Policies Under the Jurisdiction of the NCSL
Standing Committee on Labor and Economic Development
2011 - 2012
Labor and Economic Development Committee Staff Contacts
Affirming and Strengthening President Obama's Recent Order On Safeguarding Federalism In Trade Policy
NCSL thanks President Obama for his commitment to respecting state sovereignty and improving federal-state relations as evidenced by his instructions to Heads of Executive Departments and Agencies to avoid preempting states in their rule-making. This White House order is an important step towards fostering the type of vibrant federalism NCSL seeks.
The U.S. Constitution grants the federal legislative branch authority to set our nation’s trade policy, and the Tenth Amendment of the U.S. Constitution empowers states to protect the public interest, including but not limited to public health, safety, and morals. With respect to our international trade commitments, additional steps to safeguard federalism are needed.
Many current international trade agreements constrain the use of particular product and food safety standards; dictate procurement policies and the scope of permitted service sector regulations, and these rules have the effect of pre-empting vital policy space that our federal system of government provides to states to protect the public interest.
Although international trade and investment tribunals cannot directly preempt state laws and policies as a matter of U.S. law, the federal government does have an obligation under these trade agreements, enforced by the threat of trade sanctions, to compel state and local compliance. Thus, trade agreement challenges and threats of challenges of state and local laws with awards of money, damages, and retaliatory tariffs and related sanctions at stake have a pre-emptive effect. As a result, state legislative regulatory authority and policy space is compromised and the rights of states in our constitutional system are reduced.
Therefore, the President’s executive order should apply whenever such international agreements or treaties can result in challenges to state laws and policies before international tribunals—particularly in light of the fact that these rules can be enforced by retaliatory trade sanctions or awards of money damages.
NCSL requests that the White House communicate to the Office of the United States Trade Representative (USTR) in the Executive Office of the President that the President’s instructions with respect to preemption in rule-making apply to trade agreement negotiations and implementation.
NCSL requests that the President by executive order clarify that trade and investment agreements and bi-lateral investment treaties negotiated by the USTR should avoid conflicts with state governing authority, under the same terms as the executive order on preemption.
NCSL requests that the President establish, by executive order, a more effective federal-state consultation system that includes greater involvement and notification of state legislatures. Meaningful and early involvement by state and local officials in the trade agreement policymaking and negotiating process can help avoid the effective preemption of state and local policy by trade pacts.
Expires August 2012
Arts, Culture and Economic Development
Arts and culture can influence an array of policy goals, including economic development, rural development, urban revitalization, revenue generation, tourism, accessibility and participation, diversity, education, and youth development. For many of these areas, states and the federal government are partnered. Support for the production, distribution, and infrastructure of the arts is critical to success in tourism, attracting business interests, economic development, and quality of life issues. Further, the arts are a core academic subject in our schools. Strong and sequential arts education through primary and secondary school contributes to student success and workforce development. In our education systems, the study of the arts should remain vibrant. The National Conference of State Legislatures (NCSL) encourages a better and stronger understanding of this partnership as well as a reasoned study and understanding of the inputs and benefits.
Arts and culture are consistent sources of economic growth, during both good and difficult economic times. Specifically, arts and culture policies and programs increase economic development in states by attracting businesses, creating new jobs, increasing tax revenues and promoting tourism. Additionally, the arts and culture play a key role in urban revitalization and community renewal strategies. NCSL encourages the federal government to support arts and culture through investments in programs that will promote economic development, jobs creation, and community revitalization at the state and local level.
Tourism is a vital element of state economic development, diversification, and rural development programs, as well as a leading services sector employer. NCSL encourages Congress and the Administration to open and maintain consultative processes with state governments, and state legislatures in particular, to ensure that state and federal policies and programs encourage the continued vitality of this important sector of the economy. Further, federal economic development and disaster recovery programs should include tourism among the activities eligible for support.
National Heritage Areas
The National Park Service defines a National Heritage Area as a place designated by the United States Congress where natural, cultural, historic, and recreational resources combine to form a cohesive, nationally distinctive landscape arising from patterns of human activity shaped by geography. Recognizing these areas as viable drivers for historic preservation and cultural tourism, the National Park Service and the Congress should consult state legislators, as both state policymakers and community leaders, to identify ways of maximizing the National Heritage Area designation to the benefit of their communities and their states.
Collaboration and Coordination
The National Endowment for the Arts, the National Endowment for the Humanities, the National Trust for Historic Preservation, the White House Preserve America initiative, offices within USDA Rural Development, the National Park Service, the Smithsonian Institution, the U.S. Department of Education, and many others are engaged in promoting various aspects of culture, the arts, heritage preservation, and tourism. NCSL encourages collaboration and coordination among these disparate agencies and budgetary line-items with state legislatures to ensure that the policy and program outcomes meet the needs and goals identified by state policymakers. Further, this collaboration and coordination should improve the identification and sharing of best practices from and among the states and the federal government.
Expires August 2012
Recent concerns regarding public fund investments in companies doing business in Iran and Sudan have resulted in state legislation regulating pension fund investments. The National Conference of State Legislatures encourages the federal government’s efforts to limit or deny access to the U.S. capital marketplace to firms that are identified as violating U.S. laws, rules, policies or any other decree by providing support to terrorism or aiding in genocide.
Several firms and not-for-profit organizations provide state and local investors with information about specific firms and their business interests in certain countries. However, this information is not authoritative and lacks the imprimatur of the federal government’s authority regarding whether actions by certain firms in a country are in line with foreign policy goals or run counter to these goals. Thus, investors do not have reliable or pertinent information regarding potential threats certain companies may pose.
The federal government's intelligence, military, diplomatic and financial regulatory communities are best positioned to identify, monitor and report on foreign and domestic companies that may be engaging in activities with countries that are potentially threatening to our national security, supporting terrorism, against the United States or its allies, and/or aiding in genocide. Companies who are involved in these atrocities are counterproductive and volatile investments for the future and undermine our security measures. Because the objective of pension systems is to invest money for long term growth, public pension systems desire an unbiased authoritative list of companies in which to avoid investment in order to more effectively ensure the future stability of the fund.
Recent federal actions recognize the authority of state and local governments’ to divest from or prohibit the investment of state or local assets in companies that may engage in activities that may support terrorism. However, the federal government does not provide investors authoritative information on identifying companies conducting business in or with state sponsors of terrorism.
The National Conference of State Legislatures urges the federal government to provide authoritative information to U.S. investors, including state and local public pension plans, about foreign and domestic firms and their financial and investment activities in specific countries, such as those identified by the U.S. Department of State as State Sponsors of Terrorism.
