[Federal Register Volume 64, Number 153 (Tuesday, August 10, 1999)]
[Presidential Documents]
[Pages 43255-43259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20729]


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  Federal Register / Vol. 64, No. 153 / Tuesday, August 10, 1999 / 
Presidential Documents  

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 Title 3--
 The President

[[Page 43255]]

                Executive Order 13132 of August 4, 1999

                
Federalism

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, and in order to guarantee the division of 
                governmental responsibilities between the national 
                government and the States that was intended by the 
                Framers of the Constitution, to ensure that the 
                principles of federalism established by the Framers 
                guide the executive departments and agencies in the 
                formulation and implementation of policies, and to 
                further the policies of the Unfunded Mandates Reform 
                Act, it is hereby ordered as follows:

                Section 1. Definitions. For purposes of this order:

                    (a) ``Policies that have federalism implications'' 
                refers to regulations, legislative comments or proposed 
                legislation, and other policy statements or actions 
                that 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.
                    (b) ``State'' or ``States'' refer to the States of 
                the United States of America, individually or 
                collectively, and, where relevant, to State 
                governments, including units of local government and 
                other political subdivisions established by the States.
                    (c) ``Agency'' means any authority of the United 
                States that is an ``agency'' under 44 U.S.C. 3502(1), 
                other than those considered to be independent 
                regulatory agencies, as defined in 44 U.S.C. 3502(5).
                    (d) ``State and local officials'' means elected 
                officials of State and local governments or their 
                representative national organizations.

                Sec. 2. Fundamental Federalism Principles. In 
                formulating and implementing policies that have 
                federalism implications, agencies shall be guided by 
                the following fundamental federalism principles:

                    (a) Federalism is rooted in the belief that issues 
                that are not national in scope or significance are most 
                appropriately addressed by the level of government 
                closest to the people.
                    (b) The people of the States created the national 
                government and delegated to it enumerated governmental 
                powers. All other sovereign powers, save those 
                expressly prohibited the States by the Constitution, 
                are reserved to the States or to the people.
                    (c) The constitutional relationship among sovereign 
                governments, State and national, is inherent in the 
                very structure of the Constitution and is formalized in 
                and protected by the Tenth Amendment to the 
                Constitution.
                    (d) The people of the States are free, subject only 
                to restrictions in the Constitution itself or in 
                constitutionally authorized Acts of Congress, to define 
                the moral, political, and legal character of their 
                lives.
                    (e) The Framers recognized that the States possess 
                unique authorities, qualities, and abilities to meet 
                the needs of the people and should function as 
                laboratories of democracy.

[[Page 43256]]

                    (f) The nature of 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. In the 
                search for enlightened public policy, individual States 
                and communities are free to experiment with a variety 
                of approaches to public issues. One-size-fits-all 
                approaches to public policy problems can inhibit the 
                creation of effective solutions to those problems.
                    (g) Acts of the national government--whether 
                legislative, executive, or judicial in nature--that 
                exceed the enumerated powers of that government under 
                the Constitution violate the principle of federalism 
                established by the Framers.
                    (h) Policies of the national government should 
                recognize the responsibility of--and should encourage 
                opportunities for--individuals, families, 
                neighborhoods, local governments, and private 
                associations to achieve their personal, social, and 
                economic objectives through cooperative effort.
                    (i) The national government should be deferential 
                to the States when taking action that affects the 
                policymaking discretion of the States and should act 
                only with the greatest caution where State or local 
                governments have identified uncertainties regarding the 
                constitutional or statutory authority of the national 
                government.

                Sec. 3. Federalism Policymaking Criteria. In addition 
                to adhering to the fundamental federalism principles 
                set forth in section 2, agencies shall adhere, to the 
                extent permitted by law, to the following criteria when 
                formulating and implementing policies that have 
                federalism implications:

