 Preemption Monitor
Volume III, Issue 2
July 24, 2007
An information service of the NCSL Law & Criminal Justice Committee
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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
- Criminal Justice- H.R. 2640, “The National Instant Criminal Background Check System Improvement Amendments Act of 2007”
This is a bill to improve the National Instant Criminal Background Check System by speeding up the processing of background checks and by making criminal records more accessible by NICS. This bill would have a profound affect on the states by requiring the states to provide reasonable estimates of the number of records it transmits to the NICS and by mandating states to make electronically available to the Attorney General records relating to persons it disqualified from possessing a firearm, convicted of misdemeanor crimes of domestic violence or adjudicated as mentally defective or committed to mental institutions. This law would also require states to update, correct, modify, or remove obsolete records in the NCIS. Further, the act provides for discretionary and mandatory penalties for states that fail to provide the information required by this act. Although a uniform and better system for conducting criminal background checks is needed, this act would micromanage an issue which has traditionally been an area of state regulation.
Sponsor: McCarthy-NY(D)
Status: 6/14/07 Passed House. Referred to Senate Committee. Received in Senate, read twice and referred to Committee on Judiciary.
- Education- H.R. 2669, “The College Cost Reduction Act of 2007”
A provision in this act would penalize states for not maintaining higher education funding levels. Title II, Section 132 of H.R. 2669 clearly requires any state not funding “public institutions of higher education” at or above a rolling five-year average to cede federal higher education funds until the state legislature “corrects” the situation. States are welcome to beg the U.S. secretary of Education for a waiver from their misdirected fiscal decision making. This maintenance of effort provision is a part of the reconciliation instructions included in the FY 2008 budget resolution.
Reconciliation is a congressional tool used to expedite enactment of mandatory and entitlement program savings. In this case, the House Education and Workforce Development Committee is charged with finding $750 million in savings attributable to the student loan program. Although the provision does not necessarily garner savings, Chairman Miller has insisted on its inclusion in H.R. 2669, which has emerged from committee and awaits July House floor action.
Sponsor: Miller-CA(D)
Status: 7/16/2007 Received in the Senate. Read twice. Placed on Senate Legislative Calendar under General Orders.
- 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: 5/16/2007 Placed on the Union Calendar, Calendar No. 91.
- 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 Passed in the House. Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Environment and Public Works.
- Discussion Draft-Taking Initial Steps to address greenhouse gas emissions from the transportation sector and moves toward eventual economy wide greenhouse gas control program
This legislation would pre-empt California and 11 other states from implementing laws requiring automakers to reduce greenhouse gas emissions
across their fleets. The bill would prohibit the Environmental Protection Agency from granting the states waivers to put their climate change rules
into effect.
Sponsor: Boucher-VA(D)
Status: 6/6/07 Draft
- Environment-S. 357, Ten-in-Ten Fuel Economy Act
A bill which would increase fuel economy standards for passenger automobiles and light, medium, and heavy trucks starting in 2011, and would require the Department of Transportation (DOT) and the Environmental Protection Agency (EPA) to promulgate rules and regulations to implement the increased standards. However, S. 357 would preempt state and local authority to implement their own consumer information laws or regulations on the fuel efficiency impact of vehicle tires; that preemption constitutes an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA).
Sponsor: Feinstein-CA(D)
Status: 5/8/07 Senate committee/subcommittee actions. Status: Committee on Commerce, Science, and Transportation. Ordered to be reported with an amendment in the nature of a substitute favorably.
- Health- S. 1082, The Prescription Drug User Free Act of 2007 as part of The Food and Drug Administration Revitalization Act.
Language was stripped from all 10 drafts of the PDUFA legislation which, if included, would have provided a safeguard against FDA preemption of state laws and undone the FDA Prescription Drug Labeling Rule preamble preemption which noted that the rule preempted all state law requirements pertaining to a drug company’s obligation to warn the public of a drug’s potential side-effects without regard to whether the drug company intentionally withheld information or negligently failed to continually monitor, test, and analyze data regarding the safety, efficacy, and prescribing practices of the drugs.