Expires August 2012
For years states have been pioneers in developing effective economic development programs and policies. Even in times of economic declines, states continue to be the laboratories for enhancing economic development and job creation.
There are four federal agencies responsible for providing the necessary information and vital resources to support state economic development programs. The U.S. Department of Commerce and the U.S. Department of Agriculture are the federal sources for research, economic development tools and construction. The U.S. Department of Labor provides resources for training, and the Small Business Administration provides direct loans to businesses. However, significant information gaps remain within the federal government’s approach to supporting state efforts in economic development.
The National Conference of State Legislatures commends Congress and the Administration for their ongoing efforts to identify and encourage economic development and growth in states. However, current federal policy and agencies often operate independently with overlapping program and policy goals diluting the impact of limited federal resources. NCSL strongly urges the federal government to better coordinate their economic development activities by establishing a coordinator in the Office of the President to mitigate confusion and redundancies among such policies and agencies, and coordinate efforts at the executive office level. The coordinator would also produce an overall catalogue or compendium of state economic development policies and programs that would enable states to draw upon the experience of one another. NCSL also strongly believes that in order to be successful, federal policy should supplement, not supplant, state economic development policy, progress, improvements and innovations.
Expires August 2012
Employment Security System Funding
State legislators recognize the many challenges facing the nation as the economy and labor market change. In the states, differing circumstances reflect a changing economic base, prolonged higher unemployment, unique demographic trends, and limitations on available resources. State employment security, unemployment and labor market information systems must figure prominently in efforts to serve the workers and businesses of a 21st century economy. The National Conference of State Legislatures (NCSL) believes that changes are needed in employment security financing to provide a stable system that will be able to address economic and competitive challenges. NCSL supports decisions aimed at reaching consensus among workers, employers, and state and federal entities to develop comprehensive recommendations for Congress to address the following priorities and inadequacies in the current system.
Trust Fund Solvency
State governments collect payroll taxes from employers to pay for unemployment insurance benefits. These taxes are deposited into state unemployment insurance trust fund accounts in the federal Unemployment Trust Fund where each state, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands, has its own account. Each state may borrow from the federal account to cover benefits during economic downturn. During the current recession many states have borrowed to cover benefits. These loans must be repaid with interest unless repaid within a short period established in federal law. If states are unable to repay the loan with interest, an automatic gradual increase of the federal tax will be imposed on the state’s employers. More than half of the states have already borrowed and the U.S. Department of Labor projections show that up to 40 states are expected to be borrowing by the end of 2010. NCSL is encouraged by recent federal action that provided a waiver of interest payments to states with outstanding federal unemployment loans. However, the waiver expires on December 31, 2010. NCSL urges Congress to immediately extend the deadline on the waiver to states that borrow so that they may continue to pay benefits owed to unemployed workers.
Extended benefits are paid by state unemployment insurance agencies from state unemployment accounts but reimbursed at 50 percent from the extended unemployment account. Congress provided extended benefits on a 100 percent federally funded basis several times as a result of the recent recession. NCSL supports an extension of benefits fully funded by the federal government during periods of economic downturn as a means of stabilizing the economy. NCSL further urges development of more effective triggers for the federal –state extended benefit programs to improve the program’s responsiveness during periods of high unemployment and decrease the need for separate and additional emergency extended benefit programs in periods of high unemployment.
Federal Unemployment Tax Act
Under the framework of the system outlined in the Federal Unemployment Tax Act (FUTA), states collect a state payroll tax to finance unemployment benefits. The federal treasury holds the collected taxes in 'trust' accounts, but these accounts are included in the federal unified budget. NCSL urges the federal government to move the dedicated FUTA trust fund from the discretionary side to the mandatory side of the federal budget and not use the funds to offset the federal budget deficit.
The IRS collects a federal payroll tax from employers to provide funds for administration of both the federal and state unemployment insurance systems. Rising unemployment has resulted in increased state administrative costs and workforce challenges in administering and monitoring the regular, and especially, the extended benefits programs, which have not been sufficiently funded by the federal government. In addition, state unemployment insurance programs have been chronically underfunded in staffing and technology. NCSL urges Congress to adequately fund state administrative functions, and continue the state legislative role in the appropriation of administrative funds. Recognizing that the unemployment insurance system is intended to be a partnership between the states and the federal government, NCSL encourages Congress to allow states, within existing federal law, greater flexibility in implementing innovative approaches to funding, administering, and delivering unemployment insurance benefits.
Expires August 2012
Exports are vital to the well-being of the entire American economy because they provide for jobs and economic development and help buttress the nation's balance of payments. Both the states and the federal government have a role in export promotion, particularly to help small- and medium-sized businesses who may find it difficult to obtain financing or insurance for their goods.
State legislators play a vital role in export finance, working with government agencies to facilitate the export process for small- and medium-sized businesses through export finance programs. This should be a shared mission: the federal government must help by improving its coordination of and cooperation with state programs and by providing adequate federal financing.
Many U.S. businesses are not aware of export opportunities or the existence of federal programs that could enable them to export their products. NCSL urges more funding for federal export programs such as the U.S. Commercial Service (USCS) of the Department of Commerce, which would permit it to properly staff overseas posts and reopen vital offices that have been closed in recent years. Funding for the Export-Import Bank's direct and guaranteed loan programs should also be maintained, and NCSL particularly supports a constant level of funding for the Bank's City/State Program.
To improve state-federal cooperation, the USCS should enhance its domestic operations to better leverage state trade development programs that could supplement their own efforts. Many states have highly effective trade programs, but the USCS generally fails to develop working relationships with them which could free up USCS budgets and personnel for overseas export promotion efforts.
U.S. businesses should also retain the ability to coordinate their own offshore sales efforts in order to reach foreign markets they might not be able to access individually. Congress should therefore ensure the preservation of permanent statutory safe harbors for such activity in Federal antitrust law (i.e. the Webb-Pomerene Act and the Export Trading Company Act).
The federal government is best placed to collect trade data on U.S. exports and imports. However, geographically-specific data is currently lacking on items such as services imports and exports, goods imports, and in-bound foreign investment. The federal government should improve the information available so that state trade agencies may more effectively assist their exporters.
Exports Through Trade Agreements
The United States and its trading partners should seek agreements that increase U.S. exports by reducing and eventually eliminating the reliance on protectionist trade policies and practices. Tariffs and other barriers to trade such as export subsidies prevent U.S. companies from being able to export effectively. NCSL particularly supports the federal government’s efforts to work through multilateral negotiations to open markets that are currently closed to U.S. products and to reduce the use of trade-distorting subsidies. In this connection, negotiations should be pursued in accordance with the federalism and policy principles outlined in NCSL’s Free Trade & Federalism and World Trade Organization Negotiations policies, and NCSL supports the President’s ability to do so according to principles outlined in NCSL’s Presidential Trade Promotion Authority policy.
