[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1214 Reported in Senate (RS)]







106th CONGRESS
  1st Session
                                S. 1214

                          [Report No. 106-159]

   To ensure the liberties of the people by promoting federalism, to 
protect the reserved powers of the States, to impose accountability for 
  Federal preemption of State and local laws, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 10, 1999

  Mr. Thompson (for himself, Mr. Levin, Mr. Voinovich, Mr. Robb, Mr. 
 Cochran, Mrs. Lincoln, Mr. Enzi, Mr. Breaux, Mr. Roth, Mr. Bayh, Mr. 
  Domenici, Ms. Collins, Mr. Thomas, and Mr. Abraham) introduced the 
 following bill; which was read twice and referred jointly pursuant to 
   the order of August 4, 1977, to the Committees on the Budget and 
Governmental Affairs, with instructions that if one committee reports, 
    the other committee have thirty days to report or be discharged

                           September 16, 1999

               Reported by Mr. Thompson, with amendments

                           September 16, 1999

  Referred to the Committee on the Budget for a period not to exceed 
                          thirty calendar days
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
   To ensure the liberties of the people by promoting federalism, to 
protect the reserved powers of the States, to impose accountability for 
  Federal preemption of State and local laws, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federalism Accountability Act of 
1999''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the Constitution created a strong Federal system, 
        reserving to the States all powers not delegated to the Federal 
        Government;
            (2) preemptive statutes and regulations have at times been 
        an appropriate exercise of Federal powers, and at other times 
        have been an inappropriate infringement on State and local 
        government authority;
            (3) on numerous occasions, Congress has enacted statutes 
        and the agencies have promulgated rules that explicitly preempt 
        State and local government authority and describe the scope of 
        the preemption;
            (4) in addition to statutes and rules that explicitly 
        preempt State and local government authority, many other 
        statutes and rules that lack an explicit statement by Congress 
        or the agencies of their intent to preempt and a clear 
        description of the scope of the preemption have been construed 
        to preempt State and local government authority;
            (5) in the past, the lack of clear congressional intent 
        regarding preemption has resulted in too much discretion for 
        Federal agencies and uncertainty for State and local 
        governments, leaving the presence or scope of preemption to be 
        litigated and determined by the judiciary and sometimes 
        producing results contrary to or beyond the intent of Congress; 
        and
            (6) State and local governments are full partners in all 
        Federal programs administered by those governments.

SEC. 3. PURPOSES.

    The purposes of this Act are to--
            (1) promote and preserve the integrity and effectiveness of 
        our Federal system of government;
            (2) set forth principles governing the interpretation of 
        congressional and agency intent regarding preemption of State 
        and local government authority by Federal laws and rules;
            (3) establish an information collection system designed to 
        monitor the incidence of Federal statutory, regulatory, and 
        judicial preemption; and
            (4) recognize the partnership between the Federal 
        Government and State and local governments in the 
        implementation of certain Federal programs.

SEC. 4. DEFINITIONS.

    In this Act the definitions under section 551 of title 5, United 
States Code, shall apply and the term--
            (1) ``local government'' means a county, city, town, 
        borough, township, village, school district, special district, 
        or other political subdivision of a State;
            (2) ``public officials'' means elected State and local 
        government officials and their representative organizations;
            (3) ``State''--
                    (A) means a State of the United States and an 
                agency or instrumentality of a State;
                    (B) includes the District of Columbia and any 
                territory of the United States, and an agency or 
                instrumentality of the District of Columbia or such 
                territory;
                    (C) includes any tribal government and an agency or 
                instrumentality of such government; and
                    (D) does not include a local government of a State; 
                and
            (4) ``tribal government'' means an Indian tribe as that 
        term is defined under section 4(e) of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b(e)).

SEC. 5. COMMITTEE OR CONFERENCE REPORTS.

    (a) In General.--The report accompanying any bill or joint 
resolution of a public character reported from a committee of the 
Senate or House of Representatives or from a conference between the 
Senate and the House of Representatives shall contain an explicit 
statement on the extent to which the bill or joint resolution preempts 
State or local government law, ordinance, or regulation and, if so, an 
explanation of the reasons for such preemption. In the absence of a 
committee or conference report, the committee or conference shall 
report to the Senate and the House of Representatives a statement 
containing the information described in this section before 
consideration of the bill, joint resolution, or conference report.
    (b) Content.--The statement under subsection (a) shall include an 
analysis of--
            (1) the extent to which the bill or joint resolution 
        legislates in an area of traditional State authority; and
            (2) the extent to which State or local government authority 
        will be maintained if the bill or joint resolution is enacted 
        by Congress.

SEC. 6. RULE OF CONSTRUCTION RELATING TO PREEMPTION.

