U.S. GOVERNMENT PUBLISHING OFFICE

30–397 PDF WASHINGTON : 2018

FEDERALISM IMPLICATIONS OF TREATING STATES 

AS STAKEHOLDERS 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 27, 2018 

Serial No. 115–68 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Jimmy Gomez, Maryland 

SHERIA CLARKE, Staff Director 

WILLIAM MCKENNA, General Counsel 

CHRISTINA AIZCORBE, Intergovernmental Affairs Subcommittee Staff Director 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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C O N T E N T S 

Page 

Hearing held on February 27, 2018 ....................................................................... 1 

WITNESSES 

The Honorable Gary Richard Herbert, Governor of Utah 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 7 

The Honorable Susana Martinez, Governor of New Mexico 

Oral Statement ................................................................................................. 10 

Written Statement ............................................................................................ 12 

The Honorable Clement Leroy Otter, Governor of Idaho 

Oral Statement ................................................................................................. 14 

Written Statement ............................................................................................ 16 

APPENDIX 

National Governors Association Statement for the Record submitted by Mr. 

Palmer ................................................................................................................... 44 

Western Governors Association Statement for the Record submitted by Mr. 

Palmer ................................................................................................................... 49 

Recommended Principles for Regulatory Reform submitted by Mr. Connolly ... 81 

NACo Statement for the Record submitted by Mr. Connolly ............................... 82 

Letter of January 20, 2017, from NACo submitted by Mr. Connolly .................. 88 

NewDEAL Statement for the Record submitted by Mr. Connolly ....................... 95 


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FEDERALISM IMPLICATIONS OF TREATING 

STATES AS STAKEHOLDERS 

Tuesday, February 27, 2018 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 10:04 a.m., in Room 

2154, Rayburn House Office Building, Hon. Gary Palmer presiding. 

Present: Representatives Palmer, Gowdy, Duncan, Jordan, Sanford, Amash, Gosar, Meadows, DeSantis, Walker, Blum, Hice, 

Grothman, Hurd, Mitchell, Maloney, Norton, Lynch, Connolly, 

Kelly, Plaskett, Krishnamoorthi, Raskin, Welch, and DeSaulnier. 

Also Present: Representatives Bishop, Gonza ́les-Colo ́n, and 

Zeldin. 

Mr. PALMER. The committee will come to order. Without objection, the chair is authorized to declare a recess at any time. 

I would like to thank Governor Herbert, Governor Martinez, and 

Governor Otter for the time they are taking today to share important testimony with the committee and the Speaker’s Task Force 

on Intergovernmental Affairs. 

The committee and task force have been engaged in a review of 

federalism, identifying opportunities to improve the partnership between the Federal Government and State local counterparts. Your 

testimony will serve an important piece of this narrative as we look 

toward reform. 

It is my understanding Governor Herbert must leave by noon, so 

I will keep my statement short to maximize time for questions, and 

I will encourage our members to be sensitive to the time. And if 

there is a question toward the end of the five minutes that would 

require a longer answer, I would encourage the witnesses to provide the answer in writing. 

To the extent members do not need to use their full five minutes, 

please be mindful of the Governor’s time. We will work our way 

through questions quickly to accommodate everyone’s schedule. 

We would like to welcome those members of the task force for 

joining us today. I ask unanimous consent to waive members of the 

Speaker’s Task Force on Intergovernmental Affairs for today’s 

hearing. Without objection, so ordered. I will also ask unanimous 

consent to insert statements from the National Governors Association and Western Governors Association into the record. Without 

objection, so ordered. 

Mr. PALMER. I now recognize the ranking member, my friend Mr. 

Connolly, for five minutes for his opening statement. 


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Mr. CONNOLLY. I thank the chair, and I thank my friend Mr. 

Bishop in particular with the intergovernmental task force we both 

serve on, and I want to welcome our distinguished guests, the three 

Governors, for joining us this morning. 

We are conducting this hearing in collaboration with the Speaker’s Task Force on Intergovernmental Affairs. As a member of that 

task force, I have been glad to work with Mr. Bishop and our colleagues over the course of the past year on several meetings and 

events centered around the topic of improving coordination among 

all of the levels of government. 

One thing our task force has done well is to promote an intergovernmental dialogue that incorporates all perspectives. While I 

would have preferred to include in on today’s panel a local government perspective as well as the State perspective with equal billing, I hope we can invite in the near future American mayors and 

local government officials to testify to the full committee on this 

topic. And I was gratified that Chairman Gowdy agrees with that 

request. This is a dialogue best had without segregating the different levels of government in a way that promotes the very divisions we seek to address. 

In the spirit of promoting intergovernmental collaboration, I intend to introduce the Restore the Partnership Act to establish the 

National Committee on Intergovernmental Relations, a successor to 

the Advisory Commission on Intergovernmental Relations that operated from 1959 through 1995. The commission will promote 

mechanisms for fostering better relations among the levels of government; provide technical assistance to the Federal, executive, 

and legislative branches in the review of proposed legislation; recommend the most desirable allocation of government functions, responsibilities, and revenues among the various levels of government; and help coordinate and simplified tax laws and administrative policies to achieve more orderly and less competitive fiscal relationship among the levels of government. 

As a former local government official who served for 14 years on 

the Fairfax County Board of Supervisors, including five years as 

the chairman of the county, I have witnessed the good, the bad, 

and the ugly of intergovernmental relations. In our community, we 

led efforts to improve regional air quality enabled by strengthened 

Federal clean air regulations. We also dealt with the burden of unfunded mandates on localities like those imposed at the Federal 

level by the No Child Left Behind Act. 

And in Virginia, we adhere unfortunately to the Dillon Rule, 

which means local governments in my State only have those powers expressly granted to them. The Dillon Rule severely constrains 

the ways in which local governments can raise revenue to pay for 

public safety, public education, and mandates placed on localities 

by both the Federal and State Governments, and I think that is 

really important. Not all of the problems emanate from Washington. Many of them from the local government perspective emanate from State capitals. 

The revenue burden is why those of us from Dillon Rule States 

are particularly offended by the Trump budget and the administration’s so-called infrastructure plan. Undergirding both is an assumption that the Federal Government defunds an activity or 


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shifts the funding burden down to State and local governments and 

that there are untapped and unlimited revenue reserves that will 

fill the vacuum left by the Federal Government. 

The infrastructure plan, for example, would be paid for by taking 

money from Federal transit investments, and the plan would flip 

the Federal highway funding match on its head by requiring local 

governments to come up with an 80 percent of project costs as opposed to the current 20 percent. A Penn Wharton Budget Model 

team found that the plan would likely lead to an additional at best 

$30 billion in State, local, and private spending, 98 percent less 

than the $1.3 trillion the administration has claimed would be 

raised by the plan. 

The President’s budget would compound the infrastructure investment crisis by retreating on Federal funding for things like 

Metro and the types of infrastructure loans, TIFIA loans, that have 

helped fund transit throughout the United States. The budget also 

sweeps the rug out from under local affordable housing initiatives 

by eliminating entirely the Community Development and Community Services Block Grants, as well as the HOME Investment Partnership Program. These housing cuts alone would cost my communities in Fairfax and Prince William counties right across the river 

nearly $10 million, local government, in affordable housing investments. The proposed cuts would expose the conservative panacea 

of block granting as potentially a more expedient method of cutting 

Federal investments in local communities. 

I look forward to our discussion today and hope it is not bound 

by rigid ideology. We should be mindful that not all unfunded mandates consist of the Feds putting mandates on States. All 50 States 

guarantee their citizens the right to a public education, but it is 

often local governments that bear the majority of the financial burden for public education. In my community, for example, 80 percent 

of the cost of public education is borne my local taxpayers, not by 

the State. 

Additionally, not all regulations or mandates are bad. There are 

Federal regulations that ensure everyone’s right to a quality education. This Federal intervention was necessitated by State- and 

local-level intransigence in the past. This equality was hard fought 

for, and we should never again open the door to the abuse and discrimination that preceded it. 

Finally, we cannot ignore that a lack of regulation can be a form 

of an unfunded mandate in itself. For example, pollution from a 

State that lacks strong environmental protections can and will drift 

into neighboring States, creating air-quality issues and health 

problems that impose costs on both private and public sectors. 

Through the work of this committee and the task force, I hope we 

can create bipartisan support for unfunded mandate reform and 

find broad agreement that the Federal Government can and should 

improve its coordination and collaboration with State, local governments, and tribal governments. I hope the discussion today furthers our work towards those ends. 

And I thank you, Mr. Chairman, for calling us together for this 

hearing. 

Mr. PALMER. I thank the gentleman. 


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I am now pleased to introduce our witnesses, the Honorable Gary 

Richard Herbert, Governor of the State of Utah; the Honorable 

Susana Martinez, Governor of the State of New Mexico; and the 

Honorable Clement Leroy Otter, Governor of the State of Idaho and 

a former Member of Congress and the old ’70’s TV show Welcome 

Back Kotter, welcome back Otter. Welcome to you all. 

Pursuant to committee rules, all witnesses will be sworn in before they testify. Please rise and raise your right hand. 

[Witnesses sworn.] 

Mr. PALMER. The record will reflect all witnesses answered in the 

affirmative. Please be seated. 

In order to allow time for discussion, please limit your testimony 

to five minutes. Your entire written statement will be made part 

of the record. As a reminder, the clock in front of you will show you 

your remaining time. The light will turn yellow when you have 30 

seconds left and red when your time is up. Please also remember 

to press the button to turn your microphone on before speaking. 

Our first witness to give testimony will be Governor Herbert 

from Utah. 

WITNESS STATEMENTS 

STATEMENT OF HON. GARY RICHARD HERBERT 

Governor HERBERT. Well, thank you. And, Chairman Gowdy, 

Chairman Palmer, Chairman Bishop, Ranking Member Connolly, 

and members of the committee and the Speaker’s task force, I 

thank you for inviting me here today. I’ve been speaking about this 

issue for many years on—about the importance of federalism, what 

some describe as the vertical separation of powers between the 

State in the Federal Government, and to me this hearing is a sign 

of progress. 

Often when we talk about federalism, we focus on its constitutional foundation. That’s important, but there’s a very practical 

reason for federalism, to create better policy. As States, we’ve tried 

a wide variety of approaches to solving specific problems and developed expertise across the spectrum of public policy. When our political culture mistakenly presumes that the greatest expertise resides in Federal agencies, Americans miss out on the lessons already learned by the States. 

Today, I’d like to suggest several Federal laws that need to 

change to respect the separation of the power and responsibility 

and facilitate better policymaking. First, I would like to point out 

that laws and rules are poor substitutes for cultural norms, and 

what we really need is a cultural change within the Federal Government. Congress and Federal agencies must stop viewing States 

merely as—State input as merely a box-checking exercise rather 

than the genuine attempt to learn from what we’re doing. 

Some infractions of federalism are process problems. The U.S. 

Code is littered with suggestions that Federal agencies consult with 

States as simply one among many stakeholders. For example, the 

Water Resources Development Act suggests that the Secretary may 

consult with key stakeholders, including State, county, and city 

governments. Similar language is found in the National Historic 

Preservation Act, the Energy Policy Act, and many, many more. 


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And even as the title of today’s hearing implies, the States are— 

States are not stakeholders. We’re sovereign governments, partners 

who have been involved in—should be involved at the beginning of 

and throughout the policymaking process. The boilerplate language 

of these laws should be amended to reflect that reality. 

In the same vein, the National Environmental Policy Act, NEPA, 

requires a Federal agency to work with States to develop various 

alternatives and an environmental impact statement but also allows the agency to ultimately ignore input from the States. Sometimes the NEPA process feels like a little more than an exercise in 

generating high-quality paperwork. The law should be amended to 

give States not just a voice but a vote in the selection of a NEPA 

alternative, a change that would make Federal land management 

in the West far more democratic and responsive to the voters. 

States should also have a more substantive role in execution. The 

Endangered Species Act authorizes the U.S. Fish and Wildlife 

Service to write management plans, designate critical habitat, and 

impose land-use restrictions. This doesn’t make necessarily sense 

to me. Utah’s Division of Wildlife Resources is staffed with some 

of the best biologists in the field, who have a profound knowledge 

of Utah’s ecology and wildlife. There is no good reason States 

shouldn’t take the lead in species recovery. 

I don’t want to leave you with a completely negative picture. We 

are currently enjoying a season of good relationships with many 

Federal agencies, many of whom are trying to push decision-making back down to the States, and that is refreshing, though it does 

illustrate what I said earlier about the importance of a culture of 

cooperation with the States. Good cooperation should not depend on 

a particular official or administration; it should be simply the way 

things are always done, regardless of who is currently in power. 

Again, I think we are making progress. Yesterday, several of my 

colleagues and I met with Speaker Ryan and later with Minority 

Leader Pelosi. Representative Pelosi quoted—reminded all of us of 

the famous quote of Judge Brandeis who said States of the laboratories of democracy, and she said let’s let States help lead in developing good policy. I couldn’t agree more. 

I also added another famous quote that most of you know about 

our Father of our Constitution James Madison who, in talking 

about in trying to ratify the Constitution and alleviate the fears 

that the States had about this new stronger Federal Government 

said to the States not to worry, Federalist 45, it’s an interesting 

read and it’s a short one so it won’t take a long time, but he said 

don’t worry about the Federal Government because the powers 

we’ve given the Federal Government are few and defined, article 1, 

section 8 of the Constitution. He went on to say the powers we’ve 

given to the States, though, are numerous and indefinite. 

We need to get back to the vision of our Founding Fathers. We 

do need to change the culture and the thought process. We the 

American people are asking you the Federal Government to do 

more than your responsibilities would entail, more than what our 

Founding Fathers expected you to do. Rather, they should be—in 

fact, if they have problems and issues, they should first ask the 

States and their local governments and see if they can find a solution to the problem. We should get back to asking the States. As 


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I said in my initiative as chair of the National Governors Association three years ago, the States, which are closer to the people, 

much more responsive to the people, quicker to act, and doing it 

less expensively and more effectively, are where in fact we should 

be working. States are finding solutions and improving people’s 

lives. 

Thank you. I look forward to your questions. 

[Prepared statement of Governor Herbert follows:] 


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Governor Gary R. Herbert 

House Committee on Oversight and Government Reform 

Speaker's Task Force on Intergovernmental Affairs 

"Federalism Implications of Treating States as Stakeholders" 

Feb.27,2018 

Chairman Gowdy, Chairman Bishop, Ranking Member Cummings, and members 

of the Committee and the Speaker's Task Force, thank you for inviting me here 

today. I have been speaking for many years about the importance of 

federalism-what some describe as the vertical separation of powers between 

states and the federal government-and to me this hearing is a sign of progress. 

Often when we talk about federalism we focus on its constitutional foundation. 

That's important, but there is a very practical reason for federalism: to create better 

policy! As Justice Brandeis said, states are the "laboratories of democracy." We've 

tried a wide variety of approaches to solving specific problems and developed 

expertise across the spectrum of public policy. When our political culture 

mistakenly presumes that the greatest expertise resides in federal agencies, 

Americans miss out on the lessons already learned by states. Today I'd like to 

suggest several federal laws that need to change to respect this separation of 

powers and facilitate better policy-making. 

But first, I should point out that laws and rules are poor substitutes for cultural 

norms, and what we really need is a cultural change within the federal government. 

Congress and federal agencies must stop viewing state input as merely a 

box-checking exercise rather than a genuine attempt to learn from us. 

Some infractions of federalism are process problems. The U.S. Code is littered 

with suggestions that federal agencies consult with states as simply one among 

many stakeholders. For example, the Water Resources Development Act suggests 

that the "Secretary may consult with key stakeholders, including State, county, and 

city governments ... " Similar language is found in the National Historic 
8 


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Preservation Act, the Energy Policy Act, and many more. As the title oftoday's 

hearing implies, states are not stakeholders! We are sovereign governments, 

partners who should be involved at the beginning of and throughout the 

policy-making process. The boiler-plate language of these laws should be 

amended to reflect that reality. 

In the same vein, the National Environmental Policy Act (NEPA) requires a federal 

agency to work with states to develop various alternatives in an Environmental 

Impact Statement, but also allows the agency to ultimately ignore that input. 

Sometimes the NEP A process feels like little more than an exercise in generating 

high quality paper work. The law should be amended to give states not just a voice, 

but a vote in the selection of a NEP A alternative, a change that would make federal 

land management in the west far more democratic and responsive to voters. 

States should also have a more substantive role in execution. The Endangered 

Species Act authorizes the U.S. Fish and Wildlife Service to write management 

plans, designate critical habitat, and impose land use restrictions. This doesn't 

make sense. Utah's Division of Wildlife Resources is staffed with some of the best 

biologists in the field who have a profound knowledge of Utah's ecology and 

wildlife. There is no good reason states shouldn't take the lead in species recovery. 

I don't want to leave you with a completely negative picture. We are currently 

enjoying a season of good relationships with many federal agencies, many of 

whom are trying to push decision-making down to the states. That is refreshing, 

though it illustrates what I said earlier about the importance of a culture of 

cooperation with states. Good cooperation shouldn't depend on a particular official 

or administration; it should be simply the way things are always done, regardless of 

who is currently in power. 

Let me end by again emphasizing that federalism is not simply an academic 

concept but a better way to set policy. I appreciate your interest in removing some 
9 


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of these barriers to cooperation and ultimately helping us improve the lives of the 

people you and I serve. 

Thank you, and I look forward to your questions. 
10 

Mr. PALMER. I thank Governor Herbert. 

Governor Martinez, we look forward to your testimony. 

STATEMENT OF HON. SUSANA MARTINEZ 

Governor MARTINEZ. Chairman Gowdy, Ranking Member 

Connolly, Task Force Chairman Bishop, and members of the committee and the task force, I am very grateful for this opportunity 

to speak with you today about the balance of power between the 

States and our Federal Government. 

As Federal legislators, you all face an incredible challenge in 

finding solutions that work for a nation of 320 million people in 

urban, rural, and frontier areas spread over 3.8 million square 

miles. In fact, our nation’s incredible geographic and human diversity makes finding a cookie-cutter solution next to impossible. 

What works in South Carolina may not work in Virginia. And what 

works in New Mexico may not work even for our neighbors in 

Utah, which is precisely why it is imperative the Federal Government recognize the sovereignty of States, work with us, and allow 

us to lead and to innovate. When you do, great things really do 

happen. 

The New Mexico Human Services Department implemented our 

State’s Medicaid managed care program, Centennial Care, in 2014 

under a demonstration waiver granted by the Centers for Medicare 

and Medicaid Services. Through this innovative program, managed 

care organizations administer a full array of services to New Mexicans through an integrated model. Care coordinators across the 

State help to ensure members receive the right services at the right 

time. New Mexico is a leader in providing home- and communitybased services, and we are actually decreasing per-person 

healthcare costs. This innovation and resulting success is possible 

because the Federal Government allowed New Mexico to design 

and implement a Medicaid program that works for our State and 

for our people. 

House Resolution 1333 sponsored by Congressman Earl ‘‘Buddy’’ 

Carter of Georgia would provide us with even more freedom to further improve program efficiencies. When we do not receive that 

flexibility, inefficient Federal processes tend to have dire consequences that reverberate across my State. 

As another example, it takes our Energy, Minerals, and Natural 

Resources Department just 10 days to review new oil and gas permits, but it takes the Bureau of Land Management in New Mexico 

an average of 250 days. This delay has led to a BLM backlog of 

more than 800 applications for permits to drill in Mexico at a cost 

of approximately $1.9 million to New Mexico and $3.4 million to 

the Federal Government per day. Annually, this amounts to 100— 

excuse me, to $710 million for New Mexico and $1.2 billion for the 

Federal Government in lost and delayed revenue. 

If the BLM were to delegate its oil and gas revenue process to 

New Mexico and to other Western States for those—for these resources on Federal lands—States like Montana and Utah—it would 

result in billions of dollars of additional State and Federal revenue. 

During my time as New Mexico’s Governor, I’ve seen two different sides of the State-Federal partnerships. At times, regulations and edicts from Washington have brought rigid and formulaic 


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programs to New Mexico that do not allow us to adapt them to our 

unique States. That tide seems to be turning as Federal agencies 

like the Department of Interior and the Department of Transportation are engaging with us to face common challenges. As elected 

officials, we all strive to deliver the best possible results for those 

that we represent as well. We do that best when we work together 

and—constructively and collaboratively as true partners. 

And I thank you for this opportunity to speak with you. 

[Prepared statement of Governor Martinez follows:] 


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Written Testimony Of 

Susana Martinez 

Governor of New Mexico 

Before the 

United States House of Representatives 

Committee on Oversight and Government Reform and 

Speaker's Task Force on Intergovernmental Affairs 

"FEDERALISM IMPLICATIONS OF TREATING STATES AS STAKEHOLDERS" 

February 27, 2018 

Chairman Gowdy, Ranking Member Connolly, Task Force Chairman Bishop, and members of 

the Committee and Task Force, I am very grateful for this opportunity to speak with you today 

about the balance of power between the states and our federal government. 

As federal legislators, you all face an incredible challenge in finding solutions that work for a 

nation of320 million people in urban, rural, and frontier areas spread out over 3.8 million square 

miles. 

In fact, our nation's incredible geographic and human diversity makes finding a cookie cutter 

solution next to impossible. 

What works in South Carolina may not work in Virginia. And what works in New Mexico may 

not work even for our neighbors in Utah, which is precisely why it is imperative the federal 

government recognize the sovereignty of states, work with us, and allow us to lead and innovate. 

When you do, great things will happen. 

The New Mexico Human Services Department implemented our state's Medicaid managed care 

program, Centennial Care, in 2014 under a demonstration waiver granted by the Centers for 

Medicare and Medicaid Services. 

Through this innovative program, managed care organizations administer a full array of services 

to New Mexicans through an integrated care model. 

Care coordinators across the state help to ensure members receive the right services at the right 

time, New Mexico is a leader in providing home- and community-based services, and we are 

actually decreasing per-person health care costs. 

This innovation and resulting success is possible because the federal government allowed New 

Mexico to design and implement a Medicaid program that works for our state and our people. 
13 


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House Resolution 1333 sponsored by Earl "Buddy" Carter of Georgia would provide us with 

even more freedom to further improve program efficiencies. 

When we do not receive that flexibility, inefficient federal processes tend to have dire 

consequences that reverberate across my state. 

It takes our state Energy, Minerals and Natural Resources Department just 10 days to review new 

oil and gas permits, but it takes the Bureau of Land Management in New Mexico an average of 

250 days. 

This delay has Jed to a BLM backlog of more than 800 applications for permits to drill in 

Mexico, at a cost of approximately $1.9 million to New Mexico and $3.4 million to the federal 

govermnent PER DAY. 

Annually, this amounts to $710 million for New Mexico and $1.2 billion for the federal 

govermnent in lost and delayed revenue. 

If the BLM were to delegate its oil and gas review process to New Mexico and other western 

states with these resources on federal lands - states like Montana and Utah it would result in 

billions of dollars of additional state and federal revenue. 

During my time as New Mexico's governor, I've seen two different sides of the state-federal 

partnership. At times, regulations and edicts from Washington have brought rigid and formulaic 

programs to New Mexico that do not allow us adapt them to our unique state. 

That tide seems to be turning as federal agencies like the Department of Interior and Department 

of Transportation are engaging with us to face cormnon challenges. 

