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An information service of the NCSL Law & Criminal Justice Committee
Recently Introduced and Live Federal Legislation
Recently Enacted and Proposed Regulations
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Introduction
The volume of federal legislation that preempts state authority has increased. Pressure continues to mount for Congress and the White House to support federal usurpation of state authority in a variety of areas such as immigration reform, criminal law, tort reform, driver’s license security, and the environment. Judicial challenges to the exercise of state authority have made their way up to the U.S. Supreme Court. Federal preemptions adopted through regulation such as the recent FDA prescription drug labeling rule and the NHTSA roof crush rule, legislative enactments, or adverse judicial determinations have far-reaching consequences. They impose liabilities on states. They curtail state creativity and state authority, and they often seek uniformity when uniformity is not necessarily the most effective means for resolving issues. This Monitor provides an update and analysis of pending and recently finalized federal preemption proposals. It discusses how these proposals might affect the states. NCSL’s policy states that federal legislation should be based on broad principles, not upon specific mandates which would lead to a one-size-fits-all approach. The intent behind this policy is obviously to preserve state flexibility because it should be generally recognized that what works in one state is not necessarily workable in others. This is sound federalism policy and promotes good governance at both the state and federal levels.
Despite sometimes daunting odds, states can protect and preserve traditional and historic state authority. In recent years, NCSL worked hard to defeat federal bills that: (1) sought to require state legislators to file duplicative and onerous campaign finance reports with the IRS; (2) would have circumvented state administrative and court processes in 5th Amendment Takings cases; and (3) would have forced state and local police to enforce federal civil immigration laws. However, these issues continue to resurface in congressional legislation. States have also recently witnessed passage of several major pieces of federal preemptive legislation that erode traditional state authority. These include the No Child Left Behind Act, the Help America Vote Act, the Class Action Fairness Act, and the REAL ID Act.
The Preemption Monitor reviews recently enacted federal legislation that preempts state authority, describes pending legislation that would preempt state authority if enacted, and examines U.S. Supreme Court cases that have implications for state authority. It also tracks the status of federal preemption activities in Congress, the executive branch, the Supreme Court and the international arena.
The Legislation on the following page is limited to recently introduced and live legislation. Because of the start of a new session, the previous legislation that was on our watch list is no longer active. However, we anticipate that many of the issues will arise in the form of new legislation and we thus expect our list to grow exponentially in the coming months.
Recently Introduced and Live Federal Legislation
- Elections-H.R. 811, the “To Amend the Help America Vote Act of 2002 to Require a Voter Verified Permanent Paper Trail”
To amend the Help America Vote Act of 2002 to require a voter-verified permanent paper ballot under title III of such Act, and for other purposes. Amends the Help America Vote Act of 2002 (HAVA) with respect to: (1) ballot verification and mandatory paper record audit capacity; and (2) accessibility and ballot verification of results for individuals with disabilities. This legislation is before the House Administration Committee, and preempts laws in at least 40 states. The legislation requires states to purchase new or retrofit old voting systems to provide a paper trail that conforms to federal standards. The technology and voting systems software called for in the bill do not yet exist. Additionally, the bill contains an authorization of appropriation of $1 billion which is insufficient to cover the costs of such a massive endeavor. The legislation also requires random, hand-count audit procedures which again, are not based on any current state system and would be quite costly for states. Finally, H.R. 811 contains a compliance deadline of January 1, 2008 which is completely unworkable. H.R. 811 seeks to micromanage election administration which has traditionally been an area of state regulation.
Sponsor: Holt-NJ(D)
Status: 3/29/2007 House committee/subcommittee actions. Status: Committee Hearings Held. The markup on H.R. 811, which was scheduled for March 29 was cancelled due in part to the opposition of state legislators and other state and local election officials. It is important to keep the pressure on the House of Representatives to abandon this effort.
- Environment- Amendment to HR 569, Water Quality Investment Act
Amendment by Representative Rohrabacher which would prohibit the EPA from making a grant to a state, municipality or municipal entity unless the EPA has been provided satisfactory assurance that state, municipality or municipal entity will require all persons, including contractors and subcontractors, that are carrying out grant-funded activities to participate in the Employment Eligibility Verification Pilot Program and comply with its terms and conditions.
