18 May 1998

See related EO on Indian Tribal Government

    To: Public-Distribution@pub.pub.whitehouse.gov
    Date: Mon, 18 May 1998 14:41 -0400
    From: The White House <Publications-Admin@pub.pub.whitehouse.gov>
    Reply-To: Publications@pub.pub.whitehouse.gov
    Subject: 1998-05-14 Executive Order on Federalism
    Keywords: Civil-Rights, Economy, Executive-Act, Executive-Order, Federalism,
              Fiscal-Policy, Government, Regulation, Social
    Document-ID: pdi://oma.eop.gov.us/1998/5/18/4.text.1
    Message-ID: <19980518184122.0.MAIL-SERVER@pub1.pub.whitehouse.gov>
    URL: http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1998/5/18/4.text.1

                                THE WHITE HOUSE

                         Office of the Press Secretary
                             (Birmingham, England)
    ________________________________________________________________________
    For Immediate Release                                       May 14, 1998

                              EXECUTIVE ORDER

        [Published in the Federal Register May 19, 1998 as E.O. 13083]

                                - - - - - - -

                                 FEDERALISM

         By the authority vested in me as President by the Constitution and
    the laws of the United States of America, and in order to guarantee the
    division of governmental responsibilities, embodied in the Constitution,
    between the Federal Government and the States that was intended by the
    Framers and application of those principles by the Executive departments
    and agencies in the formulation and implementation of policies, it is
    hereby ordered as follows:

         Section 1.  Definitions.  For purposes of this order:

         (a) "State" or "States" refer to the States of the United States of
    America, individually or collectively, and, where relevant, to State
    governments, including units of local government and other political
    subdivisions established by the States.

         (b) "Policies that have federalism implications" refers to Federal
    regulations, proposed legislation, and other policy statements or
    actions that have substantial direct effects on the States or on the
    relationship, or the distribution of power and responsibilities, between
    the Federal Government and the States.

         (c) "Agency" means any authority of the United States that is an
    "agency" under 44 U.S.C. 3502(1), other than those considered to be
    independent regulatory agencies, as defined in 44 U.S.C. 3502(5).

         Sec. 2.  Fundamental Federalism Principles.  In formulating and
    implementing policies that have federalism implications, agencies shall
    be guided by the following fundamental federalism principles:

         (a) The structure of government established by the Constitution is
    premised upon a system of checks and balances.

         (b) The Constitution created a Federal Government of supreme, but
    limited, powers.  The sovereign powers not granted to the Federal
    Government are reserved to the people or to the States, unless
    prohibited to the States by the Constitution.

         (c) Federalism reflects the principle that dividing power between
    the Federal Government and the States serves to protect individual
    liberty.  Preserving State authority provides an essential balance to
    the power of the Federal Government, while preserving the supremacy of
    Federal law provides an essential balance to the power of the States.

         (d) The people of the States are at liberty, subject only to the
    limitations in the Constitution itself or in Federal law, to define the
    moral, political, and legal character of their lives.

         (e) Our constitutional system encourages a healthy diversity in the
    public policies adopted by the people of the several States according to
    their own conditions, needs, and desires.  States and local governments
    are often uniquely situated to discern the sentiments of the people and
    to govern accordingly.

         (f) Effective public policy is often achieved when there is
    competition among the several States in the fashioning of different
    approaches to public policy issues.  The search for enlightened public
    policy is often furthered when individual States and local governments
    are free to experiment with a variety of approaches to public issues.
    Uniform, national approaches to public policy problems can inhibit the
    creation of effective solutions to those problems.

         (g) Policies of the Federal Government should recognize the
    responsibility of -- and should encourage opportunities for -- States,
    local governments, private associations, neighborhoods, families, and
    individuals to achieve personal, social, environmental, and economic
    objectives through cooperative effort.

         Sec. 3.  Federalism Policymaking Criteria.  In addition to adhering
    to the fundamental federalism principles set forth in section 2 of this
    order, agencies shall adhere, to the extent permitted by law, to the
    following criteria when formulating and implementing policies that have
    federalism implications:

         (a) There should be strict adherence to constitutional principles.
    Agencies should closely examine the constitutional and statutory
    authority supporting any Federal action that would limit the
    policymaking discretion of States and local governments, and should
    carefully assess the necessity for such action.

         (b) Agencies may limit the policymaking discretion of States and
    local governments only after determining that there is constitutional
    and legal authority for the action.

