Volume VI, Issue II

July 2010



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. NCSL’s cornerstone policy on federalism states that federal legislation should be based on broad principles, not upon specific mandates that commonly lead to a one-size-fits-all approach. NCSL’s federalism policy promotes good governance at both the state and federal levels and can be found on NCSL’s website.

 The volume of federal legislation that preempts state authority has not subsided in the new Administration. Pressure continues to mount for Congress and the White House to support federal usurpation of state authority in a variety of areas such as criminal law, insurance regulation, and the environment. Although preemption is hard to quantify because it does not always impose a cost to states, it can be harmful because it can eliminate state innovation and creativity. Often, federal preemptions 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.


Supreme Court Cases and Other Legal Challenges 

SURPREME COURT RULES ON ATTORNEY’S FEES-In the Case Perdue v. Kenny A., 08-970 the Court held, by a 5-4 vote, that an attorney’s fee based on the “lodestar” under a federal fee-shifting statute can be enhanced based on superior performance only in “extraordinary circumstances,” where “specific evidence” shows “that the lodestar fee would not have been adequate to attract competent counsel.”  Moreover, the amount of the enhancement in such a case should be based on objective factors, such as the interest payments an attorney lost by outlaying huge expenses in exceptionally protracted litigation.  The Court therefore reversed an Eleventh Circuit ruling that affirmed an enhancement of fees from $6 million to $10.5 million based on the high quality of the plaintiff counsels’ work on a case involving the management of foster homes in Georgia. [http://www.supremecourt.gov/opinions/09pdf/08-970.pdf ]

 FIRST AMENDMENT RIGHT OF PRIVACY. Decided on June 24, 2010, John Doe #1 v. Reed, No. 09-559 presented the question whether signers of referendum petitions have a First Amendment right of privacy that prevents the State from disclosing referendum signature sheets pursuant to state public-records laws.  The Court bifurcated the case into two separate questions:  1) A general question of whether disclosure of referendum petitions by the State under its open records law violates the First Amendment, and 2) whether the First Amendment rights of petitioners in this case were violated by disclosure by the Secretary of State of their petition signatures in this specific referendum initiative involving Washington’s recently enacted domestic partners law.  The Court decided the first question in favor of the State and remanded on the second question, which has not yet been considered by the courts below.  All of the Justices except one (Justice Thomas) agreed that as a general matter States can disclose petition signatures without violating the First Amendment. 

DOES THE SECOND AMENDMENT RIGHT TO BEAR ARMS APPLY TO STATES? On June 28, 2010, the US Supreme Court extended the constitutional protection of the Second Amendment’s right to keep and bear arms to every jurisdiction in the nation. The action places in serious doubt the constitutionality of a handgun ban in Chicago, and sets the stage for more legal challenges to an array of tough gun-control laws across the United States. The 5-to-4 decision means that in addition to the federal government, state and local governments must comply with the high court’s 2008 landmark ruling recognizing an individual right to possess handguns in the home for self defense. Two years ago, in a decision called District of Columbia v. Heller, the high court struck down a handgun ban in Washington, D.C., ruling that it violated the right of individuals to keep and bear arms. Because the District of Columbia is a federal enclave – rather than part of a state – the question remained open whether the newly articulated Second Amendment right would apply beyond federal jurisdictions like Washington, D.C., to states and municipalities. That was the issue in McDonald v. City of Chicago.  In the case, Chicago maintains a handgun ban similar to the ban struck down in Washington. But it wasn’t clear from prior Supreme Court precedent whether Second Amendment protections extended to cities and states.

STATES CHALLENGE NEW HEALTHCARE REFORM LAW. Florida, joined by 20 other states, filed a lawsuit against the new health care law, the Patient Protection and Affordable Care Act (the “Act”) almost immediately after it became law. The state of Virginia has filed its own lawsuit. The larger lawsuit alleges that the Act violates the 10th Amendment to the U.S. Constitution and Article I sections 2 and 9 because it infringes upon state sovereignty by converting the Medicaid program (which the suit alleges was voluntary prior to enactment of the Act) into a mandatory top-down program under which states have no discretion and no choice but to participate.  These states also allege that the Act forces states to expand their current Medicaid programs and mandates that all citizens and legal residents of the U.S. have qualifying healthcare coverage or pay a tax. Virginia’s lawsuit is similarly premised, but adds that the Act also violates a recently-enacted state statute which makes the purchase of health insurance coverage voluntary in the Commonwealth.