As elected officials, we all strive to deliver the best possible results for those we represent. We 

do that best when we work together constructively and collaboratively as true partners. 

### 
14 

Mr. PALMER. Thank you. Governor Otter, if you would give your 

testimony. 

STATEMENT OF CLEMENT LEROY ‘‘BUTCH’’ OTTER 

Governor OTTER. Well, thank you, Mr. Chairman, and I appreciate very much the opportunity to be here. Chairman Rob, good 

to see you again—Chairman Bishop, good to see you again, and 

Ranking Member Connolly. It is indeed—members, it is indeed a 

pleasure to be here today and have the opportunity to appear before you and talk about the relationships between the Federal Government and the Federal Government’s creators, the States. 

I come to you in my 12th year as Governor of the great State of 

Idaho. I have approximately 113 days, 13 hours, 27 minutes until 

I leave office, but then, who’s counting? During my tenure, there’s 

been three presidential administrations. At times, they have provided me the opportunity to see federalism at its finest. Idaho has 

been treated as a true partner with a meaningful voice in national 

policies and most—that most directly impact all our citizens. 

At other times and far too often, I have experienced the kind of 

dysfunction and heavy handedness from our national government 

that make a mockery of what the Founders referred to as federalism. In fact, I’ve seen both interpretations of federalism come 

into play on a single issue not only during my six years here in 

Congress but also as my three terms as Governor. 

The limited and narrow powers granted to the Federal Government by our Constitution have been expanded exponentially, constantly reaching far beyond those originally enumerated and the 

central powers relegated through the Tenth Amendment to the 

dustbin of history. The kind of mission creep is most apparent in 

Idaho and throughout the West wherever the Federal Government 

controls access to the enormous and vast swaths of our lands. Instead of being recognized as sovereign States with equal standing 

in our union and essential interest at stake, when it comes to managing our resources, we find ourselves continually having to ask 

the Federal Government, ‘‘Mother, may I?’’ And the problem increasingly extends beyond land management to issues as diverse as 

immigration and health care. 

Nevertheless, hope abounds. I want to express my appreciation 

to Congress and the current administration for working to restore 

the standing of States as true partners in governance. After years 

as an afterthought, how we collaborate and develop our own solutions once again matters again. 

In Idaho, this rebirth of federalism is resulting in development 

and application of innovative approaches to addressing shared challenges. With the encouragement of President Trump and the Congress and consistent with our role as the States as laboratories of 

democracy, I signed an executive order in January of this year directing my Department of Insurance to seek creative ways of improving access to affordable health care coverage in Idaho. 

We have seen premiums for the Affordable Health Care Act skyrocket in Idaho over the past three years. As a result, individuals 

and families are forced to make unacceptable choices: paying for 

health care or paying for groceries. But encouragement by elimination of the individual mandate and this administration’s exVerDate Nov 24 2008 10:54 Aug 15, 2018 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 H:\30397.TXT APRIL

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pressed support for greater flexibility, Idaho will now have the opportunity for an off-exchange’s State plan that provides essential 

coverage at more affordable rates. 

Despite some overwrought arguments to the contrary, our plan 

actually will complement the ACA. That’s because Idaho is requiring that insurance company carriers that offer choice in the Statebased plans must also provide ACA-qualified plans. And most importantly, all ACA and State-based plans will be within the single 

risk pool, thereby broadening the risk and providing for the individual marketplace. 

Instead of standing idly by as more and more hard-working Idahoans are priced out or left out of the ACA insurance coverage, we 

decided to tackle the problem head-on using a first-of-its-kind approach, and we are confident that it will work. 

Another good example of our improving relationship with the 

Federal Government relates to a program known as the Good 

Neighbor Authority. In 2014, during the last administration, the 

2014 Farm Bill authorizes States to lead forest restoration projects 

on national forest lands. That collaborative, cross-jurisdictional effort is increasing the pace and scale of timber harvest projects in 

areas prone to insect damage, disease damage, and subsequent 

wildfire. 

Over the next three years, we expect to treat nearly 11,000 acres 

of Federal Forest Service land using the Good Neighbor Authority, 

harvesting 70 million board feet of timber and bringing $14.5 million in revenue. Good Neighbor Authority improves the forest 

health, reduces fire risk, boosts the rural economy, and pays for 

itself. It truly is the gold standard for cooperative federalism. 

We are similarly encouraged by the Trump administration’s commitment to streamlining efficient and costly environmental review 

process. Decisions too often are being made in anticipation of being 

sued rather than based on sound science and local conditions. 

And finally, we are—continue to benefit from the flexibility that’s 

being offered in Every Student Succeeds Act. Idaho now is empowered to be the architects of our own K through career education in 

Idaho. 

While this recent renewal of classic federalism is welcome and 

refreshing, there still remains much work, and I appreciate this 

committee’s attention to that work. Again, thank you for the opportunity to testify before you today. Your continuing—and thank you 

also for your continuing service to the United States of America. 

And, Mr. Chairman, I stand ready to answer questions. 

[Prepared statement of Governor Otter follows:] 


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KING-6430 with DISTILLERInsert offset folio 6 here 30397.006

Testimony of C.L. "Butch" Otter 

Governor of Idaho 

United States House of Representatives 

Committee on Oversight and Government Reform; and 

The Speaker's Task Force on Intergovernmental Affairs 

Thank you Chairman Gowdy, Chairman Bishop, committee members and task force members. 

My name is Butch Otter and I'm governor of the great state ofldaho. It's an honor to appear 

before you to discuss the relationship between our state and federal governments. 

I come to you in my 12th and final year as governor. I have approximately 313 days, 13 hours 

and 50 minutes until I leave office ... but who's counting? 

During my tenure there have been three presidential administrations. At times, they have 

provided me the opportunity to see federalism at its finest. Idaho has been treated as a true 

partner, with a meaningful voice in national policies that most directly impact our citizens. 

At other times- and far too often- I have experienced the kind of dysfunction and heavyhandedness from our national government that make a mockery of what the Framers meant by 

federalism. Idaho has been treated as if we are little more than a box to check rather than a 

partner with which to collaborate in the interest of the people we serve. 

In fact, I've seen both interpretations of federalism come into play on a single issue between my 

six years in this body and my three terms as governor. 

The limited and narrow powers granted to the federal government by our Constitution have 

been expanded exponentially, constantly reaching far beyond those originally enumerated and 

essentially relegating the Tenth Amendment to the dustbin of American history. That kind of 

"mission creep" is most apparent in Idaho and throughout the West- wherever the federal 

government controls access to and use of enormous swaths of our land. 

Instead of being recognized as sovereign states with equal standing in our union and essential 

interests at stake, when it comes to managing our resources we find ourselves continually 

having to ask our federal landlords, "Mother, may I?" And the problem increasingly extends 

beyond land management to issues as diverse as immigration and health care. 

Nevertheless, hope abounds. I want to express my appreciation to Congress and the current 

administration for working to restore the standing of states as true partners in governance. After 

years as an afterthought, how we collaborate and develop our own solutions matters again. 

In Idaho, this rebirth of federalism is resulting in development and application of innovative 

approaches to addressing shared challenges. With the encouragement of President Trump and 

Congress, and consistent with the role of states as laboratories of democracy, I signed an 

executive order in January directing my Department oflnsurance to seek creative ways of 

improving access to affordable healthcare coverage in Idaho. 
17 


KING-6430 with DISTILLERInsert offset folio 7 here 30397.007

We have seen premiums for Affordable Care Act plans skyrocket in Idaho over the past three 

years. As a result, individuals and families are forced to make the unacceptable choice of paying 

for health insurance or paying for groceries. But encouraged by elimination of the individual 

mandate and this administration's expressed support for greater state flexibility, Idaho now will 

allow off-exchange state plans that provide essential coverage at more affordable rates. 

Despite some overwrought arguments to the contrary, our plans actually will complement the 

ACA. That's because Idaho is requiring that insurance carriers that choose to offer state-based 

plans also must provide ACA plans. And most importantly, all ACA and state-based plans will 

be within a single risk pool, reducing costs across the individual marketplace. 

Instead of standing idly by as more and more hard-working Idahoans are priced out or left out 

of ACA insurance coverage, we decided to tackle the problem head on using a first-of-its-kind 

approach. And we are confident it will work. 

Another good example of our improving relationship with the federal government relates to a 

program known as Good Neighbor Authority. The 2014 Farm Bill authorized states to lead 

forest restoration projects on national forest lands. That collaborative, cross-jurisdictional effort 

is increasing the pace and scale of timber harvest projects in areas prone to insect infestation 

and disease that can lead to catastrophic wildfires. 

Over the next three years, we expect to treat nearly 11,000 acres of Forest Service land using 

Good Neighbor Authority, harvesting 70 million board feet of timber and bringing in $14.5 

million in revenue. Good Neighbor Authority improves forest health, reduces fire risk, boosts 

rural economies, and pays for itself. It truly is the gold standard of cooperative federalism. 

We are similarly encouraged by the Trump administration's commitment to streamlining 

inefficient and costly environmental review processes. Decisions too often are being made in 

anticipation of being sued rather than being based on sound science and local conditions. 

And finally, we continue to benefit from the flexibility built into the Every Student Succeeds 

Act. Idaho now is empowered to be the architects of our own K-12 education programs. The 

U.S. Department of Education has moved from punitive sanctions to enabling states to define 

their own strategies for supporting and lifting up under-performing schools. Instead of closing 

low performing schools or replacing their principals and staff, the Every Student Succeeds Act 

leaves those decisions up to states working collaboratively with local education agencies. 

While this recent renewal of classic federalism is welcome and refreshing, there remains much 

room for improvement. I highlight these positive examples in the hope that a culture of treating 

states as partners rather than stakeholders will take root and extend to other facets of our 

national government. Again, thank you for the opportunity to testify before you today and for 

your continuing service to the United States of America. 
18 

Mr. PALMER. I thank the witnesses for their testimony. The chair 

now recognizes the gentleman from Utah, the chairman of the 

Committee on Natural Resources and chairman of the Speaker’s 

Task Force on Intergovernmental Affairs, Mr. Bishop. 

Mr. BISHOP. Thank you, Gary, and thank you, the three Governors, for joining us here today. It is extremely good to have you 

back here. And I am grateful to be here, especially for the task 

force. I noticed I think about six members of the task force have 

been or were here or are leaving here at the same time, whatever. 

Let me tell you what I am going to ask each of you so you can 

be thinking about it and then preface this for just a second. 

So, Governor Herbert, I want to hit you up on the consultation 

concept again, go into more detail on that. Ms. Martinez, I do want 

to talk to you about how we can make this effort on federalism a 

bipartisan approach, and for Governor Otter, I want to talk to you 

again about what you called mission creep or creeping 

conditionalism. You have to realize, I mean, there are about 266 

former legislators who are Members of Congress. I don’t know why 

we forget our lessons we learned in State legislature, but it seems 

when we come here to Congress, all of a sudden we want to solve 

all sorts of problems, regardless of how those problems are solved. 

There is something that is very unique now as both parties, both 

liberals and conservatives, are now talking about federalism under 

different titles more than ever before. If I notice, you know, Senator Feinstein has a bill that deals with federalism dealing with 

drones and Representative Cohen has one that deals with drug policy and Senator Baldwin has one that deals with health partnership. And one of you mentioned a resolution by Representative 

Carter. People are now talking about that. This is an opportunity 

we have of actually trying to implement it. 

So, Governor Herbert, let me start with you. You talked about 

collaboration, how important it is. We have long talked about consultation is important. How do we actually define consultation here 

to allow that State and local governments are ensured that they 

are consulted and that their comments are taken seriously? For example, we have had court cases in the State of Utah where commissioners’ decisions have been thrown out because they said the 

commissioners had too much influence vis-a-vis NGOs. How do we 

ensure that States actually do fulfill that consultation role? 

Governor HERBERT. Well, I think part of it is what I talked 

about, a culture change. We need to go back and review the role 

of the Federal Government in conjunction with the role of the 

States. It is often forgot that Federal Government was, as Butch 

Otter has said, created by the States. And we are sovereign States. 

We are, as Justice Brandeis said, you know, laboratories of democracy. We do have a role to play. And that is part of an attitude 

thing. For whatever reason, we have got to the point where we 

seem to ignore the role of the States and aren’t listening to what 

the States are doing and let them perform their role as laboratories 

of democracy. 

Mr. BISHOP. You went through a litany of laws in which it is allowed. Would it be better if we actually wrote laws so it was mandated? 


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Governor HERBERT. I think that, one, there ought to be a mandate to listen and respect the role of the States and, again, it’s not 

just a matter of checking off a box and saying, well, we’ve got your 

input, now we’ll ignore it. 

Mr. BISHOP. Okay. 

Governor HERBERT. We think that the States should have a role 

to make decisions, and we ought to devolve the decision-making 

power back to the States. We’d get a better result and less cost to 

the taxpayer. 

Mr. BISHOP. Governor Martinez, how can we make this concept 

of federalism bipartisan? I mean, you represent a purple State, 

whereas in Utah and Idaho I think we have got zoning ordinances 

that keep Democrats at bay. 

Mr. DESAULNIER. If only you had a little purple. 

Mr. BISHOP. Well, I am not going to say anything about Californians. So how do we make this issue bipartisan? 

Governor MARTINEZ. Thank you for that question. So sorry, I forget the button. Thank you very much for that question, Congressman Bishop. I think it’s important that we remember that we’re 

not politicians but we’re actually leaders. I am a Republican Governor in a State where we’re outnumbered three to one by Democrats and independents, and so therefore, I have a very clear understanding that I represent all the people of New Mexico and not 

just those who voted for me or those of the same party. 

We have done this many times through, for example, when I expanded Medicaid. When I expanded Medicaid, it was not necessarily something that was a Republican thing to do. However, I 

went on a listening tour, private and local communities, private 

businesses, I did it with organizations and advocacy groups and 

wanted to hear why I should or should not expand Medicaid. And 

at the end of the day I did what was right for the people of New 

Mexico. I actually did expand Medicaid and I have also, through 

that process, costs per month—per person and per month have actually gone down, and that’s why we’re a leader in New Mexico because this was not a political decision. 

Mr. BISHOP. I appreciate you doing that because you’re talking 

about the attitude that Governor Herbert was talking about, and 

in the five seconds I have got left, I appreciate what you are talking because we are going to have an energy bill that tries to partner with the States to allow the States to do all the paperwork, 

keep the Federal standards but the States do the paperwork to see 

if we can actually work together more. I hope that comes in there. 

Butch, I am out of time, but if there is a second round, I want 

to come back to this idea of mission creep and creeping 

conditionalism with you. I will yield back but—sorry. 

Mr. PALMER. The chair now recognizes the gentleman from Virginia, Mr. Connolly, for five minutes. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

And, Governor Martinez, I appreciate the decision you made on 

the expansion of Medicaid. I believe Governor Kasich, your Republican colleague in Ohio, made a similar decision. And we are now 

wrestling with it yet again in Virginia. It is costing my State billions of dollars not to do it. It is 400,000 people not getting coverage that otherwise would get it. And ironically, it is the red parts 


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of the State, it is rural areas that are seeing the pressure on their 

hospitals and clinics closing because they financially can’t make it. 

And the expansion of Medicaid would save those hospitals and provide care to people who desperately need it. So I applaud your nonpolitical decision, and I think that is the spirit in which Republicans and Democrats ought to approach governance, especially at 

the State and local level. 

All three of you come from Western States, and I know that if 

we had the Governor of New York and the Governor of Virginia 

and some other Governors, we might have a different perspective 

about the Trump administration and how helpful it has been or 

not, and I guess the jury will be out. We will see. But the philosophy you all are sharing with us, I find myself largely in agreement in principle. And, Governor Herbert, I was shaking my head 

listening to thinking, you know, a lot of wisdom there, but doesn’t 

that apply to local governments, too? Are any of you Dillon Rule 

States? 

Governor HERBERT. I come from local government. 

Mr. CONNOLLY. You come from local government. 

Governor HERBERT. I was a local county commissioner, and I 

have concerns about making sure that the State and the legislature 

and the Governor respect the role of the counties and the cities, so 

certainly there’s some tension there. 

Mr. CONNOLLY. Yes. 

Governor HERBERT. The difference is, though, the States created 

those local entities, so they have—they are the mother. They’re the 

ones that created it. The Federal Government is created by the 

States, that miracle in 1787, so it’s a matter of roles and responsibilities under the law. You’re right; it should not be a partisan 

issue. It’s the vision of our Founding Fathers embedded in our Constitution. 

Mr. CONNOLLY. Yes. Certainly, there is a legal argument that 

local governments are the creatures of the State. They are created 

by the State. But practically speaking, that doesn’t really get us 

very far. In my State, the local government I headed is the biggest 

in the State and one of the biggest in the United States. We were 

a full-service—you know, my budget is bigger than the—you know, 

our budget was bigger than seven States’ budgets. And what we 

constantly were subjected to—and this is not unique to my State. 

You see this tension in lots of States. 

But, you know, the State legislature was prejudiced against the 

more affluent northern part of the State, which, by the way, funds 

about half of the State. And so when you look at formulas for allocating resources, we always got the short end of the stick. In fact, 

one egregious example, there was a library fund years ago created, 

of course mostly funded by Northern Virginia by my taxpayers, and 

they actually had a formula that said no jurisdiction larger than 

900,000 could qualify for benefits from the fund. So we funded the 

fund, and we got zero benefits because of course we were the only 

jurisdiction with more than 900,000 people in the State of Virginia 

it just so happened. It got that egregious. 

And, you know, we get real nervous when people talk about block 

granting things because that goes to the State capital where we 

know we are going to get the short end of the stick. We won’t get 


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a fair share. And so I am just curious, since none of you actually 

address local government in your opening remarks—understandably, you are talking about your relationship with the Feds—but 

what is good for the goose is good for the gander. What about your 

local governments? Have you ever taken a careful look at the State 

level about the unfunded mandates you impose, not you personally 

but the State does and sort of the imposition sometimes you make 

in laws and regulations that they then have to implement? Because 

the ultimate implementer of everything is local government. Governor Otter, you are shaking your head. 

Governor OTTER. Yes. Well, thank you, Representative Connolly. 

I can tell you this, that in my 12 years as Governor and all the 

legislation—probably 350 pieces of legislation that I signed—am responsible for either signing or not signing or vetoing every year, in 

the most cases, the limitations that are put on local units of government are actually edicts from the Federal Government. And you 

can go right through almost every agency starting with the EPA 

and the Clean Water Act and those sort of things, so if a local government wants to develop in a certain area, they must certainly 

follow through all the —— 

Mr. CONNOLLY. If I can interrupt, Governor Otter, because of 

time. Forgive me. But, I mean, that is not true in the case of education funding formulas. That is a State formula, not a Federal formula. And it has a huge impact on local governments and the tax 

rates they have to charge or not charge to fund their local education. In my case 80 percent of our school funding we bear because the State has a funding formula that just so happens to discriminate against certain parts of the State and benefits other certain parts of the State. I am sure politics has nothing to do with 

it. That is not a Federal issue, that is a —— 

Governor OTTER. Well, perhaps —— 

Mr. CONNOLLY.—State issue. 

Governor OTTER.—we are a little more fair in Idaho because we 

actually assign so much money for each and every classroom unit 

no matter whether it is in Weippe, Idaho, or Boise, Idaho, the largest school district or the smallest. 

Mr. CONNOLLY. My time is up. I want to learn more about that. 

Maybe we could get you to Richmond and educate them a little bit 

about —— 

Governor OTTER. Be happy to. 

Mr. CONNOLLY.—the funding formulas. Thank you, Mr. Chairman. 

Mr. PALMER. The chair recognizes the gentleman from North 

Carolina, Mr. Meadows, for five minutes. 

Mr. MEADOWS. Thank you, Mr. Chairman. I thank each of you 

for your testimony here today. The first one, the committee has reviewed a number of major Federal regulatory actions where the 

Federal Government actually did not adequately consult with the 

States. Some of those were with the EPA Army Corps of Engineers, 

the Department of Labor and its overtime rule, Department of Interior in terms of stream buffers are just a few examples of those. 

So the executive order 13132 on federalism and unfunded mandates actually required consultation with State and local governments. Can each of you very quickly let me know how you—how 


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do you think that this particular executive order is working? Is the 

consultation actually taking place? And so, Governor, will you go 

ahead and—Herbert, if you will go ahead and start. 

Governor HERBERT. Thank you. The fact that we are here today 

talking about it, I think we see progress. I’m hopeful. The fact that 

former Speaker Nancy Pelosi, first thing out of her mouth yesterday meeting with a few of us Governors was, hey, Judge Brandeis, 

laboratories of democracy, we need to let you guys take the lead 

on these policy issues. I think we are getting heard. I think there’s 

been an attitudinal change that needs to continue, and so I feel 

good about the direction we’re headed. 

Mr. MEADOWS. All right. Governor Martinez? 

Governor MARTINEZ. Yes, sir. Thank you. Certainly, there’s been 

more collaboration in the last two years than I experienced in the 

previous six years as being Governor. I’ve actually been asked to 

sit at tables within the Department of Transportation, as well as 

sitting at the table with a variety—yesterday with a committee in 

reference to our prisons and the reforms that can take place for individuals that are moving from within the prisons and out into the 

communities. That never happened before. I never even received a 

phone call when things were taking place. And particularly when 

an endangered species was being listed, it was—the State wasn’t 

given the opportunity to protect that species as it’s supposed to be 

given in order to eliminate the Federal involvement so that we can 

protect it and continue to have that not on the list of endangered 

species. 

Mr. MEADOWS. All right. Thank you, Governor. Governor Otter? 

Governor OTTER. Congressman, I can think of several times 

when we have been consulted many times and never listen to. I’ve 

served as Governor under three presidential—under three different 

Presidents, three different administrations, and from time to time 

early on in my first two years when the Bush administration, 

things began to change and not for the better. They got worse for 

the next eight years. Now, they’re starting to get better again. So 

simply in—simply requiring consultation doesn’t always work. 

Sometimes, there has to be a result and whose side are we going 

to make the final decision on, the States or the Federal Government’s side? 

Mr. MEADOWS. All right. So let me real quickly in the two minutes I have remaining follow up on that because what you are saying is it is not enough to just listen but it is actually to take that 

input and actually put it into action. So would you say that what 

we are seeing is actually more efficient policy and cost savings as 

a result of that collaboration? 

Governor HERBERT. Clearly, as we look back and just again one 

of the controversial issues of the Affordable Care Act, Obamacare, 

the Governors were never one time consulted and asked what’s our 

opinion, yet we’re going to be on the frontlines of having to implement the program. 

Mr. MEADOWS. So what you are saying is is this collaboration 

could actually save the American taxpayer dollars —— 

Governor HERBERT. Dollars and —— 

Mr. MEADOWS.—in a real way? 

Governor HERBERT.—develop better policy. 


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Mr. MEADOWS. Yes. Okay. 

Governor HERBERT. And certainly, again, we ought to have the 

States weigh in, and we ought to not just be listened to but respected and considered and let us be part of the decision-making 

process. 

Mr. MEADOWS. All right. Governor Martinez, do you agree with 

that? 

Governor MARTINEZ. Well, I agree that certainly in the education 

reform that was discussed by Congressman Connolly is that we 

were—in collaboration with the Federal Government, the—under 

the Obama administration, we were in collaboration, we were in 

agreement on education reforms, but it was our Democrat State 

legislature that was not in collaboration with the States and local 

communities. 

