1 Preamble

The relationship and authority of states and the federal government are governed by the U.S. Constitution. The federal government is delegated certain enumerated powers while all other powers not otherwise prohibited by the Constitution are reserved to the states. Through this dichotomy, America has thrived--a nation of laws with a strong national and international identity anchored by the diversity and innovation of representative self government in the states. No matter the challenges to our nation, it is vital that the duality of our federal system remain intact and that elected officials strive to preserve and promote a balanced relationship between the states and the federal government.

2 Principles for State-Federal Relations

Governors believe that federal action should be limited to those duties and powers delegated to the federal government under the Constitution, and favor the preservation of state sovereignty when legislating or regulating activity in the states. To ensure the proper balance between state and federal action and to promote a strong and cooperative state-federal relationship, Governors encourage federal officials to adhere to the following guidelines when developing laws and regulations.

2.1 Exercise Federal Forbearance. Policy priorities and preferences often vary from state to state. When determining whether federal action is appropriate, Governors recommend that federal officials follow certain fundamental principles.

• Federal action should be limited to situations in which constitutional authority for action is clear and certain.
• Federal action should be limited to problems that are truly national in scope, where the national interest requires a universal or uniform solution, and should not merely address problems that are common to all states.
• Federal action should be sensitive to each state’s ability to bring a unique blend of resources and approaches to common problems.
• Unless the national interest is at risk, federal action should not preempt additional state action.
• Federal action should depend on risk-based priorities and cost-benefit analysis and should avoid inflexible earmarking.

2.2 Avoid Federal Preemption of State Laws and Policies. Governors recognize the need for federal intervention should states fail to act collectively on issues of legitimate concern. Preemption of state laws, however, should be the exception rather than the rule. This is especially true in areas of primary state responsibility, including education, insurance regulation, criminal justice, preservation of the dual banking system, preservation of state securities regulation, and the management of state personnel programs.

2.2.1 Congress should not interfere with state revenue systems. The independent ability of states to develop their own revenue systems is a basic tenet of self government and our federalist system. The federal government should not enact any legislation or adopt any regulation that would preempt, either directly or indirectly, sources of state revenues, state tax bases, or state taxation methods.

2.2.2 State standards should be preserved. In cases where Congress determines that federal preemption of state laws is in the national interest, federal legislation should:

• accommodate state actions taken before its enactment;
• permit states that have developed stricter standards to continue to enforce them; and
• permit states that have developed substantially similar standards to continue to adhere to them without change.

2.2.3 The judicial branch should respect state authority. Avoiding federal preemption of state laws and policies also extends to the judicial branch. Governors encourage the federal courts to restore the Tenth Amendment as a substantive limit on federal intrusion into areas of state and local concern, and place meaningful limits on the federal government’s scope of authority under the Commerce Clause. In addition, court-ordered remedies should respect state authority by limiting the time and scope of injunctive relief and by extending it no further than is necessary to restore the exercise of constitutional rights. The federal courts also should exercise forbearance in policy areas that have traditionally been state responsibilities and avoid substituting their judgments for those of state legislatures and Governors absent violations of the U.S. Constitution.

2.3 Avoid Imposing Unfunded Federal Mandates. Congress and the Administration should avoid the imposition of unfunded federal mandates on states. Federal action increasingly has relied on states to carry out policy initiatives without providing necessary funding to pay for these programs. State governments cannot function as full partners in our federal system if the federal government appropriates states’ ability to devise and legislate their own solutions to domestic problems by requiring states to devote their limited resources toward complying with unfunded federal mandates.

2.4 Designing Federal-State Programs. To provide maximum flexibility and opportunity for innovation, as well as foster administrative efficiency and cross-program coordination, federal-state programs should be designed to meet the following principles.

2.4.1 General

• Legislative authorization should be kept current, and all programs should be subject to periodic review.
• There should be a congressional determination of a compelling need for federal action.
• Legislation should include clear statements of measurable program objectives to reduce administrative confusion and facilitate judicial interpretation of congressional intent.
• States should be actively involved in a cooperative effort to develop policy and administrative procedures.
• Grant requirements should be tied to the purpose of the grant.
• The federal government should respect the authority of states to determine the allocation of administrative and financial responsibilities within states in accordance with state constitutions and statutes. Federal legislation should not encroach on this authority.
• Federal programs should aim to encourage compliance through incentives rather than punish non-compliance with the loss of federal funds.
• Programs should include reasonable incentives to reward states that efficiently manage federally funded programs.

2.4.2 Financing

• Federal revenues that are dedicated for federal aid programs should be preserved and made fully available for the purposes enacted.
• Legislation should authorize and appropriate sufficient funds to meet identified program objectives.
• Federal assistance funds, including funds that will be passed through to local governments, should flow through states according to state laws and procedures.
• States should be given flexibility to transfer a limited amount of funds from one grant program to another, or to administer related grants in a coordinated manner.
• Federal assistance appropriations should be enacted on a timely basis, possibly even one year in advance.
• Federal funds or letters of credit should be provided in a timely manner.
• Federal funds should provide maximum state flexibility without specific set-asides.

2.4.3 Administrative Requirements

• Federally mandated administrative requirements should be uniform across federal agencies and programs and should allow the substitution of comparable state requirements.
• Federal grant programs should not impose unreimbursed administrative costs on states or localities.
• Congress should limit administrative authority over planning and reporting requirements by specifying the product of planning rather than the process, by delegating planning to existing state organizations, and by requiring that reporting requirements be clearly justified.
• States should be given broad flexibility in establishing federally mandated advisory groups, including the ability to combine advisory groups for related programs.
• Governors should be given the authority to require coordination among state executive branch agencies, or between levels or units of government, as a condition of the allocation or pass-through of funds.
• Federal government monitoring should be outcome-oriented and should not focus on process or procedural measures.
• Federal reporting requirements should be minimized, and states should be encouraged to develop cooperative reporting efforts.
• The federal government should not dictate state or local government organization.
• States with prior programs and acceptable performance should be excused from detailed federal requirements or certified as meeting federal requirements.
• Federal agencies should accept state and local administrative structures and program administration.

3 Conclusion

Governors recognize the unique nature of the federal system and the critical importance of developing a close working relationship with our federal partner. We also recognize and support a continued federal role in protecting the basic rights of all our citizens and in addressing issues beyond the capacity of individual states. At the same time, the federal government must recognize that there are problems that can be best addressed at the state and local levels.

The Governors are committed to a vibrant and strong partnership with Congress and the Administration to maintain and promote a balanced federal system. Governors believe that a strong, cooperative relationship between the states and federal government is vital to best serve the interests of all citizens.

Permanent policy.
Adopted Annual Meeting 1993; revised Winter Meeting 1994, Annual Meeting 1994, Annual Meeting 1995, Winter Meeting 1996, Winter Meeting 1997, and Annual Meeting 2005.