Status Update: On July 1, 2010 Judge Henry Hudson heard the federal governments arguments for dismissal in the Virginia lawsuit. If the case is not dismissed both sides will return to court on October 18.  

Recently Introduced, Pending, and Passed Legislation 


“The Healthy, Hunger-Free Kids Act of 2010.On March 17, 2010, Senator Blanche Lincoln of Arkansas, Chairman of the Senate Agriculture, Nutrition and Forestry, introduced her “mark” of legislation reauthorizing federal child nutrition programs through 2015, S. 3307.   The Secretary of Agriculture will update National School Lunch and School Breakfast nutrition standards and regulations to comply with recommendations made by the Food and Nutrition Board of the National Research Council of the National Academy of Sciences within 18 months of the implementation of the act. The Secretary will then set a date for all school food authorities participating in School Lunch and School Breakfast to be in compliance. The Secretary is granted authority to require that local food services comply with nutritional requirements through reasonable audits and supervisory assistance reviews every three years or in a time frame prescribed by the Secretary. 

The bill establishes a performance-based increase in the federal reimbursement rate for school lunches (six cents per meal) that would help states meet the new meal standards for healthier school meals. States would receive this funding for each meal served that is certified by the state to be in compliance.   Funding is provided for activities related to training, technical assistance and oversight activities, up to $50 million for states, and $3 million for federal administrative costs.

The bill requires the federal-state agreement for program participation to clarify the expectation that federal funds provided to operate the child nutrition programs be fully utilized for that purpose and that such funds should be excluded from state budget restrictions or limitations, including hiring freezes, work furloughs, and travel restrictions.

Sponsor: Lincoln (D-AR)

Status: 5/5/2010 Placed on Senate Legislative Calendar under General Orders. Calendar No. 363.


FRESH START ACT OF 2010. The purpose of H.R. 5492 is to limit the collateral consequences for formerly convicted individuals. Former convicts carry the stigma of a conviction for the remainder of their lives and in many instances are restricted from fully participating in their communities and from obtaining a number of jobs. The Fresh Start Act of 2010 mediates these effects by giving certain individuals, who have been convicted of nonviolent offenses, the opportunity to expunge their records. This is designed to increase the likelihood that many former convicts will be able to move passed their convictions and lead successful lives. This bill applies to the states and would preempt state laws and procedures governing expungement for those offenses.

Sponsor: Cohen (D –TN)

Status: 6/9/2010; Referred to the House Committee on the Judiciary.

 KATIE SEPICH ENHANCED DNA COLLECTION ACT OF 2010. Katie Sepich Enhanced DNA Collection Act of 2010 (H.R. 4614) - Amends the Omnibus Crime Control and Safe Streets Act of 1968 to increase payments to states under the Edward Byrne Memorial Justice Assistance Grant program for implementing a minimum or an enhanced DNA collection process. It creates purports to an incentive grant for states to establish DNA databases of those arrested for violent crimes, burglary and aggravated assault.  States which have set up a database “shall” have their Byrne grant increased by 5% or 10%.  Twenty-two states already have arrestee databases in place. While the bill authorizes “such sums” for these incentives, it appears that if the extra money is not appropriated, it will be taken off the top of Byrne JAG and moved around among states.  If even a few large states implement, that could quickly distort how the Byrne JAG dollars are allocated nationwide. 

Sponsor: Teague (R-NM)

Status: 5/18/2010 Passed/agreed to in House: as amended Agreed to by the Yeas and Nays: 357 – 32

5/19/2010 Received in the Senate and read twice and referred to the Committee on the Judiciary.

DEMOCRACY IS STRENGTHENED BY CASTING LIGHT ON SPENDING IN ELECTIONS ACT (DISCLOSE). The purpose of the DISCLOSE Act (H.R. 5175) is to mitigate the effects of the Supreme Court’s ruling in Citizens United v. Federal Election Commission. This ruling ended decades of campaign finance law by allowing corporations, labor unions, and other interest groups to spend unlimited amounts of their general treasury accounts on campaign-related activity. In general, this bill institutes higher disclosure standards for groups participating in elections. It is believed that higher disclosure will cast light on how and which organizations are engaging in electioneering; enabling the general public to make informed decisions about the messages they receive. In addition to heightened disclosure, both government contractors, recipients of TARP money, and foreign-led domestic corporations are prohibited from making campaign contributions.  

Sponsor: Van Hollen (D-MD)

Status: 6/24/2010 Passed/agreed to in House: On passage Passed by recorded vote: 219 - 206.

6/29/2010 Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 448.