State legislators recognize that some U.S. trading partners view some current U.S. regulations and programs as trade-distorting, which can result in retaliation on U.S. exports. Congress and the Administration must protect U.S. companies’ ability to export by promoting openness and fair trade practices in their legislation and rule-making. In particular, NCSL encourages the Congress and the Administration to work where practical and in consultation with state governments to convert farm and other supports to non-trade distorting support programs that generate opportunities for America’s farm communities and industries to adapt.
If exporters truly are to benefit from agreements, the large number of agreements that the U.S. is party to will require considerable attention to enforcement of agreement terms. NCSL supports increasing capacity at the Office of the United States Trade Representative (USTR) to work with state governments and ensure that our trading partners are adhering to the terms of our agreements.
Given the importance of farm exports to the financial health of the American economy, the Secretary of Agriculture and other federal & state officials representing agricultural interests should be included as full and equal partners in the formulation of United States policies affecting foreign trade. The U.S. Department of Agriculture should in turn cooperate with state agricultural trade officials in a coordinated effort to promote agricultural exports. State legislatures, both directly and through NCSL, should be consulted on the development of trade policies and kept abreast of evaluations of their efficacy and economic impact. In particular, NCSL supports the appointment of one or more state legislators to the USTR’s Agriculture Policy Advisory Committee (APAC).
Expanded international trade in agricultural products as a result of new trade agreements has major economic benefits, but it also creates new burdens for both federal and state agriculture inspection and quarantine services. NCSL calls upon the federal government to support training for inspection professionals and the development of new technologies to secure the health and safety of imported foods and agricultural products.
Congress and the Administration should support an aggressive market development effort to increase demand for U.S. exports, including the use of export credits for agricultural products. Emphasis should be placed on developing markets for high-value products. Food aid can be a valuable tool in market development, but programs should be directed to encourage, rather than to discourage, the development of local food security in nations facing food shortages.
In order to recapture and maintain foreign markets, the United States must demonstrate that it is a reliable supplier. To ensure that past mistakes in the use of foreign trade embargoes are not repeated, NCSL opposes any embargo of food and medicinal products, unless that embargo includes all trade with the target country.
America must maintain strong export controls to protect our national security. But, as the rest of the world catches up to the United States in high-technology fields, we must ensure that our control system protects our security without hurting our economic interests.
Expires August 2012
The Federal Role in Career and Technical Education (Joint with Education Committee)
The Carl D. Perkins Vocational & Technical Education Act of 2006 provides appropriations to support a framework to better prepare secondary and post-secondary students for further education and employment by developing their academic and technical skills. Perkins funds are provided to the states, which in turn allocate funds by federal formula to secondary and post secondary institutions. States currently receive two grants - Basic State Grants and Tech Prep. States must distribute at least 85% of the Basic funds to local programs using either the needs-based formula included in the law or an alternative formula that targets resources to disadvantaged schools and students. States may reserve up to ten percent for leadership activities and five percent for administrative activities.
While federal funds represent about 5% of aggregate expenditures for career and technical education, they are critical to maintaining service levels as states increasingly make use of this education platform. However, as with the federal contribution to K-12 education, it is vitally important that the federal role in career and technical education remain positive and supportive of state policies and not outgrow the size of the investment by burdening the system in a labyrinth of disjointed reporting requirements and accountability measures.
Research demonstrates that investment in CTE funding increases overall employment outcomes and earnings of participants. Career and Technical Education has also been shown to mitigate dropout and absentee rates by providing an alternative to the traditional four year baccalaureate degree. Furthermore, Career and Technical Education is increasingly an avenue for working adults in transition between jobs to return to school and get retrained for a new career.
The federal government should provide additional funding and support the authority of states for flexibility to allocate some funds through a competitive grant administered by the state in pursuit and support of innovative, high quality and effective programs.
- These funding decisions can best be handled at the state level rather than by individual schools and/or districts.
- States should have the discretion to fund schools based on performance and effectiveness, not on prior funding.
- States should continue to have the authority to determine the split between secondary and post secondary CTE programs.
- States sovereignty regarding teacher qualifications should be respected.
- The existing funding formula for the allocation of federal funds to the state should be maintained.
- The proper and legal recipient of federal appropriations should be the “state”, not an individual nor an agency of the state.
Furthermore, the federal government should also be mindful not to incorporate measures into reauthorization that interfere with states’ flexibility to respond to local and regional education and training needs - especially in light of the important role CTE currently plays in our economic recovery and in securing future prosperity.
Maintenance of Effort
The Carl D. Perkins Vocational and Technical Education Act and the American Recovery and Reinvestment Act (ARRA) both contain such a requirement for states to comply with in order to be eligible for federal CTE. Federal maintenance of effort (MOE) requirements are put in place to prevent states from supplanting state funding with federal dollars. However, in challenging fiscal times MOEs punish states for recent enhancements and reward those that have not made career and technical education a funding priority. The most recent economic downturn has had a devastating impact on state budgets including career and technical education. The perverse consequence of well-intentioned MOE requirements is to withhold vital federal funding when it is needed most. The impact on state programs is devastating and counterproductive as the nation builds towards economic recovery. The National Conference of State Legislatures strongly urges the U.S. Department of Education to provide flexibility for states and where appropriate waive the Perkins and ARRA maintenance of effort requirements as state budgets recover from the recession.
The National Conference of State Legislatures stands prepared to work with the Administration and Congress to ensure that Career and Technical Education programs continue to serve as a dynamic and energizing force in the American economy.
Expires August 2012
Free Trade and Federalism
The National Conference of State Legislatures (NCSL) supports efforts to expand U.S. exports through well-crafted international trade agreements. NCSL also believes that these agreements must be harmonized with traditional American values of constitutional federalism. In particular, state legislative, judicial and regulatory authority must be protected. NCSL will not support international trade and investment agreements, tradepromotion authority, or implementing legislation unless they include such federalism protections.
NCSL supports federal legislation that promotes consultation between the states and the federal government on trade policy. In particular, NCSL urges the Office of the United States Trade Representative (USTR) to consult with state legislatures as well as governors about state procurement practices. USTR should only be able to bind a state to an international procurement agreement following formal consent from the state legislature.
NCSL supports the creation of a standing federal-state commission on international trade or a national center on trade and federalism to conduct unbiased legal and economic analysis of the effect of international trade policy on states and localities.
