 451 U.S. 204 (1981). 

‘03 Peter H. Schuck, “Municipal Liability under Section 1983: 

Some Lessons from Tort Law and Organizational Theory,” 

Georgetown Law Journal 77 (1989): 1753. See, for example, City 

of St. Louis v. Praprotnik, 485 U.S. 112 (1988); City of Spring- field v. Kibbe, 481 U.S. 1033 (1987) (per curiam); and City of 

Los Angeles v. Heller, 475 U.S. 796 (1986). 

‘O‘City of St. Louis v. Praprotnik, 485 U.S. 112 (1988) at 119. 

lo5 Ibid. 

lo61bid., p. 112. 

lo’ Ibid. 

lo’ Oklahomav. Tuttle, 471 U.S. 808 (1985) and City of Springfield 

v. Kibbe, 481 U.S. 1033 (1987). 

‘09City of Canton v. Hams, 489 U.S. 378 (1989). It is important, 

also, to note that the Court has refused to impose the doctrine 

of respondeat superior on cities. That doctrine holds that a 

master is liable for the negligence of servants, even if the mas- ter was not negligent and did everything possible to prevent 

the servant from acting negligently. Monell v. Department of 

Social Services, 436 U.S. 658 at 691. 

489 U.S. 378 at 390. 

“‘Ibid., p. 391. 

‘12Ngiraingas v. Sanchez, 110 S. Ct. 1737 (1990). 

l13Howlett v. Rose, 110 S. Ct. 2430 (1990). 

11‘ Smallwood v. Jefferson County Government, 753 E Supp. 657 

(W.D. Kent. 1991). 

436 U.S. 658. 

‘I6 109 S. Ct. 2304 (1989). This case will be discussed below. 

117 753 E Supp. 657 at 660. Where counties, through agreements 

with municipal governments, act as municipal entities, they 

are currently liable for damages under Section 1983. See, for 

example, Ross v. United States, 910 E 2d 1422 (CA7, 1990). 

‘18Tenney v. Brandhove, 341 U.S. 367 (1951). 

119 Pierson v. Ray, 386 U.S. 547 (1967). 

‘201mbler v. Pachtman, 424 U.S. 409 (1976). 

121 Pierson v. Ray, 386 U.S. 547. But see, recently, Ross v. United 

States, 910 E 26 1422(CA7,1990), ruling a deputy sheriff ineligible for qualified immunity where his preventing private in- tervention to save the life of a drowning child may have caused 

the child‘s death. 

‘22Scheuer v. Rhodes, 416 U.S. 232 (1974). For instance, a governor, acting under perceived emergency conditions, would have 

a better defense against liability claims because his responsibi- lities are so wide-ranging and his discretion, as the immediate 

and ultimate executive officer, is necessarily so broad. 

123 109 S. Ct. 2304 (1989). 

1241bid., p. 2311. 

“Of course, a State official in his or her official capacity, when 

sued for injunctive relief, would be a person under Section 

1983 because ‘official capacity actions for prospective relief are 

not treated as actions against the State.”’ Ibid., footnote 10, cit- ing Ex Parte Young, p. 159 160. Moreover, in 1991, the Court 

determined that “state officers may be held personally liable 

for damages under Section 1983, based on actions taken in 

their official capacities.” Hafer v. Melo, 112 S. Ct. 358 (1991). 

lZ6 110 S. Ct. 444 (1989). 

111 S. Ct. 865 (1991). 

129 According to Justice Kennedy, Representative Shellabarger, 

the sponsor of the civil rights statute, “spoke only of interests 

secured by the Constitution.” Golden State Transit Corporation 

v. Los Angela, 110 S. Ct. 444, Kennedy, J., dissenting at 454. 

130 See, for example, Wright v. Roanoke Redevelopment and 

Housing Authority, 479 U.S. 418 (1987) (Section 1983 may be 

used as a cause of action against rights to a particular calcula- tion of rent based on the Brooke Amendment to the United 

States Housing Act of 1937,42 U.S.C. Sec 1437a); and Maine 

v. Thiboutot, 448 U.S. 1 (1980) [Section 1983 may be used as a 

cause of action to secure benefit rights created by the Social 

Security Act, 42 U.S.C. Sec. 602 (a)(?]. 

13’ 49 Stat. 449, as amended, 29 U.S.C. Sec. 151 et seq. 

132660 E Supp. 571 at 575 (C.D. Cal. 1981). 

133857 E 26 631 at 634 35 (9th Cir. 1988). 

13‘ 110 S. Ct. 444 at 450. 

135 Ibid., p. 45 1. 

136 Ibid., p. 453 (Kennedy, J., dissenting). 

137 Ibid., p. 454. 

138‘rThe Supreme Court, 1989 Term: 111. Federal Statutes and 

Regulations,” Harvard Law Review 104 (1990): 347. 

139 At issue were the reimbursement requirements of the 1980 Boren Amendment to the Medicaid Act, 42 U.S.C. Sec 

1396a(a)(13)(A). See also, ACIR, Medicaid: Intergovernmental 

Trends and Options (Washington, DC, 1992). 

Complaint, para. 1, App. 4 cited in Wilder v. Virginia Hospital 

Association, 110 S. Ct. 2510 at 2514 (1990). 

Ibid., p. 2515, citing Virginia Hospital Association v. Baliles, 

868 E 26 653 (CA4 1989). 

Ibid., p. 2517, citing Wright v. Roanoke Redevelopment and 

Housing Authority, 479 U.S. 418 at 423 (1987). In order to create 

statutory rights, the Congress must be clear in its intent and not 

merely state a “congressional preference.” Pennhmt State 

School and Hospital v. Halderman, 451 U.S. 1 at 19 (1981) 

110 S. Ct. 2590 at 2517. 

‘“Ibid., p. 2525 (Rehnquist, C.J., dissenting) citing the Boren 

Amendment. 

145 Ibid. (Rehnquist, C.J., dissenting) (footnotes omitted). 

1461bid., p. 2526 (Rehnquist, C.J., dissenting), making note of 

14’ 111 S. Ct. 865 (1991). 

‘48Denni~ v. State, 234 Neb. 427,451 N.W. 2d 676 at 678 (1990). 

149 Consolidated Freightways Corp. of Delaware v. Kassel, 730 E 

12’ 110 s. Ct. 2510 (1990). 

Maine v. Thiboutot, 448 US. l(1980). 

2d 1139 (CA8), cert. denied, 469 U.S. 834 (1984). 

111 S. Ct. 865 at 868 (citation omitted). 

lS1 Ibid., p. 868. 

15* Ibid., p. 869. 

Ibid., p. 870. 

”‘Ibid., pp. 870-871, 872. 

104 U.S. Advisory Commission on Intergovernmental Relations 
-- 

lS5 On the issue of procedural restrictions, see Parratt v. Taylor, 

451 U.S. 527 (1981) (denying a Section 1983 claim based on 

simple negligence where plaintiff failed to seek initial remedy 

through the state tort claims procedure); and Hudson v. Palm- er, 468 US. 517(1984)(extending Parratt limitations to “inten- tional, unauthorized deprivations”). Cited in Harvard Law 

Review 104 (1990): 349. 

Hmd Low Review 104 (1990): 347. 

Gildin suggests that this phenomenon of countervailance in 

Section 1983 decisions is due to the Court’s applying common law 

doctrines to issues of official immunity, while refusing to apply 

those doctrines to causes of action. Gary S. Gildin, “Immunizing 

Intentional Violations of Constitutional Rights through Judicial 

Legislation,” Emory Law Journal 38 (1989): 371. 

15’ 110 S. Ct. 1651 at 1678-79 (Kennedy, J. concurring in part and 

concurring in judgment). 

Swann v. Charlotte-Mecklenburg Board of Education, 402 

US. l(1971) at 15-16. 

160 Brocker, “Taxation without Representation,” p. 766. 

U.S. Advisory Commission on Intergovernmental Relations 105 
106 U.S. Advisory Commission on Intergovernmental Relations 
Conclusions and Prognoses 

From the start, [President] Washington’s Court did just what it waspicked to do. After hesitating with preliminary actions in several lawsuits, the Court held, in the 1793 case of Chisholm v. Georgia, just what state sovereignty advocates had feared it would do and what the 

Constitution ’sproponent ’s hadpromised it would not: it ruled that a citizen of one state could 

sue ?he government of another state in the Supreme Court. . . . The Chisholm decision was 

hailed by some as an advance for the national government, and blasted by others as “annihilating the sovereignty of the states. ” Georgia’s state assembly was so exercised by the decision 

that it actually made any attempt to carry out the Court’s mandate a felony punishable by 

“hanging without benefit of clergy. ” And other states were so incensed by the Chisholm 

Court’s rampant nationalism that Congress was persuaded to act promptly. Less than a year 

latec Congress passed the Eleventh Amendment to the Constitution. . . .’ 