    (a) Statutes.--No statute enacted after the effective date of this 
Act shall be construed to preempt, in whole or in part, any State or 
local government law, ordinance, or regulation, unless--
            (1) the statute explicitly states that such preemption is 
        intended; or
            (2) there is a direct conflict between such statute and a 
        State or local law, ordinance, or regulation so that the two 
        cannot be reconciled or consistently stand together.
    (b) Rules.--No rule promulgated after the effective date of this 
Act shall be construed to preempt, in whole or in part, any State or 
local government law, ordinance, or regulation, unless--
            (1)(A) such preemption is authorized by the statute under 
        which the rule is promulgated; and
            (B) the rule, in compliance with section 7, explicitly 
        states that such preemption is intended; or
            (2) there is a direct conflict between such rule and a 
        State or local law, ordinance, or regulation so that the two 
        cannot be reconciled or consistently stand together.
<DELETED>    (c) Favorable Construction.--Any ambiguities in this Act, 
or in any other law of the United States, shall be construed in favor 
of preserving the authority of the States and the people.</DELETED>

SEC. 7. AGENCY FEDERALISM ASSESSMENTS.

    (a) In General.--The head of each agency shall--
            (1) be responsible for implementing this Act; and
            (2) designate an officer (to be known as the federalism 
        officer) to--
                    (A) manage the implementation of this Act; and
                    (B) serve as a liaison to State and local officials 
                and their designated representatives.
    (b) Notice and Consultation With Potentially Affected State and 
Local Government.--Early in the process of developing a rule and before 
the publication of a notice of proposed rulemaking, the agency shall 
notify, consult with, and provide an opportunity for meaningful 
participation by public officials of governments that may potentially 
be affected by the rule for the purpose of identifying any preemption 
of State or local government authority or other significant federalism 
impacts that may result from issuance of the rule. If no notice of 
proposed rulemaking is published, consultation shall occur sufficiently 
in advance of publication of an interim final rule or final rule to 
provide an opportunity for meaningful participation.
    (c) Federalism Assessments.--
            (1) In general.--In addition to whatever other actions the 
        federalism officer may take to manage the implementation of 
        this Act, such officer shall identify each proposed, interim 
        final, and final rule having a federalism impact, including 
        each rule with a federalism impact identified under subsection 
        (b), that warrants the preparation of a federalism assessment.
            (2) Preparation.--With respect to each such rule identified 
        by the federalism officer, a federalism assessment, as 
        described in subsection (d), shall be prepared and published in 
        the Federal Register at the time the proposed, interim final, 
        and final rule is published.
            (3) Consideration of assessment.--The agency head shall 
        consider any such assessment in all decisions involved in 
        promulgating, implementing, and interpreting the rule.
            (4) Submission to the office of management and budget.--
        Each federalism assessment shall be included in any submission 
        made to the Office of Management and Budget by an agency for 
        review of a rule.
    (d) Contents.--Each federalism assessment shall include--
            (1) a statement on the extent to which the rule preempts 
        State or local government law, ordinance, or regulation and, if 
        so, an explanation of the reasons for such preemption;
            (2) an analysis of--
                    (A) the extent to which the rule regulates in an 
                area of traditional State authority; and
                    (B) the extent to which State or local authority 
                will be maintained if the rule takes effect;
            (3) a description of the significant impacts of the rule on 
        State and local governments;
            (4) any measures taken by the agency, including the 
        consideration of regulatory alternatives, to minimize the 
        impact on State and local governments; and
            (5) the extent of the agency's prior consultation with 
        public officials, the nature of their concerns, and the extent 
        to which those concerns have been met.
    (e) Publication.--For any applicable rule, the agency shall include 
a summary of the federalism assessment prepared under this section in a 
separately identified part of the statement of basis and purpose for 
the rule as it is to be published in the Federal Register. The summary 
shall include a list of the public officials consulted and briefly 
describe the views of such officials and the agency's response to such 
views.
    (f) Judicial Review.--
            (1) In general.--Only a State or local government, or its 
        representative organization, that is adversely affected or 
        aggrieved by final agency action under this section may file an 
        action seeking judicial review of compliance with this section.
            (2) Limitation of review.--Compliance by an agency with 
        this section shall be subject to judicial review only--
                    (A) in connection with review of final agency 
                action;
                    (B) in accordance with this subsection; and
                    (C) in accordance with the limitations on timing, 
                venue, and scope of review imposed by the statute 
                authorizing judicial review.
            (3) Agency determinations.--Any determination of an agency 
        whether a federalism assessment shall be prepared under this 
        section shall be set aside by a reviewing court only upon a 
        showing that the determination is arbitrary or capricious based 
        on information available at the time the agency made the 
        determination.
            (4) OMB determinations.--Any determination by the Director 
        of the Office of Management and Budget that a federalism 
        assessment shall be prepared under this section, or any failure 
        to make such determination, shall not be subject to judicial 
        review.
            (5) Federalism assessment.--The federalism assessment 
        required under this Act shall not be subject to judicial review 
        separate from review of the final rule to which it applies. The 
        federalism assessment shall be part of the rulemaking record 
        and shall be considered by a court to the extent relevant, only 
        in determining under the statute granting the rulemaking 
        authority whether the final rule is arbitrary or capricious, an 
        abuse of discretion, or is unsupported by substantial evidence 
        where that standard is otherwise provided by law.
            (6) Court action.--If any agency fails to perform the 
        federalism assessment or undertake any consultation, a court 
        may, giving due regard to prejudicial error, remand or 
        invalidate the rule. The adequacy of compliance with the 
        specific requirements of this section shall not otherwise be 
        grounds for remanding or invalidating a rule under this 
        section. If the court allows the rule to take effect, the court 
        shall  order the agency to promptly perform the federalism 
assessment.
    (g) Emergency Exemption.--
            (1) In general.--A rule may be adopted without prior 
        compliance with this section if--
                    (A) the agency for good cause finds that conducting 
                the federalism assessment under this section before the 
                rule becomes effective is impracticable or contrary to 
                an important public interest; and
                    (B) the agency publishes the rule in the Federal 
                Register with such finding and a succinct explanation 
                of the reasons for the finding.
            (2) Compliance.--If a rule is adopted under paragraph (1), 
        the agency shall comply with this section as promptly as 
        possible unless the Director of the Office of Management and 
        Budget determines that compliance would be clearly 
        unreasonable.