Sponsor: Pascrell-NJ(D)
Status: 3/8/2007 Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Environment and Public Works.
- Health- H.R. 493/S. 358, Genetic Information Nondiscrimination Act of 2007
A Bill to prohibit discrimination on the basis of genetic information with respect to health insurance and employment. H.R. 493/S. 358 would amend the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to expand the prohibition against discrimination by group health plans and health insurance issuers in the group and individual markets on the basis of genetic information or services to prohibit: (1) enrollment and premium discrimination based on information about a request for or receipt of genetic services; and (2) requiring genetic testing. Sets forth penalties for violations.
Sponsor: Slaughter-NY(D)/ Snowe-ME(R)
Status: 3/29/2007 Placed on the Union Calendar, Calendar No. 46.
- Health- S. 558, Mental Health Parity Act of 2007
A bill to provide parity between health insurance coverage of mental health benefits and benefits for medical and surgical services. Amends the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act to require a group health plan that provides both medical and surgical benefits and mental health benefits to ensure that: (1) the financial requirements applicable to such mental health benefits are no more restrictive than those of substantially all medical and surgical benefits covered by the plan, including deductibles and copayments; and (2) the treatment limitations applicable to such mental health benefits are no more restrictive than those applied to substantially all medical and surgical benefits covered by the plan, including limits on the frequency of treatments or similar limits on the scope or duration of treatment. Prohibits the plan from establishing separate cost sharing requirements that are applicable only with respect to mental health benefits.
Sponsor: Domenici-NM(R)
Status: 3/27/2007 Placed on Senate Legislative Calendar under General Orders. Calendar No. 93.
- Health- H.R. 1424, Paul Wellstone Mental Health and Addiction Equity Act of 2007
H.R. 1424 amends section 712 of the Employee Retirement Income Security Act of 1974, section 2705 of the Public Health Service Act, and section 9812 of the Internal Revenue Code of 1986 to require equity in the provision of mental health and substance-related disorder benefits under group health plans.
Status: 3/9/2007 Referred to House committee. Status: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Education and Labor, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsor: Kennedy-RI (D)
- Health- S. 910, The Healthy Families Act
A bill to provide for paid sick leave to ensure that Americans can address their own health needs and the health needs of their families. The bill would require certain employers, who employ 15 or more employees for each working day during 20 or more workweeks a year, to provide a minimum paid sick leave and employment benefits of: (1) seven days annually for those who work at least 30 hours per week; and (2) a prorated annual amount for those who work less than 30 but at least 20 hours a week, or less than 1,500 but at least 1,000 hours per year. Allows employees to use such leave to meet their own medical needs or to care for the medical needs of certain family members.
Status: 3/15/2007 Referred to Senate committee. Status: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Sponsor: Kennedy-MA(D)
- Health- S. 625/H.R. 1108, Family Smoking Prevention and Tobacco Control Act
A bill to protect the public health by providing the Food and Drug Administration with certain authority to regulate tobacco products. Amends the Federal Food, Drug, and Cosmetic Act to provide for the regulation of tobacco products by the Secretary of Health and Human Services through the Food and Drug Administration, including through disclosure, annual registration, inspection, recordkeeping, and user fee requirements.
Status: Feb 27, 2007: Committee on Health, Education, Labor, and Pensions. Hearings held
Sponsor: Kennedy-Ma(D)/ Waxman-CA(D)
- Insurance- S. 618/HR 1081, A Bill To Further Competition in the Insurance Industry
S. 618/HR 1081 would repeal certain sections of the McCarran-Ferguson Act enacted in 1945 which gave states the sole authority to regulate the business of insurance. The legislation would repeal the antitrust provisions of the McCarran-Ferguson Act. In doing so, Congress would end the exclusive role of the states as the regulator of insurance. States would have to share regulatory authority with the Department of Justice and the Federal Trade Commission. Eventually, this bifurcated regulatory system would likely lead to just a federal regulator of insurance.
Sponsor: Leahy-VT(D)/DeFazio-OR(D)
Status: 3/7/07: Committee on the Judiciary. Hearings held.