Umpires of Federalism 

Throughout its history, the task of refereeing the precarious balance between national and state interests has 

occasionally thrust the Supreme Court to the center of 

federalism’s maelstroms, from Chisholm, to Dred Scott, to 

Brown v. Board of Education. More frequently, but with 

little public notice and measured opposing reaction, the 

Court steers the course of less turbulent intergovernmental 

storms. Unlike President Washington’s Court, which was 

specifically chosen to exclude those who were either “am- bivalent about the new national government, or who . . . were advocates of strong state powers,”* later Courts may 

be characterized by a kind of collective equivocation in the 

face of a continuing caseload rife with often subtle impli- cations for the delicate balance of federalism. 

The Supreme Court is an enigma in flux. Over the 

past decade, the Court saw the departures of Justices Potter Stewart, Lewis F. Powell, Jr.,William J. Brennan, Jr., 

and Thurgood Marshall, and Chief Justice Warren E. 

Burger. Replacing the old guard were Justices Sandra Day 

O’Connor, Antonin Scalia, Arthur M. Kennedy, David H. 

Souter, and Clarence Thomas. William H. Rehnquist was 

elevated to the position of chief justice. 

The “graying Court” of the early 1980s is increasingly 

the “middle-aged Court” of the 1990s. The Democratic 

Court of Roosevelt, Truman, Kennedy, Johnson, and per- haps, ironically, Eisenhower gave way almost completely 

to the Republican Court of Nixon, Ford, Reagan, and 

Bush. Furthermore, the Court’s long-standing liberal bent 

gave way to a conservative inclination, most often realized 

in its Fourth, Fifth, and Sixth Amendment rulings. Yet, 

while the focal confrontation over civil liberties and rights 

involves the fundamental constitutional issue of federalism, the topic, for all its historical significance, is seldom 

discussed or fully under~tood.~ 

The following discussion is an attempt to characterize 

the current Supreme Court in terms of its intergovernmental philosophy. Such collective characterizations, regardless of institution or subject matter reviewed, are 

inherently risky, particularly with regard to what may be 

the nation’s least comprehensible governing body. 

An Era of Ambivalence: 

Jurisprudential Federalism in the Eighties 

As mentioned above, the Supreme Court of the 1980s 

and early 1990s may be characterized in terms of its collective equivocation on questions of federalism. Such ambiv- alence was particularly apparent and noteworthy in the 

dramatic philosophical shift occurring between the 1976 

U.S. Advisory Commission on Intergovernmental Relations 107 
opinion in National League of Cities (NLC) v. Usery and the 

1985 ruling in Garcia v. San Antonio Metropolitan Transit 

Authority (see Chapter 6 for additional details). In less 

than a decade, the Court moved from a position favoring 

%nth Amendment protection for “traditional” and “integral” state functions to one that abandoned specific con- stitutional defenses against intrusive federal regulations. 

Of course, the NLC-to-Garcia reversal need not have 

augured continuing uncertainty in the Court’s handling of 

federal-state relations issues. Rather, Garcia’s legacy, followed in 1988 by South CaroZina v. Bakez (see Chapter 6) may 

have indicated a new and certain (if federally deferential) 

course. ?b the contrary, however, a cursory review of Court 

decisions over roughly the past decade uncovers an ambivalence-albeit, an ambivalence leaning toward national inter- ests-over the direction and balance of judicial federalism. 

Of the major intergovernmental cases listed in Bble 

8-1,13 were decided in favor of the federal government or 

of business interests, and eight in favor of state and local 

governmental concerns. At first blush, therefore, it would 

seem that, despite the change in jurisprudential language 

that accompanied the NLC overturn, the Court continued, during the past decade, to grapple with its federalism 

caseload, less according to some rigid philosophical guide- line than according to the facts of each case. 

On the other hand, if one reads the state-favorable 

decisions in the implied preemption cases as logical extensions of the Garcia doctrine: a more compelling argument may be made for a nationalist reading of Supreme 

Court policies in the 1980s. Moreover, a trend toward 

greater nationalism in Court outcomes may be bolstered 

by two additional factors. First, each of the major cases allocating power between federal and state or local legislatures (Garcia, Baker, Dole, and Croson) was decided in 

favor of national interests. Second, using Garcia as a judicial bellwether, of those cases decided in 1985 and after, 11 

- ~ ~~~ ~ ~~ 

Table 8-1 

Winners and Losers in Selected U.S. Supreme Court Cases, 1980-1 991 

Case’ Date SubjectZ National’ State4 

Decided for 

Garcia v. San Antonio Metropolitan Transit Authority 1985 DO/CC X 

South Carolina v. Baker 1988 %ation X 

South Dakota v. Dole 1987 Spending X 

English v. General Electric 1990 IP 

Silkwood v. Ken-McGee 1984 IP 

Pacific Gas & Electric v. SERC&D 1983 IP 

Tyler Pipe v. Washington 1987 DCC X 

Reeves v. Stake 1980 DCC 

White v. MACCE 1983 DCC 

SCT v. Wunnicke 1984 DCC X 

NECI v. Limbach 1988 DCC X 

Richmond v. Croson 1989 14th Amendment X 

Spallone v. United States 1990 Equity 

Missouri v. Jenkins 1990 Equity /Comity X 

Owen v. Independence 1980 42 U.S.C. 1983 X 

Pembaur v. Cincinnati 1986 42 U.S.C. 1983 X 

St. Louis v. Praprotnik 1988 42 U.S.C. 1983 

Canton v. Harriss 1989 42 U.S.C. 1983 X 

Will v. Michigan 1989 42 U.S.C. 1983 

GST v. Los Angeles 1989 42 U.S.C. 1983 X 

Wilder v. Virginia Hospital Association 1990 42 U.S.C. 1983 X 

Dennis v. Higgins 1991 42 U.S.C. 1983 X 

Key: 

DO-Direct order 

CC-Commerce Clause 

IP-Implied Preemption 

DCC-Dormant Commerce Clause 

Includes only Supreme Court cases cited in the text and discussed at some length in Chapters 6 and 7. The table does not include merely 

referenced Supreme Court cases or lower court cases. 

2Refers to the major constitutional or statutory aspect of the case. In addition, many of the cases had important Tenth Amendment 

implications. 

Indicates a final disposition favorable to federal governmental or business interests and/or unfavorable to state governmental interests. 

Indicates a final disposition favorable to state and/or local governmental interests. 

5The Hams outcome was mixed. The Court added to the potential liability of cities for inadequate employee training, but carefully 

circumscribed the conditions under which plaintiffs might seek damages for instructional deficiencies. 

X 

X 

X 

X 

X 

X 

X 

X 

X 

108 U.S. Advisory Commission on Intergovernmental Relations 
were decided against state and local interests, while only 

four were decided in their favor. 

An analysis of Supreme Court decisions from 195310 

1989 involving state and local governments as direct parties revealed similar trends? The authors found that state 

and local governments won smaller proportions of cases 

involving federalism and economic activity during the 

1980s than they had during the previous three decades 

(see nble 8-2). State and local governments did win larger 

proportions of criminal procedure and civil rights cases in 

1981-1989 than previously, despite the fact that the State 

and Local Legal Center does not intervene in individual 

rights cases. The wins in these areas, however, can be attributed more to changing Court attitudes toward federal 

rights protection and federal court caseloads than to prin- ciples of federalism. As shown in able 8-2, the outcomes in 

First Amendment cases have been quite mixed since 1953. 

Federalists, Nationalists, or Something Else? 

Richard Fallon has suggested that the jurisprudence of 

courts and legal commentators may be influenced by one of 

two conflicting models of intergovernmental decisionmaking: Federalist or Nationalist! Fallon employs these 

models to describe philosophies in the area of “judicial 

federalism,” by which he means the allocation of power 

between federal and state courts. Broadly construed, how- ever, the “models” may be used as ideal decisionmaking 

types for a variety of intergovernmental cases. 