Mr. MEADOWS. But I can’t help with that problem so —— 

Governor MARTINEZ. I understand, but there are opportunities 

that we have actually agreed. 

Mr. MEADOWS. All right. Governor Otter? 

Governor OTTER. I would say yes, and improving daily. 

Mr. MEADOWS. All right. So if that is indeed the case, would you 

encourage more reforms of this type where we can actually streamline this, yes or no in my 12 seconds? Yes, Governor? 

Governor HERBERT. Yes, the more you involve the States, the 

better it’s going to be. 

Mr. MEADOWS. Governor? 

Governor MARTINEZ. Absolutely. There is no cookie-cutter solution that can be done for all States. 

Mr. MEADOWS. Governor? 

Governor OTTER. Yes. 

Mr. MEADOWS. All right. Thank you. I yield back. 

Mr. PALMER. The chair recognizes the gentleman from Maryland, 

Mr. Raskin, for five minutes. 

Mr. RASKIN. Mr. Chair, thank you so much for putting together 

this terrific panel, and it is an honor to be in the presence of these 

Governors. 

Everybody loves federalism in principle. Everybody loves federalism in theory, in the abstract. The question is whether you are 

willing to defend federalism when it cuts against your deepest-held 

policy preferences. And so I want to try to get beyond the level of 

principle, which we all embrace, to the critical issues that are facing us in this Congress. 

Let’s start with marijuana. Right now, this might be the greatest 

federalism issue in the country. We have dozens of States that 

have embarked upon experiments with medical marijuana, with decriminalization of marijuana, with treating it as a public health 

problem rather than a criminal problem, and we got the Attorney 

General of the United States, Attorney General Sessions, who 

wants to come down like a sledgehammer on the States to crush 

all of these experiments and to revive a war on marijuana. And I 

just wonder whether any of you are willing to take a position on 

behalf of States’ rights and federalism against what the Attorney 

General is trying to do? Governor Otter, perhaps you could start 

and just quickly go down. 


KING-6430 with DISTILLER
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Governor OTTER. Of all the States that I border, four of them 

have legalized recreational marijuana, and it would be one thing if 

that stopped at the border, but it doesn’t stop at the border. 

Mr. RASKIN. Well, nothing ever stops at the border. That’s always the argument that the nationalizers take against people who 

I thought you were siding with, which was the States’ rights people. 

Governor OTTER. But it doesn’t cause harm to my State —- 

Mr. RASKIN. That is always the argument made it. Do you see? 

There is the problem. 

Governor OTTER. Well, maybe that ought to give —— 

Mr. RASKIN. We all love federalism in theory, but are we really 

willing to stick to it when it comes to a specific case where we are 

against it? I assume you don’t favor the decriminalization of marijuana? 

Governor OTTER. I do not. 

Mr. RASKIN. Okay. So, Governor Martinez, where do you stand 

on it? 

Governor MARTINEZ. As a prosecutor for 25 years and on the border of New Mexico with the Mexican border, I do not support the 

legalization of marijuana. I completely support —— 

Mr. RASKIN. As a matter of States—you mean as a matter of exercise of your State power. The question is do you think the Federal Government should crush the experiments in the States with 

dealing with the marijuana problem? 

Governor MARTINEZ. As the law stands today, it is my responsibility as a lawyer, as the Governor to the people of New Mexico. 

I have to comply with the laws of the United States Government, 

and that means there’s no legalization of marijuana in my State. 

However, we do have a medical marijuana program that is very 

successful. 

Mr. RASKIN. And they want to crush that, too. Governor Herbert? 

Governor HERBERT. You’ve put the States in a Catch-22 problem. 

You have a Federal law that says it’s illegal. If you don’t like that, 

change the law. 

Mr. RASKIN. Yes, so you —— 

Governor HERBERT. So that allows us then as States to take on 

the responsibility on a statewide basis. We are learning. We’re 

next-door to Colorado. I’ve worked with Governor Hickenlooper. 

He’s told us as a State and other Governors be very careful, watch 

we do. I —— 

Mr. RASKIN. So you are supporting a change in Federal laws —— 

Governor HERBERT. I support —— 

Mr. RASKIN.—to allow the States —— 

Governor HERBERT. Change the Federal law. 

Mr. RASKIN.—to experiment —— 

Governor HERBERT. Yes, you can’t —— 

Mr. RASKIN. Okay. 

Governor HERBERT. You put —— 

Mr. RASKIN. So let’s try another one, which is again something 

we are dealing —— 

Governor HERBERT. Take it off the schedule I so we can actually 

do the research necessary to backup —— 

Mr. RASKIN. Good. 


KING-6430 with DISTILLER
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Governor HERBERT.—science to back up what—at least the anecdotal stories. 

Mr. RASKIN. Here is another one that is happening right now. 

There is an effort to wipe out medical malpractice laws across the 

country and to impose one Federal one-size-fits-all solution in 

terms of medical malpractice where the awards are set when you 

get a jury trial and so on. Do you favor that, or do you think each 

of the States should be able to decide for themselves what their 

medical malpractice laws are? 

Governor OTTER. We already have that in Idaho. 

Mr. RASKIN. You have what? 

Governor OTTER. We have limitations on medical malpractice. 

Mr. RASKIN. Sure, but they are set at different places in different 

States. You think we should have one-size-fits-all national solution 

or do you think the States should be able to decide for themselves? 

Governor OTTER. I do not think we ought to have a national solution. 

Mr. RASKIN. Governor Martinez? 

Governor MARTINEZ. I agree completely. 

Mr. RASKIN. Yes? 

Governor HERBERT. State decision-making, no one-size-fits-all. 

Mr. RASKIN. Okay. Well, so there I just want you to know you 

are siding with the Democrats in Congress against the legislation 

that is being pushed by the Republicans —— 

Governor HERBERT. It shouldn’t be partisan. 

Mr. RASKIN. And that is why I am with you. I appreciate the fact 

that you are standing up for the federalism principle, you know, in 

reality when it counts. Let me just do one more. The conceal-carry 

permits, there is an attempt to wipe out all of the laws of the 

States on concealed carry to say that if you get the right to carry 

a loaded weapon in Florida, which has very liberal laws on this, 

you should be able to come into my State, for example, which 

doesn’t allow people who have domestic violence offenses or other 

violent misdemeanor convictions to get one. Do you think that 

should be a matter of national law or do you think it should be up 

to the States who gets to carry a loaded pistol in their —— 

Governor HERBERT. I can tell you —— 

Mr. RASKIN. Yes. 

Governor HERBERT.—it’s clearly—it’s been tested all over the Supreme Court, it’s a State issue. We have reciprocity. We have people that come to Utah, get a concealed weapon permit when 31 

other States —— 

Mr. RASKIN. And you can make the reciprocity agreements and 

—— 

Governor HERBERT.—run State by State by State —— 

Mr. RASKIN. Yes. 

Governor HERBERT.—reciprocity, there should not be a national 

norm. 

Mr. RASKIN. Got you. Governor Martinez? 

Governor MARTINEZ. Absolutely, I am—I have a conceal-carry license, and I at first was very leery, but I certainly appreciate the 

fact that it’s something that can be decided within the State because, as a law enforcement family, my father, my husband, my 

son, it always worried me that citizens were carrying it. However, 


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with the training that we have implemented, it is a very safe thing 

to be able to have a concealed carry. 

Mr. RASKIN. And you don’t want us trampling the laws of New 

Mexico to say we know better than you, we are going to bring it 

down to the lowest common denominator? 

Governor MARTINEZ. That’s exactly right. 

Mr. RASKIN. Governor Otter? 

Governor OTTER. I believe the same. It’s a State issue. 

Mr. RASKIN. Well, I thank you very much for standing up for federalism in that case, and I am happy to yield back, Mr. Chairman. 

Mr. PALMER. I thank the gentleman. The chair now recognizes 

the gentlewoman from Puerto Rico, Ms. Gonzalez-Colon, for five 

minutes. 

Ms. GONZALEZ-COLON. Thank you, Mr. Chairman. And thank 

you, all Governors, for being here today and for your testimony. 

Coming from Puerto Rico, we also have got the same problem in 

the States, and when these executive orders may not apply to the 

island as we do not have that sovereign power, I may say that all 

those regulations did apply and do apply to Puerto Rico. And each 

agency it says the executive order shall have accountable process 

to ensure meaningful and timely input by State and local officials 

in the development of regulatory policies that have federalism implications within 90 days. Of course, that 90 days never occurred, 

and that designation that comes with that mandate always put a 

burden on some of the States to comply with those regulations. So 

what kind of burden in terms of the expenses all of your States are 

incurring to comply with all those regulations in your States? Governor Otter? 

Governor OTTER. Well, I haven’t got—I haven’t added up the list 

of the costs that we’ve had, but I can tell you this: Nearly every 

public policy that we deal with in Idaho we have to factor in what 

the Federal Government wants us to do, as well as how much of 

the cost they want us to suffer. So I would tell you when we establish public policy, we really need to see who it helps and who it 

harms. And sometimes there’s very little attention or care paid, especially from the Federal level. 

Ms. GONZALEZ-COLON. Governor Martinez? 

Governor MARTINEZ. Yes, thank you so much. And certainly our 

prayers continue to be with your people —— 

Ms. GONZALEZ-COLON. Thank you. 

Governor MARTINEZ.—in Puerto Rico. Regulations, for example, 

with BLM and the duplication of work that takes place with the 

Federal Government and the State Government, the types of testing that is done, environmental testing, that’s a duplication of costs 

not only to State Government but also to the Federal Government 

and the people who are conducting business within our State. You 

know, time is money, and when something can take 10 days within 

a State regulation, what takes 250 days in a Federal regulation, 

you can see where time is money and that business people will end 

up going someplace else to conduct business where it is easier and 

better to do it because they don’t have the Federal land that they’re 

having to deal with with BLM but actually having to deal with just 

State land. 

Ms. GONZALEZ-COLON. Are we talking about NEPA? 


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Governor MARTINEZ. NEPA is one of those that is required, yes, 

and then sometimes it’s not required but they’re making us do it 

anyway, which ends up being more expensive. There are regulations that actually have exclusions, but we’re made to comply nonetheless. 

Ms. GONZALEZ-COLON. And how much will that cost your State? 

Governor MARTINEZ. Oh, cost—the costs that I was quoting you 

just a while ago, it costs the Federal Government in actual dollars. 

It is $1.9 million to New Mexico per day and $3.4 million to the 

Federal Government per day in revenues. That is what is being lost 

right now because of these regulations. 

Governor HERBERT. Let me just speak about Utah, and again, it 

kind of goes to what Representative Connolly was talking about, 

local government. When we put together our budget, we have local 

government comes to us and said we’ll trade you one dollar of Federal money that comes to the local government for 85 cents of a 

State dollar, and that’s because the red tape, the regulations are 

so expensive they’ll give a discount of 15 percent just to get a State 

dollar. 

Why does it take so long for the Federal Government to make decisions? We had a question with Interior here on a road, whether 

it should be opened or closed on some of our public lands. It took 

us 7–1/2 years, 7–1/2 years to get a decision, and the only reason 

we got a decision was because we eventually decided to sue to 

make them make a decision. That is time is money, and when you 

have local governments say we’ll give you the Federal dollar, give 

us back just 85 cents, we know that the cost of the Federal oversight is really getting too expensive and too time-consuming. 

Ms. GONZALEZ-COLON. So you know that with President Trump’s 

infrastructure plan we also are looking for a streamlined process 

in NEPA. Are you in favor of that? 

Governor MARTINEZ. Yes. 

Governor OTTER. Yes. 

Governor HERBERT. Absolutely. 

Ms. GONZALEZ-COLON. Can you provide some examples of specifically what can we be looking at that process directly for the States? 

Governor OTTER. Well, I can tell you that we find most of the 

standards for our highway systems in Idaho if there’s any Federal 

participation in those—in some cases if it’s our State highways 

paid for by our State-only money leading to a Federal connection— 

intersection, those are required to meet the same standards, and 

those are standards that may work very well in Virginia or New 

York or someplace else, but in Idaho it’s a little different. 

Governor MARTINEZ. I agree. Certainly, I think NEPA has its 

place, but to have it overly expansive on a State that not necessarily—like, we’re very rural, and to have similar type of testing. 

I believe in the facts and the evidence and the data that shows 

that—whether or not NEPA is something that should be applied to 

a particular project. If it doesn’t support it, then we shouldn’t be 

doing it just for the sake of that’s how we’ve always done it. 

Governor HERBERT. I think it speaks to the lack of trust. Again, 

the Federal Government doesn’t believe that our own environmental scientists can make the assessment and the evaluation. 

We’re doing a reconstruction of our interstate along the Wasatch 


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front. It’s the same right-of-way and roads that we’ve had for 50 

years. Why are we having to go—because we’re expanding capacity—a complete revival of an environmental assessment costs time 

and it’s a waste of time and money. 

Ms. GONZALEZ-COLON. Thank you, Mr. Chairman. 

Mr. PALMER. The chair now recognizes the gentlelady from the 

District of Columbia, Mrs. Holmes Norton, for five minutes. 

Ms. NORTON. Thank you very much, Mr. Chairman. 

Much of the discussion both from those of us in Congress as we 

question you and from you have, it is assumed, an adversarial relationship. Of course, there is a built-in adversarial relationship 

when you are part of a whole and yet we are very different. We 

are exquisitely different from coast to coast. 

On the other hand, the deep pockets of the Federal Government 

does allow it, along with the Constitution and Federalist notions, 

to fund important benefits that the States want. 

I want to ask about Medicaid expansion because of the way you 

all have approached it. There are States that apparently prefer to 

leave a considerable amount of money, indeed most of the money 

the Federal Government would pay for—most of it on the table, 

which is to leave the health care of their own residents on the 

table. Governor Martinez, you did not make that decision. An article was provided from the Albuquerque Journal where you stated, 

‘‘Access to health care has the potential to improve the well-being 

of our families so our kids can learn better in school and so Mom 

and Dad can be better parents and more productive employees.’’ 

You did accept Medicaid expansion. 

Governor MARTINEZ. I did. 

Ms. NORTON. And would you discuss the remarkable results 

there? The figures I have show that your uninsured rate was 25 

percent and that it is down now to 10.2 percent. Are those figures 

correct? 

Governor MARTINEZ. Yes, ma’am. 

Ms. NORTON. Governor Herbert, so you found that rather than 

assuming the Federal Government was an adversary, working with 

the Federal Government, particularly when there was money on 

the table and the health and lives of your own residents was at 

stake, that that is not always an adversarial relationship. It can be 

a very beneficial relationship, perhaps the way the Founders saw 

it. 

Governor Herbert, you of course tried to expand Medicaid in 

Utah, and I commend you for the several compromises that you 

tried to achieve so that Medicaid could be—or so that health care 

could be available for more in Utah. And you were not able to do 

that. You said, ‘‘The poorest among us will continue to struggle 

until Utah leaders can find agreement on this difficult issue.’’ What 

was difficult with the Federal Government funding the lion’s share 

of health care and your compromising approach so as to try to 

bring together people who might otherwise be adversaries? 

Governor HERBERT. Well, one, I respectfully reject the attitude 

that it ought to be adversarial. I think it ought to be collaborative. 

We have difference of opinion. There may be some tension there, 

but it shouldn’t be adversarial. We should try to solve the people’s 

problems. 


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Ms. NORTON. Exactly. 

Governor HERBERT. All the money that the Federal Government 

gets comes from State taxpayers. You take the money from us, you 

come back, you come up with programs. Sometimes we like them, 

sometimes we don’t. We learn from the States. We learn from 

Susana Martinez, New Mexico, and how it works in there and we’ll 

learn maybe that will—we’ll want to adopt in the State of Utah. 

Ms. NORTON. Well, why were you unable, since you were willing 

to compromise, to get Medicaid expansion? 

Governor HERBERT. Because we could not convince members of 

the legislature, particularly in our House side, that it would be the 

fiscally responsible thing to do in the long term. It’s not just a matter of what can we get today, get some of our taxpayers’ money 

back, but what’s going to be the ongoing obligation in the long 

term? Can we afford to buy today and not afford to buy tomorrow? 

Ms. NORTON. Yes, that was the reason that that was given even 

though there was a huge amount of money on the table and no indication that Congress was going to pull it back. 

Governor Otter, did you mention that you had tried some sort of 

compromise in this regard as well? 

Governor OTTER. I have and I continue to. In fact, I have one before the Legislature this year. 

Ms. NORTON. I just want to say that what this does indicate is 

that the Governors are closest to the people, and while we see some 

States that would rather leave that health care—leave where, for 

example, Governor Martinez was unwilling to leave the health care 

of her residents, increasingly we do see more States. Even though 

the affordable health care has been under such assault in Congress, we now see more States wanting to be a part of the program, 

and I think that has everything to do with who is closest to the 

people. We can debate the matter here. You have got to live with 

the matter in the States. Thank you for your testimony. 

Mr. PALMER. I thank the gentlelady. The chair now recognizes 

the gentleman from Iowa, Mr. Blum, for five minutes. 

Mr. BLUM. Thank you, Mr. Chairman, and thank you to our panelists today for being here. I must say, first of all, I am a huge, 

huge supporter of the Tenth Amendment. In addition to it being in 

the Constitution, I also know that Governors and their State legislators can do most everything less expensive than this Federal Government and produce better results. You see here in Washington— 

this is not news to you all—there is no penalty for failure. Typically, when a program here doesn’t produce results, we just spend 

more money on it. It is always we haven’t spent enough money. 

But you all are CEOs of your States and you have to live with the 

results, so thank you for being here and thank you for what you 

do. 

I don’t have an agenda here but I would like to chat about sanctuary cities, sanctuary counties. I am from eastern Iowa, and when 

I am out there talking to people, they just don’t understand how 

cities, counties—it is not States per se, but how they can choose to 

ignore the law. And we have had Presidents who, if they didn’t like 

a law, let’s just not enforce it. You know, I think you would all 

agree one of the reasons we are the greatest nation on the face of 

this earth is because of the rule of law, and we are a nation of 


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laws. And I am going to listen. I would like to have your opinions 

about sanctuary cities, how you deal with that in your State. I 

don’t know if you have any in your States, but what your thoughts 

on that are. 

Governor HERBERT. Well, us going first, it’s a challenge because 

we do respect our local governments in Utah, so our cities, our 

mayors and council people, our county commissioners. We don’t 

support anything other than the rule of law. We think if anybody 

goes contrary to that, that’s a mistake. If you don’t like the law, 

change the law, whether it’s a Federal law or a State law. So I 

think we’re asking for chaos and division in our country if we don’t 

adhere to the rule of law. 

Mr. BLUM. Do you have sanctuary cities in Utah? 

Governor HERBERT. We—maybe Salt Lake City. I think the 

mayor there was—indicate we—we’re not going to round up people 

and violate their peace and tranquility to be upholding the law of 

the Federal Government, so they don’t feel like it’s their responsibility. So I don’t know if I’d say we’re a sanctuary city there, but 

that would probably be the only place it would be considered at all. 

I don’t think they claim to be a sanctuary city. 

Mr. BLUM. Recently, I saw on TV—you probably all did as well— 

the Oakland, California, mayor saying that she felt it was her— 

ethically, she needed to forewarn potentially illegal immigrants 

that ICE was going to conduct operations in their area, in their 

neighborhood. Governor, can you give me your thoughts on that? 

Governor HERBERT. Well, my thoughts really are it’s a Federal 

issue. We actually tried to find a State solution. We went to the— 

we were challenged in court by the Obama administration. We lost 

where the court said this is a Federal issue. I later met with President Obama and he talked about his executive order, and I said, 

well, you’re trying to do the same thing I did. We tried to do it by 

law and a State-right position. You’re trying to do it by executive 

order, and you’re going to lose in court, too, because it’s a congressional responsibility. 

It’s disappointing I think to many people across the country that 

we can’t come together on that. Maybe there are different aspects 

we have disagreement, but we all agree we should secure the borders. Why don’t we just do that? We—is not just the gate—or, excuse me, not just the fence, the wall, again talking to President 

Obama about this. The gate doesn’t work. We ought to work on the 

gate so the people come and go as we think would be appropriate, 

and he agrees. He says, why can’t we get Congress to act? That 

was President Obama to me. Well, that’s the frustration I think of 

many people across the country. 

Mr. BLUM. Well said. Governor Martinez? 

Governor MARTINEZ. Yes. As Governor, I took an oath to enforce 

the rule of law, whether that be the Federal Government and the 

implementation of their Federal laws and the State laws. However, 

I also understand that the enforcement of immigration laws is that 

of the Federal Government and not of the State. I do not support 

sanctuary cities. I think it is something that is—can be very chaotic. We are releasing individuals from jails, et cetera, that are violent offenders and not notifying the Federal Government that 

someone is within our community who is a violent offender, whethVerDate Nov 24 2008 10:54 Aug 15, 2018 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 H:\30397.TXT APRIL

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er be released from prison or from the State or from local jails that 

now are amongst the population of the people. 

And I have a responsibility to protect the people of the State of 

New Mexico, the citizens of New Mexico from anyone who is violent 

and being released from a jail. So I signed an executive order just 

shortly after becoming Governor and doing away with sanctuary 

State policies. That doesn’t mean cities have not declared themselves as a sanctuary city. However, I am very much not in favor 

of that. 

If the law needs to be changed, the Federal law, then change it, 

but the confusion that is taking place is going to end up in some 

very terrible outcomes, and so that is why I don’t support it. I support making sure that we’re enforcing the rule of law. 

Mr. BLUM. With the indulgence of the chair, could Governor 

Otter answer my question? 

Mr. PALMER. I yield additional time to Governor Otter. 

Mr. BLUM. Governor Otter? 

Governor OTTER. Well, thank you very much, Congressman. You 

know, it really is a pretty simple—28 words. ‘‘Those powers not delegated to the United States by the Constitution nor denied to the 

States by it are reserved to the States respectively or to the people.’’ And if you want to view the scope and the jurisdiction of supremacy, look to article 1, section 8—or, pardon me, section 8 of article 1 because those enumerated powers are exactly what the 

Tenth Amendment was talking about. That is where the government—Federal Government is supposed to exercise supremacy. 

Those are the limited and delegated powers. 

Mr. BLUM. Thank you. I have gone past my time, but thank you 

for your service to your States. Thank you very much. 

Governor OTTER. Thank you. 

Mr. CONNOLLY. Mr. Chairman? 

Mr. BLUM. Thank you, Mr. Chairman. 

Mr. PALMER. Yes? 

Mr. CONNOLLY. Mr. Chairman, if you would just allow me real 

quickly, picking up I think on a distinction made by Governor Herbert. There is a distinction between declaring oneself a sanctuary 

city or county and a local police force or sheriff’s office saying it is 

a Federal responsibility for enforcement, not ours, and we are not 

going to take that on ourselves. Those are two different things, and 

I think I heard Governor Herbert make that distinction. Certainly, 

in my community that is our position, one that we don’t declare it 

sanctuary but we don’t feel that it is our responsibility locally to 

enforce Federal immigration laws as such. That is a Federal responsibility. Thank you, Mr. Chairman. 

Mr. PALMER. The chair recognizes the gentlewoman from New 

York, Mrs. Maloney, for five minutes. 