The Commission must have trade policy capacity with resources relevant to state level concerns, and promote information sharing and trade policy dialogue between USTR and the states.
NCSL encourages USTR to utilize the “positive list” approach for making services, procurement, and investment commitments in trade agreements. Only state laws that are specifically committed should be covered in the agreement. Following appropriate consultations with USTR, the states must be able to set and adjust their commitments – a right the states have and which USTR has repeatedly recognized. USTR should therefore make clear to trade negotiating partners that U.S. states retain the ability to make adjustments to commitments regarding state-level services, procurement, and investment policies.
NCSL supports the authorization and appropriation of adequate resourcesso that USTR is best equipped to fully consult with state legislatures in order torepresent their interests and the American public in trade negotiations while protectingand preserving American constitutional principles.
NCSL encourages Congress to require the Government Accountability Office to develop state economic and sovereignty impact statements for international trade and investment agreements under negotiation.
NCSL will not support Bilateral Investment Treaties (BITs) or Free Trade Agreements (FTAs) with investment chapters that provide greater substantive or procedural rights to foreign companies than U.S. companies enjoy under the U.S. Constitution. Specifically, NCSL will not support any BIT or FTA that provides for investor/state dispute resolution. NCSL firmly believes that when a state adopts a non-discriminatory law or regulation intended to serve a public purpose, it shall not constitute a violation of an investment agreement or treaty, even if the change in the legal environment thwarts the foreign investors’ previous expectations.
NCSL believes that BIT and FTA implementing legislation must include provisions that deny any private action in U.S. courts or before international dispute resolution panels to enforce international trade or investment agreements. Implementing legislation must also include provisions stating that neither the decisions of international dispute resolution panels nor international trade and investment agreements themselves are binding on the states as a matter of U.S. law.
NCSL will support federal legislation assuring states that the federal government will not seek to preempt state law as a means of enforcing compliance with an international agreement unless Congress has expressed clear intent to preempt state law in implementing legislation or other law. Likewise, the federal government must not withhold federal funds to a state as a means of enforcing compliance with provisions of an international agreement.
NCSL similarly supports federalism protections related to enforcement actions by the federal government. Because the federal government retains the power to sue a state to enforce international agreements, federal legislation implementing any new trade or investment accord must continue to include appropriate protections for the states related to rules of procedure, evidence, and remedies in such litigation. The federal government must continue to bear the burden of proof in court showing that state law is inconsistent with an international agreement, regardless of the finding of an international dispute resolution panel. As current law now provides, in any implementing legislation for new agreement, the President must be required, at least 30 days before the Justice Department files suit against a state, to file a report with Congress justifying its proposed action. In the event of an unfavorable judgment, states must be protected from financial liability. If the federal government agrees to allow foreign firms to collect money damages for “harm” caused by a state law, then the federal government must bear the burden of any such award by international tribunals and not seek to shift the cost to states in any manner. Additionally, states must be fairly compensated by the federal government for the time and expense associated with assisting the federal government in defending against a foreign claim. The absence of such a requirement has led to a kind of “unfunded mandate,” such as was experienced by the California Department of Justice during its preparations for defense in the NAFTA “Methanex” and “Glamis Gold” cases.
The President, the U.S. Trade Representative, and other federal agencies involved in negotiating trade agreements must remain cognizant of the intimate role that state legislators play in crafting state laws, policies, and programs directly affected by today’s international commercial agreements. In particular, NCSL urges the United States Trade Representative (USTR) to consult with state legislators as well as governors prior to the onset of trade negotiations about state procurement practices, investment, and services issues.
NCSL believes that all international services agreements entered into by the United States must include provisions that preserve the right of federal, state, and local governments to provide and regulate services in the public interest on a non-discriminatory basis. Nothing in any services agreement should bar measures rolling back service privatization or require the privatization of public services.
With respect to ongoing negotiations on “domestic regulation” under the General Agreement on Trade in Services (GATS), NCSL believes that the United States should never accept an agreement that requires domestic regulations to meet a “necessity test” even if drafted in language requiring domestic regulation to be “pre-established, based on objective criteria, or relevant.” It is the job of elected legislatures, not international tribunals to decide when regulations are necessary.
NCSL acknowledges that trade can bolster economies. However, many families and communities may suffer in the adjustment to open international markets. NCSL, therefore, supports federal efforts to provide Trade Adjustment Assistance (TAA) to affected workers. NCSL encourages Congress and the implementing federal agencies:
- to ensure that the funding for TAA programs is sufficient to meet current and future needs;
- to expand benefits eligibility to service-sector and agricultural workers impacted by trade; and
- to work with NCSL and state legislatures to ensure that TAA programs are flexible to suit different states’ needs.
Building Capacity in Trading Partners
NSCL recognizes that many developing countries do not have the institutions or capacity to fully implement and enforce FTA obligations. NCSL supports federal efforts to assist in building the trade capacity and trade agreement compliance of developing countries, including funding infrastructure and rural development, and ensuring that laws and institutions related to labor and the environment are improved and strengthened.
Expires August 2012
Maintaining the Solvency of Social Security
The National Conference of State Legislatures (NCSL) strongly believes that the federal government has an obligation to preserve the financial integrity of the Social Security system and assure the long-term solvency of the program. State legislatures believe Social Security must ensure a safety net for low-income older retirees as well as provide survivor benefits and disability insurance. It is critical that all workers paying into the system have confidence that Social Security will continue to be available to them at retirement or to provide for their survivors after their death. NCSL believes that efforts to assure solvency should strengthen the existing program upon which so many beneficiaries and their families rely. Social Security reform should continue to encourage private savings and employer-provided pension plans as important components of retirement savings.
The Administration and Congress face difficult choices in maintaining the solvency of Social Security. As Congress considers alternatives to maintain Social Security solvency, it must analyze and understand the impact of these proposals on states, taxpayers, state budgets, and state laws. Social Security reform will have major impacts on state employees, teachers, local government, private employers and taxpayers. The National Conference of State Legislatures opposes reform proposals that finance this shortfall by shifting federal costs to state budgets. If Social Security does not continue to provide a stable form of assistance to the elderly, state low-income programs and budgets would be severely impacted. A sudden loss of promised Social Security benefits would likely impose financial hardship on many dependent American seniors and families. It replaces lost income for workers and their spouses and children when a worker becomes disabled, dies or retires. NCSL strongly opposes any efforts to reform Social Security that create unfunded mandates for the states or preempt state laws and authority. NCSL also opposes the expansion of mandatory Social Security coverage to state and local public employees who are not already covered. Additionally, state legislators recommend the following for the solvency of the Social Security program:
- Congress and the Administration should continue to study various combinations of federal policy adjustments that would avoid negatively impacting any one sector of the population and keep costs to wage earners as low as possible;
- Congress and the Administration should continue to provide the expected benefits promised by Social Security and the important role of Social Security in alleviating poverty should not be lost in the efforts to restore solvency or reform the program.