According to Fallon, the Federalist model is rooted in 

an interpretation of the Constitution that takesas its starting point a particular understanding of the intent of the 

framers of the original document and Amendments I 

through XI. Crucial to the ideology and methodology of a 

Federalist jurist is the notion that the Founders intended 

to leave intact certain spheres of state sovereignty: 

Seen in a Federalist light, the Constitution is 

most importantly a document that allocates power among entities of government. . . . [Flrom a 

Federalist perspective, federalistic decentralization not only promotes values of democracy and 

local control but also functions as a safeguard of 

fundamental freedoms. According to a Federalist 

account, the authors of the original Constitution 

set out to create a national government adequate 

to meet national concerns. But, equally significant, the fra’mers continued to view the states as 

important-indeed, in many ways as the primary-entities of government. The Federalist model emphasizes that the framers delegated only an 

enumerated set of functions to the national gov- ernment. In contrast, the states were left the “responsibility for dealing, and . . . [the] authority to 

deal, with the whole gamut of problems cast out of 

the flux of everyday life.” Viewed from a Federal- ist perspective, the tenth and eleventh amendments ratify these understandings7 

Although Nationalists, too, take an historical ap- proach to constitutional interpretation, their perspective 

views the original Framers as less protective of state inter- ests than of unity concerns. Moreover, Nationalists put 

enormous stock-much more, at least, than do Federal- ists-in the constitutional and statutory revisions occurring in the wake of the Civil War. Thus, 

the Constitution embodies a strong conception of 

national supremacy that exalts federal interests, especially the federal interest in the effective en- forcement of constitutional rights, above 

asserted state sovereignty interests. Viewed from 

a Nationalist angle of vision, the Federalist model 

draws too heavily from the attributes of historical 

Anti-Federalism in its theory of the constitution- al protections afforded to state governments. . , . Although forced to compromise, the proponents 

of broad national authority prevailed in the historical debates surrounding the Constitution’s 

drafting and ratification. . . . [Moreover,] according to a Nationalist theory, state sovereignty-a 

concept of dubious analytical power even under 

the original Constitution-must be viewed as 

vastly diminished, if not eviscerated, by the Reconstruction amendments, at least insofar as it is 

invoked to frustrate the enforcement of federal 

constitutional rights.* 

Table 8-2 

Success Rates of State and local Governments Before the U.S. Supreme Court, 1953-1 989 

Case 

Percentage Number Percentage Number Percentage Number 

Won of Cases Won of Cases Won of Cases 

Criminal Procedure 39.3 328 65.7 382 73.3 360 

Civil Rights 27.9 208 54.5 277 56.1 148 

First Amendment 30.4 125 50.0 170 41.5 53 

Economic 55.9 68 60.5 86 50.0 60 

Federalism 40.8 49 43.5 23 38.6 44 

Source: Richard C. Kearney and Reginald S. Sheehan, “Supreme Court Decision Making: The Impact of Court Composition on State 

and Local Government Litigation,” Tile Jounial of Politics 54 (November 1992): 1015. 

U.S. Advisory Commission on Intergovernmental Relations 109 
In fact, neither of Fallon’s models is of much practical 

utility for describing the output of the current Court as an 

institution, nor for pinpointing the intergovernmental 

philosophy of most of its members? They do seem to approximate the views of two of the recent justices, with Justice Thurgood Marshall’s robust emphasis on individual 

rights placing him within the Nationalist camp and Justice 

Sandra Day O’Connor’s generally forceful consideration 

of states’ rights placing her in a Federalist rnilieu.’O 

Although Justice Marshall’s jurisprudence of individual rights and liberties occasionally cast him in a pro-state 

and local stance,” it more frequently found him favoring 

national interests (see lhble &3). Moreover, Marshall took a 

decidedly Nationalist rhetorical position regarding the historical locus of constitutional power and rights, asserting that 

we must be careful, when focusing on the events 

which took place in Philadelphia two centuries 

ago, that we not overlook the momentous events 

which followed. . . . While the Union survived the 

civil war, the Constitution did not.In its place 

~~ 

Table 8-3 

Nationalist and Federalist Perspectives: 

Positions of Justices Marshall and O’Connor in Selected Supreme Court Cases, 1980-1991 

Case’ Date Na tiona12 State3 

Marshall 0 ’Connor 

(0) 

0 

Garcia v. San Antonio Metropolitan Transit Authority 1985 w> 

South Carolina v. Baker 1988 M 

South Dakota v. Dole 1987 M 0 

English v. G.E.4 1990 M/O 

Silkwood v. Kerr-McGee 1984 M 0 

Pacific Gas & Electric v. SERC&D 1983 M/O 

pier Pipe v.Washington 1987 M/O 

Reeves v. Stake’ 1980 M 

White v. MACCE 1983 M/O 

SCT v. Wunnicke6 1984 0 

NECI v. Limbach4 1988 M/O 

Richmond v. Croson’ 1989 0 M 

Spallone v. United States 1990 M 0 

Missouri v. Jenkinss 1990 M 0 

Owen v. Independences 1980 M 

Pembaur v. Cincinnati 1986 M/O 

St. Louis v. Prapotnik9 1988 M/O 

Will v. Michigan 1989 M 0 

GST v. Los Angeles 1989 M 0 

Wilder v. VHA 1990 M 0 

Dennis v. Higgins 1991 MI0 

Tbtals: Marshall 14 6 

O’Connor 5 14 

‘Includes only Supreme Court cases named in the text and discussed at some length in Chapters 6 and 7. The table does not include 

’Indicates a position generally favorable to federal governmental or business interests and/or unfavorable to state governmental intermerely referenced cases. Canton v. Harris was omitted from this table (see Table 8-1) because of its mixed outcome. 

ests. 

Indicates a position favorable to state and/or local governmental interests. 

Unanimous decision. 

O’Connor had not yet been appointed to the Court. 

6Marshall did not take part in this decision. 

‘It is notable that while Justices Marshall and OConnor found themselves on the same side seven times, Croson marks the only time 

they “switched” sides. It is, of course, very typical of affirmative action cases to be highly indecisive, producing multiple conflicting 

opinions. Moreover, it suggests that such cases tend to be highly outcome oriented. 

*Although O’Connor agreed with the Court that the district court exceeded its authority, she joined with the chief justice and Justice 

Scalia in Justice Kennedy’s concurrence, chastising the majority for sanctioning the use of judicially imposed taxes in certain circum- stances. 

Marshall concurred in the judgment of the Court, but joined with Justices Brennan and Blackmun in concluding that courts may not 

simply rely on state law in determining where actual decisionmaking authority resides. 

110 U.S. Advisory Commission on Intergovernmental Relations 
‘1 

arose a new, more promising basis for justice and 

equality, the 14th Amendment, ensuring protection of the life, liberty, and property of all persons 

against deprivations without due process, and 

guaranteeing equal protection of the laws.12 (Emphasis in original.) 

Sandra Day O’Connor: Federalist 

Although Thurgood Marshall’s departure, following 

closely on the heels of Wdliam Brennan’s resignation, may 

signal a reduction of clearly Nationalistic jurisprudence on 

the Court, it is not necessarily the case that a strongly Federalistic philosophy will emerge in its place. With the possible, and inconsistent, exception of the chief justice,” 

Justice O’Connor would appear to be the lone proponent 

of something approximating Federalistic thought. For that 

reason, her views are worth examination here. 

More often than not, O’Connor’s views have put her 

in the minority.14 Thus, O’Connor’s philosophy has tended to emerge most distinctively in dissenting opinions 

over cases pitting federal governmental authority against 

that of the states.ls On such issues, she generally favors a 

Federalistic view of the Framers’ intent. For instance, in 

her Garcia dissent, O’Connor spent some time discussing 

her reading of the decentralist tendencies of the Founders: 

The true “essence” of federalism is that the States 

as States have legitimate interests which the National Government is bound to respect even though 

its laws are supreme. If federalism so conceived and 

carefully cultivated by the Framers of our Constitution is to remain meaningful, this Court cannot abdicate its constitutional responsibility to oversee the 

Federal Government’s compliance with its duty to 

respect the legitimate interests of the States. . . . [Tlhe framers of our Constitution intended Congress to have sufficient power to address national 

powers. But the Framers were not single-minded. 