Mrs. MALONEY. Thank you, Mr. Chairman, and I thank all the 

Governors for your service and for your testimony today. 

I would like to ask you about President Trump’s infrastructure 

proposal and how it is going to affect your States. When the President released his proposed budget for 2019, he announced the 

vague outlines of a plan that he claims will boost investment in infrastructure in our nation. We need it. His plan includes $40 billion 

through a rural block grant program, as well as $130 billion in varVerDate Nov 24 2008 10:54 Aug 15, 2018 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 H:\30397.TXT APRIL

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ious funding pots for which States will compete. But even if they 

win this competition, States would receive only 20 percent of the 

amount needed to fund an infrastructure project, and States and 

localities would have to contribute the remaining 80 percent of the 

cost. 

And he further went forward with his idea to allow States to impose tolls on all interstate highways, and he says this would allow 

them to raise the revenue for the infrastructure investment. 

So I would like to ask all of you, would you raise tolls on interstate highways to generate revenues for the infrastructure funding 

under this plan for your State? Are you planning to raise tolls 

which—if you want to go down just starting with Governor Herbert 

and Martinez, Otter. 

Governor HERBERT. There may be some appropriate use of toll 

roads. We see them around the country. Certainly, the Pennsylvania Turnpike and others have been worked out very successfully. 

I’m not really in favor of toll roads. I think that we need to address 

our infrastructure needs that has been neglected. I think President 

Trump is right about that since the Eisenhower days. But probably 

an adjustment of the gasoline tax, which has not been done for, 

what, 25 years or so —— 

Mrs. MALONEY. I agree. 

Governor HERBERT. So if you’re going to do that, at least to recapture what we’ve lost from inflation, it would probably be a good 

thing. 

That being said, you know, States aren’t waiting for the Federal 

Government. Again, we appreciate the partnership when it’s appropriate. You’re taking money from us, and we’d like to get some of 

it back. But we just completed one of the larger construction 

projects in America, $1.7 billion of our interstate, did it all with 

State dollars. 

Mrs. MALONEY. Governor Martinez, would you support a gas tax 

for infrastructure? 

Governor MARTINEZ. No, ma’am, I would not. 

Mrs. MALONEY. Okay. 

Governor MARTINEZ. We’ve actually done something very different in New Mexico. Having had continuing resolutions with the 

budget, we had to become very creative in how we were going to 

widen roads, make roads more accessible. We do not have any tollbooths in New Mexico, and so what we’ve done is made sure that 

there was skin in the game for local communities, counties, the legislators that represent those counties and municipalities in the 

State legislature, that their port dollars are going towards true infrastructure. The State would—and then the port—the part of the 

infrastructure dollars that were given to me were part of that, and 

then Federal dollars were. 

Also private sector, they were laying, for example—Facebook, 

when we brought them in, they were going to lay down cable for 

the internet, and what we did through the Department of Transportation is actually dig the trenches for them to be able to then 

lay down the cable that was necessary for the web. And so these 

are public-private community local projects for very big projects of 

road infrastructure that were not only funded but completed and 

completed on time and on budget. 


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Mrs. MALONEY. And, Governor Otter, would you support a gas 

tax or would you support tolls on your interstate highways? 

Governor OTTER. As recently as two years ago, I increased the 

gas tax in Idaho and also the licensure of automobiles. One of the 

problems with just looking at the gas tax is that we have so many 

automobiles that are either 50 miles to the gallon but still want the 

same amount of safety, still want the same amount of space on the 

highway but are getting 50 miles to the gallon or a run-off of electricity. 

In Idaho—in fact a lot of places in the West—it would be very 

difficult to put in toll roads because of the access to the freeway— 

to the State freeways. So that’s something we’d have to—we might 

be able to find some isolated places where we could do that, but 

I can tell you this, the infrastructure in all the West and especially 

Idaho—because we are a value-added manufacturing State and 

there’s only one way to get our products to market, and that’s down 

that highway. 

Mrs. MALONEY. Okay. And also, his budget would cut $122 billion from the existing Highway Trust Fund over 10 years, and this 

means States would receive less money from Federal highway and 

transit formula programs, which currently match at a rate of 80 

percent Federal to 20 percent local. So let me ask all of you. Would 

your States like to receive less money from the Highway Trust 

Fund? 

Governor HERBERT. You know, we would take less money if you’ll 

take away the red tape and redundancy. I’ve met with our contractors in Utah, seven major road builders, and say if we could get 

the money block granted to the States without all the Federal red 

tape, we’ll build the same number of roads for 50 percent less 

money. You don’t have to have more money, you just cut and save. 

Mrs. MALONEY. Well, my time is expired. Thank you. 

Mr. PALMER. I thank the gentlelady. 

Mr. CONNOLLY. Mr. Chairman, I ask unanimous consent to enter 

into the record statements from the National Association of Counties on this subject and from the NewDEAL Coalition, Debbie Cox 

Bultan, the executive director —— 

Mr. PALMER. Without objection, so ordered. 

Mr. CONNOLLY. I thank the chair. 

Mr. BISHOP. Mr. Chairman? 

Mr. PALMER. Mr. Bishop. 

Mr. BISHOP. I have one request if I could from the task force at 

the end of this. All of you have spoken very well about how, if everyone has good intentions, we can always get along. The problem 

that Congress has to try and come up with rules to make sure that 

if people are jerks, we can still get along. So what the task force 

needs from you three, if you would be kind enough, are some specific recommendations of what we can do not just to ensure that 

you are consulted but you are remembered for it. But we can talk 

about—I didn’t get a chance to ask you about the mission creep, 

how we can deal with those issues, the mission creep. Should 

States have not just standing, which they have, but special standing in order to sue on issues that are imposed upon you? Some specific ideas that can be very helpful to ensure that, regardless of 


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what happens, States are recognized, States are understood, and 

States have the right to have that statement. 

So I am asking that for the task force, not for the subcommittee 

purposes but for the purpose of the task force as we try and come 

up with recommendations. So anything you could give me that is 

specific as to what we can do statutorily to help on all these issues, 

as the gentlelady from the District said, you know, what you do 

with the money that is laying on the table. 

Governor OTTER. Representative Bishop, I can tell you this, consult us at the beginning. Generally, what we find is we come—we 

are invited late to the party. Public policy has already started to 

see its first or second or third draft by the time—if they ever do 

ask the States—by the time the States are asked. And make it a 

requirement for the agencies that are going to put in new rules, 

new—which become laws and which become those laws that we 

have to operate by, but ask us at the beginning. Is this something 

you folks need? Are we solving a problem here or are we looking 

for—just to create another law? 

Mr. BISHOP. Perfect. Help me find a place that we can statutorily 

mandate that. 

Governor HERBERT. Can I add, Congressman Bishop, that it 

would be nice if the Congress would say—when issues come before 

them and say is this best handled at the State level? That’ll be the 

first question. Maybe it’s their responsibility. Maybe they can address this better rather than just taking on anything and everything. I think, again, we the people of America are asking you to 

do more than was ever envisioned by our Constitution or our 

Founding Fathers. And the States are adept. As Congresswoman 

Pelosi said yesterday, laboratories of democracy. You guys should 

be leading in on policy. We have a lot of responsibility. You have 

a few. Article 1, section 8, as Governor Otter mentioned. So ask 

yourself, is this really something we should do or should we let this 

be handled by the States? 

Governor MARTINEZ. I just have one last statement if I may. I 

am certainly hopeful that federalism is not just a principal or a 

theory but that it is actually a practice as a United States citizen. 

And with that I think we will actually become a better country 

every single day, understanding that the States have the solutions 

for their people that may be very different from our neighbors, allowing us to take lead in many of the projects, many of the things 

in which the Federal Government cannot make a single solution 

that satisfies us all. 

Mr. CONNOLLY. Would my friend from Utah yield for a minute? 

Mr. PALMER. I don’t know. Would I? It depends. What are you 

going to say? 

[Laughter.] 

Mr. CONNOLLY. I would certainly support his request, but I 

would remind ourselves respectfully we have three Governors from 

Western States in front of us. We don’t have the Northeast perspective, we don’t have the West Coast perspective, and this is big 

country and there could be other points of view. And I just hope 

that in inviting feedback to inform us in considering a statute that 

we make sure we have broad feedback from other experiences, including, well, other States just so that we are well-informed at that 


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we are getting all balanced points of view, with no disrespect at all 

because I found the testimony quite convincing this morning in 

many respects, but I just ask that of my friend from Utah. 

Governor HERBERT. Can I just respond? Because I’m the one here 

who’s been the chairman here three years ago of the National Governors Association, a bipartisan organization. We get along actually 

very well, very congenial, and we respect each other’s difference of 

opinions on things. So I would welcome all 50 States and the five 

territories for that matter to weigh in on this issue. But I can tell 

you, having experienced my involvement for eight years with the 

National Governors Association, most all of us would say give us 

more flexibility. Let us take on the challenges. We don’t need the 

one-size-fits-all mentality that comes too often out of Washington, 

D.C. Democrats and Republicans alike would agree with that. So 

I think get everybody. I think you’ll find that we have a lot of consensus on this issue amongst the States. 

Mr. CONNOLLY. I had dinner last night with your colleague John 

Carney of Delaware, and he said very nice things about you. 

Governor HERBERT. Well, and I’ll say nice things about him. We 

were Lieutenant Governors together, so we’ve been around for a 

long time. 

Mr. PALMER. Just for the record, we gave every opportunity for 

a Democratic Governor to join the panel and would really like to 

have heard from them. In that regard, what I would recommend 

is that if there are other Governors, Republican or Democrat, who 

would like to submit a statement for the record, the record will be 

held open for two weeks. I will remind you of that at the conclusion 

of the hearing. 

At this time I will recognize the gentleman from California, Mr. 

DeSaulnier, for his questions for five minutes. 

Mr. DESAULNIER. Thank you, Mr. Chairman. And being from 

California, I wish our Governor was here. It would be even more 

entertaining; he always is. 

Let me just say this challenge of course has been with this country forever, how this relationship works. When I was on the executive board of the National Conference of State Legislatures, to your 

comments, Governor, I found that environment to be very collegial, 

bipartisan, being a Democrat from the bay area and the State Senate. So there are examples where this works. And I think when you 

are involved in that, as you are, you realize that 50 States are very 

different and there are lots of communities within that. 

But there are compelling places, and I want to talk specifically 

about addiction and opioid addiction in my questions and the results of the bipartisan commission that the administration put together that was chaired by former Governor Christie and what the 

relationship is in terms of best practices to this epidemic and the 

Federal Government’s role. 

So one of the key quotes from that report from Governor Christie 

is ‘‘One of the most important recommendations in the final report 

is getting Federal funding support more quickly and effectively to 

State governments who are on the frontlines of fighting this addiction battle every day.’’ And my district, very different from other 

places, it is a more upscale part of the bay area, or much of my 

district, and it is upper middle income. I have lots of meetings and 


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put a good deal of my time in my former job working with the Attorney General’s Office, now U.S. Senator Kamala Harris to deal 

with that. So knowing that it is very different in different communities, what you need from the Federal Government, and could you 

express the urgency you need it when it comes to addiction and 

opioid addiction in your States? Can you start? 

Governor HERBERT. We’re not asking for much from the Federal 

Government. Again, I am cognizant of your budget challenges. The 

fact that you’re $20–21 trillion in debt is not lost on a State that 

has a AAA bond rating. We try to live within our means and not 

spend more than we take in and we have rational debt. 

So, that being said, I’m not looking to the Federal Government. 

We’re trying to do this—this has been an issue that’s been raised 

by the National Governors Association four years ago. We’re on the 

cutting edge of this in the States. We’re doing things in our respective States to address this issue. We’re putting warning labels, 

we’re—there’s talk about litigation, lawsuits against the pharmaceuticals that have evidently withheld information about the addictive nature of these drugs. That’s probably something that’s 

going to be in our future. I think tobacco litigation. 

We are training our doctors better. We have now put a database 

in the State of Utah so that doctors can know if you’re doctor-shopping and what your issues have been, if you’ve been in the emergency room, if you’ve been to a doctor, and your general practitioner, they can all access this on the internet without violation of 

HIPAA laws. We’ve got that wired in so there’s permission given. 

So, again, we’re doing things at the States. We’re learning from 

each other. And again, we’ll homogenize together as we find the 

successes that are taking place in the States. So I’m not asking for 

anything from the Federal Government. 

Mr. DESAULNIER. Either of you? 

Governor MARTINEZ. No, actually, we’ve done the very same 

thing in making sure that we can prevent that kind of doctor-shopping. You know, you go in for a root canal and you get 30 days’ 

worth of opioids, which is really completely unnecessary. However, 

that person can become addicted, and therefore, the database is 

very helpful for us to make sure that there isn’t that doctor-shopping because from the opioids and we’re not able to continue to 

have access, then you turn over to heroin, and heroin is very accessible because we’re on the border. It may be very different from 

Montana, may be very different from the middle of the country, but 

right there in New Mexico it is very accessible and very cheap. 

Governor OTTER. During our meetings this week, we had a very 

good roundtable on—and we had a report from the task force to 

which you referred that Governor Christie held. And there was one 

thing that almost all the States need, and that was a review of all 

Federal rules and regulations that inhibit us from defending ourselves from that epidemic. 

Mr. DESAULNIER. And that one thing I would ask for your help 

with, Representative Carter, a Republican from Georgia, a pharmacist, he and I have worked closely together. In California, we 

spent $5 million, which was not significant in our budget, to make 

sure that the Department of Justice and the medical board has 

real-time information for people who are doctor-shopping. So one of 


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the things that Representative Carter and I have been working on 

is interoperability as all States try to bring this system up. 

And then, just lastly, until I came to Congress, I never was a 

States’ rights advocate, but being from California, I am becoming 

more and more of one. When you see things that work well in one 

State that is very different from another State, just if we could 

have more of a conversation that I would see as more bipartisan, 

more evidence-based, that what works in the bay area is not going 

to work in many of your jurisdictions and vice versa. Some of that 

is politically driven obviously, but when we really look at the evidence and what works, including on immigration, I wish we had 

more of those discussions, and I hope you have them when you 

meet with your colleagues. 

Governor OTTER. Thank you. 

Mr. DESAULNIER. Thank you, Mr. Chairman. 

Governor MARTINEZ. Thank you. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the gentleman from Wisconsin, Mr. 

Grothman, for five minutes. 

Mr. GROTHMAN. Thank you very much. It is an honor we have 

three Governors at one shot. 

The committee has heard from State and local governments, and 

I certainly hear from them at home all the time that the compliance of Federal regulations is very, very expensive. And lawmakers 

have shared compliance with Federal—some lawmakers have 

shared compliance with Federal regulators, forcing local governments to create funding by increasing sales and property taxes on 

citizens. Do you know how much money, say, your States spend to 

comply with Federal mandates and regulations? 

Governor HERBERT. As I mentioned earlier—and I don’t—we 

could probably reduce it to a number, but it’s—our local governments tell us we’ll give you a dollar—a Federal Government dollar 

to spend in exchange for 85 cents, so it’s about a 15 percent margin 

as a minimum. 

Mr. GROTHMAN. Okay. I will give you another question. I used 

to be a State legislator in Wisconsin, and one of the things that 

bothered me is sometimes Federal funds come with a maintenanceof-effort requirement in which you are really forced to spend money 

just to keep the Federal funds coming, money that you don’t want 

to spend. Have you guys had any experience like that? 

Governor HERBERT. We have. Remember years ago the cops 

grant where you’re trying to get public safety and so you would get 

money from the Federal Government to hire policemen, but then 

you had to maintain those. You could not diminish your law enforcement, so it was built into your baseline. You took the grant 

and then you had to continue to spend money. 

Again, as far as the concern we talked about with Medicaid expansion, for our legislators, the concern is what is going to be the 

ongoing cost? And the match just stays the same, so you still get— 

have to come up with your portion of the match, and that’s an ongoing—I mean, with the rising cost of health care has caused some 

of the legislators to say we can afford it today, but we’re not—we 

don’t think we can afford our match tomorrow. 


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Mr. GROTHMAN. How about TANF? Do you guys have any problem spending all your TANF dollars, or when things are going well, 

do you find that you have to look around to spend things on that 

you really wouldn’t spend them on otherwise? 

Governor HERBERT. You know, we’ve taken a little different approach in Utah. Again, we appreciate the programs that are out 

there to help people get out of poverty. We’re probably the State 

leading the Nation in getting people out of poverty. The average 

length of time when people come to us, say, on Medicaid is only 

nine months because we emphasize we’re going to help you in the 

short term. We’re going to give you education, training, and skills 

so you can start helping yourself. It’s the old adage of we’re not just 

going to give you —— 

Mr. GROTHMAN. Right. 

Governor HERBERT.—a fish, we’re going to teach you to fish. And 

that’s something that I think is a good program that we’re doing 

in Utah that I think other States, work efforts are —— 

Mr. GROTHMAN. It is, but I am going to tell you the problem that 

I think we bumped into in Wisconsin, and that is when you are 

successful, you have to keep spending the same amount of money 

or more, right, which is a problem. You are kind of penalized for 

being successful because the Federal Government says if you want 

to keep this money coming, find something to spend it on. And in 

that way you kind of penalize the successful States. 

Governor HERBERT. Well, that’s an adverse incentive, and so 

that’s probably not a good policy. 

Mr. GROTHMAN. Okay. But you guys never have a problem 

spending all your TANF money. Okay. 

Governor HERBERT. Yes, I don’t know—for example, CHIP, we 

don’t spend all the CHIP money. Again, we’re working on trying to 

get people off government assistance, and most people don’t want 

to have government assistance. They want to have a job; they want 

to be able to be self-sustaining. That’s the American way. So we 

don’t spend it just to spend it and find ways to spend it. We’re trying to actually solve problems. 

Mr. GROTHMAN. You can always find a way, though, to spend it 

that might be good. I mean, the question is—I should put it this 

way: Because of maintenance effort, are you spending dollars that 

you feel you would never spend on your own if you had to tax yourself for it? I guess I should put it that way. 

Governor OTTER. I think there’s many areas, Congressman, 

where we could cut down on the amount of Federal dollars that we 

need if we’re allowed to implement those things that the Federal 

Government or those programs want us to achieve. And I think 

Governor Herbert has spoken to it very well, and that is we know 

that there’s going to be a time when people are going to hit an economic or a financial speedbump in their life, and yes, it’s important 

that they have a government which can respond to that but only 

on a temporary basis. And if we had the rules and regulations that 

we could enforce that say, okay, while you’re laid up, while you’re 

doing this, you’re going to get an education. We’re going to send 

you back to school. And we would spend some of that money then 

on getting you a retrofitted for the economy of the State of Idaho 

in a new profession if we were allowed to. 


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Mr. GROTHMAN. I think one final question here in the final 30 

seconds, obviously, everybody is thinking about what went on in 

Florida, and you get so much stuff on the internet and so many articles on there, you don’t know what is true and what is not true, 

but it appears as though there have been Federal grants in which 

you are encouraged to report less crimes or less arrests or that sort 

of thing. So, in other words, maybe people do things different to 

pretend that they have better outcomes than they are having. In 

other words, they are in this case apparently arresting fewer people than they should arrest or I would say they should arrest to 

get more Federal money. Do you find that there are any programs 

like that in which you are incentivized to hit targets that you 

might not want to hit? 

Governor HERBERT. You know, I can’t think of anything. If in 

fact that’s the case, again, we can see the incentive is in the wrong 

place. It ought to be for—the incentive ought to be have better outcomes, and we ought to be full and transparent in how we collect 

the data and not try to game the system. 

Governor MARTINEZ. I think at times there’s—there are Federal 

dollars, for example, in law enforcement and the maintenance of efforts that takes place. However, the paperwork, the amount of documentation that is required to be submitted, the limitations that 

come with those dollars when they may be better used different 

than having to come to the Federal Government for permission, to 

change the shift a little bit but still under the umbrella of law enforcement, that becomes a challenge for us. 

Governor OTTER. If I understand your question, Congressman, 

probably the most egregious that I’ve seen is the introduction of a 

new species under the Endangered Species Act that then the State 

is required to maintain. 

Mr. GROTHMAN. Okay. I would like to thank the chair for giving 

me an additional minute. 

Governor OTTER. So would I. 

Mr. PALMER. At this time I will recognize myself for five minutes. 

And the first thing I want to do, Governor Martinez, is your testimony talked about the fact that there are more than 800 applications for permits to drill in New Mexico at a cost of approximately 

$1.9 million to New Mexico and $3.4 million to the Federal Government per day. And I think you went on to say that it takes an average of 250 days. That is $850 million just on the Federal side. 

And the reason I bring that up is that I have been here—what 

is today, the 27th? I have been here three years, one month, and 

21 days, and one of the first things I pushed was opening up Federal lands for energy. We are an energy superpower. There is no 

question about it. The Federal Government has tremendous resources. 

And I bring this up in the context of infrastructure because I 

think a gas tax is the revenue source of diminishing returns. Governor Otter made this point about the fuel efficiency that we are 

achieving and we continue to want to do that. Everybody wants 

more fuel-efficient vehicles. So when you attach a gas tax, you 

know that that is a revenue source of diminishing return. 

What I think might be more helpful is if we take your testimony 

and this whole permitting thing, expedite this, get it down so that 


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we not only can shorten the amount of time it takes to take advantage of a lease but increase the royalties—we haven’t increased the 

royalties on Federal energy resources since the 1920s—and direct 

a portion of that into the Highway Trust Fund for infrastructure. 

We could set it up on a system where there could be matching 

money for the States and let the States manage it. Would you like 

to comment on that? 

Governor MARTINEZ. Yes. Thank you very much for that question 

and comment. I think it’s very important to understand that New 

Mexico is really a gem within the country not only for energy independence for the country but also the revenues that it generates. 

There’s—for petroleum, there are so many products. It’s not just for 

vehicles and —— 

Mr. PALMER. That is right. 

Governor MARTINEZ.—gas is not just for vehicles. I mean, what 

goes—what products use the petroleum? And if we took that out of 

every product that we see and touch every day, we would be 

shocked to know how much of that is used in a variety of products. 

The—under the previous administration, it was better to say 

nothing to the private industry, not to give permission or to deny 

it. Under my previous administration as a Governor, the same 

thing. It was easier to say nothing, which costs people money to 

have something sitting there. We had some of these permits sitting 

there three years when I entered into office, so it was a quick move 

of going forward and backwards for every permit coming in the 

door and everything that was sitting there. To be able to have the 

revenues that allow us for education, allow for special projects, infrastructure projects that we have, and our permanent fund. We 

have a permanent fund, is one of the healthiest ones in the country 

because of oil and gas just in case when it was developed we ran 

out of oil and gas. But because technology is so great now, we’re 

able to actually produce more and make it more available so that 

we’re not reliant on countries that are in such turmoil. 

Mr. PALMER. Well, it has been reported that there is a formation 

out West in western Colorado, southwestern Wyoming, and northern Utah, the Green River Formation, that holds three trillion barrels of recoverable oil. That is three times what the entire world 

has used in the last 100 years. I don’t want to stay focused on that. 

I want to talk about some of these other issues and a more collaborative effort between State and local government. 

I think that is a legitimate discussion, particularly since my 

brother is a county engineer—on how we can work on infrastructure together on the permitting. What we have seen over the last 

few years is just an enormous drag on infrastructure and really on 

the economy because of permitting. The infrastructure is so important to the economy. 