Recently Enacted and Proposed Agency Regulations
- Department of Homeland Security Chemical Security Regulations
Security regulations for chemical facilities, implementing the statutory authority granted in the Homeland
Security Appropriations Act, 2007 (P.L. 109-295, Section 550).
The interim final rule clarifies the Department’s position on preemption of state laws in light of the comments submitted by members of Congress, NCSL and other interested parties. The Department states that the regulations do not preempt the “field” of chemical facility regulations, rather the regulations will only preempt those laws that “conflicts with, hinders, poses an obstacle to or frustrates the purposes of this regulation.” States may still regulate their “high risk” chemical facilities as long as their laws not frustrate the intent of the federal regulations. The Department reiterates that the regulations do not apply to chemical facilities that are not deemed to be “high risk” facilities. The Department notes that it does not intend to preempt existing state health, safety and environmental regulations, though case specific determinations will be made as necessary. However, the Department explicitly reaffirms it’s authority to preempt state law where the law frustrates the purpose of the federal regulations under existing precedent.
Status: 4/2/07: The U.S. Department of Homeland Security (DHS) issued interim final rules establishing federal standards for chemical facility security. These regulations can be found at http://www.dhs.gov/xlibrary/assets/IP_ChemicalFacilitySecurity.pdf The interim rules support preemption of any state law that “conflicts with, hinders, poses an obstacle to or frustrates the purposes of this regulation.” DHS officials note that it is not their intention to preempt existing state health, safety and environmental regulations, but reserves the right to judge when those regulations or statutes “frustrate” the purpose of federal regulations. Both the House and Senate versions of the FY 2007 supplemental appropriations bills, contain NCSL-supported provisions protecting state authority to enforce stricter and stronger chemical facility security standards. These provisions were added in the House by Texas Representative Sheila Jackson-Lee and in the Senate by New Jersery Senator Frank Lautenberg. An attempt to strick the Jackson-Lee language by Texas Representative John Culberson failed. In the Senate, Ohio Senator George Voinovich withdrew a proposed floor amendment striking the Lautenberg language.
- Environment- Environmental Protection Agency’s proposed regulation for the National Pollutant Discharge Elimination System (NPDES) Permit Incentive Fee for Clean Water Act Section 106 Grants
The rule as drafted proposes to set aside a portion of the federal funds, Section 106 grants, to establish an incentive program which will be accessible by few if any states. As drafted the rule would divert funding above FY 2006 levels to a set-aside account available only to states where more than 75% of their program costs are funded through permit fees. To receive the maximum incentive, states would need to fund 100% of their program costs through permit fees.
Status: Commenting Phase
- Tax- Legislative Tax Home Ruling by the Internal Revenue Service
Following a recent ruling by the IRS concerning Section 162(h) of the Tax Code, Legislators are being told that they may not take per diem deductions for days the Legislature was in session, but during which no substantial business was conducted. This ruling and subsequent policy is being applied for the first time and is currently affecting the New York State Legislature and is sure to affect many other states. More broadly, the ruling preempts many state statutes and/or constitutions which define “legislative day.” The reading of 162(h) clearly is meant to provide the per diem deduction to any day the legislature is in session. The provision allows the legislators to take a per diem deduction for each “legislative day” the legislature is in session. A “legislative day shall be any day during such year on which the legislature was in session”(including any day in which the legislature was not in session for a period of 4 consecutive days or less). 162(h)(2)(A). Congress provided no more specificity or limitations as to the definition of legislative session and the IRS now seeks to retroactively define what a legislative day is and collect additional taxes on Legislators’ returns.
Status: Representative Charles Rangel (D-NY), who is now the Chair of the House Ways and Means Committee, has sent a letter to the IRS at the urging of the New York Legislature and NCSL stating that the IRS does not have the authority to define what constitutes a legislative day and asking for the IRS to revoke its ruling of retroactivity. If the IRS stands its ground, NCSL will be pursuing a legislative solution to preserve states’ ability to define “legislative day.”
For further information, please contact Susan Parnas Frederick or Hirsh Kravitz at 202-624-5400.
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Preemption Monitor