The Constitution is animated by an array of inten- tions. Just as surely as the Framers envisioned a 

National Government capable of solving national 

problems, they also envisioned a republic whose 

vitality was assured by the diffusion of power not 

only among the branches of the Federal Government, but between the Federal Government and 

the States. . . . The Framers’ comments indicate 

that the sphere of state activity was to be a significant one. . . . The States were to retain authority 

over those local concerns of greatest relevance 

and importance to the people.16 

In conjunction with her constitutional philosophy, 

O’Connor has “also explained the need for courts to select 

an appropriate methodology for the protection of state interest~.”~’ Again, in Garcia, she suggested: 

The proper resolution [of such cases] lies in 

weighing state autonomy as a factor in the balance when interpreting the means by which Congress can exercise its authority on States as 

States. It is insufficient, in assessing the validity of 

congressional regulation of a State pursuant to 

the commerce power, to ask only whether the 

same regulation would be valid if enforced 

against a private party. That reasoning, embodied 

in the majority opinion, is consistent with the spirit of our Constitution. It remains relevant that a 

State is being regulated. . . . As far as the Constitution is concerned, a State should not be 

equated with any private litigant. Instead, the autonomy of a State is an essential component of 

federalism. If state autonomy is ignored in assessing 

the means by which Congress regulates matters af- fecting commerce, then federalism becomes irrelevant simply because the set of activities 

remaining beyond the reach of such commerce 

power “may well be negligible.”’* 

The need to consider special state interests as part of 

the decisional equation also was apparent in O’Connor’s 

dissents over taxing and spending issues. In South Carolina 

v. Baker, she chastised her fellow justices for failing “to inquire into the substantial adverse effects on state and local 

governments that would follow from federal taxation of 

the interest on state and local bonds.”1g Furthermore, in 

South Dakota v. Dole, she argued the proposition that 

strings attached to federal grants to states be “reasonably 

related to the expenditure of federal funds.”2o 

The Tenth Amendment, according to O’Connor, is 

more than a “truism.” Although admittedly imprecise,21 

its strong “spirit” connotes the Founders’ aim to have the 

states “retain their integrity in a system in which the laws 

of the United States are nevertheless supreme.”22 

O’Connor on the Guarantee Clause 

More interesting in some respects is Justice O’Connor’s suggestion that the essence of constitutionalfederalism may be found in another portion of the Constitution, 

namely, Article 4, Section 4 (the guarantee clause). Operating from that viewpoint, she argued in Baker “that the 

States’autonomy [maybe] protectedfrom substantial federal intrusions by virtue of the Guarantee Clause of the 

Con~titution.”~~ O’Connor has “revisited” the guarantee 

clause since Baker, and in a very different thus 

meriting discussion. 

In relevant part, the guarantee clause holds that, ‘The 

United States shall guarantee to evey State in this Union a 

republican form of government. . . .”z Historically, litigation 

arising under the clause has involved claims of individual 

rights against state governments. As a by-product of Dorr’s 

Rebellion, the Supreme Court was asked in 1849 to decide 

whether the charter government of Rhode Island, by imposing martial law, had violated the republican principle contained in the guarantee clause. Although the Supreme 

Court decided that federal courts were constitutionally empowered to decide whether state governments had contraU.S. Advisory Commission on Intergovernmental Relations 11 1 
11 2 U.S. Advisory Commission on Intergovernmental Relations 

vened the guarantee clause, it determined that Rhode Island 

had not acted unconstitutionally because the martial law period imposed was of such limited duration.26 

Similarly, in several late 19th and early 20th century 

cases, litigants invoked the guarantee clause against alleged state infractions of republican tenets. As with the 

Rhode Island claim, however, the Court upheld the questioned state action in each case.27 

Reversing previous doctrine, the Court held in its 

1912 opinion Pacific State Telephone and Telegraph Company v. Oregon that determining whether a state government 

was responsibly republican constituted a so-called political question and, thus, could not be considered by the federal judiciary. 

At issue in Pacific States was the assertion that the 

state’s initiative process resulted in a departure from republican structural principles.28 The Court concluded that 

to declare one mechanism of state government unconstitutional under the terms of the guarantee clause would 

necessarily render the entire government a nullity. Under 

the Court’s logic, therefore, judicial enforcement of the 

republican principle would “obliterate the division between judicial authority and legislative power. . . .’’m 

As a result, the guarantee clause ceased being a potential “source of judicially enforceable private rights.”30 

Justice O’Connor’s modem variant on the guarantee 

clause would take the Court on an entirely different course. 

Rather than reading the clause as a constitutional wellspring 

of civil rights against state governments, she views it as a 

source of states’ rights against the federal government. In 

her view, the Clause is a very different legal animal from the 

one the Court despaired of nearly eight decades ago. 

Although O’Connor has only recently, and only in two 

cases, begun to articulate an explicit theory of the guarantee clause, she appears, implicitly, to have been leading up 

to such an analysis for some time. For instance, in 1982, she 

asserted that “federalism enhances the opportunity of all 

citizens to participate in representative government. . . .”31 

Moreover, she drove the point home with an approving 

reference to Alexis de Tocqueville, noting especially his 

statement that 

the love and the habits of republican government 

in the United States were engendered in the 

townships and in the provincial assemblies. . . . [Tlhis same republican spirit [is] engendered and 

nurtured in the different States. . . .32 

One impetus for O’Connor’s moving from an implied 

theory of states’ rights under the guarantee clause to an 

explicit assertion of such rights was the 1988 publication of 

Deborah Jones Merritt’s article “The Guarantee Clause 

and State Auton~my.’’~~ Although John Adams complained nearly 200 hundred years ago that he “ ‘never understood’ what the . . . Clause meant and ‘believe[d] no 

man ever did or ever will,’ ”34 Merritt claims that both the 

language and the history of the provision support a strong 

measure of state autonomy. 

She contends that although the term “republican” 

may have struck Adams as being “loose” and “indefinite,”3S a core meaning of primarily majority control over 

government has emerged as the consensus definition 

among scholars and jurists.36 As a result, 

the guarantee clause . . . promises each state a government based on popular control. This promise 

plainly restricts the freedom of the states. No state 

may establish a monarchy, dictatorship, or any 

other form of government inconsistent with popular representation. At the same time, however, 

the words of the guarantee clause suggest a limit 

on the power of the federal government to infringe state autonomy the citizens of a state cannot 

operate a republican government, “choos[ing] 

their own officials” and enact[ing] their own 

laws,” if their government is beholden to Washington. Article IV’s pledge by the “United 

States” to “guarantee.. . every State. . . aRepublican Form of Government,” therefore, may be 

read as a promise to preserve the state autonomy 

necessary to foster republican government. Only 

by leaving the citizens of each state free to establish and run their own governmental bodies can 

those citizens achieve Madison’s republican ideal of 

“a government which derives all its powers directly 

or indirectly from the great body of the people.”37 

Moreover, Merritt claims to find considerable evidence in support of her guarantee clause interpretation in 

Convention notes, diaries, and other materials surrounding ratification. She cites the apparently influential remarks of Jasper Yeates, a member of Pennsylvania’s 

ratifying convention. 

Yeates, a strong Federalist, was at pains to assure his 

fellows that the states would not be obliterated by the proposed Union, an argument he drove home by reference to 

the guarantee clause: 

Lest anything, indeed, should be wanting to as- sure us of the intention of the framers of this constitution to preserve the individual sovereignty 

and independence of the States inviolate, we find 

it expressly declared by the 4th section of the 4th 

article. . . . me] constitutional security [provided 

the states by the guarantee clause is] far superior 

to the fancied advantages of a bill of rights.38 

Similarly, a Federalist tract originating in New Jersey, but 

receiving nationwide attention, dubbed the guarantee 

clause “a guard against improper [national] encroachments” and a protector against “the danger of our state 

governments being annihilated.”39 

To Merritt, both the language and history of Article 

Iv, Section 4 suggest a far stronger and more supportable 

basis for state claims against federal intrusions than do the 

vague and historically problematic language and history of 

the Tenth Amendment. 