- Any effort to balance the federal budget or reduce the federal debt shall not be accomplished by reductions Social Security benefits.
Expires August 2012
The National Conference of State Legislatures (NCSL) strongly supports the efforts of the federal government to improve the safety of all mines. However, NCSL strongly encourages the Congress and the Administration to support flexibility and state discretion in mine safety programs. Mine safety is a joint federal and state effort, and federal action should not preclude states from pursuing stronger approaches that are appropriate for them. The National Conference of State Legislatures urges the federal government to supplement and not supplant current state efforts to improve mine safety, and to work in conjunction with states to ensure the safety of the nation’s mines.
States have been pioneers in establishing strong mine safety policy and laws and the nation’s legislators strongly support ongoing federal evaluation and improvement of federal laws designed to protect miners. However, federal action must prioritize safety, not punitive actions. Federal reforms intended to target companies with poor records should not unfairly or unintentionally reprimand companies that consistently adhere to state and federal safety rules. Federal action must emphasize safety, ensuring that all mines follow the law and those which fail to do so receive increased regulatory action. These penalties should be assessed accordingly and paid upon the issuance of a citation in escrow and subject to a refund, if necessary. Additionally, there should be progressive sanction enhancements for each similar violation for which a mine is cited.
NCSL congratulates the Congress and the Administration on previous studies in mine safety and strongly encourages the Government Accountability Office (GAO), Mine Safety and Health Administration (MSHA) and the National Institutes of Occupational Safety and Health (NIOSH) to further study the effectiveness and implementation of federal laws regarding safety, inspection and emergency standards of our nation’s mines.
Expires August 2012
Presidential Trade Promotion Authority
The National Conference of State Legislatures (NCSL) supports efforts to negotiate trade agreements that secure free and open access to overseas markets for American products. In negotiating new agreements, adequate federalism protections must be included.
NCSL believes that federalism protections must be incorporated into any new trade or investment agreement and its implementing legislation. NCSL will only support trade promotion authority that improves direct communication between the United States Trade Representative (USTR) and state legislative leaders and the negotiation of free trade agreements that adhere to the NCSL Free Trade and Federalism policy, and the following:
- grant “no greater rights,” either substantively or procedurally, to foreign investors than granted to U.S. citizens;
- respect state sovereignty and state governmental functions;
- protect state police and regulatory authorities when exercised in conformity with accepted U.S. constitutional principles of nondiscrimination against foreign commerce;
- “grandfather” existing state laws;
- utilize an “opt in” or “positive list” process for making commitments relative to state-level authorities or interests, which includes state legislative consent for any agreement by a state affecting state statutory law;
- include full consultation with each state’s legislative leaders on procurement, services and investment commitments relevant to state-level policies;
- preserve states’ abilities to set and adjust the procurement, services and investment commitments for their states;
- fully indemnify the states for any monetary claims brought against the United States under an agreement as a result of state action;
- do not contain incentives for American manufacturing to move offshore to take advantage of low wage foreign labor and environmental regulations;
- require express congressional action to legitimize preemption of a state law to comply with a trade agreement;
- promote effective and meaningful consultation between the states and the federal government related to any dispute involving state law or any dispute that could prompt retaliation against states;
- require federal or other reimbursement of state expenses incurred in trade disputes;
- include enforceable labor and environmental standards; and
- be briefed to the IGPAC as the first round of negotiations concludes.
Expires August 2012
There are approximately 2,600 public employee pension plans in the United States covering 18.5 million state and local government workers. In June, 2008, these plans held nearly $3 trillion in assets for the benefit of plan participants and their beneficiaries. State and local governments have been responsible partners in providing retirement savings vehicles to virtually all full-time state and local employees. They also have a strong commitment to the retirement security of their employees and retirees by providing sound, secure benefits in retirement.
Additionally, state and local public pension plans are backed by their respective state or local governments, which are permanent institutions that have a strong moral, contractual, and, in some cases, constitutional commitment to back their pension liabilities. This strong commitment assures state and local employees and retirees that they will receive the benefits to which they are entitled.
Generally, public plans adhere to the following:
- They are administered through boards of trustees, which, unlike private plans, generally include representatives of retiree and active members.
- Boards act for the exclusive benefit of members of the pension system, as required under state trust law.
- Plan fiduciaries include both individuals responsible for the operation of the plans in accordance with applicable laws.
- Fiduciaries are subject to strict fiduciary and trust law that governs their conduct on behalf of the plan, including the investment of the plan's assets. Breaches of fiduciary trust laws result in civil or criminal penalties.
- In addition to fiduciary law, public pension plan boards and administrators are subject to codes of ethics, conflicts of interest laws, and criminal laws. Violators may be punished by imprisonment, fines, or both.
- Routinely provide comprehensive disclosure, investment education and benefit statements to plan participants.
The National Conference of State Legislatures (NCSL) is concerned that efforts by the federal government to intrude into the administration and regulation of these plans will result in preemptive, redundant, costly and administratively burdensome requirements. NCSL firmly opposes federal legislative and regulatory proposals that would burden public sector pension plans with requirements intended to address private sector pension concerns. NCSL maintains that any additional federal regulation of state and local pension plans, systems and assets is a violation of the sovereign power of state governments, and urges that current regulations that impose excessive and unnecessary administrative costs on states and localities be simplified or eliminated.
Federal Reductions to Social Security Benefits
Under some circumstances, the Social Security Administration reduces benefits to state and local employees who earn government pensions through work not covered by Social Security. Since 1983, the Social Security Administration has reduced worker and spousal benefits through two provisions called the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). There have been numerous proposals before Congress to repeal or to limit the application of the GPO and the WEP. The National Conference of State Legislatures supports efforts by Congress and the Administration to address the inequities and unintended consequences to state and local government retirees caused by federal reductions of Social Security benefits. NCSL urges Congress to enact legislation that will reduce or eliminate the impact of the GPO and WEP on state and local government retirees, particularly those who have earned lower uncovered government pension benefits or partial benefits.
Finally, NCSL opposes any federal efforts to shift responsibility and costs for determining to whom these offsets should apply to state and local government employers and pension systems.
Mandatory Medicare and Social Security Coverage
On June 28, 1991, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations and a revenue procedure under a new requirement included in the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990). The law mandates full Social Security coverage, including Medicare, for public sector employees who are not members of a retirement system.
