Standard-Setting Mechanisms, Implementation Roles Link States to National Regulatory Objectives

We identified five regulatory or standard-setting mechanisms and four patterns of implementation or enforcement that characterize areas in which the federal government and the states share regulatory objectives and responsibilities. The five mechanisms are: fixed federal standards that preempt all state regulatory action in the subject area covered; federal minimum standards that preempt less stringent state laws but permit states to establish standards more stringent than the federal; inclusion of federal regulatory provisions in grants or other forms of assistance;   cooperative programs in which voluntary national standards are formulated by federal and state officials working together; and   widespread state adoption of voluntary standards formulated by quasi- official entities. The first two mechanisms involve preemption. The other three represent alternative approaches. The mechanisms also offer different options with respect to implementation or enforcement. Fixed federal standards and minimum federal standards permit three patterns of implementation: (1) direct implementation by the federal agency, (2) implementation by the states, approved by and under some degree of oversight by the federal agency, and (3) a combination of federal agency and federally approved state implementation. Regulatory Authority May Be Divided between the Federal Government and the States

In other instances, regulatory authority is divided between the federal government and the states. 106-102) involves NAIC in a different way. We discuss these advantages and limitations in terms of federal-state balance and in terms of operational challenges. Options for addressing these issues include the following:   The state’s share can be preserved through the use of fiscal provisions such as maintenance of effort or matching requirements.
What GAO Found

Both federal and state governments exercise regulatory authority in many of the same policy areas. In enacting new legislation in these shared areas, Congress must provide federal protections, guarantees, or benefits while preserving an appropriate balance between federal and state regulatory authority and responsibility. State efforts can be directed toward federal or nationally shared regulatory objectives through various arrangements, each of which reflects a way to define and issue regulations or standards and assign responsibility for their implementation or enforcement. Regulatory and standard-setting mechanisms for achieving nationwide coverage include (1) fixed federal standards that preempt all state regulatory action, (2) minimum federal standards that preempt less stringent state laws but permit states to establish more stringent standards, (3) the inclusion of federal regulatory provisions in grants or other forms of assistance, (4) cooperative programs in which voluntary national standards are formulated by federal and state officials working together, and (5) widespread state adoption of voluntary standards formulated by quasi-official entities. The first two of these mechanisms involve preemption; the other three represent alternative approaches. Each represents a different combination of federal and state regulatory authority. The mechanisms also offer different options to implementation or enforcement. Furthermore, each standard-setting mechanism offers advantages and disadvantages that reflect the key considerations of federal-state balance in the context of a given national regulatory objective. Shared implementation involves several operational challenges, such as finding the appropriate level of federal oversight, allocating costs between the federal government and the states, potentially increasing the vulnerability of federal agencies to sudden increases in responsibilities and costs, handling variations in implementation from state to state, and adjusting to the new federal-state balance.