Developing Interstate Compacts

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Development Background
At their most basic level, interstate compacts are contracts between two or more states. As such, compacts are governed by the tenets of contract law, meaning an offer to enter the agreement is expressed by the first state to join the compact and accepted by each subsequent jurisdiction that joins. A state voluntarily elects to join a compact in the same way any piece of legislation is passed and adopted.

While compacts function pretty consistently from one agreement to the next, developing an interstate compact is not an exact science and varies considerably depending on the nature of the agreement. The development process also has evolved considerably during the past 200-plus years. Border compacts, which are agreements between two or more states, represent the most basic use of the compact mechanism and are the simplest to draft. On the other end of the spectrum are administrative or regulatory compacts. These types of compacts represent the most sophisticated use of the compact mechanism and are also the most difficult and frequently timeconsuming to design.

CSG’s National Center for Interstate Compacts focuses mostly on regulatory compacts. These types of agreements frequently are created to allow states to work cooperatively to resolve cross-border policy challenges short of a federally mandated solution. While there is no universal format to follow when developing this type of compact, CSG works hard to promote a process that is deliberate, transparent and driven by subject matter experts. 

CSG-Derived Best Practices for Development of Regulatory Compacts
The compact development process has evolved for more than 200 years, taking root in such efforts as the Maryland-Virginia Compact of 1785 orchestrated by George Washington in his Mount Vernon home.1 Regardless of the type of compact or policy area that it is addressing, however, the integrity of the development process is of utmost importance. This is true because, unlike most legislation, compact bills are difficult to amend following initial passage because of their contractual nature. Therefore, compacts face a unique hurdle and can be easily derailed if the appropriate stakeholders have not been addressed at the beginning of the process. Legislative buy-in is crucial, and in CSG’s experience, the development of any interstate compact should be a state-driven and state-championed solution to a policy issue.

The development of an interstate compact should not be entered into lightly. Instead, emphasis should be placed on making it an inclusive process with stakeholder input and buy-in, along with substantive
research in advance of and during the advisory phase. Considerable effort must be made to determine if an interstate compact is feasible for a particular policy problem, and if so, what the final product should look like. When developed and structured correctly, interstate compacts provide states a durable solution to interstate policy challenges and a viable alternative to federal pre-emption.

Key steps to the development process of a regulatory compact—one of the more sophisticated and common forms of modern compacts—are outlined below. This process has been extremely important in developing compacts that are legally sound, workable for the member states and enforceable over time. The following steps in the process should be viewed as examples and can be customized as needed based on the issue area.

  1. Advisory Group: Composed of state officials and other critical stakeholders, an advisory group examines the scope of the problem, suggests possible solutions and makes recommendations about the structure of the interstate compact. Typically, an advisory group is composed of around 20 people, each representing various groups and states. This step also represents a crucial foundation and opportunity to ensure a credible, inclusive process. An advisory group usually meets two or three times over a period of several months, with its work culminating in a set of recommendations about what the final compact product should look like.
  2. Drafting Team: While the advisory group is tasked with thinking about the issue from a broad level, a drafting team pulls the thoughts, ideas and suggestions of the advisory group into a draft compact. The drafting team, composed of five to eight compact and issue experts, will craft language based on the recommendations of the advisory group, as well as their own thoughts and expertise. The document also will be open for comments from a wide swath of stakeholders and the public. Following these comment periods, the compact will be revised as needed and eventually circulated back to the advisory group for final review to ensure it meets the original spirit of the group’s recommendations. A drafting team meets three to four times over a period of 10-14 months, with significant staff work and support between sessions. 
  3. Education: Once completed, the interstate compact is available to states for legislative approval. During this phase of the initiative, state-by-state technical assistance and on-site education are keys to rapid success. Previous interstate compact efforts have convened end-of-the-year legislative briefings for state officials to educate them on the solutions provided by the interstate compact. Education occurs before and during state legislative sessions. 
  4. Enactment: A majority of interstate compacts do not become active immediately. Interstate compacts typically activate when a preset number of  states join the compact. For instance, the Interstate Compact for Adult Offender Supervision (Adult Compact) required 35 state enactments before it could become active. This number was chosen because it signified that a significant majority of states were in favor of the agreement. Moreover, the number created a sense of urgency for states because the first 35 jurisdictions to join would meet soon thereafter and fashion the operating rules of the compact. Frequently, interstate compacts take many years to reach critical mass. Recent efforts managed by CSG, such as the Adult Compact and the Interstate Compact on Educational Opportunity for Military Children, each reached 35 states in just 30 months, or about two and a half legislative sessions. In this legislative session alone, the State Authorization Reciprocity Agreement—which was developed as a joint effort among the Presidents' Forum, The Council of State Governments, the Commission on Regulation of Postsecondary Distance Education and the four regional higher education compacts—has been approved in seven states.
  5. Transition: Following enactment by the required minimum number of states, the new compact becomes operational and, depending on the administrative structure placed in the compact, goes through standard startup activities, such as state notification, planning for the first commission or state-to-state meetings, and, if authorized by the compact, hiring of staff to oversee the agreement and its requirements. A critical component of the transition is the development of rules, regulations, forms, standards, etc., by which the compact will operate. Typically, transition activities run between 12 and 18 months before the compact body is an independently run and self-sustaining entity. 

These steps represent the core best practices for compact development and generally are followed by CSG’s National Center for Interstate Compacts. The model has been used in previous compacts efforts such as the Interstate Compact on Educational Opportunity for Military Children, the Interstate Compact for Juveniles and the Interstate Compact for Adult Offender Supervision, as well as all of CSG’s ongoing projects.



1 Broun, Caroline N., Buenger, Michael L., McCabe, Micahel H., & Masters, Richard L. (2006) p 73. The Evolving use and the Changing Role of Interstate Compacts: A Practitioner’s Guide. Chicago: American Bar Association.


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