As noted above, O’Connor made initial reference 

to the guarantee clause in her lone dissent to Baker. 
More compelling, however, was her revisitation of a sta- te-centered guarantee clause theory three years later in 

Gregory v. Ashcroft.4O 

At issue in Gregory was the contention that a Mis- souri constitutional provision, mandating a retirement 

age of 70 for most state judges, violated the federal Age 

Discrimination in Employment Act (ADEA).4l The Court 

held that it did not. Although the Tenth Amendment 

continued to be a central focus of the majority’s analy- sis, the guarantee clause now also received attention. To 

wit, the Court noted: 

The authority of the people of the States to determine the qualifications of their most important 

government officials. . . is an authority that lies at 

“the heart of representative government.” It is a 

power reserved to the States under the Tenth 

Amendment and guaranteed them by that provi- sion of the Constitution under which the United 

States ‘guarantees to every State in this Union a 

Republican Form of Government.’ ’’42 

What makes Gregory significant is not that it extends the guarantee clause analysis begun in Baker. In 

fact, reference to the clause is cursory, with much of the 

case involving a discussion of the “plain statement” 

rule43 or equal protection analysis. Rather, the significance may lie in the fact that unlike Baker, in which O’Connor registered a lone dissent, her’s was the majority 

opinion in Gregory, an opinion joined fully, and in relevant part, by Chief Justice Rehnquist and Justices Scalia, Kennedy, and Souter. It is by no means clear, of 

course, that Gregory’s alignment signals the majority’s 

willingness to press forward the state autonomy theory 

of the guarantee clause. The analysis is incipient at best. 

Nonetheless, the fact that five justices accepted that 

theory in the extant case assures a scenario in which state 

litigants increasingly press the guarantee clause in future 

claims. It is at least conceivable that Garcia could be revis- ited less with an eye toward the Tenth Amendment than 

with a nod toward Article IV As such, O’Connor’s stance 

is a legally tantalizing one in need of further explication. 

The Supreme Court in the 1990s: 

An Era of Ad Hoc Federalism? 

In his Garcia dissent, Chief Justice Rehnquist prom- ised that NLC principles would “once again command the 

support of the majority of this Yet, in three subsequent major cases pitting federal legislative power 

against state autonomy, he demurred from fully supporting the state or local position. Instead, he authored the 

opinion in South Dakota v. Dole. 

Furthermore, the record of the other justices has not 

been promising in this regard. Justice Scalia has proven, 

overall, to be a less than enthusiastic proponent of state 

legislative autonomy.4s Moreover, Justice Powell, one of 

NLC’s strongest supporters and the author of the princi- pal dissent to Garcia, has retired. His replacement on the 

Court, Justice Kennedy, has a scant and somewhat mixed re- cord.46 Justice Souter’s and Justice Thomas’ views remain 

relatively ~~-1kn0wn.4~ Thus, only O’Connor, among the 

Court’s newer guard, may be said to have a fairly consistent 

“Federalist“ rmrd--if one somewhat marred by Croson.48 

On the other hand, in the space of two years, the 

Court’s most fervent contemporary “Nationalists”-Justices Brennan and Marshall-left the Court. Of the re- maining justices, White49 and StevensSo have no clearly 

articulated intergovernmental philosophy. It is notable, 

however, that Justice Blackmun, whose concurrence was 

so crucial to theNLC majority, authored the Garcia opinion. In fact, it may be that he is the most consistently “Na- tionalist” jurist remaining on the 

Even with some changes in personnel, the 1990s could 

well continue the 1980s trend of ad hoc federalism on the 

Court, depending on the substantive issue at hand (e.g., 

civil rights or interstate commerce). Although it is likely 

that court jurisdictional questionss2 will lean slightly in favor of state concerns, it is equally likely that legislative 

jurisdictional questions, with the possible but notable exception of implied preemptions, will continue to tilt toward congressional preeminence. 

Before the Court: 

Legal/Constitutional Strategies 

in an Era of Judicial Uncertainty 

The colIective judicial ambivalence characteristic of intergovernmental deckionmaking during the 1980s and early 

1990s presents special challenges for strategic players. Such 

challenges are heightened by the difficulties of “lobbying” 

courts, which is, in a visible and substantive sense, a task that 

can be accomplished only as a litigant or recognized amicus. 

Beyond such formal roles, interested parties may only hope 

to influence judicial behavior via the indeterminate routes of 

published legal theory or editorial opinion. 

The State and Local Legal Center 

Notable among front-line players in the judicial arena 

are the State and Local Legal Center and the state and local public interest groups. 

The State and Local Legal Center was created in 

1983, following numerous complaints of inadequate and 

uncoordinated state and local legal representation and 

subsequent recommendations to improve the position of 

state and local governments before the Supreme C0urt.S3 

Over the past eight years, the center has counseled state 

and local officials on the preparation of court briefs and 

oral arguments and has monitored lower court cases with 

Supreme Court potential. Perhaps most important, the 

center may count among its achievements the strong role 

it has played as an amicus advocate for supporting state 

and local interests, including the National Governors’ AsU.S. Advisory Commission on intergovernmental Relations 11 3 
sociation, the Council of State Governments, the National 

Conference of State Legislatures, the National Association of Counties, the National League of Cities, the 

United States Conference of Mayors, and the Interna- tional CityICounty Management As~ociation.5~ 

Considering its own organizational youth and new 

court rules restricting amicus the center has had 

a remarkably successful track record relative to other major 

amici. As illustrated in Bble 8-4, the center’s winAose record 

is comparable to, if not better in many instances than, those 

of organizations with much longer standing and far greater 

resources.56 Of particular importance have been the center‘s 

accomplishments in the field of preempti~n,~’ where Garcia’s otherwise devastating doctrine has been used to the ad- vantage of state and local governments. 

In addition to their formal, directed roles in the court 

process and their support of the State and Local Legal Cen- ter, the national associations of state and local government 

officials occasionally have endeavored to influence judicial 

outcomes by means of legal-political strategies. 

For example, in 1988, the National Governors’ Association adopted aproposal to establish a third alternative to the constitutional amendment process. Under 

NGA’s approach: 

lbo-thirds of the states could pass memorials 

that seek the addition of a specific constitutional 

amendment. Unlike petitions for a Constitutional Convention that must be served on Congress, 

these memorials would be filed with every state. 

When the necessary number of 34 states is 

reached, the states would appoint representa- tives to a committee on style that would be responsible for reconciling the language of the 

various memorials. Upon approval by a majority 

of the states represented at the committee on 

style, the proposed amendment would be sub- mitted to Congress. A two-thirds vote by both 

houses within the next session of Congress would 

be necessary to stop the amendment from going 

back to the states for ratification. Failure to get 

the necessary two-thirds vote would cause the 

amendment to be submitted to the states for ratification by the required three-fourth~.~~ 

In 1989, a task force of the National Conference of 

State Legislatures recommended a series of proposals, in- cluding one that the states begin instigating test cases for 

possible Supreme Court review.59 

The Advisory Commission 

on Intergovernmental Relations 

Although ACIR does not participate directly in the 

judicial forum, it has played an indirect role through its re- ports and recommendations. Commission reports have 

been cited in at least 12 Supreme Court decisionsm and 13 

lower federal court opinions, although not always by the 

majority.61 Moreover, since 1982, Commission documents 

have been cited in at least 75 law review Finally, 

in recent years, the Commission has aimed a number of its 

recommendations at the legal process and its participants 

(see Dble 8-5). 

Organization 

Table 8-4 

Amicus Scorecard: 

1987-1 991 Supreme Court Terms 

1990.91 1989-90 1988-89 1987.88 

W L W L W L W L 

State-Local Legal Center 

American Bar Association 

American Civil Liberties Union 

Equal Employment Advisory Council 

NAACP Legal Defense 

National Association of Manufacturers 

National Chamber Litigation Center 

NOW Legal Defense 

Pacific Legal Foundation 

Public Citizen 

Solicitor General 

Women’s Legal Defense Fund 

5 4 12 11 12 4 

2 0 1 2 2 4 

NIA N/A 11 16 19 29 

4 4 1 3 9 1 

10 10 10 5 7 16 

1 5 1 4 4 9 

5 5 3 5 4 9 

1 3 5 1 0 5 

2 2 2 4 7 6 

8 5 7 10 9 11 

48 18 60 23 63 12 

1 2 2 0 1 6 

11 

4 

14 

2 

5 

2 

3 

6 

4 

N/A 

66 

NIA 

8 

1 

14 

2 

3 

0 

2 

2 

2 

NIA 

29 

NIA 

Key: 

W-Wins 

L-Lmses 

N/A -Not Available 

Sources: “1990-91 Amicus Scorecard,” Tews Lawyer; August 5,1991, p. S-2; “1989-90 Amicus Scorecard,” TmLawyer, July 30,1990, p. 