                    (a) There shall be strict adherence to 
                constitutional principles. Agencies shall closely 
                examine the constitutional and statutory authority 
                supporting any action that would limit the policymaking 
                discretion of the States and shall carefully assess the 
                necessity for such action. To the extent practicable, 
                State and local officials shall be consulted before any 
                such action is implemented. Executive Order 12372 of 
                July 14, 1982 (``Intergovernmental Review of Federal 
                Programs'') remains in effect for the programs and 
                activities to which it is applicable.
                    (b) National action limiting the policymaking 
                discretion of the States shall be taken only where 
                there is constitutional and statutory authority for the 
                action and the national activity is appropriate in 
                light of the presence of a problem of national 
                significance. Where there are significant uncertainties 
                as to whether national action is authorized or 
                appropriate, agencies shall consult with appropriate 
                State and local officials to determine whether Federal 
                objectives can be attained by other means.
                    (c) With respect to Federal statutes and 
                regulations administered by the States, the national 
                government shall grant the States the maximum 
                administrative discretion possible. Intrusive Federal 
                oversight of State administration is neither necessary 
                nor desirable.
                    (d) When undertaking to formulate and implement 
                policies that have federalism implications, agencies 
                shall:
                    L  (1) encourage States to develop their own 
                policies to achieve program objectives and to work with 
                appropriate officials in other States;
                    L  (2) where possible, defer to the States to 
                establish standards;
                    L  (3) in determining whether to establish uniform 
                national standards, consult with appropriate State and 
                local officials as to the need for national standards 
                and any alternatives that would limit the scope of 
                national standards or otherwise preserve State 
                prerogatives and authority; and
                    L  (4) where national standards are required by 
                Federal statutes, consult with appropriate State and 
                local officials in developing those standards.

[[Page 43257]]

                Sec. 4. Special Requirements for Preemption. Agencies, 
                in taking action that preempts State law, shall act in 
                strict accordance with governing law.

                    (a) Agencies shall construe, in regulations and 
                otherwise, a Federal statute to preempt State law only 
                where the statute contains an express preemption 
                provision or there is some other clear evidence that 
                the Congress intended preemption of State law, or where 
                the exercise of State authority conflicts with the 
                exercise of Federal authority under the Federal 
                statute.
                    (b) Where a Federal statute does not preempt State 
                law (as addressed in subsection (a) of this section), 
                agencies shall construe any authorization in the 
                statute for the issuance of regulations as authorizing 
                preemption of State law by rulemaking only when the 
                exercise of State authority directly conflicts with the 
                exercise of Federal authority under the Federal statute 
                or there is clear evidence to conclude that the 
                Congress intended the agency to have the authority to 
                preempt State law.
                    (c) Any regulatory preemption of State law shall be 
                restricted to the minimum level necessary to achieve 
                the objectives of the statute pursuant to which the 
                regulations are promulgated.
                    (d) When an agency foresees the possibility of a 
                conflict between State law and Federally protected 
                interests within its area of regulatory responsibility, 
                the agency shall consult, to the extent practicable, 
                with appropriate State and local officials in an effort 
                to avoid such a conflict.
                    (e) When an agency proposes to act through 
                adjudication or rulemaking to preempt State law, the 
                agency shall provide all affected State and local 
                officials notice and an opportunity for appropriate 
                participation in the proceedings.

                Sec. 5. Special Requirements for Legislative Proposals. 
                Agencies shall not submit to the Congress legislation 
                that would:

                    (a) directly regulate the States in ways that would 
                either interfere with functions essential to the 
                States' separate and independent existence or be 
                inconsistent with the fundamental federalism principles 
                in section 2;
                    (b) attach to Federal grants conditions that are 
                not reasonably related to the purpose of the grant; or
                    (c) preempt State law, unless preemption is 
                consistent with the fundamental federalism principles 
                set forth in section 2, and unless a clearly legitimate 
                national purpose, consistent with the federalism 
                policymaking criteria set forth in section 3, cannot 
                otherwise be met.

                Sec. 6. Consultation.

                    (a) Each agency shall have an 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 after the effective date of this order, the head 
                of each agency shall designate an official with 
                principal responsibility for the agency's 
                implementation of this order and that designated 
                official shall submit to the Office of Management and 
                Budget a description of the agency's consultation 
                process.
                    (b) To the extent practicable and permitted by law, 
                no agency shall promulgate any regulation that has 
                federalism implications, that imposes substantial 
                direct compliance costs on State and local governments, 
                and that is not required by statute, unless:
                    L  (1) funds necessary to pay the direct costs 
                incurred by the State and local governments in 
                complying with the regulation are provided by the 
                Federal Government; or
                    L  (2) the agency, prior to the formal promulgation 
                of the regulation,

                  L  (A) consulted with State and local officials early 
                    in the process of developing the proposed 
                    regulation;

[[Page 43258]]

                  L  (B) in a separately identified portion of the 
                    preamble to the regulation as it is to be issued in 
                    the Federal Register, provides to the Director of 
                    the Office of Management and Budget a federalism 
                    summary impact statement, which consists of a 
                    description of the extent of the agency's prior 
                    consultation with State and local officials, a 
                    summary of the nature of their concerns and the 
                    agency's position supporting the need to issue the 
                    regulation, and a statement of the extent to which 
                    the concerns of State and local officials have been 
                    met; and

                  L  (C) makes available to the Director of the Office 
                    of Management and Budget any written communications 
                    submitted to the agency by State and local 
                    officials.