Prevent All Cigarette Trafficking Act of 2009 or PACT Act. S. 1147 Preempts state, local, and tribal laws regulating the delivery of cigarettes or smokeless tobacco to consumers that impose obligations on common carriers or delivery services that are duplicative of, or inconsistent with, the new obligations imposed under the Jenkins Act as amended.

Sponsor: Kohl (D-WI)

Status: 3/31/2010 Became Public Law No: 111-154


American Jobs and Closing Tax Loopholes Act of 2010 H.R. 4213. Introduced by Utah Senator Orrin Hatch, SA 4358, preempts state authority to determine TANF policy and is an unfunded federal mandate.  NCSL is against these decisions being made at the federal level and that they should be made at the state level. The amendment requires the State to operate a new program to test all new applicants for assistance for TANF and Unemployment Insurance programs. The program will a plan to provide individuals who test positive for illegal drug use with services under State or federally funded drug treatment programs, and to allow individuals who test positive on the first test to repeat the drug test after 60 days upon request by the individual.

Sponsor: Original Bill- Rangel (NY-15)

Amendment-Senator Evan Hatch (R- UT)

Amendment Status: 6/15/2010 Senate amendment submitted 


Restoring American Financial Stability Act of 2010.  House Financial Services Committee Chairman Frank (D- MA), agreed to the Senate’s framework for a new consumer protection regulator. The House approved a free-standing consumer protection agency in the overhaul legislation it approved in December but, facing GOP opposition, Senate Democrats agreed to house the Supervisor inside the Federal Reserve. Meanwhile, Sen. Richard J. Durbin, D-Ill., said he has struck a deal with House negotiators that will largely keep intact his language allowing the Federal Reserve to limit the amount banks and card companies can charge merchants each time a debit card is used.

In a press release, Durbin, who wrote the language to limit the fees, said the deal will exempt from the regulations cards issued by governments — federal, state and local — for programs such as unemployment insurance, welfare programs and food stamps. State treasurers wrote House and Senate conferees earlier this month saying that they opposed the Durbin language because it would adversely impact the elderly and the poor who utilize social safety net programs through a government-issued card. They argued that the use of cards, as opposed to issuing checks, saves states money and that banks can issue the cards at little cost to states because of the revenue brought in by the interchange fees. The interchange language has been one of the most hotly lobbied parts of the bill (H.R. 4173) now being negotiated by House and Senate conferees. Banks and card companies have argued that the fees charged each time a debit card is used are needed to cover the cost of the transaction. Retailers, who have sought to limit these charges for years, counter that big card companies like Visa and MasterCard inflate the fees in order to attract banks as customers.

Sponsor: Frank (D-MA)

Status: 6/30/2010 Conference report agreed to in House. On agreeing to the conference report Agreed to by the Yeas and Nays: 237 - 192 (Roll no. 413).

Consumer Financial Protection Agency Act of 2009. H.R. 3126 would establish an independent federal agency, to be known as the Consumer Financial Protection Agency (CFPA), which would regulate and enforce consumer products and laws. This legislation includes preemptive provisions that would prohibit states from increasing fees they levy on depository institutions for consumer compliance purposes, require state attorneys general to consult with the Office of the Comptroller of the Currency within the Treasury Department and the CFPA before carrying out certain enforcement activities, and would preempt certain state laws that would prohibit the issuance of alternative mortgages and those that restrict remittances. H.R. 3126 was reported out of the House Financial Services Committee but has yet to be discussed on the House floor.

Sponsor: Frank (D-MA)

Status: 12/9/09 Reported (Amended) by the House Committee on Energy and Commerce


H.R. 1719. “Voter Registration Modernization Act of 2009.” This bill amends the National Voter Registration Act of 1993 and the Help America Vote Act of 2002 to promote the use of the Internet by state and local election officials in carrying out voter registration activities. It would require states to establish and maintain online voter registration forms, online assistance, online completion and submission of forms, and ensure online acceptance of forms be available on a state public website. This bill also stipulates the time applicants have to submit online voter registration forms (not later than 15 days or the period provided by state law, before the election). NCSL has opposed this bill in the past because there is a pending bill in the House (H.R. 4449 sponsored by McCartney R-CA) that makes the requirements voluntarily.

Sponsor: Lofgren (D-CA)

Status 3/25/2009 Referred to House committee. Status: Referred to the House Committee on House Administration.