I would like to get some feedback from each of you on how you 

see we could improve that process, maybe let the State and local 

governments do more of the work in a collaborative way, as you 

talk about, Governor Herbert. 

Governor HERBERT. Well, thank you. Again, I come from local 

government. I was a county commissioner for 14 years. I participated with NACo on many things. We railed against the Federal 

Government when I was there about the unfunded or underfunded 


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mandates would come to local government, so the issue is still 

here. It’s always probably going to be here, but at least we ought 

to be cognizant of it. 

In Utah, we in fact invite—they have an association for the cities 

called the League of Cities and Towns. They come. We have 245 

of them that they represent, the cities of the State, 29 counties, 

part of our Utah Association of Counties. They are probably the 

most active people on the Hill during the legislative session to 

make sure that what we do, they get input and they’re invited. 

We equalize our educational funding in the State of Utah so that 

if you’re in a rural part on the Navajo Nation that you get as much 

education funding as you do if you’re in the middle of the urban 

heartland of the State of Utah. So we try to respect, you know, all 

the local government and their subdivisions and make sure that 

they’re part of the decision-making process in the State of Utah. 

Again, a lot of it’s just an attitude. We’re saying we’re not going 

to make decisions at the State level until we’ve got input from the 

local levels, and some of that we devolve down and let them say, 

you know what, that’s a county issue. In your county, you take care 

of it. That’s a city issue. You’re a city, you take care of it and the 

State will stay out of it. 

Mr. PALMER. Okay. In that regard—and this is my last question—we have talked a good bit about shrinking the State and local 

consultation requirements of reforming the Unfunded Mandates 

Reform Act to help restore the States’ partnership with the Federal 

Government. What I want to know is how important are these 

types of reforms, and are there other possible areas for reform that 

Congress could be, should be looking at to improve the relationship 

or communication between the Federal Government and the 

States? And each of you can answer that, and we will be done. 

Governor OTTER. Mr. Chairman, let me begin by saying we 

learned a lot about ourselves during the recession between ’08 and 

’10. And what we did is what almost every Idaho family did is they 

sat around the breakfast table when the work ran out for Dad and 

said, you know, what things do we—what are—what is necessary 

and what is nice? To find out what is necessary, we look to the 

Constitution, and the Constitution was pretty specific about an 

education system for the State of Idaho and other areas. And then 

we said, well, what is nice? If we haven’t got the money for nice, 

we’re not going to do those things anymore. 

And so I think at every level of government, especially when you 

run into a time like the Great Recession—like the recession was, 

that’s the process that you have to go through. And even further 

than that, after the recession we didn’t go back to the old ways of 

doing things because we learned there were a lot of things that 

were simply not the proper role of government. 

Mr. PALMER. Thank you. Governor Martinez? 

Governor MARTINEZ. I completely support that. You know, having 

inherited the largest structural deficit in the history of our State. 

I have not raised a tax once. And they can call it whatever they 

want, revenue enhancements, whatever it may be. We’ve not raised 

a single tax but we’ve actually become competitive with our surrounding States, which didn’t exist for a very, very long time. It 

was believed doing the same thing over and over again we were 


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going to get different results, and we didn’t. We became competitive and we’ve actually recruited companies and businesses to New 

Mexico because we’re doing it different. 

However, now, we’re turning over an amazing budget. We have 

a surplus. We have great royalties. We have a permanent fund 

that’s outstanding. But I hope that the next Governor doesn’t see 

it as a way to start a spending frenzy and then growing government back to where it used to be, which was absolutely unnecessary, way too many employees to actually complete the mission of 

the State. And so that’s what we’ve done is reduce our actual government size to fit what was necessary for us to deliver the services that are required. 

Mr. PALMER. Thank you. Governor Herbert? 

Governor HERBERT. I’ll just finish by saying this. You’ve heard 

me say this already. But all 435 Members of the House, all 100 

Members of the Senate, the President should always ask the question, ‘‘Is this an issue, something that should be better addressed 

at the State level?’’ That should be the beginning of every discussion. And it’ll be differences of opinion, but many times you’re 

going to say, you know what, that probably is going to be better 

and more effectively addressed at the State level. Let them take on 

that responsibility. We will welcome that. And I think that’s a bipartisan approach, by the way, that feeling. Thanks for hearing us 

today. 

Mr. PALMER. Well, I thank our witnesses again for appearing before us today. I think this has been an excellent hearing and very 

constructive. 

The hearing record will remain open for two weeks for any member to submit a written opening statement or questions for the 

record. 

If there is no further business, without objection, the committee 

stands adjourned. 

Governor MARTINEZ. Thank you. Thank you for the opportunity. 

[Whereupon, at 11:48 a.m., the committee was adjourned.] 


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APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


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NG •• Brian Sandoval fill' Governor of Nevada 

NATIONAL GOVERNORS ASSOCIATION Chair 

Steve Bullock Governor of Montana 

Vice Chair 

Written Statement of the 

National Governors Association 

On 

Scott D. Pattison Executive Director and CEO 

Federalism Implications of Treating States as Stakeholders 

To The 

House Committee on Oversight and Government Reform 

February 27,2018 
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The National Governors Association ("NGA'') appreciates the opportunity to submit 

written comments for the record in today' s hearing of the House Oversight and 

Investigations Committee about the implications to federalism of treating States as 

stakeholders. 

Established more than 100 years ago, the NGA is the bipartisan organization for the 

nation's governors. NGA assists governors on domestic policy and state management 

issues, and provides a forum for governors to speak with a unified voice to our federal 

partners in the Executive, Legislative, and Judicial branches. 

We begin with several main points: 

• Governors believe that a strong, cooperative relationship between the states and 

federal government is vital to best serve the interests of all. 

• Governors believe that federal action should be limited to those duties and powers 

delegated to the federal government under the Constitution. We favor the 

preservation of state sovereignty when our federal partners legislate or regulate 

activity in the states. 

• Governors believe that federal preemption should be the exception, not the rule 

because it often poisons the well for healthy intergovernmental collaboration. 

Principles for State-Federal Relations 

To ensure the proper balance between state and federal action and to promote a strong 

and cooperative state-federal relationship, governors encourage federal forbearance. 

Forbearance involves limiting federal action to situations where constitutional authority 

for such action is clear. It curbs federal action to challenges that are truly national in 

scope. It also carefully balances federal action with each state's ability to deliver 

resources and approaches to common challenges. Unless constitutionally prohibited, 

federal action should not set preemptive ceilings but rather provide a floor for additional 

state action. 

Regarding federal preemption, governors recognize the need for federal intervention 

should states fail to act collectively on issues of legitimate concern. Preemption of state 

laws, however, should be the exception rather than the rule. This is especially true in 

areas of primary state responsibility, including, but not limited to: education, insurance 

regulation, criminal justice, preservation of the dual banking system, preservation of state 

securities regulation, and the management of state personnel programs. 

NGA also urges its federal colleagues to reconsider federal-state program design, which 

has run the gamut from prescriptive to devolution. NGA encourages middle-ground 
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partnerships, not these two extremes. We believe that there are opportunities to improve 

collaboration and cooperation in program design to provide maximum flexibility and 

opportunity for innovation, as well as foster administrative efficiency and cross-program 

coordination. 1 

The "Federalization" of Federalism? 

Governors believe that a strong, cooperative relationship between the states and federal 

government is vital to best serve the interests of all. 

Federalism is a dynamic, not static doctrine. It recognizes that, while dual sovereignty 

governs our nation, federal and state power derives from the people. In practice, 

however, the ebb and flow of power among those sovereigns during federalism's modern 

historical arc triggers the need for regular adjustments, where appropriate, to maintain 

optimum balance. 

Today's hearing invites a candid conversation about whether, and to what extent, 

federalism has, in practice, become "federalized," shifting our dual sovereign relationship 

away from States-as-Partner, to one of States-as-Stakeholder. The federal agency 

rulemaking process offers a window into this question. 

1 NGA Permanent Policy at Section 2.3 (2016) outlines specific principles to help design federal-state 

programs including: 

• States should be actively involved in a cooperative effort to develop policy and administrative 

procedures. 

• The federal government should respect the authority of states to determine the allocation of 

administrative and financial responsibilities within states in accordance with state constitutions 

and statutes. Federal legislation should not encroach on this authority. 

Legislation should authorize and appropriate sufficient funds to meet identified program 

objectives. 

• Federal assistance funds, including funds that will be passed through to local governments, should 

flow through states according to state laws and procedures. 

• States should be given flexibility to transfer a limited amount of funds from one grant program to 

another, or to administer related grants in a coordinated manner. 

• Federal funds should provide maximum state flexibility without specific set-asides. 

States should be given broad flexibility in establishing federally mandated advisory groups, 

including the ability to combine advisory groups for related programs. 

• Governors should be given the authority to require coordination among state executive branch 

agencies, or between levels or units of government, as a condition of the allocation or passthrough of funds. 

• Federal government monitoring should be outcome-oriented. 

Federal reporting requirements should be minimized. 

The federal government should not dictate state or local government organization. 
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Executive Order 13132 ("EO 13323"), first issued in 1999 and renewed on a bipartisan 

basis by successive administrations, directs all non-independent federal agencies and 

departments to evaluate proposed rulemakings for their effects on federalism. 2 EO 13132 

calls for federal consultations with state and local governments, and requires federal 

agencies to provide a federalism impact statement whenever proposed regulations would 

have "substantial direct effects on the States, on the relationship between the national 

government and the States, or on the distribution of power and responsibilities among the 

various levels of government."3 In practice, however, the application of EO 13132 has 

been uneven, with only some, but not all federal agencies and departments maintaining 

internal guidance to evaluate the effect of proposed agency actions and rulemakings on 

federalism. 4 

The Administrative Conference of the United States ("ACUS"), a federal advisory body, 

released recommendations in 2011 for federal agencies and departments to help guide the 

federal-state relationship on regulatory preemption. 5 The recommendations, which were 

aspirational, not obligational, included one calling for federal agencies to "reach out to 

appropriate State and local officials early in the [rulemaking] process when they are 

considering preemptive rules."6 

For States and local governments, this recommendation raises the question, "to what 

end?" When a federal agency proposes a draft regulation that would have a preemptive 

effect on state and local governments, the affected parties often file comments with the 

intent to modify the draft rule and mitigate the preemption. Instead of providing state and 

local officials with new equipment to improve the odds of mitigating, let alone 

overcoming a federal preemptive rulemaking, optimally at the conceptual stage, the 

ACUS recommendation simply reminds sub-federal stakeholders to be alert to the 

pending preemption. 

ACUS also explained that their goal with these recommendations was "not to favor or 

disfavor preemption".7 Unfortunately, the ACUS recommendations may have been an 

opportunity missed to help move the intergovernmental relationship closer to partnership 

because by remaining neutral on preemption, ACUS endorsed the status quo. 

Federal officials may desire partnership with States and local governments, but, in 

practice, statutory and administrative rules limit it. States are often petitioners in 

rulemakings, offering formal comments to proposed rules based on self-interest, 

governed by filing deadlines and ex parte procedures. The federal "notice-and-comment" 

2 Exec. Order No. 13132, 64 Fed. Reg. 153 (Aug. 10, 1999). 

'Id. at §6(c)(2) and §1(a). 4 Sharkey, C., Federal Agency Preemption of State Law (Executive Summary), 

htt;ps· //www.acus gov/sjtes/defau!t/files/documents/Executiye-Summar:y Dec 20 pdf (Last visited 

Feb. 22, 2018). 5 Recommendation 2010- Agency Procedures for Considering Preemption of State Law, 76 Fed. Reg. 

81 (Jan. 3, 2011). 6 ld. at 83 (Recommendation S.d.) 7 Id. at82. 
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mlemaking process itself can invite procedural challenges that may thwart the desired 

collaborative intergovernmental relationship. 

Governors support a vibrant and strong partnership with Congress and the Administration 

to maintain and promote a balanced federal system. But, until a pragmatic strategy 

developed through intergovernmental collaboration among committed champions from 

across the levels of government emerges that roadmaps revisions, for instance, to longstanding administrative procedures that guide federal mlemakings, the federal call for 

"partnership" risks a less-than-satisfying answer. 

We encourage this Committee specifically, and the Congress generally, not to pass on 

important opportunities to go bold and help promote the intergovernmental partnership. 

### 
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Testimony ofJames D. Ogsbury 

Executive Director, Western Governors' Association 

Beforetbe 

United States House of Representatives 

Committee on Oversight and Government Reform 

and tbe 

Speaker's Task Force on Intergovernmental Affairs 

Oversight Hearing on Federalism Implications of Treating States as Stakeholders 

February 27, 2018 

Chairman Gowdy, Ranking Member Cummings, Task Force Chairman Bishop, and members of the 

Committee and Task Force, Western Governors appreciate the opportunity to provide written 

testimony on matters involving the relationship between states and the federal government. These 

remarks are presented by the Western Governors' Association (WGA), an independent, bipartisan 

organization representing the Governors of 19 western states and three U.S. territories in the 

Pacific. 

We are encouraged that the Committee and the Task Force are focusing on the critical issue of the 

state-federal relationship. This is a high priority for Western Governors, as reflected by their 

adoption ofWGA Policy Resolution l!llZ.::.Q1, Building a Stronger State-Federal Relationship. This 

resolution articulates the Governors' vision for a more efficient and effective partnership between 

the federal government and the states. It is appended to this testimony for inclusion in the hearing 

record. 

States Are NOT Stakeholders 

"States, tribes, local governments, groups and organizations, and other stakeholders ... " This phrase 

(and multiple variants thereof) often appears in legislation and throughout federal proclamations: 

notices ofrulemakings, requests for comments, departmental orders, and all types of policy 

statements. The idea that it communicates (i.e. that states stand in the same relation to the federal 

government as any other organized group) has taken firm hold in various theaters of the federal 

executive and legislative branches of government. This widespread notion, however, is legally 

incorrect and contrary to our fundamental principles of governance. 

States are not stakeholders. Rather, they are a sovereign level of United States government. States 

not only created the federal government, but they reserved to themselves the greater measure of 

authority over public affairs. This reservation of power is memorialized in the Tenth Amendment 

of the U.S. Constitution, which reads in its entirety: "The powers not delegated to the United States 

by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to 

the people." 

Under the American construct of federalism, the powers of the federal government are narrow and 

defined, while those of the states are vast and innumerable. Nevertheless, the balance of power 

envisioned by the Founding Fathers has, over generations, been turned on its head. The outsized 

role of the federal government is reflected in the enormity of its budget, the scale of its workforce 

and the scope of its regulatory reach. 
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As the chief elected officials of sovereignties, Western Governors expect to engage with federal 

officials as co-regulators. They are fiercely committed to working with federal offices as authentic 

partners in the formulation and execution of public policy. They understand that Governors- who 

exercise authority closer to the governed - have specialized knowledge of their states' 

environments, legal frameworks, culture, and economies that is essential to informed national 

decision-making. A bonafide partnership between state and federal authorities will result in more 

efficient, cost-effective, and legally defensible decision-making. It will result in better public policy. 

A Complex Relationship 

The relationship between state and federal governments manifests itself in various, legally distinct 

contexts. Thoughtful consideration of improvements to the relationship must account for its 

various incarnations. 

Certain areas of responsibility (e.g. national defense, production of currency) are exclusively within 

the federal purview. Other areas (e.g. groundwater and wildlife management) are the province of 

state government. There are instances of shared authority (e.g. the adjudication of federal water 

rights under state law), and cases where federal authority is delegated to the states (e.g. Clean 

Water Act and Clean Air Act implementation). There are other situations where the relationship is 

predicated on historical obligations (e.g. Payments-in-Lieu-of-Taxes) or wholly voluntary 

collaborations (e.g. Memoranda of Understanding, conservation joint ventures). These different 

"flavors" of the state-federal relationship are explained more fully in the attached resolution. 

Congress has, through various statutes, expressly recognized states' unique status as sovereignties 

with their own inherent authority. In other instances, Congress has specifically designated states as 

co-regulators with federally-delegated authority, and has directed federal agencies to consult with 

states accordingly. 

The intersection of federal and state authority is especially complex with respect to the 

management of natural resources. On the one hand, such managerial authority is mostly vested in 

the states. States are the principal authority for the allocation and management of natural 

resources within their borders. They exercise inherent police power in the management of wildlife 

resources and possess plenary authority over groundwater resources. 

On the other hand, the federal government is by far the largest single landowner in the West In 

fact, 4 7 percent of the 11 westernmost continental states is federally owned, as is 61 percent of the 

State of Alaska. In contrast, the federal government owns only four percent of lands in the other 

states. It is incumbent upon federal land managers to administer their holdings according to the 

laws of the states in which they reside. Accordingly, it is especially important that federal and state 

officials work collaboratively and constructively in resource management to deliver the best 

possible results for their common constituents. 

Strengthening the State-Federal Relationship and Consultation 

WGA commends the attention of the Committee and Task Force to the attached resolution for 

specific recommendations to improve the state-federal relationship. For example, the resolution 

addresses the issue of federal preemption and notes that, in the absence of Constitutional 

delegation of authority to the federal government, state authority should be presumed sovereign. 

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With respect to the delegation of authority to states for the administration of federal programs, the 

resolution provides that when a state (which should be respected and regarded as a co-regulator) is 

meeting the minimum requirements of a delegated program, the role of a federal department or 

agency should be limited to the provision of funding, technical assistance and research support. 

Federal agencies should grant states the maximum administrative discretion possible, and federal 

oversight of states should not unnecessarily intrude on that discretion. 

The resolution further identifies opportunities for positive engagement between Governors and 

federal officials. It calls for robust application of a revised and enforceable executive order on 

federalism. Moreover, it offers specific suggestions for the involvement of states in the 

development and implementation of federal land use plans. 

An improved state-federal relationship depends on improved communication. Accordingly, the 

resolution's provisions on consultation are especially salient to the subject of this hearing, and they 

are presented here for consideration by the Committee and Task Force. 

Each Executive department and agency should be required to have a clear and accountable process 

to provide each state - through its Governor as the top elected official of the state and other 

representatives of state and local governments as he or she may designate - with early, meaningful, 

and substantive input in the development of regulatory policies that have federalism implications. 

This includes the development, prioritization and implementation of federal environmental 

statutes, policies, rules, programs, reviews, budgets, and strategic planning. 

Federal agencies should rely on state data and expertise in development and analysis of underlying 

science serving as the legal basis for federal regulatory action. States merit greater representation 

on all relevant committees and panels (such as the Science Advisory Board of the Environmental 

Protection Agency and related issue panels) advising federal agencies on scientific, technological, 

social and economic issues that inform federal regulatory processes. 

Federal agencies must engage in early (pre-rulemaking) consultation with Governors and state 

regulators. This should include substantive consultation with states during development of rules or 

decisions and a review by states of the proposal before a formal rule making is launched (i.e., before 

such proposals are sent to the White House Office of Management and Budget). As they receive 

additional information from state agencies and non-governmental entities, Governors and 

designated state officials should have the opportunity to engage with federal agencies on an 

ongoing basis to seek refinements to proposed federal regulatory actions prior to finalization. 

Western Governors can conceive of no legitimate reason they could not or should not be consulted 

at the earliest stages of policy ideation. An interactive, relational model of cooperative policy 

development would yield great dividends for our shared constituents. Adoption of such a model, 

however, is only possible upon embrace of states as partners and rejection of the notion that states 

are stakeholders. 

The Promise of Restored Partnership 

Governors are eager to work with the federal government as authentic partners. They hope to 

engage with federal agencies at the earliest stages of federal decision-making and program 

development. A decision-making paradigm that applies local knowledge, expertise, resources, and 

competencies will result in efficiencies, cost-savings, and legally sound (and defensible) policy. 

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Western Governors are not the only group to recognize the importance of strengthening the 

relationship between federal, state, and local governments. In coordination with other state and 

local groups, they have developed a common set of Principles to Clarify and Strengthen the StateFederal Relationship. In addition to WGA, adopters of these principles include the Conference of 

Western Attorneys General, Council of State Governments- West, Western Interstate Region of the 

National Association of Counties, Pacific NorthWest Economic Region, Western States Air Resources 

Council, and Western States Water Council. 

As Governors pursue efforts to realign the state-federal relationship, they would appreciate the 

opportunity to consult with Congress on the development and use of precise legislative language 

that recognizes the sovereignty of states and helps restore their status as a co-equal level of 

government. They also request your vigilance to protect against the undue transfer of financial 

burdens to states and localities. A common goal should be to maximize the return that Americans 

receive on the investment of their limited tax dollars. 

Western Governors appreciate the interest of the Committee and the Task Force in improving the 

state-federal relationship. They are interested in working with you to effect meaningful and 

enduring improvements and assisting you in creating a legacy of which you can jointly be proud. 

Western Governors look forward to helping you realize a historic opportunity to develop a more 

functional policy-making paradigm that promises untold benefits for generations to come. 

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WESTERN 

GOVERNORS' 

ASSOCIATION 

A. PREAMBLE 

Western Governors' Association 

Policy Resolution 2017-01 

Building a Stronger State-Federal Relationship 

The Governors of the West are proud of their unique role in governing and serving the citizens 

of this great nation. They recognize that the position they occupy- the chief elected official of a 

sovereign state- imposes upon them enormous responsibility and confers upon them 

tremendous opportunity. Moreover, the faithful discharge of their obligations is central to the 

success of the Great American Experiment. 

It was, after all, the states that confederated to form a more perfect union by creating a national 

government of limited and defined powers. The grant of specific responsibilities for irreducibly 

common interests such as national defense and interstate commerce -was brilliantly designed 

to make the whole stronger than the sum of its parts. 

The genius of American democracy is predicated on the separation of powers among branches 

of government (viz. the legislative, executive and judiciary) and the division of power between 

the federal and state governments (federalism). Under the American version of federalism, the 

powers of the federal government are narrow, enumerated and defined. The powers of the 

states, on the other hand, are vast and indefinite. States are responsible for executing all powers 

of governance not specifically bestowed to the federal government by the U.S. Constitution. 

This principle is memorialized in the Tenth Amendment, which states in its entirety, "The 

powers not delegated to the United States by the Constitution, nor prohibited by it to the States, 

are reserved to the States respectively, or to the people." 

This reservation of power to the states respects the differences between regions and peoples. It 

recognizes a right to self-determination at a local level. It rejects the notion that one size fits all, 

and it provides for a rich tapestry of local cultures, economies and environments. 

Because of the Constitutional recognition of state sovereignty, the states have been 

appropriately regarded as laboratories of democracy. States regularly engage in a kind of 

cooperative competition in the marketplace of ideas. Western Governors are leaders in 

innovative governance who employ their influence and executive authority to promote 

initiatives for improvement of their states' economies, environments and quality of life. 

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Despite the foregoing, the balance of power has, over the years, shifted toward the federal 

government and away from the states. The growth in the size, cost and scope of the federal 

government attests to this new reality. Increasingly prescriptive regulations infringe on state 

authority, tie the hands of states and local governments, dampen innovation and impair on-theground problem-solving. Failures of the federal government to consult with states reflect a 

lesser appreciation for local knowledge, preferences and competencies. 