                    (c) To the extent practicable and permitted by law, 
                no agency shall promulgate any regulation that has 
                federalism implications and that preempts State law, 
                unless the agency, prior to the formal promulgation of 
                the regulation,
                    L  (1) consulted with State and local officials 
                early in the process of developing the proposed 
                regulation;
                    L  (2) in a separately identified portion of the 
                preamble to the regulation as it is to be issued in the 
                Federal Register, provides to the Director of the 
                Office of Management and Budget a federalism summary 
                impact statement, which consists of a description of 
                the extent of the agency's prior consultation with 
                State and local officials, a summary of the nature of 
                their concerns and the agency's position supporting the 
                need to issue the regulation, and a statement of the 
                extent to which the concerns of State and local 
                officials have been met; and
                    L  (3) makes available to the Director of the 
                Office of Management and Budget any written 
                communications submitted to the agency by State and 
                local officials.

                Sec. 7. Increasing Flexibility for State and Local 
                Waivers.

                    (a) Agencies shall review the processes under which 
                State and local governments apply for waivers of 
                statutory and regulatory requirements and take 
                appropriate steps to streamline those processes.
                    (b) Each agency shall, to the extent practicable 
                and permitted by law, consider any application by a 
                State for a waiver of statutory or regulatory 
                requirements in connection with any program 
                administered by that agency 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.
                    (c) Each agency shall, 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 shall provide the 
                applicant with timely written notice of the decision 
                and the reasons therefor.
                    (d) This section applies only to statutory or 
                regulatory requirements that are discretionary and 
                subject to waiver by the agency.

                Sec. 8. Accountability.

                    (a) In transmitting any draft final regulation that 
                has federalism implications to the Office of Management 
                and Budget pursuant to Executive Order 12866 of 
                September 30, 1993, each agency shall include a 
                certification from the official designated to ensure 
                compliance with this order stating that the 
                requirements of this order have been met in a 
                meaningful and timely manner.
                    (b) In transmitting proposed legislation that has 
                federalism implications to the Office of Management and 
                Budget, each agency shall include a certification from 
                the official designated to ensure compliance with this 
                order that all relevant requirements of this order have 
                been met.

[[Page 43259]]

                    (c) Within 180 days after the effective date of 
                this order, the Director of the Office of Management 
                and Budget and the Assistant to the President for 
                Intergovernmental Affairs shall confer with State and 
                local officials to ensure that this order is being 
                properly and effectively implemented.

                Sec. 9. Independent Agencies. Independent regulatory 
                agencies are encouraged to comply with the provisions 
                of this order.

                Sec. 10. General Provisions.

                    (a) This order shall supplement but not supersede 
                the requirements contained in Executive Order 12372 
                (``Intergovernmental Review of Federal Programs''), 
                Executive Order 12866 (``Regulatory Planning and 
                Review''), Executive Order 12988 (``Civil Justice 
                Reform''), and OMB Circular A-19.
                    (b) Executive Order 12612 (``Federalism''), 
                Executive Order 12875 (``Enhancing the 
                Intergovernmental Partnership''), Executive Order 13083 
                (``Federalism''), and Executive Order 13095 
                (``Suspension of Executive Order 13083'') are revoked.
                    (c) This order shall be effective 90 days after the 
                date of this order.

                Sec. 11. Judicial Review. This order is intended only 
                to improve the internal management of the executive 
                branch, and is not intended to create any right or 
                benefit, substantive or procedural, enforceable at law 
                by a party against the United States, its agencies, its 
                officers, or any person.

                    (Presidential Sig.)

                THE WHITE HOUSE,

                    August 4, 1999.

[FR Doc. 99-20729
Filed 8-9-99; 8:45 am]
Billing code 3195-01-P