CLIMATE CHANGE/ GREENHOUSE GAS CONTROLS. As expected thedraft legislation cosponsored by Senators Kerry (D-MA) and Lieberman (I-CT) included language which would reign in EPA’s authority to regulate greenhouse gases under the Clean Air Act and which would preempt state laws cap-and-trade programs.  Since the release of the legislation the debate in the Senate has shifted to a sector specific approach targeting power plant emissions in a broad energy bill as opposed to comprehensive climate change legislation.  Proposals are being presented by a number of Senators and it is unclear what affect a sector specific approach would have on existing state programs.  The energy legislation is expected to be taken up in the Senate the week of July 26th

Sponsors: Kerry (D-MA) and Lieberman (I-CT)

CHESAPEAKE CLEAN WATER AND ECOSYSTEM RESTORATION ACT OF 2009. S. 1816 is a bill to aid restoration of Chesapeake Bay watershed. It includes a provision allowing for citizen suits against states and state officials to be brought in federal court. This is a preemption of state sovereign immunity since states generally have immunity to private rights of action.

Sponsor: Cardin (D-MD)

Status: 6/30/2010 Committee on Environment and Public Works. Passed with an amendment.


Preemption Watch List


Bill Number



Bill Status

Criminal Justice

S. 714

Webb (D-VA)


This bill seeks to establish the National Criminal Justice commission and stipulate the organization, membership, and responsibilities or such a commission. As drafted, the bill does not provide opportunities for meaningful input from state or local elected officials other than Governors. Several provisions of S. 714 propose preemptions of state laws, governing prison administration, and state corrections policy.

5/6/2010 Placed on Senate Legislative Calendar under General Orders.

Criminal Justice

S. 1261

Akaka (D-HI)

A half dozen U.S. senators introduced legislation on June 15, 2009 that would repeal the REAL ID law and replace it with a state-federal regime that mirrors numerous recommendations NCSL and governors have sought for years. S. 1261, the "Providing for Additional Security in States Identification Act" (PASS ID), would require states to issue compliant licenses one year after the promulgation of regulations by the U.S. Department of Homeland Security. Identity verification by states through federal agencies would be free rather than fee-based. Information sharing mandates among individual state motor vehicle bases would be eliminated, and states would be relieved of numerous other requirements. The PASS ID Act would ensure that state privacy laws stricter than federal standards not be preempted. This bill was reported from Senate Committee on Homeland Security and Governmental Affairs without a written report.

12/9/2009 By Senator Lieberman from Committee on Homeland Security and Governmental Affairs filed written report

Criminal Justice

H.R. 560/ S. 251

Brady (R-TX)/ Hutchinson(R-TX)

“State Prisons Communications Act of 2009.” Amends Section 333 of the Communications Act o 1943 (47 U.S.C. 333) and adds a waiver provision, allowing the installation of jamming devices in a prison (or other correctional facility) for 10 years. The director of the Federal Bureau of Prisons or the Governor must petition the Federal Communications Commission (FCC) for this waiver or its renewal after 10 years. The FCC will not charge a fee for this petition. The FCC must provide copies of received petitions to commercial mobile service providers in the relevant area and maintain a public database record of received petitions. Once a waiver is granted to a particular prison facility, it is not transferable to any other facility.


3/16/2009 Referred to the Subcommittee on Crime, Terrorism, and Homeland Security. / 10/06/2009   Received in the House, after passage in the Senate and referred to the Subcommittee on Crime, Terrorism, and Homeland Security



H.R. 1604

Davis (D-CA)

This is a bill to amend the Help America Vote Act of 2002 to allow eligible voters to vote by mail in Federal elections. In short, this language mandates that every state allow no-excuse vote by mail options for every eligible voter. Currently, 28 states allow no-excuse absentee voting by mail. The remainder of states have different processes that have been passed through the appropriate state legislative process. H.R. 281 would preempt state absentee voting laws in at least 22 states and the District of Columbia and force states to unravel one component of their election process that is not necessarily broken, dysfunctional, or an impediment to absentee voting. These states will be forced to overhaul their standards, protocols and policies in a very short period of time and with no appropriated federal dollars in place. A markup was held on June 10, 2009. One amendment was passed which requires signature verification for absentee voting.


7/16/2009 Placed on the Union Calendar



H.R. 1719

Lofgren (D-CA)

This bill amends the National Voter Registration Act of 1993 and the Help America Vote Act of 2002 to promote the use of the Internet by state and local election officials in carrying out voter registration activities. It would require states to establish and maintain online voter registration forms, online assistance, online completion and submission of forms, and ensure online acceptance of forms be available on a state public website. This bill also stipulates the time applicants have to submit online voter registration forms (not later than 15 days or the period provided by state law, before the election).