S-6; “1988439 Amicus Scorecard,” Legal Times, August 7,1989, n.p.; and ‘Amicus Scorecard,” Legal Timer, August 29,1988, n.p. 

11 4 U.S. Advisory Commission on Intergovernmental Relations 
Table 8-5 

AClR Recommendations 

Restoring Constitutional Boundaries 

The Commission recommends a reassessment of the legal doctrines delimiting the boundaries of national constitutional authority vis-a-vis 

the reserved powers of the states so that those reserved powers again become meaningful and viable. To help restore a sense of balance between 

the kxels of gowmment, the Commission urga reconsideration by the federal legislative, executive, and judicial branches of current intepreta- tiom of the commerce and spending prs as they apply to the newer and more intrusive forms of federal regulation, such as partial preemp 

tions, cnxsscutting grant requirements, crOSSOver sanctions applied to federal aid, and direct orders. (A-95,1984) 

Judicial Interpretations 

The Commission . . . expresses its hope that the federal judiciary will revive and expand the principles expressed in NLC v. Usery, 

particularly those addressing the ‘‘basic attributes of state sovereignty” and “integral functions” of state government. (A-95, 1984) 

The Commission expresses its further hope that the federal judiciary, when judging grantor-grantee disputes, will recognize that 

“compulsion” rather than “voluntariness” and “coercion” rather than “inducement” now characterize many federal grants-in-aid and 

their requirements. (A-95, 1984) 

The Solicitor General’s Role’ 

The Commission recommends that the Administration, through the Office of Solicitor General, show special sensitivity to the 

claims of state and local government in arguing or otherwise entering relevant cases before the federal judiciary when such cases pertain 

to the newer and more intrusive forms of regulation. (A-95, 1984) 

Supporting the State and Local Legal Center 

The Commission recommends that state and local governments and their associations give full institutional and adequate financial 

support to the State and Local Legal Center in its monitoring, analytic, and training efforts and in its efforts to assist in presenting com- mon state and local interests before federal courts. (A-95, 1984) 

An Amendment to the Amendment Article 

The Commission recommends that the Congress propose, and the states speedily ratify, an amendment to Article V of the US. 

Constitution to clarify the procedure for calling a constitutional convention for some limited purpose, thus removing the fear of a “run- away’’ convention that wuld exceed the purpose of its call. Specifically, the Commission recommends adoption of an amendment to the 

U.S. Constitution to provide the following: 

A convention called for the purpose of proposing amendments to the Constitution, pursuant to Article V, shall be limited to the consider- ation of amendments that pertain exclusively to subjects jointly specified by the legislatures of tw+thirds of the several states The Supreme 

Court of the United States shall have original jurjsdiction to decide, in the case of dispute, whether a convention has exceeded the purpose of its 

call. (Adopted March 1988) 

A Commission of the States for Constitutional Revision 

The Commission recommends that, prior to petitioningcongress tocall a constitutional convention, some number of states, but no 

less than nine, jointly create a Commission of the States for Constitutional Revision, for the purpose of conducting an inquiry into the 

constitutional problems of joint concern to the states and of formulating a common resolution to be submitted to the legislatures of the 

several states for their consideration. 

The Commission recommends further that the governor of each participating state be authorized to appoint one member of the 

revision commission subject to confirmation by the legislature of the state. 

The Commission recommends that this procedure be followed whether or not the Congress has proposed, and the states ratified, an 

amendment to clarify the procedures for limiting a constitutional convention to the purpose of its call. (Adopted March 1988) 

Reaffirmation of Requirements for Explicit Intent to Preempt and Principles for Limiting Federal Preemption 

The Commission reaffirms its earlier recommendations to the effect that 

(1) Congress not preempt state and local authority without clearly expressing its intent to do so; 

(2) Congress limit its use of the preemption power to protecting basic political and civil rights, managing national defense and 

foreign relations, ensuring the free flowof interstate commerce, preventingstate and local actions that wuld harm other states 

or their citizens, and protecting the fiscal and programmatic integrity of federal-aid programs into which state and local govemments freely enter; 

(3) The executive branch not preempt by administrative rulemaking unless Congress has expressly authorized such action and 

established clear guidelines for doing so, and unless the administrative agency taking such action clearly expresses its intent to 

preempt; and 

(4) The federal courts not confirm the validity of statutory and administrative preemptions unless accompanied by a clear statement of intent to preempt and unless the extent of preemption is no greater than necessary to give effect to that intent within 

the limits of constitutional authority. (Adopted March 1988) 

State and Local Vigilance on Federal Preemptions 

The Commission recommends that the national associations representing state and local governments, acting individually and 

jointly. , . , join litigation to limit the use of the federal preemption power to necessary and proper cases. (Adopted March 1988) 

‘Deputy Under Secretary Koch, County Executive William J. Murphy, and County Supervisor Peter E Schabarum requested to be recorded 8s opposing this recommendation. 

U.S. Advisory Commission on Intergovernmental Relations I1 5 
Conclusion 

If the long history of constitutional federalism is 

told in terms of the states losing battles, then the short 

story, beginning in 1985 with Garcia v. Sun Antonio Metropolitan Trm’t Authority, may well appear to be the tale of 

intergovernmental Armageddon-mere battles aside, 

states and localities seemed to have lost the whole war. 

Yet, as suggested by the foregoing, within, or perhaps 

despite, the context of Garcia, the landscape of constitutional federalism remains uncertain, no doubt the result 

of an ever-mutating and ideologically ambivalent Supreme 

Court. Thus, while state and local governments remain 

vanquished in an important doctrinal sense, they continue 

to win significant legal battles. 

Decisions like those in Gregory have given rise to 

hope for abrighter future among advocatesof areduced 

federal regulatory presence. Richard Ruda, chief counsel of the State and Local Legal Center, recently remarked that “what we saw last year [1990-91 Term], 

particularly near the end, was a resurgence of the 10th 

Amendment. . . . Certainly the philosophy that informs 

the 10th Amendment of Gregory is very different than 

the philosophy that informed Garcia.”63 Others, like 

Charles J. Cooper, a former Reagan administration offi- cial who headed a 1986 study of federalism, are even 

more optimistic, boldly declaring Garcia to be “hanging 

by a thread.”&2 

Still, the future is far from clear. Notwithstanding the 

victories of 1991, the Court can hardly be said to be pursuing an undeviating path toward a “Federalistic” jurispru- dence. The dust, after all, has hardly cleared on Baker, 

Dole, and Croson, all major power-allocating decisions 

that only appeared to reinforce the dominant themes of 

Garcia. Moreover, the Supreme Court has displayed a 

mixed record in the area of public law generally. Finally, 

although the Court, in recent terms, has softened somewhat the blow of preemption on state and local govern- ments, it has been prone to engage in a kind of 

self-generated regulatory behavior. 

The bottom line, then, remains judicial ad hockerythough an ad hockery interspersed with enough tantalizing 

dicta and significant gains to reassure both “Federalists” 

and “Nationalists” about the direction of judicial federalism in the foreseeable future. 

Notes 

Laurence H. Tribe, God Save This Honorable Court: How the 

Choice of Supreme Court Justices Shapes Our History (New 

York: Random House, 1985), p. 55. 

Ibid., pp. 54-5. 

For instance, a cursory review of Justice Souter’s Senate con- firmation hearings revealed only Sen. Arlen Specter (R-PA) 

directly making reference to the implications of NIX and Garcia. Congressional Record, September 11, 1990, S. 12777 (Exchange between Senators Joseph Biden and Specter). 

See Chapter 6. 

5Richard C. Keamey and Reginald S. Sheehan, “Supreme 

Court Decision Making The Impact of Court Composition on 

State and Local Government Litigation,” The Journal of Poli- tics 54 (November 1992): 1008. 

6Richard H. Fallon, Jr., “The Ideologies of Federal Courts 

Law,” I/irginia Law Review 74 (1988): 1141. 

71bid., pp. 11521153. Footnotes omitted. 

* Ibid., p. 1158. Footnotes omitted. 