The National Conference of State Legislatures opposes expansion of mandatory Social Security and Medicare Coverage to public employees of state and local governments who are not already covered. NCSL believes that state and local governments should be allowed to affiliate their plans with Social Security and Medicare on a voluntary basis.
Taxation and Regulation
Public pension plans have been repeatedly targeted as a revenue source by the federal government. Both Congress and the Administration have considered taxing public plans through a direct tax on investments, penalties, or excise taxes under the U.S. Internal Revenue Code. The National Conference of State Legislatures believes that taxation of public pension plans violates a long-standing and sound component of federal tax policy, which exempts state plans from taxation. Therefore, NCSL calls upon Congress and the Administration to oppose taxation and excessive regulation of state pension and benefits plans. All states and many local governments sponsor a supplemental defined contribution plan in addition to the general retirement plan to allow participants to voluntarily to defer an additional portion of their salary in anticipation of retirement needs. Some states provide limited matching contributions to encourage supplemental plan participation. Federal legislation enacted over the past decade has simplified participation in, and the administration of, these supplemental arrangements. The National Conference of State Legislatures supports further efforts to improve existing arrangements and to provide simplification and flexibility to supplemental defined contribution plans when directed by state and local governments. However, NCSL opposes federal efforts aimed at increasing federal regulation, diminishing the plans' unique features and characteristics, and providing mandates that replace existing plans with methods designed for the private sector.
NCSL maintains that primary regulation for supplemental plans should remain with the states, and states should have the authority to tailor the design of the plans to the needs of the public sector workforce. Further we oppose efforts to supplant rather than supplement current savings, and efforts that could result in additional cost and complexity for state and local governments as well as for plan participants.
Finally, NCSL encourages federal policymakers and regulators to continue to recognize the distinctive characteristics of state and local governments and their supplemental retirement arrangements and keep these in mind when promulgating regulations or further legislative changes to these plans.
Expires August 2012
Adequate and affordable housing is a necessary ingredient for community, education, workforce, and economic development. State legislators support the integration and coordination of public and private resources to make effective, affordable housing services available as means to preventing homelessness, to encouraging self-sufficiency, to promoting economic opportunity, or to promoting homeownership. NCSL encourages the Congress and the Administration to support flexibility and state discretion in housing programs and to avoid legislatively mandated set-asides in programs such as the HOME Investment Partnerships (HOME) program and the Low-Income Housing Tax Credit. NCSL encourages efforts to promote a greater state role in administering federal housing programs, subject to sufficient funding and flexibility.
NCSL is encouraged by the efforts of the Congress to review and reduce regulatory burden at the federal level. We request Congress and the Administration to fully review and examine the impact on housing affordability of relevant federal laws and regulations. It is imperative that state and local governments make land use decisions based on the unique needs of their jurisdiction without interference from the federal government.
America's population and housing needs and preferences have become more diverse. NCSL recognizes that adequate and affordable housing can take many forms, including apartment dwellings, condominiums, cooperatives, single-family homes and manufactured housing. Federal housing policy must provide ample flexibility that allows state legislators the ability to fully utilize this entire range of possibilities as they craft affordable housing policy to meet the needs of their constituents.
Distressed Communities, Urban Sprawl, and Smart Growth
As the inner-cities core spread to the suburban corridors and as businesses and builders develop what may have been once green spaces, the desire by some for either limited or no growth may further impact the availability of affordable homes. Some states and localities have considered smart growth plans to ease the impacts of urban sprawl. Several localities have chosen to limit urban sprawl by preserving already affordable homes and apartments inside their boundaries.
While the National Conference of State Legislatures does not take a position as to whether a state or locality should consider or adopt any smart growth initiatives, NCSL opposes any federal mandate requiring states and/or local communities to adopt such long-term comprehensive plans. Rather, NCSL calls upon the Congress and the Administration to work with states and our cities in the development and redevelopment of infill sites in many of our older cities and inner suburbs. Many infill sites are brownfields; abandoned industrial sites with some kind of contaminant that could be a barrier to any redevelopment. To make these brownfields available for housing, Congress needs to give states flexibility to immunize project providers from future federal cleanup liability and provide the necessary funding to assist states in the clean-up of these sites.
The Neighborhood Stabilization Program (NSP) was established to stabilize communities that have suffered from foreclosures and abandonment. NSP provides emergency funding for grants to states and localities to purchase and redevelop foreclosed and abandoned homes and residential properties. The National Conference of State Legislatures supports the continuation of NSP as a means of economic recovery.
The National Conference of State Legislatures endorses efforts both by the federal government and the private sector to make the dream of homeownership a reality for more Americans. NCSL is pleased to be a partner with our federal colleagues and the private sector in this endeavor and supports programs that help people determine the best housing option for them, promote financial literacy, as well as homeownership preparedness.
NCSL applauds efforts by the federal government to recognize this dilemma and to respond with housing counseling. These efforts should respond to a need and not simply become a federal mandate, should build upon and not replace state and local counseling programs, should provide complete flexibility for states to use any federal assistance to improve or establish counseling services, should recognize the variety of housing options available to U.S. residents and not endorse a single option, and should include adequate outreach components to reach those populations in most need of counseling and assistance. Federal housing counseling efforts should not siphon funds from proven and successful programs and should be separately and adequately funded.
States have developed an array of innovative housing affordability policies and are responding to the homeownership problem by issuing mortgage revenue bonds and establishing housing trust funds to expand homeownership opportunities for moderate-income families. NCSL is encouraged and supportive of public private partnership programs and initiatives that cut home buying transaction costs, reduce down payment and mortgage carrying costs, and increase the availability of financing.
NCSL encourages the federal government to consult state legislators and other state officials as voucher program reforms are designed to ensure that they will meet state needs, provide the flexibility we desire, avoid cost shifts to states, and continue with ample federal funding for program and administrative costs. Additionally, we urge the Congress to sustain funding levels sufficient to maintain existing vouchers and already committed project based Section 8 subsidies.
The HOME Investment Partnership program is a successful and proven model of a state-federal partnership that should be used in other housing and development areas. HOME was designed as a federal-state-local program, with states receiving a substantial share of the funding, having the flexibility to fit HOME funds into the full range of housing services, including homebuyer education and counseling, and having the authority to spend funds anywhere within a state rather than only in rural areas. NCSL encourages statutory and regulatory changes that further streamline and simplify HOME so that it is more responsive to state-identified needs. NCSL also supports effective federal programs and adequate funding to address the affordable housing and community development needs of rural America.
The Low-Income Housing Tax Credit is a vital tool in producing new, affordable housing. NCSL supports the Housing Credit Program as well as the continuation of the Tax Credit Assistance Program, a state-administered homeownership tax credit to stimulate the production of homes for low-income families as long as it does not undermine investor interest in the Housing Credit.