The inauguration of a new Administration presents a historic opportunity to realign the statefederal relationship. Western Governors are excited to work in true partnership with the 

federal government. By operating as authentic collaborators on the development and execution 

of policy, the states and federal government can demonstrably improve their service to the 

public. Western Governors are optimistic that the new Administration will be eager to unleash 

the power and creativity of states for the common advantage of our country. By working 

cooperatively with the states, the Administration can create a legacy of renewed federalism, 

resulting in a nation that is stronger, more resilient and more united. Such an outcome will 

redound to the credit of the Administration and inure to the benefit of the American people. 

B. BACKGROUND 

1. The relationship between state government authority and federal government authority 

is complex and multi-dimensional. There are various contexts in which the authorities 

of these respective levels of U.S. government manifest and intersect. For example: 

a) Exclusive Federal Authority- There are powers that are specifically enumerated 

by the U.S. Constitution as exclusively within the purview of the federal 

government.' 

b) State Primacy- States derive independent rights and responsibilities under the 

U.S. Constitution. All powers not specifically delegated to the federal 

government are reserved for the states; in this instance, the legal authority of 

states overrides that of that federal government.2 

1 The structure of the government established under the U.S. Constitution is premised upon a system of 

checks and balances: Article VI (Supremacy Clause); Article I, Section 8 (Congressional); Article II, Section 

1 (Executive Branch); Article III, Section 2 (Judicial Branch). State law can be preempted two ways. If 

Congress evidences an intent to fully occupy a given "field," then state law falling within the field is 

preempted. If Congress has not fully displaced state regulation over the matter, then state law is 

preempted to the extent it actually conflicts with federal law. 

Amendment 10 of the U.S. Constitution: "The powers not delegated to the United States by the 

Constitution, nor prohibited by it to the States, are reserved tothe States, respectively. or to the people." 

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Governors have responsibilities for the condition of land, air, forest, wildlife and 

water resources, as well as energy and minerals development, within their state's 

borders. 

c) Shared State-Federal Authority- In some cases, state and/or federal authority 

can apply, given a particular fact pattern.3 Federal preemption of state law is a 

concern under this scenario. According to the Council on State Governments, the 

federal government enacted only 29 statutes that pre-empted state law before 

1900. Since 1900, however, there have been more than 500 instances of federal 

preemption of state law. 

d) State Authority "Delegated" from Federal Agencies by Federal Statute -The 

U.S. Congress has, by statute, provided for the delegation to states of authority 

over certain federal program responsibilities. Many statutory regimes - federal 

environmental programs, for example -contemplate establishment of federal 

standards, with delegated authority (permissive) available to states that wish to 

implement those standards. 

According to the Environmental Council of the States (ECOS), states have chosen 

to accept responsibility for 96 percent of the primary federal environmental 

programs that are available for delegation to states. States currently execute the 

vast majority of natural resource regulatory tasks, including 96 percent of the 

enforcement and compliance actions and collection of more than 94 percent of 

the environmental quality data currently held by the U.S. Environmental 

Protection Agency (EPA). 

e) Other- Where the federal government has a statutory, historical or "moral" 

obligation to states. 4 

3 The federal government has authority to regulate federal property under Article IV of the Constitution. 

That authority, however, is limited. General regulatory authority (including regulation of wildlife and 

land use) is held by the states, unless Congress passes a specific law that conflicts with a state's exercise of 

authority. This is discussed in detail in U.S. Supreme Court case, Kleppe v. New Mexico. 4 These historic agreements include, but are not limited to: Payments in Lieu of Taxes; shared revenues 

authorized by the Secure Rural Schools Act; Oregon and California Railroad Revested Lands payments; 

shared mineral royalties at the historic level of 50% and renewable energy leasing revenues from 

development on U.S. Forest Service lands, Bureau of Land Management lands and waters off the coasts of 

the western states; Abandoned Mine Lands grants to states consistent with 2006 Amendments to the 

Surface Mining Control and Reclamation Act; legally binding agreements and timetables with states to 

clean up radioactive waste that was generated in connection with nuclear weapons production and that 

remains on lands managed by the Department of Energy in the West. 

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2. Over time, the strength of the federal-state partnership in resource management has 

diminished. Federal agencies are increasingly challenging state decisions, imposing 

additional federal regulation or oversight and requiring documentation that can be 

unnecessary and duplicative. in many cases, these federal actions encroach on state 

legal prerogatives, especially in natural resource management. In addition, these federal 

actions neglect state expertise and diminish the statutorily-defined role of states in 

exercising their authority to manage delegated environmental protection programs. 

3. The current fiscal environment exacerbates tensions between states and federal agencies. 

For example, states have a particular interest in improving the active management of 

federal forest lands. The so-called "fire borrowing" practice employed by the U.S. Forest 

Service and the Department of the Interior to fund wildfire suppression activities is 

negatively affecting restoration and wildfire mitigation work in western forests. 

Changes are needed, as the current funding situation has allowed severe wildfires to 

bum through crippling amounts of the very funds that should instead be used to 

prevent and reduce wildfire impacts, costs, and safety risks to firefighters and the 

public. This also has impacts on local fire protection districts, which often bear the brunt 

of costs associated with first response to wildfire, and state budgets that are also 

burdened by the costs of wildfire response. Fire borrowing represents an unacceptable 

set of outcomes for taxpayers and at-risk communities, and does not reflect responsible 

stewardship of federal land. In addition, states increasingly are required to expend their 

limited resources to operate regulatory programs over which they have less and less 

control. A 2015 report by the White House Office of Management and Budget on the 

costs of federal regulation and the impact of unfunded mandates notes that federal 

mandates cost states, cities and the general public between $57 and $85 billion every 

year. 

4. States are willing and prepared to more effectively partner with the federal government 

on the management of natural resources within their borders. 

5. The U.S. Advisory Commission on Intergovernmental Relations- established in 1959 

and dissolved in 1996 -was the federal government's major platform for addressing 

broad intergovernmental issues beyond narrow considerations of individual programs 

and activities. 

6. The current Executive Order on Federalism (E.O. 13132) was issued by then-President 

William Clinton in 1999. That E.O. has not been revisited since and it may be time to 

consider a new E.O. 

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C. GOVERNORS' POLICY STATEMENT 

1. Review of the Federal-State-Local Relationship 

a) It is time for thoughtful federal-state-local government review of the federal 

Executive Order on Federalism to identify areas in the policy that can be clarified 

and improved to increase cooperation and efficiency. 

b) Governors support reestablishment of the U.S. Advisory Commission on 

Intergovernmental Relations. It is imperative that the President show his 

commitment to the Constitutional separation of powers by establishing a 

platform at the highest level to address federalism concerns. 

2. Avoiding Preemption of States 

a) In the absence of Constitutional delegation of authority to the federal 

government, state authority should be presumed sovereign. Accordingly, 

federal departments and agencies should, to the extent permitted by law, 

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 evidence compelling the conclusion that Congress intended 

preemption of state law, consistent with established judicial precedent. 

b) When Congress, acting under authority granted to it by the Constitution, does 

preempt state environmental laws, federal legislation should: 

i. Accommodate state actions taken before its enactment; 

ii. Permit states that have developed stricter standards to continue to 

enforce them; 

iii. Permit states that have developed substantially similar standards to 

continue to adhere to them without change and, where applicable, 

without consideration to land ownership. 

3. Defining Meaningful State-Federal Consultation 

a) Each Executive department and agency should be required to have a clear and 

accountable process to provide each state through its Governor as the top 

elected official of the state and other representatives of state and local 

governments as he or she may designate - with early, meaningful and substantive 

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input in the development of regulatory policies that have federalism 

implications. This includes the development, prioritization and implementation 

of federal environmental statutes, policies, rules, programs, reviews, budgets and 

strategic planning. 

b) Consistent with C(2) and C(3)(a), federal agencies should consult with states in a 

meaningful way, and on a timely basis. 

i. Predicate Involvement: Federal agencies should take into account state 

data and expertise in development and analysis of underlying science 

serving as the legal basis for federal regulatory action. States merit 

greater representation on all relevant committees and panels (such as the 

EPA Science Advisory Board and related issue panels) advising federal 

agencies on scientific, technological, social and economic issues that 

inform federal regulatory processes. 

ii. Pre-Publication I Federal Decision-making Stage: Federal agencies 

should engage in early (pre-rulemaking) consultation with Governors 

and state regulators. This should include substantive consultation with 

states during development of rules or decisions and a review by states of 

the proposal before a formal rulemaking is launched (i.e., before such 

proposals are sent to the White House Office of Management and 

Budget). 

iii. Post-Publication I Pre-Finalization Stage: As they receive additional 

information from state agencies and non-governmental entities, 

Governors and designated state officials should have the opportunity to 

engage with federal agencies on an ongoing basis to seek refinements to 

proposed federal regulatory actions prior to finalization. 

4. State Authority "Delegated" from Federal Agencies Pursuant to Federal Statute 

Where states are delegated authority by federal agencies pursuant to legislation: 

a) Federal agencies should treat states as co-regulators, taking into account state 

views, expertise and science in the development of any federal action impacting 

state authority. 

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b) Federal agencies should grant states the maximum administrative discretion 

possible. Any federal oversight of such state should not unnecessarily intrude on 

state and local discretion. Where states take proactive actions, those efforts 

should be recognized and credited in the federal regulatory process. 

c) When a state is meeting the minimum requirements of a delegated program, the 

role of a federal department or agency should be limited to the provision of 

funding, technical assistance and research support. States should be free to 

develop implementation and enforcement approaches within their respective 

jurisdictions without intervention by the federal government. 

d) New federal rules and regulations should, to the extent possible, be consistent 

with existing rules and regulations. The issuing agency should identify elements 

and requirements common to both the proposed and existing regulations and 

provide states an opportunity to develop plans addressing the requirements of 

both in a coordinated fashion. This will achieve economies of scale, saving both 

time and money. 

e) When a federal department or agency proposes to take adjudicatory actions that 

impact authority delegated to states, notice should be provided to affected 

Governors' offices, and co-regulating states should have the opportunity to 

participate in the proceedings. Where legally permissible, that right should 

extend to federal agencies' settlement negotiations impacting state 

environmental and natural resource management prerogatives. Where their 

roles and responsibilities are impacted, states should be meaningfully consulted 

during settlement negotiations, including negotiations aimed at avoiding, rather 

than resolving, litigation (such as negotiations following a notice of intent to sue 

under the Endangered Species Act, but prior to a formal complaint being filed to 

initiate legal action). 

f) States' expertise should be recognized by federal agencies and robustly 

represented on boards and in other mechanisms upon which agencies rely for 

development of science to support regulatory action. 

5. Other Opportunities for Positive Engagement by the Federal Government with 

Western States 

a) Federalism Reviews- Federal agencies are required by federal Executive Order 

13132 to consider and quantify consequences of federal actions on states. In 

practice, the current process falls short of its stated goals. Governors call on the 

President to revisit the executive order to, among other things: 

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i. Specifically involve Western Governors on issues (e.g., public lands, 

water and species issues) that disproportionately impact the West; 

ii. Work with Governors to develop specific criteria and consultation 

processes: 1) for the initiation of federalism assessments and 2) that guide 

the performance of every federal Department and agency federalism 

assessment; 

iii. Require federal Departments and agencies to meet the criteria developed 

under C(S)(a)(ii), rather than simply require the consideration of 

federalism implications; 

iv. Provide states, through Governors, an opportunity to comment on 

federalism assessments before any covered federal action is submitted to 

the Office of Management and Budget for approval. 

b) Federal and State Land-Use Planning- Governors possess primary decisionmaking authority for management of state resources. Accordingly, it is essential 

that they have an opportunity to review new, revised and amended federal land 

management plans for consistency with existing state plans. Governors and their 

staffs have specific knowledge and experience that can help federal agencies craft 

effective and beneficial plans. A substantive role in federal agencies' planning 

processes is vital for Western Governors: 

i. Federal landscape-level planning presents new issues for Governors to 

consider as they attempt to ensure consistency between state and federal 

requirements. Agencies should provide Governors sufficient time to 

ensure a full and complete state review. This is particularly true when 

agency plans affect multiple planning areas or resources; 

ii. Agencies should seek to align the review of multiple plans affecting the 

same resource. This is particularly true for threatened or endangered 

species that have vast western ranges; 

iii. When reviewing proposed federal land management plans for 

consistency with state plans, Governors should be afforded the discretion 

to determine which state plans are pertinent to the review, including 

state-endorsed land use plans such as State Wildlife Action Plans, 

conservation district plans, county plans and multi-state agreements; 

iv. Governors must retain a right to appeal any rejection of 

recommendations resulting from a Governor's consistency review. 

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c) Honoring Historic Agreements- The federal government should honor its 

historic agreements with states and counties in the West to compensate them for 

state and local impacts associated with federal land use and nontaxable lands 

within their borders that are federally-owned. 

d) Responsible Federal Land Management- The federal government should be a 

responsible landowner and neighbor and should work diligently to improve the 

health of federally-owned lands in the West. Lack of funding and conflicting 

policies have resulted in large wildfires and the spread of invasive species from 

federally owned forests and grasslands, negatively impacting adjacent state and 

privately-owned lands, as well as state-managed natural resources (soils, air 

and water). 

e) Recognizing State Contributions to Federal Land Management- The U.S. 

Congress and appropriate federal departments and agencies should provide 

opportunities for expanded cooperation, particularly where states are working 

to help their federal partners to improve management of federal lands within 

their states' borders through the contribution of state expertise, manpower and 

financial resources. 

f) Avoiding Unfunded Mandates- The U.S. Congress and federal departments 

and agencies should avoid the imposition of unfunded federal mandates on 

states. The federal government increasingly requires states to carry out policy 

initiatives without providing the funding necessary to pay for implementation. 

State governments cannot function as full partners if the federal government 

requires them to devote their limited resources to compliance with unfunded 

federal mandates. 

g) Other Considerations in Designing an Effective State-Federal Relationship 

Other important considerations in the design of a stronger state-federal 

relationship include: 

i. The U.S. Congress and federal departments and agencies should respect 

the authority of states to determine the allocation of administrative and 

financial responsibilities within states in accordance with state 

constitutions and statutes. Federal action should not encroach on this 

authority. 

ii. Federal assistance funds, including funds that will be passed through to 

local governments, should flow through states according to state laws 

and procedures. 

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iii. States should be given flexibility to transfer a limited amount of funds 

from one grant program to another, and to administer related grants in a 

coordinated manner. 

iv. Federal funds should provide maximum state flexibility without specific 

set-asides. 

v. States should be given broad flexibility in establishing federallymandated advisory groups, including the ability to combine advisory 

groups for related programs. 

vi. Governors should be given the authority to require coordination among 

state executive branch agencies, or between levels or units of government, 

as a condition of the allocation or pass-through of funds. 

vii. Federal government monitoring should be outcome-oriented. 

viii. Federal reporting requirements should be minimized. 

ix. The federal government should not dictate state or local government 

organization. 

D. GOVERNORS' MANAGEMENT DIRECTIVE 

1. The Governors direct the WGA staff, where appropriate, to work with Congressional 

committees of jurisdiction and the Executive Branch to achieve the objectives of this 

resolution. 

2. Furthermore, the Governors direct WGA staff to develop, as appropriate and timely, 

detailed annual work plans to advance the policy positions and goals contained in this 

resolution. Those work plans shall be presented to, and approved by, Western 

Governors prior to implementation. WGA staff shall keep the Governors informed, on a 

regular basis, of their progress in implementing approved annual work plans. 

Western Governors enact new policy resolutions and amend existing resolutions an a bi-annual basis. 

Please consult www. westqav.orgloolicies far the most current copy of a resolution and a list of all 

current WGA policy resolutions. 

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SIGNATORIES 

Principles to Oarify and Strengthen the State-Federal Relationship 

Western Governors' Association (December 2016) 

Conference of Western Attorneys General (December 1016) 

Council of State Governments-West (December 2016) 

National Association of Counties- Western Interstate Region (December 2016) 

Pacific NorthWest Economic Region (December 2016) 

Western States Air Resources Council (August 2017) 

Western States Water Council (August 2017) 
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Principles to Clarify and Strengthen the State-Federal Relationship 

A. Fundamental Federalism Principles 

1. The structure of government established by the United States Constitution is premised 

upon a system of checks and balances. 

2. The Constitution created a federal government of supreme, but limited and enumerated, 

powers. The sovereign powers not granted to the federal government are reserved to the 

people or to the states, unless prohibited to the states by the Constitution. The 

constitutional relationship among sovereign governments, state and federal, is 

memorialized in the Tenth Amendment to the Constitution. Under this Constitutional 

framework, states also confer governmental powers to counties and local governments. 

3. Our constitutional system encourages a healthy diversity in the public policies adopted 

by the people of the several States according to their own conditions, needs, and desires. 

4. Effective public policy is achieved when there is competition among the several states in 

the fashioning of different approaches to public policy issues. The search for enlightened 

public policy Is advanced when individual states and local governments are free to 

experiment with a variety of approaches to public issues. One-size-fits-all national 

approaches to public policy problems can inhibit the creation of effective solutions to 

those problems. 

5. In the absence of clear constitutional or statutory authority, the presumption of 

sovereignty should rest with the individual states. Uncertainties regarding the legitimate 

authority of the federal government should generally be resolved in favor of state and 

local authority and regulation. 

6. To the extent permitted by law, federal executive departments and agencies should not 

construe, in regulations and otherwise, a federal statute to preempt state or local 

authority unless 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 or local authority, or when the exercise of state or local authority 

directly conflicts with the exercise of federal authority under the relevant federal statute 

or U.S. Constitution. 

7. When an executive department or agency proposes to act through adjudication or 

regulatory action to preempt state or local authority, the department or agency must 

provide all affected states and local governments notice and an opportunity for 
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appropriate participation in the proceedings [as outlined in 8(2)}. 

8. With respect to federal statutes and regulations administered by states and local 

governments, the federal government should grant states and local governments the 

maximum administrative discretion possible. Any federal oversight of such state and 

local administration should not unnecessarily intrude on state and local discretion or 

create undue burdens on state and local resources. 

B. Actions by Federal Agencies That Should Be Covered by FederaUsm Executive Order 

I Consultation 

1. Actions having federalism impfications include federal regulations, proposed federal 

legislation, policies, rules, guidances, directives, programs, reviews, budget proposals, 

budget processes and strategic planning efforts that have substantial direct effects on the 

states and/or local governments or on their relationship with the federal government, or 

the distribution of power and responsibilities, between the federal government and the 

states and local governments. 

2. "Consultation" - Each federal executive department I agency should be required to 

have a clear, consistent and accountable process (see Section C below) to provide states 

and localities with early, meaningful and substantive input in the development of 

regulatory policies that have federalism implications. 

3. Independent regulatory agencies should be required to comply with the same 

federalism-related requirements that other executive departments and agencies are 

required to follow. 

C. Federalism Review Process 

1. The head of each federal executive department and agency should be required to 

designate an official responsible for ensuring that the federalism consultation process is 

executed appropriately and completely. 

a. Regulatory actions [see 8(1)] with federalism implications should trigger 

preparation of a federalism assessment Such assessments should be considered 

in all decisions involved in promulgating and implementing the policy. 

b. Each federalism assessment should accompany any submission concerning the 

policy that is made to the Office of Management and Budget pursuant to 

Executive Order No. 12291 or OMB Circular No. A19, and: 
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i. contain the designated official's certification that the policy has been 

assessed in light of the principles, criteria and requirements contained in 

this document; 

ii. identify any provision or element of the policy that is inconsistent with 

the principles, criteria, and requirements stated in this document; 

iii. specifically identify the extent to which the policy imposes additional 

costs or burdens on state or local governments, including the likely 

source of funding for the state and local governments and the ability of 

the states and Impacted local governments to fulfill the purposes of the 

policy; and 

iv. specifically identify the extent to which the policy would affect impacted 

governments' abilities to discharge traditional state and local 

governmental functions, or other aspects of state sovereignty and local 

government authority. 

2. No executive department or agency should promulgate any regulation that is not 

authorized by federal statute. Where regulations are appropriate, authorized and 

Constitutional, but have federalism implications or impose substantial direct compliance 

costs on states or localities, the executive department or agency must: 

a. Ensure that new funds sufficient to pay the direct costs incurred by the state or 

local government in complying with the regulation are provided by the federal 

government to the impacted state and local governments for the duration of the 

impact; and 

b. Prior to the formal promulgation of the regulation: 

i. in a separately identified portion of the preamble to the regulation as it is 

to be issued in the Federal Register, provide to the Director of the Office 

of Management and Budget a description of the extent of the executive 

department I agency's prior consultation with representatives of affected 

states and local governments, a summary of the nature of their concerns, 

and the executive department I agency's position supporting the need to 

issue the regulation; and 

ii. makes available to the Director of the Office of Management and Budget 

any written communications submitted to the agency by states or local 

governments. 
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D. Increasing Flexibility for State and Local Waivers 

1. Agencies should review the processes under which states and local governments apply 

Cor waivers of statutory and regulatory requirements and take appropriate steps to 

streamline those processes. 

2. Each agency should, to the extent practicable and permitted by law, favorably consider 

any application by a state or local government for a waiver of statutory or regulatory 

requirements in connection with any program administered by that agency. In general, 

federal agencies should operate with a general view toward increasing opportunities for 

utilizing flexible policy approaches at the state or local level in cases in which the 

proposed waiver is consistent with applicable federal policy objectives and is otherwise 

appropriate. 

3. Each agency should, to the extent practicable and permitted by law, render a decision 

upon a complete application for a waiver within 120 days of receipt of such application 

by the agency. If the application for a waiver is not granted, the agency should provide 

the applicant with timely written notice of the decision and the reasons for the 

application's rejection. 

4. This process would apply only to statutory or regulatory requirements that are 

discretionary and subject to waiver by the agency. 
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WESTERN 

GOVERNORS' 

ASSOCIATION 

States Are Not Stakeholders -

Legal Primer 

Some truths are so basic that, like the air around us, they are easily overlooked. 

Justice O'Connor (on State sovereignty in New York v. U.S., 505 U.S. 144, 187 (1992)). 

States are sovereigns. 

U.S.C.A. Canst. Amend. 10. 

The U.S. Supreme Court has recognized that the States entered the federal system with their 

sovereignty intact. Blatchford v. Native Vi//. Of Noatak, 501 U.S. 775, 779 (1991). 

The U.S. Supreme Court and Congress recognize that States are entitled to the degree of 

respect due a co-equal governmental institution. 

See, e.g. Fed. Mar. Comm'n v. S.C. State PortsAuth., 535 U.S. 743,760 (2002);Alden v. Maine, 

527 U.S. 706, 750 (1999); Printz v. U.S., 521 U.S. 898, 928 (1997); New York v. U.S., 505 U.S. 

144, 156-57 (1992); federal agency enabling acts; Unfunded Mandates Reform Act, 2 U.S.C. § 

1501 et seq. (Guidelines and Instructions for Implementing Section 204, State, Local, and 

Tribal Government Input); Federalism, E.O. 13132. 

Congress has, through various statutes, expressly recognized States' unique status as 

sovereignties with their own inherent authority- as well as instances in which States serve 

as co-regulators with federally-delegated authority- and has directed federal agencies to 

consult with States accordingly. 

As recognized by the U.S. Supreme Court, Congress directs federal agencies to defer to State 

authority in areas such as: land and water use and zoning, education, domestic relations, 

criminal law, property law, local government, taxation, and fish and game. 