Nor, it should be noted, does Fallon make any such claims. The 

models “are intellectual constructs, . . that ‘cannot be found in 

reality’ but with which ‘concrete phenomenon can be com- pared for the purpose of explicating some of their significant 

components’.” Ibid., p. 1143, n. 3, citing C. Hempe1,Aqwtsof 

Scientific Explanation, pp. 155-171. 

lo In addition, Fallon cites Chief Justice Rehnquist as a generally 

good example of a Federalist jurist. While this has tended to be 

true of Rehnquist’s position in court jurisdictional issues, which is 

the thrust of Eillon’s article, and certain additional major cases, 

notably NLC and Garcia, Rehnquist’s divergence in recent years 

from the strong states’ rights position of his colleague, Justice 

OConnor, makes him a less-than-perfect prototype for these 

puposes Notably, for instance, Rehnquist joined the majorities 

in South Carolina v. Baker and South Dakota v. Dole. 

Moreover, Justice Scalia was expected by some observers to 

be astrong advocate of states’ rights. However, as recent Court 

observers have noted, with the notable exception of his strong 

stance against the dormant commerce clause, “Justice Scalia 

has given state and local governments more reason to wny 

than to hope. Although the jury is still out, Justice Scalia is 

emerging as at best an occasional-perhaps only an accidental-advocate of federalism.” Stewart A. Baker and Katherine 

K. Wheatley, “Justice Scalia and Federalism,” Urban Lawyer20 

(1988): 353. See also David M. Gelfand and Keith Werhan, 

“Federalism and Separation of Powers on a ‘Conservative’ 

Court: Currents and Cross Currents from Justices O’Connor 

and Scalia,” Tulane Law Review 64 (1990): 1443. 

I1 See, for instance, Justice Marshall dissenting for himself and Jus- tices Brennan and Blackmun in Croson. Note especially, his com- ments citing liberally Justice OConnor‘s previous dissents: 

It may well be that “the autonomy of a state is an essen- tial component of federalism,” Garcia v. San Antonio 

Metropolitan Transit Authority, 469 US. 528,588 (1985) 

(O’Connor, J., dissenting), and that “each state is sover- eign within its own domain, governing its citizens and 

providing for their general welfare,” Federal Energy 

Regulatory Commission v. Mississippi, 456 U.S. at 777 

(O’Connor, J., dissenting), but apparently this is not the 

case when federal judges, with nothing but their impres- sions to go on, choose to disbelieve the explanations of 

these local governments and their officials. 

Richmond v. Croson, 488 US. 469 at 546 (1989) (Marshall, 

J., dissenting). 

l2 Remarks of Thurgood Marshall, Annual Seminar of the San 

Francisco Patent and Trademark Law Association, Maui, Ha- waii, May 6, 1987. 

l3 See endnote 9 above.. 

l4 It is still too early to determine where Justice Souter stands on 

such issues and clearly far too early to predict the federalism 

jurisprudence of Justice Thomas. 

One explanation for O’Connor’s stance on federalism is- sues lies in her professional background. Alone among the jus- tices, she has served in all three branches of state government, 

having been an Arizona assistant attorney general, a state sen- ator, and a state superior court judge. Savage, “Legislative Past 

Guides O’Connor,” Los Angeles Times, October 8, 1988. 

11 6 U.S. Advisory Commission on Intergovernmental Relations 
”See especially Garcia, South Carolina v. Baker, and South Da16469 U.S. 528 at 581 (O’Connor, J., dissenting). Footnotes 

” Gelfand and Werhan, “Federalism and Separation of Powers 

“469 U.S. 528 at 588. 

l9 485 U.S. 505 at 532 (1988) (OConnor, J., dissenting). 

”483 U.S. 203 at 213 (1987). 

21 469 US. 528 at 582 (OConnor, J., dissenting). 

22 Ibid., p. 586. 

485 U.S. 505 at 534 (OConnor, J., dissenting). 

24 Gregory v. Ashcroft, 111 S. Ct. 2395 (1991). 

25 United States Constitution, Article IV, Section 4. 

26 Lutherv. Borden, 48 U.S. 1,45 (1849). Cited in Laurence Tribe, 

American Constitutional Law (Westbury, New York Founda- tion Press, 1988), p. 98. 

27 See, for example, Attorney General ex rel. Kies v. Lowery, 199 

U.S. 233 (1905); Forsyth v. Hammond, 166 U.S. 506 (1897); and 

Minor v. Happersett, 88 U.S. 162 (1875). 

=223 U.S. 118 (1912). Cited in Tribe, American Constitutional 

mIbid., p. 142. 

30 Tribe, American Constitutional Law, p. 99. 

31 Federal Regulatory Commission v. Mississippi, 456 U.S. 742 at 

789 (1982) (OConnor, J., dissenting). 

321bid., p. 789-90, citing Alexis de Tqueville, Democmcy in 

America, p. 181 (H. Reeve translation, 1961). 

33 Deborah Jones Memtt, “The Guarantee Clause and State Au- tonomy,” Columbia Law Review 88 (1988): 1. In both Baker 

and Gregory, O’Connor made explicit, approving note of Merritt’s thesis. 

34Letter from John Adams to Mercy Warren (July 20, 1807). 

Cited in Memtt, “The Guarantee Clause and State Autonomy,” p. 23. 

kota v. Dole. But see Richmond v. Croson. 

omitted. 

on a ‘Conservative’ Court,” p. 1452 

Law, p. 99. 

35 bid. 

36 bid. 

”bid., p. 25. Quotations are those of Madison, Federalist No. 39, 

p. 251 (J. Cooke, ed. 1961). 

38 Pennsylvania and the Federal Constitution (1880 at 436-37). 

Cited in Memtt, “The Guarantee Clause and State Autono- my,” p. 31. 

39 A Jerseyman, To the Citizens of New Jersey, Trenton Mercury, 

November 6, 1787. Cited in Memtt, p. 33. 

40 111 S. Ct. 2395 (1991). 

4’81 Stat. 602, as amended, 29 U.S.C. Sec. 621-634. 

42 111 S. Ct. 2395 at 2402. Citations omitted. 

43See Pennhurst State School and Hospital v. Halderman, 451 

44469 U.S. 528 at 580. (Rehnquist, J., dissenting). 

45 For example, Scalia concurred in the Baker decision, joined 

the majority in Dole, and maintained aNationalist position in 

Croson. On the other hand, he is emerging as an opponent of 

the Court’s dormant commerce clause activities. He also has 

tended to take a pro-state stance in Eleventh Amendment 

cases. See Gelfand and Werhan, “Federalism and Separation 

of Powers on a ‘Conservative’ Court,” p. 1459. 

U.S. l(1981). 

&For example, Kennedy was not yet on the Court when Dole 

was decided; he did not participate in Baker; and he joined 

O’Connor’s opinion in Croson. On the other hand, his was the 

most forceful warning against judicial taxation in Jenkins. 

47 In the one fully reviewed 1991 case, Dennis v. Higgins, Souter 

joined with the majority in concluding that Section 1983 could 

be used to sue for commerce clause claims. See Chapter 7. 

However, he joined fully in Justice O’Connor’s opinion in 

Gregory v. Ashcroft. See note 39. 

481t may also be notable that she silently joined the majority in 

Dennis v. Higgins, asserting that suits for violations of the 

commerce clause may be brought under Section 1983. 

The fact that O’Connor has been such an outspoken proponent of the need for maintaining realms of state sovereignty 

makes her opinion in Richmond v. Croson all the more confusing. Indeed, and ironically, an observer assessing O’Connor’s jurisprudence only on Croson would be forced to 

conclude that the justice supports a Nationalist view of the 

constitutional balance of power. Thus, she seemingly embraced the Nationalist historicism and sounded a note that 

might otherwise have issued from the pen of Justice Marshall 

had he not, of course, been on the opposite side of this peculiar 

case. (Note, for instance, her reference to the “Civil War 

Amendments. . . work[ing] a dramatic change in the balance 

between congressional and state power over matters of race,” 

488 U. S. 469 at 490. For a more detailed description and analysis of the case, see Chapter 6. See also note 10 for Marshall’s 

pointed references in the case to O’Connor’s generally prostate and local stance.) 