Department of Housing and Urban Development
The National Conference of State Legislatures is supportive of efforts to revitalize the Department of Housing and Urban Development (HUD) and to reinvent its services delivery. State legislators are well aware of the promises of federal housing and development assistance for distressed communities within their states, only to see those resources tied up in the bureaucratic maze of HUD headquarters in Washington. NCSL is encouraged by progress made by HUD in addressing these concerns and the improved outreach to state legislators. However, HUD must continue these efforts in order to fully revitalize the agency and improve its service delivery. NCSL stands ready to work with the Administration and Congress to reinvent HUD into a community development department which would work in partnership with state and local governments and the private sector to provide the tools and flexibility for empowering those Americans within distressed communities to become part of this nation's economic mainstream.
Expires August 2012
Retiree and Employee Health Care Costs
Many state and local governments provide current and retired employees with access to group health care coverage, through their retirement systems or by some other mechanism. Some of these government employers cover all or part of the health care expenses for these retired plan members. Health care costs continue to rise at rates that threaten the ability of government employers to continue to provide these benefits, and out-of-pocket health care costs consume a growing percentage of retirement income for retired government employees.
State efforts to provide health care for retirees have also been challenged by Governmental Accounting Standards Board (GASB) accounting changes requiring states to report the full cost of these benefits. These requirements have caused many state and local governmental entities to consider greater funding of these benefits, plan design changes and increased contributions from current employees and retirees in the financing of these benefits. NCSL encourages GASB to provide an open dialogue with states as they continue to examine their current employee and retiree health care benefits and explore their options to meet these accounting requirements and funding obligations in the future.
Federal retiree health efforts represent a variety of solutions for state employees.
The National Conference of State Legislatures (NCSL) supports federal efforts that allow public sector retirees to deduct health care premium costs and/or additional medical expenses from their taxable income, as well as federal efforts to allow retirees to save for health care costs through tax preferred vehicles.
Expires August 2012
State Employee Pension Plan Reporting (Action Resolution)(Joint with Budgets and Revenue Committee)
Legislation introduced in Congress, specifically H.R. 567 and S. 347, would impose annual federal reporting requirements on state and local governments regarding various aspects of their public employee pension plans. Failure to meet any of these annual reporting requirements would result in the loss of federal tax exempt financing benefits for bonds issued by state or local governments during any noncompliance reporting period.
The National Conference of State Legislatures (NCSL) believes this legislation is unnecessary, intrusive and coercive. States report most of the information sought in the federal legislation in their consolidated annual financial reports. States submit information based on guidelines developed, and now under modification, by the Governmental Accounting Standards Board. The legislation would impose new, unfunded costs on states by first requiring these additional reports and second mandating use of the federal funds rate for the discount rate when determining public plan assets and liabilities. The legislation imposes the presence of the federal government in issues exclusively managed and legislated by states. Ironically, the proposed federal reporting requirements are suggested at a time when state legislatures are actively and comprehensively addressing issues related to their pension and post-employment retiree benefits. Finally, casual dismissal of the economic value of tax exempt financing is counterproductive. NCSL urges Congress and the administration to oppose this legislation.
Expires August 2012
Workforce Investment Act Reauthorization and Funding
The Workforce Investment Act (WIA) has been up for reauthorization since 2003. The current economic downturn and rising unemployment highlight the need for states to have a 21st century workforce system in place that can provide workers with the necessary training and employers with the highly skilled employees they need. In its current form, WIA is not ready to meet these challenges. Outdated, overly focused on process and administratively burdensome with a myriad of reporting requirements and performance standards, WIA has become a barrier to innovation in the states.
The National Conference of State Legislatures (NCSL) recognizes that U.S. prosperity and long-term economic security depend on training and maintaining a highly skilled workforce. State legislators play a critical role in addressing the economic challenges facing the nation as we strive to recover from the economic downturn and maintain our position in the global economy.
NCSL recognizes that a comprehensive, seamless and flexible national workforce development system must encompass workforce agencies, education, human services, and economic development programs and ensure the attention and investment of all levels of government, the private sector, and community- and non-profit service providers. State legislators further maintain that this system must produce a highly skilled workforce that strengthens America’s businesses and the economy while providing training and supports that enable unemployed workers, job seekers and incumbent workers to attain economic self-sufficiency and educational and career advancement.
Enactment of WIA in 1998 marked the first significant attempt to retool the nation's workforce development programs since the early 1980s. WIA was not a revolutionary departure from existing law and maintains many of the structures inherent to predecessor programs. NCSL strongly encourages Congress and the Administration to evaluate the relevance and effectiveness of a workforce system designed decades ago. NCSL believes reauthorization of WIA should reflect the future and not be a piecemeal update of existing law that maintains and reinforces the status quo.
Reauthorization of WIA presents an important opportunity to support state and local innovation, to enhance the federal-state-local workforce system and to enhance those aspects of WIA that have been successfully implemented and to radically redefine or eliminate those aspects of the Act that are administratively burdensome, ineffective or cost prohibitive. To address these challenges, state legislatures support efforts to comprehensively reform the system and provide the following recommendations to guide actions by the Administration and Congress in reauthorizing the Workforce Investment Act and in appropriating a consistent level of funding for WIA activities on an annual basis.
Maintain State Legislative Authority to Appropriate Workforce Investment Funds
Reauthorization must maintain the authority of state legislatures to appropriate workforce development funds under the WIA Section 191. The Act currently reinforces the legislatures’ fundamental role in appropriating training dollars coming into the states from the federal treasury cementing the role of the legislature to establish statewide workforce and economic development priorities and in influencing the implementation of programs and services by the local delivery system.
Enhance State Flexibility
NCSL believes that states should be given flexibility to meet the broad goals set out in the Workforce Investment Act and that state discretion to establish and administer workforce development services should be maintained. Reauthorization should not include inflexible federal mandates and restrictions on how funds can be used by states and the localities which deliver these services.
An integral component of state flexibility is the permissibility of state waivers to address state specific problems with program requirements. NCSL believes that states need flexibility for further innovation and strongly maintains that states must be able to continue current federal workforce investment act waivers. The elimination of current state waivers would substantially undermine existing state authority and local service delivery. NCSL strongly believes that the waiver process must also be conducted in a manner that is transparent and consistent among the states.