• Congress directs federal agencies to co-regulate with the States under statutes such as: 

Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, and 

Comprehensive Environmental Response, Compensation, and Liability Act. 

Because States are sovereign, the U.S. Supreme Court provides the States with unique 

consideration for the purposes of invoking federal court jurisdiction. Massachusetts v. EPA, 

549 U.S. 497, 518 (2007) (finding states are not "normal litigants."). 

Federal agencies are directed by Executive Order 13132, Federalism to adhere to fundamental 

federalism principles and develop an accountable process to ensure meaningful and timely input 

from States when formulating policies that have federalism implications. 

Will litigation be the ultimate form of State involvement over federal regulatory policies? 

Proper agency consultation with states produces more informed, effective, and durable 

administrative rules, regulations, and policies. 
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Explanation 

Some Examples 

FEDERAL-STATE RELATIONSHIP: 

AUTHORITY FRAMEWORK1 

All powers not specifically delegated to the 

U.S. Constitution are reserved for the states, 

authority to overrule federal intrusion. 

Groundwater,:; water allocations/management, wildlife management 

(outside ESA context) 4 and natural resource management under state 

"trust" authorities.' 

I (Congressional) Section 8; Article !!, Section 1 

(Executive Branch), Article Branch). State law can be preempted two ways: Congress 

evidences an intent to fully occupy a given "tleld," then state law falling within the field is preempted lf 

Congress has not fully displaced state regulation over the matter, state la\"-' is preempted to the extent it 

actual(!' conflicts with federal law. 3 Congress recognized states as the sole authority over groundwater in the Desert Land Act of 1877. The U.S. 

Supreme Court has the exclusive nature of state authority over water management, 

including in California v. Beaver Portland Cement Ca., 295 U.S. 142 4 

4 Amendment See AFWA's 2014 10 of report: the U.S. C ~:~~~~~~~~~;;~~~;/~~~~::t-:;i 

nor prohibited by it to the States, are reserved to the States, respectively, or to the people." 

is a common-law concept concerning public rights to lands and water to be held "in trust" by states for certain 

public uses. This is the basis of states' so-called "trust" authority over natural resources and wildlife. The 

manner in which states hold title to such lands and water is described in the U.S. Supreme 

Central Railroad vs Illinois. In the wildlife context, this is further articulated through"'' W"-""-"'"'-"'-""""' 

Amendment, state authority dominates in the pre-listing conservation context. 
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Explanation 

Some Examples 

Explanation Where a statutory regime contemplates establishment of federal 

standards, with delegated authority (permissive) available to states that 

wish to implement those standards.' 

Some Examples 

Explanation 

Supreme 

CAA, CWA, EPCRA, FlFRA, OPCA, RCRA, SDWA, SMCRA, TSCA.B 

Where the federal government has a statutory, historical or "moral" 

obligation to states. 

7

There are requirements state environmental laws, The CWA, 

CAA, RCRA, SDWA, TSCA and CERCLA all include provisions that require implementation activities involved 

to be subject to, and federal, state, interstate and local requirements. 8 See ECOS, 2016) for lists of states 

under various environmental statutes. ECOS, states imolem<mt96 

programs that can be delegated to states. States conduct over 90% of environmental inspections, 

enforcementJ environmental data collection. 

Western Governors' Association Page 2 
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Some Examples 

9 AFWA 2014 report: 

unfunded mandates, regulatory 

impacts analyses, reviews, 

ESA cooperating agency (Section and 

co.rmer;•ti\re a2neernents and "maximum 

Where state( s) and federal governments enter wholly voluntary 

collaborative relationships. 

WGA Chair initiatives, conservation joint venh1res 9, collaboratives. 

26-27 

\¥estern Governors' Association Page 3 

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Asked and Answered: Issues Raised Regarding State-Fede

Consultation 

This document identifies issues which have, in the past, frequently arisen in the context of state consultation during the federal 

administrative rulemaking process, as well as analyses of the legal foundations and legitimacy of each such issue. 

Non-Legislative Rulemaking: Federal 

agencies often categorize their proposed 

rules and regulations as "non-legislative," 

which are not subject to the requirements 

of the Administrative Procedure Act (APA) 

for notice-and-comment rulemaking. This 

practice precludes transparencv in the 

rulemaking process, as well as 

opportunity for the "public" (in which 

agencies include state governments) to 

input to the agency in the 

rlPvPlnnmPnt and adoption of rules. 

Ex Parte Communications: Agencies have 

expressed that general agency policy 

restricting" ex parte" communications with 

1) All agency rules intended to be legally 

binding (on the agency and/or the 

public) must be promulgated through procedures for notice-and-comment 

rulemaking. 

2) "Rules which do not merely interpret 

existing law or announce tentative 

policy positions, but which establish 

APA's notice-and-comment 

requirements, regardless of how they 

initially are labeled." (OMB Good 

Guidance Bulletin). 

Requirements. 

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communications with state officials ("and with non-agency officials at any point ~grmQnt Y:a!lk.€!1 l!f.uc/ear l:!ll!lf!.C C.o

other stakeholders") during an agency's during the rule making process l!f.atural Rgwurl:tls D!1[r:.n~f1 C.oundl 

rulemaking process. Several federal 2) Many of the federal policies on ex parte 519 (1978). 

agencies have adopted their own policies communication were hastily adopted in 

which restrict communications with non- response to overly-restrictive federal 

agency personnel during the rulemaking case law which has been subsequently 

process. These policies are non-legislative overturned. 

rules, which are highly immune from legal 3) Agency policies addressing ex parte 

or administrative challenge. communications have been adopted as 

non-legislative rules and, thus, cannot 

have any binding effect. 

For detailed analysis, see WGA 

Memorandum: Ex Parte Communications 

Between State and Federal Officials in the 

Federal Administrative Rulemaking Process. 

Application ofFACA to Communications 1) FACA's application to meetings between federal ll.dllisQ!}!: CQmmittee Ad: 5 

with State Officials (and Representative federal and non-federal officials is App !I§§ 1-15 

Organizations): Federal agency officials limited in scope and only applies to 

have expressed reluctance to consult with committees that are established by l1ntimded Mandete~ Re[Qrm A~t e 

state interests and associations of elected federal officials to obtain collective U225l 

state government officials due to concern advice. 

that such communications would trigger 2) The Unfunded Mandates Reform Act A!ke M BiJllin MemQrendym (Sep

the procedural requirements of the Federal (UMRA) provides an exemption from 12.2Sl 

Advisory Committee Act (FACA). FACA for consultations held exclusively 

between federal personnel and nonfederal elected officials (or their 

designees) "relating to the management 

or implementation of federal programs 

established pursuant to statute that 

explicitly or inherently share 

intergovernmental responsibilities or 

administration." 

'--- -

Western Governors' Association 

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For detailed analysis, see WGA 

Memorandum: FACA Application to WGA 

Intergovernmental Meetings with Federal 

Officials. 

FOIA- Deliberative Process Exemption's 1) FOIA's "Deliberative Process" exemption Qf lnfgrmatiQ!l Act, 5 Jl.s

Application to State Consultation: applies to communications that are: (i) f.t:.Wl. 

Federal agency officials have expressed inter-agency or intra-agency; (ii) preconcern about sharing- or even discussing decisional and not a final policy adopted De(l't o[the Interior v. Klamath Wa

the details of- pre-decisional agency by an agency; and (iii) part of a process Protective Ass'n, 532 U.S. 1 (2001) 

documents with state officials due to the by which governmental decisions and 

possibility the such shared information policies are formulated. Compare, lud.icial!1Latr;h, lJ:l!:- v.ll.t:.f

would be subject to public disclosure under 2) Some federal courts have applied the 2SQ E. Sullll· 2d 

the Freedom oflnformation Act (FOIA). "consultant corollary," which extends (D.D,C. 2013) with Peo{lle [qr the A

FOIA's Deliberative Process exemption WQJ! v. U.S.ll.eat o[.EducatiQn, 516 

to documents produced or 2d 28 (D DC 2QQZ). 

communications between non-federal 

entities in certain circumstances, to communications between federal and 

state officials when such 

communications are made exclusively in 

the context of a federal agency's 

deliberative process. The U.S. Supreme 

Court has declined to apply the 

consultant corollary to federal-tribal 

communications and documents created 

by the tribe in the context of a long-term 

operations plan. 

For detailed analysis, see WGA 

Memorandum: FOIA and the Application of 

its Deliberative Process Exemption to 

Communications Between State and Federal 

Officials. 

' ... 

Western Governors' Association 

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Tribal Consultation Model: Most federal 1) Comprehensive federal agency E.O. 13175, CQu,w.lrutiQn and CoQragencies have developed and adopted procedures for tribal consultation have ll!it!J lndiau Tribal GQllC.mments 65 

comprehensive policies and rules which developed over multiple presidential !17242 (NQ.Y. !l. 2QQQ) 

prescribe procedures for consulting with administrations. 

federally-recognized Indian tribes 2) Federal agencies should afford at least Memorandum on Trib

throughout the course of an agency's comparable "government-to- Consultation (NQy. 5 ZQQ2) 

rulemaking process. Although similarly government" consultation opportunities 

directed to do so by effective Executive to elected state officials in their 

Orders, federal agencies have largely failed rulemaking processes. Such 

to adopt similar policies for consulting with consultation should involve early, 

state officials. meaningful, substantive, and ongoing 

back-and-forth communications between state and federal officials with 

decision-making authority. 

For detailed analysis, see WGA 

Memorandum: Federal Policies Regarding 

Tribal Consultation as a Model for State 

Consultation Regulatory Reform. 

Consultation through Notice-and- 1) Federal courts have held that, when Cali[qmia WJfdeml!i.S Coaliti!lllll 

Comment Rulemaking: In many instances, required by statute to promulgate rules Ene.ru.Y. !131 E 3d lQZZ (9th Cir. 2Q

federal agencies are required (by statute, "in consultation with states," agencies 

rule, or executive order) to consult with cannot satisfy this mandate by merely 

states when developing and adopting conducting notice-and-comment 

agency rules and regulations. However, rulemaking. as otherwise directed by the 

several agencies have demonstrated that APA. 

their "consultation" requirements can be 2) Federal agencies should afford states 

satisfied by typical notice-and-comment with opportunities for "government-torulemaking, which would otherwise be government" consultation in their 

required by law, and which does not rulemaking processes. Consultation 

involve any meaningful "consultation" with should involve early, meaningful, 

states. substantive, and ongoing back-and-forth 

communications between state and 

federal officials with decision-making 

authority. 

Western Governors' Association 

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3) Federal agencies should designate 

agency officials with decision-making 

authority to conduct consultations with 

states. 

Federalism Consultation with States 1) E.O. 13132 applies to all agency Exgcutive 13132, 

(Executive Order 13132}: Federal "regulations, legislative comments or 43255 (Aug. 4, 1999) 

agencies have largely ignored the mandates proposed legislation, and other policy 

expressed in E.O. 13132, Federalism, which statements or actions that have QMB fQr lm11lementing E

requires agencies to "have an accountable substantial direct effects on the States, 13132 (Oct. 28, 199

process to ensure meaningful and timely on the relationship between the national 

input by State and local officials in the government and the States, or on the 

development of regulatory policies that distribution of power and 

have federalism implications." Agencies responsibilities among the various levels 

must consult with state and local officials of government," 

early in the process of developing any 2) OMB guidance expresses that agencies 

proposed regulation which has federalism "must include elected State and local 

implications or imposes substantial direct government officials or their 

compliance costs on state or local representative national organizations in 

governments. Agencies' failure to adhere to the consultation process." 

the procedural requirements ofE.O. 13132 

(or with the mandates of E.O.'s, generally) 

does not give rise to legal challenge or 

administrative appeal. 

Western Governors' Association 

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STATU ARE NOT "STAI{EHOLQERs"' ,· Sif4Ri,lfiQBRALISM eBJNCIPLiS

. . . ..·.··· · ...... / ' ' ;', '<!'' ,· '', ' ' 

States' Status as Sovereign Entities Sec. (A):" ... Constitutional recognition of Sec. (A)(Z): "The sovereign powers n

state sovereignty ... " granted to the federal government ar

reserved to the people or to the state

Sec. (B)(l)(b): " ... are reserved for the 

states ... " 

States' Status as Co-Regulators and Sec. (B)(l)(d): " ... with delegated authority Sec. (A)(8): "With respect to statutes 

Partners with Federal Agencies (permissive) available to states that wish regulations administered by states an

to implement those standards." governments, the federal governmen

grant states and local governments th

Sec. (C)(4)(a): "Federal agencies should maximum administrative discretion 

treat states as co-regulators ... " possible." 

Sec. (C)(S)(e): " ... opportunities for 

expanded cooperation, particularly where 

states are working to help federal partners 

to improve land management..." 

Federalism Impacts (E.O. 13132) Sec. (C)(S)(a): "Federal agencies are Sec. (B)(l): "Actions having federalis

required by [E.0.]13132 to consider and implications include ... " 

quantify consequences of federal actions on states. In practice, the current process Sec. (B)(Z): " ... early, meaningful, and 

falls short of its stated goals. Governors substantive input in the developmen

call on the President to revisit the [E.O.} ... " regulatory policies that have federali

implications." 

Sec. (C)(l): " ... ensuring that the feder

consultation process is executed 

appropriately and completely." 

Unfunded Mandates (E.O. 12866) Sec. (C)(S)(fJ: "The U.S. Congress and Sec. (C)(l)(b): " ... pursuantto [E.0.]1

federal departments and agencies should OMB Circular No. A19 ... " avoid the imposition of unfunded federal 

mandates on states." 

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Clear, Consistent, and Accountable 

Process 

Encompasses a Broad Range of 

Federal Actions and Occurs in 

Various Contexts 

Sec. (C)(3)(a): "Each executive department 

and agency should be required to have a 

clear and accountable process to provide 

each state ... with early, meaningful and 

substantive input ... " 

Sec. (C)(3)(b)(Hi): " ... Governors and 

designated state officials should have the 

opportunity to engage with federal 

agencies on an ongoing basis to seek 

refinements to proposed federal 

regulatory actions prior to their 

finalization." 

Sec. (C)(3)(a): " ... clear and accountable 

process ... " 

Sec. (C)(3)(a): "This includes the 

development, prioritization, and 

implementation of federal environmental 

statutes, policies, rules, programs, 

reviews, budgets, and strategic planning." 

Sec. (C)(2)(a): "Ensure that new fun

sufficient to pay the direct costs inc

the state or local government ... " 

Sec. (B)(2): " ... early, meaningful, and 

substantive input in the developmen

regulatory policies that have federal

implications." 

Sec. (B)(2): " ... a clear, consistent, an

accountable process ... " 

Sec. (B)(l): "Actions having federali

implications include federal regulati

proposed federal legislation, policies

guidances, directives, programs, rev

budget proposals, budget processes 

strategic planning efforts ... " 

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Predicate Involvement f State Data Sec. (C)(3)(b)(i): "Federal agencies should None 

and Expertise take into account state data and expertise 

in development and analysis of underlying 

science serving as the legal basis for 

federal regulatory action." 

Supplemental to, but not Satisfied Sec. (C)(3)(a): "Each Executive Sec. (B)(Z): "Each federal executive 

by, Notice-and-Comment department and agency should be department/agency should be requi

Rulemaking required to have a clear and accountable have a clear, consistent, and account

process to provide each state - through its process to provide states and localit

Governor as the top elected official of the early, meaningful, and substantive in

state and other representatives of state the development of regulatory polic

and local governments as he or she may have federalism implications." 

designate - with early, meaningful, and 

substantive input in the development of 

regulatory policies that have federalism 

implications." 

Sec. (C)(3)(b ): " .. .federal agencies should 

consult with states in a meaningful way, and on a timely basis." 

WJIO MUST PARTICIPA'I'E IN THI! WGA POLleY JlliSO 21Jl7·01 Fl!l>ERAJ,lSMl'RINCIPLl!

CON$ULTATJON PROC6SS? 

Governors (or Their Designees) Sec. (C)(3)(a): "Each Executive Sec. (A)(7): " ... provide all affected st

From all Potentially-Affected States department and agency should be local governments notice and an opp

required to have a clear and accountable for appropriate participation in the 

process to provide eacb state -through its proceedings." 

Governor as the top elected official of the 

state and other representatives of state 

and local governments as he or she may 

designate ... " 

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Designated Federal Official with Sec. (C)(3)(a): " ... clear and accountable Sec. (C)(1): " ... designate an official 

Adequate Decisionmaking process ... " responsible for ensuring that the fedAuthority consultation process is executed 

appropriately and completely." 

--- ' 

AGENCY ACCOUNT,ABILITY I WGA SHARED FEDERALISM PRJNCIPJ:.E

-- - -.. :---- : 

-

._: -; -- -- -: 

Clear and Accountable Process for Sec. (C)(S)(a)(ii): "Work with Governors to Sec. (C)(1): " ... designate an official 

Agency Determinations of Whether develop specific criteria and consultation responsible for ensuring that the fed

State Consultation is Required processes: 1) for the initiation of federalism consultation process is executed 

assessments; and 2) that guide the appropriately and completely." 

performance of every federal Department 

and agency federalism assessment;" 

Avenues for Administrative Appeal Sec. (C)(3)(a): " ... accountable process ... " Sec. (B)(2): " ... accountable process ..

andfor Judicial Review 

Review of Agency Consultation Sec. (C)(S)(a): "Governors call on the Sec. (C)(l): " ... designate an official 

Procedures, Implementation, and President to revisit [E.O. 13132] ... " responsible for ensuring that the fed

Effectiveness consultation process is executed 

Sec. (C)(S)(a)(iv): "Provide states, through appropriately and completely." 

Governors, an opportunity to comment on 

federalism assessments before any covered federal action is submitted to the Office of 

Management and Budget for approval." 
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I mt\ 

I IIIII 

NCSL N ... T!ONAL CONEffU:NCt 

•f StArt Ltc!SL.Al'Uli.H 

The CourdofState Gc:Nemments 

NATIONAl I lEAGUE 

o~CITIES ili1lii 

Recommended Principles for Regulatory Reform 

Avoid pre-emption of state and local laws. 

Require early analysis and consultation with state and local leaders 

during the rulemaking process. 

Ensure federal agencies recognize the differences in geography and 

resources among state and local governments to make certain none are 

disproportionally affected. 

Communicate proposed rules and regulations clearly and consistently to 

state and local governments. 

Avoid unfunded mandates-federal programs must not impose 

unreimbursed costs on state and local governments. 

Provide state and local governments with sufficient time to implement 

new guidelines or regulations and take into consideration legislative 

calendars. 

Provide maximum flexibility in the administration and maintenance of 

federal programs, to ensure that programs do not impose new burdens 

on state and local budgets. 

Make certain federally mandated administrative requirements are 

uniform across federal agencies. 

Harmonize federal regulations with current actions at the state and local 

levels. 
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Written statement submitted for the record by the 

National Association of Counties 

Statement for the 

U.S. House Oversight and Government Reform Committee 

Hearing on 

Federalism Implications of Treating States as Stakeholders 

February 27, 2018 
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Chairman Gowdy, Ranking Member Cummings, and members of the committee, thank you for 

holding this hearing on the important topic of federalism and the implications for all levels of 

government. We know the Oversight and Government Reform Committee continues to look for 

ways to best strengthen intergovernmental coordination as we serve our shared constituencies. 

We are also grateful to U.S. House Speaker Paul Ryan for convening the Speaker's Task Force on 

Intergovernmental Affairs, and to Rep. Rob Bishop for his leadership of the task force. As a 

member of the Advisory Committee to the Task Force, NACo will continue working to enhance 

the intergovernmental partnership between all levels of government. 

Examining our current system of federalism provides an opportunity for increased 

intergovernmental collaboration on major legislative and regulatory efforts. America's counties 

stand ready and willing as able partners, and often as co-regulators, to enact policies and 

solutions to best serve our local communities. 

While counties originated during the colonial era, today's counties are primarily an extension of 

states. Typically states govern their counties by one of two principles: the Dillon Rule (county 

authority is derived directly from state legislatures) or Home Rule (governing authority is 

granted within their boundaries). However, even under Home Rule, counties can remain 

beholden to the state's legislature for a variety of functions through mandates and other laws, 

including those from the federal government. 

Of course, no two counties are the same. The organization and structure of today's 3,069 

counties are charted under state constitutions or laws and are tailored to fit the needs and 

characteristics of each state and local area. However, nearly all counties are governed by locally 

elected officials, including more than 19,000 county elected executives and commissioners and 

another 18,000 independently elected constitutional officers, including sheriffs, coroners, 

district attorneys, public defenders, treasurers, clerks, auditors and assessors. 
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No matter their structure, all county governments are on the front lines of building healthy and 

safe communities. County leaders stand ready to help build vibrant and diverse economic 

opportunities for all our residents. 

Additionally, while counties provide front line support for the health, safety and prosperity of 

our communities and residents, many counties struggle to fulfill state and federal mandates 

and deliver essential services to constituents, as these mandates are often imposed without 

providing adequate funding. At the same time, states increasingly limit counties' capacity to 

raise revenue to fund our activities. In many cases counties have adopted creative fiscal 

solutions, but these are not always sufficient to cover our needs and citizen demands. 

According to NACo and state associations of counties, the current state of county finances 

shows four critical factors this task force should consider: 

1. States are limiting counties' revenue authority to fund essential services. Property 

taxes and sales taxes are the primary revenue sources for most counties. While counties 

in 45 states collect property taxes, all forty-five (45) states place limitations on county 

property tax authority, and the number of restrictions has expanded significantly since 

1990s (nearly half of current state caps on county property taxing authority have been 

enacted or modified since 1990). Only 29 states authorize counties to collect sales taxes, 

but almost always under various restrictions: twenty-six (26) impose a sales tax limit and 

nineteen (19) require voter approval. 

2. Counties are struggling with more state and federal mandates not fully covered by 

state and federal ald. Many county services are mandated by the states or the federal 

government, from activities in criminal justice and public safety, health and human 

services, transportation and infrastructure, to administration of elections and property 

assessments. NACo interviews reveal nearly three-quarters (73 percent) of states have 

escalated the number and/or cost of mandates for counties over the past decade, 
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decreased state funding to counties over the past decade, or imposed a combination of 

both. 

3. Counties are adjusting to new fiscal challenges on the horizon. Marijuana legalization 

provided a new revenue stream for counties in only five of the 25 states that legalized 

its use prior to the November 2016 elections, but costs associated with potential 

substance abuse problems, public health issues and law enforcement and public safety 

considerations may prevent counties from receiving a net financial benefit. In 14 states, 

plummeting prices for oil and natural gas over the past two years have erased much of 

the annual severance tax revenue received by counties. Declining Secure Rural Schools 

payments from the federal government, due to a lack of reauthorization for the 

program as well as reduced timber receipts from federal lands, have impacted western 

and rural counties' budgets. The "sharing economy," a technological development best 

exemplified by Airbnb and Uber, is challenging county revenue structures. 

4. Counties are pursuing innovative solutions to ensure quality service delivery despite 

fiscal constraints. Counties throughout the country partner with cities, other counties, 

nonprofit organizations and the private sector to deliver high-quality services to their 

residents in a cost-efficient manner. Further, 37 states grant counties the authority to 

create and/or manage special-purpose tax districts to fund specific services, though in 

22 of the 37 states, counties must first obtain voter approval. 