The probable explanation for the Crmon anomaly is that, like 

the Court’s prior confounding array of affirmative action decisions, juisprudenw was being guided by a preferred policy outcome. Generally, the Court’s major affirmative action cases have 

yielded pluralities or, at the very least, multiple, conflicting opinions. See, among others, Regents of the University of California 

v. Bakke, 438 U.S. 265 (1978); Fullilove v. Klutmick, 448 U.S. 448 

(plurality) (1980); Wygant v. Jackson Board of Education, 476 

US. 267 (1986); and Local 28 of Sheet Metal Workers’ Intemational Association v. Equal Employment Opportunity Conimission, 428 U.S. 421 (plurality) (1986).] See also Jack M. Beerman, “ 

‘Bad’ Judicial Activism and Liberal FederalCourts Doctrine: A 

Comment on Professar Doernberg and Professor Redish,” Case 

Western Reserve Law Review 40 (1990): 1053, and Robin West, 

‘‘Progressive and Conservative Constitutionalism,” Michigan 

Law Review 88 (1990). 669472. 

In any event, as several commentators have noted, “the 

treatment of the relative powers of Congress and state and lo- cal governments in the various Croson opinions inverts the 

Court’s usual line-up on federalism.” Kathleen M. Sullivan, 

“City of Richmond v. J.A. Croson: The Backlash against Affir- mative Action,” Tulune Law Review 64 (1990): 1616. See also 

Gelfand and Werhan, “Federalism and Separation of Powers on a 

‘Conse,mtive’ Court,” pp. 1454-1455; and Linda S. Greene, 

“Race in the 2lst Century: Equality through Law?” Eilune Law 

Review 64 (1990): 1531. At the very least, it marks a disturbing de- parture from OConnor‘s normal principled stance. 

49 For example, Justice White silently joined the Baker and Dole 

majorities and the Croson majority. 

50 For example, Justice Stevens concurred in the Baker decision, 

silently joined the Dole majority, and concurred in part and in 

judgment in Croson. 

51 Justice Blackmun joined in the Baker and Dole majorities and 

in the Croson dissent. 

521ncluded broadly among such issues would be Eleventh 

Amendment questions, habeas corpus concerns, and prison 

administration cases, among others. 

U.S. Advisory Commission on Intergovernmental Relations 11 7 
53 See, for example, Hon. Warren E. Burger, Chief Justice of the 

United States, Remarks before a Conference on Supreme 

Court Advocacy, Washington, DC, October 17, 1983; Law- rence R. Velvel, “State ‘Better Mousetrap’ Could Convince 

the High Court,” Legal Times, May 30,1983, p. 10; U.S. Adviso- ry Commission on Intergovernmental Relations, An Agenda 

forAmerican Federalism: Restoring Confidence and Competence 

(Washington, DC, 1981), p. 144; Stewart A. Baker and James 

R. Asperger, “Foreword: Toward a Center for State and Local 

Legal Advocacy,” 31 Catholic University Law Review 31 (1982): 

372, and “!4fterword: More about the Center,” Catholic Univer- sity Law Review 31 (1982): 505. 

54As of August 1991, the center had filed 111 fully published 

briefs with the Supreme Court, representing work on 99 major 

Court cases, in support of the positions of some or all of the 

aforementioned public interest groups. Source: EXIS 

“Briefs” file. 

55 In an attempt to stem the tide and burden of amicus briefs, in 

January 1990, the Court issued Rule 37.1 

An amicus curiae brief which brings relevant matter to 

the attention of the Court that has not already been 

brought to its attention by the parties is of considerable 

help to the Court. An amicus brief which does not serve 

this purpose simply burdens the staff and facilities of the 

Court and its filing is not favored. 

56 Recently, the center commissioned four former Supreme 

Court law clerks to examine its briefs for quality, persuasiveness, and “their effect on the development of the law.” On all 

counts, the former law clerks found the center’s briefs, overall, 

to be of “extremely high” quality. Indeed, they judged the 

briefs to be among the ‘‘‘fint tier,’ along with [those] filed by the 

Solicitor General‘s office and the best law firms.” Memorandum 

submitted to Stewart Baker from Gregory Dovel, Peter Keisler, 

Ronald Lee, and Gene Schaerr, September W, 1991. 

571n 1991 alone, the center and its sponsoring organizations 

could count as major preemption victories Gregory v. Ashcroft, 111s. Ct. 2395 (1991), and Barnesv. GlenTheatre, 111s. 

Ct. 2456 (1991) (allowing localities to regulate nude dancing) In 

addition, state and local interests won a unanimous decision in 

Wisconsin Public Intervenor v. Mortier, 111 S. Ct. 2476 (1991) 

(holding that the Federal Insecticide, Fungicide, and Rodenticide 

Act does not preempt local regulation of pesticide use) 

58 National Governors’ Association, Policy Positions, 1988-89 

(Washington, DC, September 1988), p. 2. 

59 Lawrence Haas, “States Bounce Back,” National Journal, August 10, 1991, p. 1980. 

60Trivona v. Michigan Dept. of Treasury, 111 S. Ct. 818 (1991); 

Eu v. San Francisco County Democratic Central Committee, 

489 US. 214 at 226(1989); Garciav. San Antonio Metropolitan 

Transit Authority, 469 U.S. 528 at 554 (1985) and at 565,576 

(dissent); Dixson v. US., 465 U.S. 482 at 509 (1984) (dissent); 

Federal Energy Regulatory Commission v. Mississippi, 456 

U.S. 742 at 787 (1982) (dissent); Rosewell v. LaSalle National 

Bank, 450 US. 503 at 521, 527 (1981); First National Bank of 

Boston v. Bellotti, 435 U.S. 765 at 775 (1978); Shapiuro v. 

Thompson, 394 U.S. 618 at 645 (1969) (dissent); Avery v. Midland County, 390 US. 474 at 489, 494 (1968) (dissent); 

Reynolds v. Sims, 377 U.S. 533 at 573,584 (1964) and at 611 

(dissent); Lucas v. Forty-Fourth General Assembly of Colorado, 377 U.S. 713 at 734 (1964); and Gray v. Sanders, 372 U.S. 

368 at 382 (1963) (dissent). 

61 Amalgamated Transit Union International v. Donovan, 767E 

2d (CADC 1985); U.S. v. Frumento, 563 E 2d 1083 (CA3 1977); 

Texas Department of Public Welfare v. Califano, 556 E 2d 326 

(CA5 1977); County of Alameda v. Weinberger, 520 E 26 344 

(CA9 1975); National Welfare Rights Organization v. Finch, 

429 E 2d 725 (CADC 1970); Core v. Nomlk Redevelopment 

Agency, 395 E 2d 920 (CA2 1968); U.S. v. General Douglas 

MacArthur Senior Village, 337 E Supp. 955 (E.D. NY 1972); 

Second National Bank of New Haven v. US., 297 E Supp. 1080 

(Conn. 1969); Drew v. Scranton, 229 E Supp. 310 (M.D. PA 

1964); Buttenvorth v. Dempsey, 229 E Supp. 754 (Conn. 1964); 

German0 v. Kerner, 220 E Supp. 230 (N.D. IL 1963); Nolan v. 

Rhodes, 218 E Supp. 953 (S.D. OH 1963); and Sobel v. Adams, 

214 E Supp. 811 (S.D. FL 1963). 

62 See, for a few examples, Memtt, “The Guarantee Clause and 

State Autonomy,” pp. 7-8,16,62; Bernard Schwartz, “National 

League of Cities Again-R.1.P or a Ghost that Still Walks?” 

Fordhum Law Review 54 (1985): 164; George D. Brown, “State 

Sovereignty under the Burger Court: How the Eleventh 

Amendment Survived the Death of the Tenth,” Georgetown 

Law Joumal74 (1985): 375-376; Stephen L Smith, “State Au- tonomy after Garcia: Will the Political Process Protect States’ 

Interests?” Iowa Law Review 71 (1986): 1547-1550; Bruce La 

Pierre, “Political Accountability in the National Political Pro- cess,” Northwestem University Law Review 80 (1985): 584,595; 

and James V. Corbelli, “Tower of Power: South Dakota v. Dole 

and the Strength of the Spending Power,” Universily of Pittsburgh Law Review 49 (1988): 1109. The figure of 75 articles was 

arrived at through a search of LEXIS, which features articles 

from only 76 select law reviews. 

Ibid. 

63 Cited in Haas, “States Bounce Back,” p. 1980. 

1 I8 U.S. Advisory Commission on Intergovernmental Relations