SEC. 8. PERFORMANCE MEASURES.

    Section 1115 of title 31, United States Code, is amended by adding 
at the end the following:
<DELETED>    ``(g) The head of an agency may not include in any 
performance plan under this section any agency activity that is a 
State-administered Federal grant program, unless the performance 
measures for the activity are determined in cooperation with public 
officials as defined under section 4 of the Federalism Accountability 
Act of 1999.''.</DELETED>
    ``(g) When developing a performance plan under this section that 
includes a State-administered Federal grant program, the agency shall 
consult with public officials as defined under section 4 of the 
Federalism Accountability Act of 1999.''.

SEC. 9. CONGRESSIONAL BUDGET OFFICE PREEMPTION REPORT.

    (a) Office of Management and Budget Information.--Not later than 
the expiration of the calendar year beginning after the effective date 
of this Act, and every year thereafter, the Director of the Office of 
Management and Budget shall submit to the Director of the Congressional 
Budget Office information describing interim final rules and final 
rules issued during the preceding calendar year that preempt State or 
local government authority.
    (b) Congressional Research Service Information.--Not later than the 
expiration of the calendar year beginning after the effective date of 
this Act, and every year thereafter, the Director of the Congressional 
Research Service shall submit to the Director of the Congressional 
Budget Office information describing court decisions issued during the 
preceding calendar year that preempt State or local government 
authority.
    (c) Congressional Budget Office Report.--
            (1) In general.--After each session of Congress, the 
        Congressional Budget Office shall prepare a report on the 
        extent of Federal preemption of State or local government 
        authority enacted into law or adopted through judicial or 
        agency interpretation of Federal statutes during the previous 
        session of Congress.
            (2) Content.--The report under paragraph (1) shall 
        contain--
                    (A) a list of Federal statutes preempting, in whole 
                or in part, State or local government authority;
                    (B) a summary of legislation reported from 
                committee preempting, in whole or in part, State or 
                local government authority;
                    (C) a summary of rules of agencies preempting, in 
                whole or in part, State and local government authority; 
                and
                    (D) a summary of Federal court decisions on 
                preemption.
            (3) Availability.--The report under this section shall be 
        made available to--
                    (A) each committee of Congress;
                    (B) each Governor of a State;
                    (C) the presiding officer of each chamber of the 
                legislature of each State; and
                    (D) other public officials and the public on the 
                Internet.

SEC. 10. FLEXIBILITY AND FEDERAL INTERGOVERNMENTAL MANDATES.

    (a) Definition.--Section 421(5)(B) of the Congressional Budget Act 
of 1974 (2 U.S.C. 658(5)(B)) is amended--
            (1) by striking ``(i)(I) would'' and inserting ``(i) 
        would'';
            (2) by striking ``(II) would'' and inserting ``(ii)(I) 
        would''; and
            (3) by striking ``(ii) the'' and inserting ``(II) the''.
    (b) Committee Reports.--Section 423(d) of the Congressional Budget 
Act of 1974 (2 U.S.C. 658b(d)) is amended--
            (1) in paragraph (1)(C) by striking ``and'' after the 
        semicolon;
            (2) in paragraph (2) by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(3) if the bill or joint resolution would make the 
        reduction specified in section 421(5)(B)(ii)(I), a statement of 
        how the committee specifically intends the States to implement 
        the reduction and to what extent the legislation provides 
        additional flexibility, if any, to offset the reduction.''.
    (c) Congressional Budget Office Estimates.--Section 424(a) of the 
Congressional Budget Act of 1974 (2 U.S.C. 658c(a)) is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following:
            ``(3) Additional flexibility information.--The Director 
        shall include in the statement submitted under this subsection, 
        in the case of legislation that makes changes as described in 
        section 421(5)(B)(ii)(I)--
                    ``(A) if no additional flexibility is provided in 
                the legislation, a description of whether and how the 
                States can offset the reduction under existing law; or
                    ``(B) if additional flexibility is provided in the 
                legislation, whether the resulting savings would offset 
                the reductions in that program assuming the States 
                fully implement that additional flexibility.''.

SEC. 11. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect 90 
days after the date of enactment of this Act.
                                 <all>