3/25/2009 Referred to the House Committee on House Administration.


P.L. 111-84

Skelton (D-MO)

On October 28, 2009, President Barack Obama signed H.R. 2647 (P.L. 111-84, a defense authorization bill that includes mandatory voter registration and absentee ballot provisions states must follow regarding U.S. military and overseas voter registration and how states to handle mail and electronic requests for voter registration and absentee ballots, ensure voter privacy, and establish procedures for transmission of voting materials to military and overseas voters. “Hardship waivers” are available to states from the director of the Federal Voting Assistance Program where a state’s primary election date prohibits the state from complying with the bill. Waivers can also be sought when a state’s constitution prohibits compliance of when a state has experienced a delay in generating ballots due to a legal contest.


10/28/2009   Became Public Law No. 111-84

Financial Services


Levin (D-MI)

Legislation aimed at detection and prevention of money laundering and related misconduct would preempt the ability of the states to regulate the corporate formation of business within their jurisdictions. The legislation, sponsored by Michigan Senator Carl Levin, Iowa Senator Charles Grassley, and Missouri Senator Claire McCaskill, would preempt state corporate governance authority. It would withhold federal homeland security funding from any state not amending its corporate laws to compel detailed, publicly disclosed personal information of all beneficial owners of a non-public corporation or limited liability company. NCSL expressed its concerns regarding S. 569 in a November 4, 2009 letter signed by Rhode Island Representative Brian Patrick Kennedy, chair of NCSL’s Communications, Financial Services and Interstate Commerce Committee. One hearing has been held on S. 569, the bill’s chief sponsors are urging a full committee vote and companion legislation has yet to surface in the House.

11/5/2009 Senate Committee on Homeland Security and Government Affairs Committee Hearing held.


Financial Services

H.R. 3126

Frank (D-MA)

State consumer protection and financial services laws would apply to national banks and federally chartered financial institutions under an amendment (North Carolina Representative Mel Watt and Kansas Representative Dennis Moore) added on October 20th to H.R.3126. H.R. 3126 creates a federal consumer protection agency. The provision would reverse a two decade long string of preemption of state consumer financial protections led by the Office of the Comptroller of the Currency (OCC).

States also retained their ability to regulate three lines of insurance through an NCSL-led effort to exclude insurance regulation among the powers of a new federal consumer protection agency. Wisconsin Representative Gwen Moore promoted the amendment accomplishing this deletion. NCSL tendered a letter to key House members on October 19, 2009 essentially supporting Representative Moore’s efforts and raising concerns for other insurance-related legislation. Georgia Senator Don Balfour, NCSL President, and Rhode Island Representative Brian Kennedy, chair of NCSL’s communications, Financial Services, and Interstate Commerce Committee, signed the October 19 letter. H.R. emerged from the House Financial Institutions Committee on October 22, 2009 on a 39-26 party-line vote.


12/09/2009   Report filed from House Committee on Energy and Commerce


H.R. 3596/S. 1681

Conyers (D-MI)/Leahy (D-VT)

 On Feb. 24, 2010, the U.S. House of Representatives overwhelmingly supported legislation repealing the six-decades old McCarren-Ferguson health insurance anti-trust exemption. The legislation, H.R. 4626, would compel health insurance entities to comply with both federal and state antitrust regulations. These provisions are similar to those in the House-passed health care reform bill, but are excluded from the Senate-passed health care package and were not included in President Obama’s 11-page health reform proposal.

11/02/2009   Report filed from House Committee on the Judiciary/ 10/14/2009   Senate Committee on the Judiciary hearing held


H.R. 2609

Kanjorski (D-PA)

The House Financial Institutions Committee has delayed further consideration of legislation preempting state regulation of insurance. H.R. 2609 (Pennsylvania Representative Paul Kanjorski) would empower a new office within U.S. Treasury Department to monitor all aspects of the insurance industry. The Department’s bureaucracy would make preemption of state law determinations and study state insurance regulatory structures to determine if they meet or fail the meet federal regulatory principles. NCSL opposes this legislation. H.R. 2609 and other regulatory reform initiatives are on hold until December 2009. A substitute currently being considered by the House Financial Institutions Committee would determine what state insurance laws and regulations are inconsistent with international treaties and agreements, and study state insurance regulatory structures to determine if they meet or fail to meet federal regulatory principles. The compromises achieved with NCSL and other state groups in prior on legislation that was never enacted are missing from the current bill.

10/20/2009 Scheduled for Markup. 10/27/2009 Not heard in House Committee on Financial Services.