Sponsor: Kennedy-MA(D)
Status: 5/9/07: Passed in the Senate and Held at Desk
- Health- H.R. 493/S. 358, Genetic Information Nondiscrimination Act of 2007
H.R. 493/S. 358 would preempt current state laws in place by prohibiting discrimination on the basis of genetic information with respect to health insurance and employment. Federal health insurance legislation that establishes mandated benefits or uniform standards, should establish a floor, not a ceiling. The federal government should continue to give deference to state, local and tribal governments regarding the regulation of state, local and tribal government employee health plans. 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: 4/30/2007 Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 125.
- Health- S. 558, Mental Health Parity Act of 2007
S. 558 would preempt state laws by regulating in an area traditionally regulated by states. This bill would provide parity between health insurance coverage of mental health benefits and benefits for medical and surgical services. The bill 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: 4/11/2007. Senator Kennedy from Committee on Health, Education, Labor, and Pensions filed written report. Report No. 110-53.
- 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, thereby preempting current state laws.
Status: 6/27/2007. House Education and Labor: Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
Sponsor: Kennedy-RI (D)
- Health- S. 910, The Healthy Families Act
Mandates that states 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
This bill would preempt current state laws by implementing language in an attempt 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.
Military- S. 1547/H.R. 1565, Department of Defense FY2008 Appropriations Bill
Provisions in both House and Senate Department of Defense authorization bills would return power to deploy the National Guard to states. Last year, Congress preempted state authority and granted the president exclusive power to call out the guard for various “major disasters” without state consent. Last year, NCSL opposed this “blatant and dangerous” threat to public stating that “...the historic domestic mission of the National Guard in emergency management under state authority must be strengthened rather than co-opted by federal decree.”
Sponsor: Levin-MI(D)
Status: Passed the House and on the floor in Senate
Public Safety- H.R. 980, Public Safety Employer/Employee Cooperation Act of 2007
HR 980 establishes minimum organized-labor rights for firefighters, police officers and other public safety officials, including the rights to form and join a union and to bargain collectively over hours, wages and work conditions. It also would provide for the enforcement of contracts through the state government. This bill would give the Federal Labor Relations Authority 180 days to determine whether states meet the minimum standards. In deciding that public safety workings should have the right to join unions, this usurps a role traditionally granted to the states.
Sponsor: Kildee-MI(D)
Status: 7/17/07: Passed in the House
Recently Enacted and Proposed Agency Regulations
Department of Justice National Guidelines for Sex Offender Registration and Notification
The Sex Offender Registration and Notification Act (SORNA) requires the Indian tribes to comply with the national registration requirements, extends the classes of sex offenders and offenses for which registration is required, requires that sex offenders in the covered classes register and keep their registration current in the jurisdictions in which they reside, work or go to school and requires additional national standards for periodic in-person appearances by registrants to verify and update registration information. In addition, the act adopts reforms affecting the required duration of registration. The said changes preempt each jurisdictions’ current laws they have in place and thus dictate the manner in which they maintain their registration and notification systems. NCSL states for the record that the proposed guidelines, coupled with the underlying law they seek to clarify, promote a burdensome, preemptive scheme for the states with absolutely no federal funding provided for their implementation.
Although each jurisdiction shall maintain their own jurisdiction-wide sex offender registries, the registries must conform to the above title. By requiring states to implement minimum federal standards in order to comply with the requirements of the act, the federal government is imposing on a matter which is traditionally regulated by the states. As individual jurisdictions, states have a multitude of differing standards and regulations in place governing the process by which the offenders are required to register and a federally funded study is needed to determine the extent by which each jurisdiction has complied with the act. Title I of Public Law 109-248 would require states to adjust their current system in order to comply.
Status: Comments due on 8/1/07.
- 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.”
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