Despite these constraints, counties are often responsible for implementing and helping fund 

policies and programs established by states and the federal government. In many instances, we 

even function as co-regulators with state and federal agencies. Given these important 

intergovernmental roles and responsibilities, counties are more than mere stakeholders, or 

interested members of the community- counties are intergovernmental partners. All too 

often, our opportunity to engage in the regulatory and rulemaking processes is limited to the 

comment period offered to the public. 
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We appreciate the continued efforts of this committee and Congress take state and local 

governments into account when passing major legislation. However, to ensure the best use of 

federal resources and generate the most effective outcomes, our current regulatory and rulemaking system could be improved by strengthening the federal consultation process to include 

early and frequent feedback from states and local governments. While Title II of the Unfunded 

Mandates Reform Act (UMRA) established a framework for federal agencies to consult with 

state and local governments, this process has been applied unevenly and remains ineffective. 

The framework established under UMRA leaves the responsibility to each agency to develop its 

own consultation process. Unfortunately, this flexibility has resulted in a system that Is 

inconsistently developed and applied across all federal agencies. 

Meaningful consultation with counties and local governments early in the rulemaklng process 

will not only reduce the risk of unfunded mandates but will also result in more pragmatic and 

successful strategies for implementing federal policies. For intergovernmental consultation to 

be truly meaningful, Congress should direct federal agencies to engage state and local 

governments as partners, actively participating in the planning, development and 

implementation of rules. Counties are often the level of government closest to the people and 

directly accountable to them. 

We hope this committee's focus on federalism will help federal lawmakers better understand 

the role counties play in implementing federal laws and regulations and increase awareness of 

the variability in counties across the country. A sustained, strong partnership with the federal 

and state governments is essential to counties' ability to effectively and successfully support 

thriving communities across the country, which often vary widely in size, fiscal capacity and 

economic strength. 

Ultimately, there are few federal and state programs that do not interact with counties In some 

manner, and we hope this federalism discussion encourages members of Congress to 

proactively consult state and local partners as you develop policy going forward. We are also 
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attaching a set of regulatory reform principles agreed to by other organizations representing 

state and local governments, and a letter NACo sent to the committee last year regarding 

unfunded mandates and the importance of the federal consultation process. Counties stand 

ready and willing to work side-by-side with our federal and state partners to ensure the health, 

well-being and safety of our citizens. 
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january 20, 2017 

Chairman jason Chaffetz 

Committee on Oversight and Government Reform 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Chaffetz, 

On behalf of the National Association of Counties (NACo) and the 3,069 counties we represent, we 

thank you for your efforts to study and minimize the effects of unfunded mandates on state, local 

and tribal governments and private entities. As an integral part of the federal-state-local 

intergovernmental process, counties are directly impacted by federal unfunded mandates and look 

forward to working with you on this effort. 

Counties are highly diverse across our nation and vary significantly in size, population, natural 

resources, political systems and cultural, economic and structural circumstances. Yet, as an arm of 

the state, counties are mandated through federal and state law to fulfill many responsibilities at the 

local level. Additionally, county governments directly affect the economic vitality and quality of life 

in our communities. This role encompasses a range of services, from maintaining 45 percent of 

America's roads to supporting nearly 1,000 hospitals to keeping communities safe through law 

enforcement These services require massive resources including more than $106 billion annually 

in building infrastructure and maintaining and operating public works, more than $53 billion 

annually in construction of public facilities and nearly $70 billion annually for community health 

and hospitals. 

County governments exist to deliver public services at the local level, with accountability to our 

constituents and communities as well as to state and federal authorities. In fulfilling this mission, 

counties are not only subject to state and federal regulations, but also help to implement them at 

the local level. Therefore, as both regulated entities and regulators, it is critical that counties be fully 

engaged as intergovernmental partners through the entire federal regulatory process-from initial 

development through implementation. 

While responsibilities are shared among all levels of government, the primary oversight for these 

programs occurs at the local level. In recent years, under both federal and state rules, county 

responsibilities have expanded, often without additional funding to meet these new requirements, 

creating unfunded mandates for our counties. This leaves counties in a precarious position. On one 

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hand, we are obligated under law to implement these new requirements; on the other hand, 

counties are limited by the states in our ability to adequately raise revenue. This dynamic often 

forces counties to prioritize spending set in a manner that is often at odds with community needs. 

Counties are further challenged because states are limiting counties' revenue authority to fund 

these essential services. The main general revenue source for most counties is property and sales 

taxes. However, while counties in 45 states collect property taxes, under state law, we only can keep 

about a quarter (23.7 percent) of the taxes collected. AdditionallY. 42 states l!mjtthe authority 

of counties to raise or cham:e property taxes. This limits a county's ability to effectively raise 

additional revenue to pay for unfunded mandates. Attached is a 2016 NACo report, "Doing More 

with Less: State Revenue Limitations and Mandates on County Finances," which further explains 

county fiscal restraints. 

In addition to implementing state and federal programs, local governments are also expected by our 

constituency to provide local services, like public safety and after school programs. When the cost 

of unfunded mandates outweighs available funds, counties often have to make difflcult 

budget choices on these services-for example, do we cut hours at local libraries, delay road 

and bridge maintenance projects or even cut back on emergency response services? 

Ultimately, when counties are faced with these difficult choices, it is our residents and local 

communities that are negatively impacted. 

To aid your efforts of studying unfunded mandates, we have listed below several examples of 

existing and proposed federal regulations that create unfunded mandates on our counties. 

Additionally, attached to this letter is a more comprehensive list of unfunded mandates that impact 

local governments. 

Uncompensated Health Care 

Nationally, counties invest $83 billion annually in community health for more than 300 million 

residents nationwide. Through 961 county-supported hospitals, 883 county-owned and supported 

long-term care facilities and 1, 943 county public health departments, counties deliver health 

services to millions of Americans, including many Medicaid beneficiaries. Additionally, through 750 

county behavioral health authorities and community providers, county governments plan and 

operate community-based services for persons with mental illnesses and substance abuse 

conditions which represent 75 percent of the U.S. population. 

The majority of states require counties to provide some level of health care for low-income, 

uninsured, or underinsured residents-but this care is often not reimbursed. The Urban Institute 

estimates that states and localities spent $20 billion for uncompensated care in 2013. In Harris 

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County, Texas, for example, resident pays more than $500 million per year in property taxes to 

cover the cost of uncompensated care in the county's public hospitals. 

Providing Costly Health Services for Individuals in Jail 

At a cost of $176 billion annually, criminal justice and health systems are a huge budget item for 

counties. As owners and operators of 87 percent of the nation's jails, we are required to provide 

adequate health care for individuals entering the criminal justice system, even for those individuals 

who are awaiting trial and presumed innocent. Under federal law, once a person is booked into jail, 

even though still presumed innocent until adjudicated, they are unable to access their federal 

Medicaid and veterans' health benefits. The jail assumes all medical and/or mental health care 

service costs for that individual until they leave the jail. This is a significant expense for counties 

since it is estimated that 68 percent of inmates have a history of substance abuse, 64 percent of 

inmates struggle with mental illness and 40 percent have a chronic health condition. Ultimately, 

these extra expenses are borne by county tax-payers. 

For example, in 2014, in State of Washington, King County Public Health paid $29 million in health 

care services for incarcerated people in the custody of the King County jail, which accounted for 20 

percent of total jail costs for the county. According to the 2011 Indiana State Health care Spending 

Report, the average national healthcare cost for inmates is $3,025 per month. However, the cost 

could be significantly higher depending on the health of the individual in jail. 

"Waters of the U.S.": Costly Maintenance and Permitting Requirements 

While NACo has numerous examples of the impact of environmental mandates on counties, the 

most significant examples come from the current Clean Water Act's (CWA) definition on "waters of 

the U.S." (WOTUS) or Clean Air Act (CAA) regulations. 

Under CWA, many of the basic functions of county government, including ownership and 

maintenance of roads and roadside ditches, bridges, stormwater systems and flood control 

channels, are regulated under federal and state water policies. Ditches, in particular, are pervasive 

across the nation and, until recently, were never considered to be jurisdictional under WOTUS. 

However, in the last decade, certain Army Corps of Engineers (Corps) districts have inconsistently 

found public safety ditches jurisdictional. Once a ditch falls under federal jurisdiction, the CWA 

Section 404 permit is triggered, often leading to extremely cumbersome, time-consuming and 

expensive processes. 

One Midwest county recently studied five road projects that were delayed over a period of two 

years as the county awaited federal permits. Conservatively, the cost to the county for the delays 

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was $500,000. Some counties have missed building seasons waiting for federal CWA Section 404 

permits. 

Further, while the CW A Section 404 permit contains provisions to exempt ditch maintenance 

activities, these provisions are unevenly applied. For example, a county in Florida applied for 18 

specific maintenance exemptions on the county's network of drainage ditches and canals. Due to the 

complicated federal permitting process, the county had to hire a consultant to compile the data and 

surveying materials that were required for the exemptions. Within three months, the county had 

spent $600,000 and was still waiting for 16 of the exemptions to be determined. Due to the timeconsuming maintenance process, the county was unable to maintain upkeep of the ditches, 

resulting in extreme flooding in residential areas. 

Tighter Air Quality Standards: EPA's Clean Air Act Rules 

As both regulated and regulating entities, counties are uniquely positioned to play a key role in the 

development and implementation of CAA regulations. Counties fulfill both of these roles and are 

responsible for ensuring that CAA goals are achieved. This is demonstrated under the CAA National 

Ambient Air Quality Standards (NAAQS) program. NAAQS establishes national air pollution limits 

for ozone, particulate matter, carbon monoxide, lead, sulfur dioxide and nitrogen dioxide. 

New NAAQS rules have a significant impact for counties who are required to implement and enforce 

new air pollution rules and regulations at the local level, such as implementing rules governing 

open-air burning or limiting vehicle emissions. Implementing these new rules and regulations can 

be costly for local governments and may have an unintended impact on local economic 

development efforts. Many of our counties have watched businesses and industry find alternative 

locations for their plants outside of NAAQS nonattainment areas to avoid new requirements. This 

impacts the ability of counties to attract and retain businesses within their borders. 

For example, in the last several years, Berks County, Pennsylvania, was placed on a maintenance 

plan for the 2008 NAAQS for lead, which led to tighter air quality requirements in the county. This, 

in tum, led to a major coal-fired power plant closing. As a result, 75 employees lost their jobs and 

the county lost $44,403 in annual tax revenue. 

DOL's Overtime Pay Rule: Requiring County Employers to Make Difficult Decisions 

In May of 2016, the U.S. Department of Labor (DOL) released a final rule that would increase the 

salary threshold for "white collar" employees who are eligible for overtime pay from $23,660 to 

$47,476. Since counties employ over 3.6 million people, the rule could have the unintended effect of 

placing additional strain on already limited county budgets throughout the country, hindering our 

ability to provide crucial services to our local communities. 

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For example, in Sebastian County, Arkansas, which has a population of 127,342, urider DOL's new 

rules, 35 of the county's current 382 full-time employees are eligible for overtime pay. This will 

result in an additional unexpected financial burden of almost $228,000 in the first year alone, which 

may reduce incentive compensation opportunities and require county employers to make difficult 

employee decisions. 

After the DOL rule was finalized, Mineral County, a small rural county of 4,478 in western Nevada, 

determined that at least ten percent of their workforce would be impacted by the new rule. This 

would be significant for a county of this size and it led the county to make several difficult decisions 

on cutting non-essential but popular community programs. For example, the county assessed 

whether to close the county's sole library, which was a key source for Internet access to the 

residents, or severely limit access to its library resources. These examples highlight the challenges 

our counties faced with the new DOL overtime rule. 

Preemption of Local Tax Authorities: Internet Tax Freedom Act 

Most counties are limited in our abilities to collect additional revenue to pay for mandated and unmandated public services and find themselves depending heavily on property and sales taxes. This 

dependence was put to the test in 1998, after Congress passed the Internet Tax Freedom Act (ITFA) 

which limited state and county ability to collect Internet sales tax and has resulted in a loss of 

hundreds of millions of dollars. Since counties own and maintain the roads, bridges and other 

public infrastructure and public safety used to deliver and safeguard goods purchased online, it is 

reasonable that a portion of the Internet sales should be dedicated to supporting this infrastructure. 

The scale of lost revenue that local governments are facing is evident in the fact that the seven 

states (Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin) who are 

grandfathered under ITFA-and thus allowed to collect Internet tax revenue-are collecting over 

$500 million a year in taxes. Counties In non-grandfathered states doubtlessly feel the Impact of this 

loss of revenue on their already strained budgets. 

For example, in Georgia alone, local governments lost $737 million in revenue in 2013. And in the 

State of Washington, local governments lost $663.8 million in uncollected sales tax revenue during 

the same year. 

These examples demonstrate the heavy burden that unfunded mandates continue to place 

on counties. Reforms to the Unfunded Mandates Reform Act of 1995 (UMRA) are needed to 

remedy this situation and enable counties to provide needed services to local communities. 

NACo's suggestions for such reforms are respectfully listed below. 

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Strengthen the Federal-State-Local Rulemaking Partnership 

Over two decades ago, Congress passed UMRA. While UMRA resulted in progress on unfunded 

mandates, further improvements are needed to strengthen the federal-state-local government 

partnership. 

Over the last few decades, UMRA's Title I has helped to identify and reduce the number of mandates 

in the legislative process. Specifically, it established a procedural framework to shape how Congress 

considers proposed legislation that could place unfunded mandates on state and local governments. 

According to the Congressional Research Service (CRS), since UMRA's enactment, unfunded 

mandates in proposed legislation were found in only one percent of over ten thousand cost 

estimates prepared by the Congressional Budget Office (CBO). 

However, UMRA's Title II consultation process with federal agencies has not been as effective as 

Title I. Under UMRA's Title II, each federal agency is required to consult with state and local 

governments to assess the effects of federal regulatory actions containing intergovernmental 

mandates. However, UMRA leaves the responsibility up to each agency to develop its own 

consultation process and provides no uniform standards for agencies to follow. As a result, the 

requirement has been inconsistent and each agency's internal process is different. 

Many of the issues could be prevented if counties were regularly consulted in the rulemaking 

process. Meaningful consultation early in the process not only reduces the risk of unfunded 

mandates, but also results in more pragmatic and successful strategies for implementing federal 

policies. If the federal government works with counties, we can strengthen legislative and 

regulatory processes and craft rules that relieve the pressure of unfunded mandates on local 

governments. 

For example, while EPA has an internal guidance document that governs the agency's interactions 

with state and local governments on pending rules, it is inconsistently applied at the agency. 

Under "EPA's Action Development Process: Guidance on Executive Order 13132: Federalism, • it states 

that states and local governments must be consulted on rules if they impose substantial compliance 

costs of $25 million or more, preempt state or local laws and/or have substantial direct effects on 

state and local governments. For rules that trigger this requirement, EPA is required to consult in a 

"meaningful and timely" manner with a specific set of state and local elected officials or their 

organizations. In theory, EPA's guidance is a good first step in strengthening the consultation 

process, however, if the policy is haphazardly applied, the agency loses valuable insight into how 

proposed rules and regulations impact state and local governments. 

The bottom line is that Congress should require federal agencies to engage with state and 

local governments often, and as early as possible, when considering proposed and pending 

rules that have a direct Impact on state and local governments. Meaningful consultation with 

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counties and local governments early in the rule making process would not only reduce the risk of 

unfunded mandates, but would result in more pragmatic and successful strategies for implementing 

federal policies. 

We thank you for your time and stand ready to work with you to strengthen the regulatory process 

between federal, state and local governments that we hope will result in successful strategies for 

implementing federal policies. 

Sincerely, 

Matthew D. Chase 

Executive Director 

National Association of Counties 

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Testimony of Debbie Cox Sultan, Executive Director of the NewDEAL 

House Oversight and Government Reform Committee . 

Hearing on Federalism Implications for Treating States as Stakeholders 

February 27, 2018 

Chairman Gowdy, Ranking Member Connolly, and members of the Committee on Oversight and 

Government Reform, thank you for the opportunity to provide these comments and for 

convening a hearing on this critical topic. The effectiveness of government at all levels- federal, 

state, and local- depends significantly on the way issues related to federalism are handled and 

whether leaders at each level fulfill the roles for which they are best suited. 

As a network of 150 innovative state and local leaders pursuing policies on a wide range of 

issues in 46 states, the NewDEAL has gained an important perspective on the impact that the 

approach to federalism in Washington is having on governments throughout the country. The 

NewDEAL brings together these leaders to develop and share ideas at numerous in-person and 

virtual forums during which they have provided valuable insights on the ways in which the 

federal government has supported, and hindered, efforts to improve the quality of life of their 

constituents. 

As NewDEAL Honorary Co-Chair and former Delaware Governor Jack Markell has noted, the 

ability of states, as well as their local government counterparts, to serve as laboratories of 

democracy remains as clear as ever. The best approach for the federal government to realize 

this potential is to first set goals for states to meet and then provide flexibility for states to 

reach those goals, whether it is improving student performance in public schools, reducing dirty 

air emissions, cutting health care costs, or many other policy objectives. Second, even while 

granting flexibility in how funding is spent, the federal government must ensure accountability 

for results. Third, Washington must avoid unnecessary regulations that restrict state's 

opportunities to experiment so long as states are not disadvantaging portions of their 

populations. 

The following testimony will provide more detail about what those three principles mean in 

practice. 

One area in which the federal government has taken positive strides and should continue to 

incentivize state innovation is workforce development. The Workforce Innovation and 

Opportunity Act (WIOA), signed into law in 2014, reduces federal red tape to allow states to do 

what makes sense on the ground by better tailoring workforce efforts to local employers, while 

also giving states the ability to streamline youth through adult workforce efforts, including 

through better integration with K-12 systems. 

NewDEAL leaders are on the front lines of preparing workers for new and growing industries 

and must adapt to· the employment opportunities in the areas they represent. They recognize 

that no effort Is more important for attracting business activity, giving their people access to 

good jobs, and growing the economy in their communities. 
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In Cook County, Illinois, Commissioner Bridget Gainer has demonstrated an effective way to tap 

into federal funding by starting the first earned credit for employers who create and run a 

Department of labor registered apprenticeship program. This initiative includes opportunities 

for employers to build apprenticeships in non-traditional areas, like services and technology 

fields, where there is projected growth in the coming decades. 

Louisville Mayor Greg Fischer's Code Louisville program involves a series of 12-week software 

development tracks for adults who want to pursue a career in the software development 

industry at no cost to the student. More than 100 companies have already hired Code Louisville 

graduates. 

Moreover, Arkansas Representative Warwick Sabin founded the Arkansas Regional Innovation 

Hub, a model for communities to provide the space, equipment, and employer to 

worker/student connections that are critical to a well-trained workforce. Partnerships with high 

schools and community colleges give students access to programs in high-tech areas like 

robotics and 3D-printing, while employers can create programs to train current employees or 

potential recruits in welding, coding, and more. 

Workforce preparation is essential to the prosperity of the nation, yet the responsibility to carry 

it out falls to leaders who are closest to the people who need help. Congress and federal 

agencies should continue to look to the leadership of these officials and others like them, and 

to encourage communities across the country to replicate their successes . 

••• 

NewDEAl applauds the legislation recently introduced by Representative Connolly- H.R.534, 

Restoring the Partnership Act- as embodying the right approach to the federal- state 

relationship. Americans prosper when federal, state, and local governments work together to 

advance their interests and refuse to let bureaucracy, regulatory roadblocks, and power 

struggles dominate the dynamic. The federal government must recognize that while flexibility 

for state and local governments is necessary, new unfunded mandates or cuts to federal 

funding, including those that come disguised as streamlined programs with more flexibility, like 

"block grants," threaten the ability of state and local officials to deliver on essential support for 

their constituents. 

President Trump's infrastructure proposal embodies the wrong approach. Although the White 

House claims to have put forward a $1.5 billion infrastructure plan, the President has provided 

for only about one-sixth of that in federal funding, while placing the rest of the financial burden 

on local and state governments. He appears to want the federal government to take the credit, 

while state and local governments foot the bill. That is heavy-handed federalism at its worst. In 

addition, Congress should heed the comments of NewDEAl Leader Columbia, SC Mayor Steve 

Benjamin, who has expressed concern that most of the funding in the President's plan comes 
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from budget cuts to transit, community development block grants, and other programs upon 

which cities like Columbia rely. 

Initiative like the West Coast Infrastructure Exchange, which creates a regional public-private 

partnership to streamline infrastructure investments, show that repairing our nation's 

infrastructure does not need to be the responsibility of a single government entity, or even the 

public sector alone. However, the federal government needs to fulfill its responsibilities. State 

and local governments often need federal flexibility and policy structures, but also the 

resources that only the federal government can offer, to maximize progress. 

*** 

While state and local leaders value the recognition of their key priorities and flexibility in using 

federal resources to address them, NewDEAL also appreciates the importance of accountability 

for the use of those resources. The latest reauthorization of the Elementary and Secondary 

Education Act, known as the Every Student Succeeds Act and signed into law in 2015, took 

positive steps in restoring authority in education policy to states while also retaining some 

notable accountability provisions of the previous version of the major federal education law, No 

Child left Behind. ESSA kept the requirement to not only test nearly all students to measure 

school, district, and state progress, but also to break out results by sub-groups, such as minority 

populations and students with disabilities, to ensure schools are supporting all of their 

students. 

NewDEAlleader Massachusetts Senator Eric lesser is pursuing expansion of the successful 

Education Empowerment Zones initiative, which frees struggling schools from many district 

directives, giving them more control over hiring and curriculum. Initiatives like this are more 

possible because of the federal government's requirements to intervene when groups of 

students are persistently struggling, as well as the flexibility that the federal law gives states to 

allow innovation in school turnaround at the local level. This balance is the key: federal 

requirements to hold states accountable for advancing the interests of all of their people 

equitably, while maintaining flexibility for identifying new solutions. 

*** 

Many positive models exist for the federal government working cooperatively with state and 

local leaders to solve major policy challenges, including WIOA and ESSA. 

NewDEAl urges Congress and the Trump Administration to learn from those models and avoid 

unnecessarily limiting state and local leaders' opportunities to find innovative solutions to 

America's challenges. One example of these solutions, pursued by State Treasurers Tobias Read 

(Oregon) and Mike Frerichs (Illinois), addresses the extraordinary lack of retirement savings 

among Americans by giving employers the choice to either provide qualified retirement savings 

options, or facilitate employees' enrollment into a state program. While employees can 
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voluntarily opt out, automatic enrollment significantly increases the likelihood of a worker's 

long-term participation. The savings accounts are individually owned by the respective workers 

and are portable from job to job. 

As Treasurers Read and Frerichs have pointed out, "Congress recently chose to create more red 

tape for states by rolling back U.S. Department of Labor rules that had supported these state 

efforts, apparently acting at the behest of financial industry firms wary of competing with states 

that could establish savings options that are 'relatively low-cost for workers."' 

When states and municipalities develop new ways to tackle major problems that impact large 

proportions of Americans, the federal government's first reaction should be to follow those 

efforts to see if they should inform national policy, rather than trying to restrict them before 

their results are known. 

Thank you again for the chance to participate in this important discussion and to highlight a 

perspective gleaned from working with forward-looking, innovative state and local leaders who 

regularly navigate the challenges and opportunities created by how the federal government 

interacts with states. I look forward to any opportunities to follow up on this testimony.