In order for the Workforce Investment Act to be effective, its activities must be fully funded. NCSL believes that the components of the integrated WIA system should be adequately supported through full annual appropriation and funded in reauthorization. NCSL urges Congress to fully fund the Act on an annual basis and to ensure that such funding be consistent with the goals, requirements and performance standards in current law and future iterations. Current law allows states three years to spend down workforce funds. This should be maintained in reauthorization. States have been judicious in spending funds for training and need the flexibility to reserve contingency funds in order to respond to mass-layoffs and other unpredictable events.
Youth services should also be fully funded and services for both in- and out-of-school youth should be maintained in reauthorization, allowing states and localities the flexibility to determine how best to allocate funds to address, local, regional and state goals for youth employment, skills development and educational opportunities. Furthermore, linkages between WIA Youth Services and Career and Technical Education programs provided for under the Carl D. Perkins Career and Technical Education Improvement Act of 2006 should be maximized to improve student performance and career opportunities while supporting innovative, high quality and effective programs. Full funding for these programs should be maintained.
Consolidation of WIA and Other Activities
Congress has repeatedly proposed to consolidate funding for adult, dislocated worker and state Employment Services (ES) authorized through the Wagner-Peyser Act in efforts to reauthorize WIA. NCSL believes that any consolidation of these programs, if considered, should be made consistent with NCSL’s Policy on Federal Grants and Programs, which outlines principles for maintaining existing financial commitments to state-federal partnership programs and current and proposed block grants. In particular, proposals to place authority over a consolidated block grant with Governors, negates the legislatures' authority and role in setting program goals, appropriating funds and oversight. Similarly, reauthorization proposals that would consolidate funding streams of WIA adult, dislocated worker and ES activities currently authorized and funded through the Wagner-Peyser Act would reduce overall federal financial support for these activities and would reduce the amount of federal dollars flowing from the Federal Unemployment Trust Fund (FUTF) to states.
Fully Fund and Support the Infrastructure Costs of the One-Stop Centers
Infrastructure funding for the One-Stops should be central to WIA reauthorization. A primary criticism of WIA is that funding for infrastructure under the current framework is limited. NCSL supports efforts to provide a separate line of funding in reauthorization to fully fund the One-Stop Centers infrastructure and to avoid the need to siphon limited resources from training and partner programs to support infrastructure needs.
Encourage Voluntary Coordination of TANF and Child Support
NCSL opposes changes to federal law that would require TANF and Child Support to participate as mandatory partners with WIA. NCSL also opposes changes to federal law that would require limited TANF administrative and Child Support funds to be used in support of infrastructure funding for One Stops. NCSL does support efforts to lift federal barriers to collaboration between TANF, Child Support and WIA and to allow states the flexibility to maximize these partnerships on a voluntary basis.
Streamline Reporting and Performance Standards
Federal workforce development program reporting should be further streamlined to eliminate barriers to effective service delivery caused by inconsistent and administratively burdensome definitions, planning and reporting requirements, and accountability measures.
Streamlined performance measures should be developed at the state level in cooperation with localities and the federal government. These streamlined measures should determine common and broad performance and accountability standards for the workforce investment and training system rather than many sets of standards for various funding streams that are overly burdensome, inconsistent and increasingly difficult and costly with which to comply. Measures should be simple and direct, readily illustrating the value that the workforce development system provides to workers, businesses and communities. Further, results quantified by performance measures should be circulated widely as a tool for the timely continuous improvement of the system.
Fully Engage America’s Businesses in the Workforce System
Two primary customer groups utilize the services provided by the workforce system—workers, both current and future, and businesses. While WIA has been successful in engaging workers, more work remains to ensure that businesses are fully engaged in the workforce system. State efforts to fully engage business in state workforce investment activities should be enhanced by WIA reauthorization and federal policy should support strong public/private partnerships and provide states with continued authority to build and enhance these partnerships.
Workforce Investment Boards
The current governance structure of state and local workforce investment boards limits their effectiveness. NCSL supports flexibility in the composition of state and local workforce boards to streamline their work, improve their efficiency in order to meet the unique workforce needs of the areas they serve.
Reauthorization of the Workforce Investment Act must strengthen connections between education and training. NCSL supports efforts to provide career pathways with multiple entry points into the workforce system in order to meet the training and employment needs of the 21st century. This requires employing career pathways programs in high schools, career and technical schools, apprenticeship programs, and postsecondary institutions. NCSL further supports efforts to allow for the seamless transfer between programs to ensure opportunities for career-long learning.
Expires August 2012
World Trade Organization Negotiations
NCSL supports U.S. efforts to:
- Increase WTO transparency, accessibility, participation and accountability;
- Address environmental and labor matters; and
- Further reduce trade barriers in manufactured products and agriculture.
However, NCSL will only support trade agreements that:
- are consistent with NCSL’s Free Trade and Federalism policy;
- limit preemption of state law and preserve the authority of state legislatures;
- protect our constitutional system of federalism;
- safeguard existing state laws that might be subject to challenge; and
- Prohibit private rights of action in U.S. courts or international dispute resolution panels based on international trade or investment agreements.
General Agreement on Trade in Services
The World Trade Organization’s General Agreement on Trade in Services (GATS) covers many sectors regulated by states. National Conference of State Legislatures strongly recommends a commitment to state-federal consultation in GATS sectors including but not limited to financial, energy, environment, distribution and education related services. Further, NCSL urges the United States Trade Representative to support provisions that direct the WTO to not interfere in state’s constitutional regulation of the service sector and to oppose adoption of new disciplines on domestic regulation in the accountancy sector or any other new disciplines proposed by the WTO Working Party on Domestic Regulation (WPDR) that limit state regulatory authority.
Agreement on Government Procurement
NCSL calls upon USTR to strictly observe the states’ constitutional authority to set procurement policy to promote these public interests while negotiating any modifications to the World Trade Organization’s Agreement on Government Procurement (GPA) or procurement chapters in free trade agreements. The GPA and procurement chapters in other free trade agreements undermine state’s constitutional authority to establish state purchasing policies, local purchasing policies and other local economic development efforts. USTR must recognize that governors are not authorized to bind state governments unless legislatively permitted and NCSL strongly recommends that USTR, when inquiring about each state’s willingness to be bound to such procurement commitments, include state legislatures. The federal government must cooperate with state legislatures to provide that decisions about state procurement practices or other matters governed by state laws under our federal system are not made without the consent of the legislature.
NCSL also strongly recommends USTR to consult regularly and meaningfully with state governments including the legislatures and NCSL during any renegotiations of the GPA. This means consulting with state legislative leaders directly – particularly in the 37 states currently bound to the GPA and to ensure the states’ rights to set and adjust procurement commitments.
Expires August 2012
NCSL Staff contacts:
Diana Hinton, Committee Director
Jeanne Mejeur, Program Director
Last updated August 18, 2011