         (c) With respect to Federal statutes and regulations administered
    by States and local governments, the Federal Government should grant
    States and local governments the maximum administrative discretion
    possible.  Any Federal oversight of such State and local administration
    should not unnecessarily intrude on State and local discretion.

         (d) It is important to recognize the distinction between matters of
    national or multi-state scope (which may justify Federal action) and
    matters that are merely common to the States (which may not justify
    Federal action because individual States, acting individually or
    together, may effectively deal with them).  Matters of national or
    multi-state scope that justify Federal action may arise in a variety of
    circumstances, including:

         (1) When the matter to be addressed by Federal action occurs
    interstate as opposed to being contained within one State's boundaries.

         (2) When the source of the matter to be addressed occurs in a State
    different from the State (or States) where a significant amount of the
    harm occurs.

         (3)  When there is a need for uniform national standards.

         (4) When decentralization increases the costs of government thus
    imposing additional burdens on the taxpayer.

         (5) When States have not adequately protected individual rights and
    liberties.

         (6) When States would be reluctant to impose necessary regulations
    because of fears that regulated business activity will relocate to other
    States.

         (7) When placing regulatory authority at the State or local level
    would undermine regulatory goals because high costs or demands for
    specialized expertise will effectively place the regulatory matter
    beyond the resources of State authorities.

         (8) When the matter relates to Federally owned or managed property
    or natural resources, trust obligations, or international obligations.

         (9) When the matter to be regulated significantly or uniquely
    affects Indian tribal governments.

         Sec. 4.  Consultation.

         (a) Each agency shall have an effective process to permit elected
    officials and other representatives of State and local governments to
    provide meaningful and timely input in the development of regulatory
    policies that have federalism implications.

         (b) To the extent practicable and permitted by law, no agency shall
    promulgate any regulation that is not required by statute, that has
    federalism implications, and that imposes substantial direct compliance
    costs on States and local governments, unless:

              (1) funds necessary to pay the direct costs incurred by the
           State or local government in complying with the regulation are
           provided by the Federal Government; or

              (2) the agency, prior to the formal promulgation of the
           regulation,

                   (A) in a separately identified portion of the preamble
                to the regulation as it is to be issued in the Federal
                Register, provides to the Director of the
                Office of Management and Budget a description of the extent
                of the agency's prior consultation with representatives of
                affected States and local governments, a summary of the
                nature of their concerns, and the agency's position
                supporting the need to issue the regulation; and

                   (B) makes available to the Director of the Office of
                Management and Budget any written communications submitted
                to the agency by States or local governments.

         Sec. 5.  Increasing Flexibility for State and Local Waivers.

         (a) Agencies shall review the processes under which States and
    local governments apply for waivers of statutory and regulatory
    requirements and take appropriate steps to streamline those processes.

         (b) Each agency shall, to the extent practicable and permitted by
    law, consider any application by a State or local government for a
    waiver of statutory or regulatory requirements in connection with any
    program administered by that agency with a general view toward
    increasing opportunities for utilizing flexible policy approaches at the
    State or local level in cases in which the proposed waiver is consistent
    with applicable Federal policy objectives and is otherwise appropriate.

         (c) Each agency shall, to the extent practicable and permitted by
    law, render a decision upon a complete application for a waiver within
    120 days of receipt of such application by the agency.  If the
    application for a waiver is not granted, the agency shall provide the
    applicant with timely written notice of the decision and the reasons
    therefor.

         (d) This section applies only to statutory or regulatory
    requirements that are discretionary and subject to waiver by the agency.

         Sec. 6. Independent Agencies.  Independent regulatory agencies are
    encouraged to comply with the provisions of this order.

         Sec. 7. General Provisions.
         (a) This order is intended only to improve the internal management
    of the executive branch and is not intended to, and does not, create
    any right or benefit, substantive or procedural, enforceable at law or
    equity by a party against the United States, its agencies or
    instrumentalities, its officers or employees, or any other person.

         (b) This order shall supplement but not supersede the requirements
    contained in Executive Order 12866 ("Regulatory Planning and Review"),
    Executive Order 12988 ("Civil Justice Reform"), and OMB Circular A-19.

         (c) Executive Order 12612 of October 26, 1987, and Executive Order
    12875 of October 26, 1993, are revoked.

         (d) The consultation and waiver provisions in sections 4 and 5 of
    this order shall complement the Executive order entitled, "Consultation
    and Coordination with Indian Tribal Governments," being issued on this
    day.

         (e) This order shall be effective 90 days after the date of this
    order.

                                       WILLIAM J. CLINTON
                                       THE WHITE HOUSE,
                                       May 14, 1998.

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