Best Practices for Compact Development

Interstate compacts are contracts between states. Applying best practices - developed over more than two centuries of the  history of compact use - helps ensure that the complex process of orchestrating a contract between multiple state governments is successful.

 

 
Other Briefs in this Series:  Interstate Compacts: Background and History
 
Compacts Background
Interstate compacts date back to colonial times and function as contracts between states.  Referenced in Article I, Section X of the U.S. Constitution, interstate compacts are governed by contract law, including the notions of one party offering the contract and another party or parties accepting the contract.
 
In order to take effect, compacts require adoption by at least two states. Many modern  compacts, however, are designed in such a way that they do not become active until a minimum number of compacting states have joined. If the compact affects a power delegated to the federal government or alters the political balance within the federal system,  congressional consent is required.
 
Although there are many types of interstate compacts, they can generally be divided into three classifications:
 
1. Border Compacts:
  • These are agreements between two or more states that establish or alter the boundaries of a state.
  • Border compacts require approval of Congress.
  • Key examples of border compacts include the Virginia-Tennessee Boundary Agreement of 1803, Arizona-California Boundary Compact of 1963, the Missouri-Nebraska Compact of 1990, and the Virginia-West Virginia Boundary Compact of 1998.
2. Advisory Compacts:
  • These are agreements between two or more states that create study commissions, which examine a problem and report their findings to their respective states.
  • These compacts do not result in changes to a state’s boundaries or create ongoing administrative agencies with regulatory authority.
3.Regulatory Compacts:
  • These compacts are a development of the 20th century that cover a wide range of policy topics, including:

    •  Regional planning and development
    •  Crime control
    •  Agriculture
    •  Flood control
    •  Water resource management
    •  Education
    •  Mental health
    •  Juvenile delinquency
    •  Child support
  • Regulatory compacts create ongoing administrative agencies that are granted rulemaking and regulatory authority by the compact.
  • Many regulatory compacts require congressional consent.
CSG-Derived Best Practices for Development of Regulatory Compacts
The compact development process has evolved for more than 200 years, and maintaining the integrity of the development process remains crucial to the success of a compact.
 
Unlike most legislation, a compact bill should not be amended from its original form after introduction because it legally functions as the acceptance of a contractual agreement between states. Therefore, compacts face a unique hurdle.1 They can be easily derailed, merits aside, if the appropriate stakeholders and groundwork have not been addressed on the front end. 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.
 
Outlined below are the key steps to the development process of a regulatory compact—one of the more sophisticated and common forms of modern compacts. This facilitated approach has become popular because of its flexibility. The following steps in the process should be viewed as examples and can be customized as needed.
 
  • Advisory Group: Composed of state officials and other critical stakeholders, an advisory group examines the problem, suggests possible solutions and makes recommendations as to the structure of the interstate compact. Typically, an advisory group is comprised of approximately 20 individuals, each representative of 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 as to what the final compact product should look like.
     
  • Drafting Team: While the advisory group is tasked with thinking about the issue from a macro level, a drafting team pulls the thoughts, ideas and suggestions of the advisory group into a draft compact. The drafting team, comprised of five to eight compact and issue experts, crafts language based on the recommendations of the advisory group, as well as their own thoughts and expertise. The drafting team opens the document for comments from a wide swath of stakeholders and the public. Following these comment periods, the drafting team revises the compact as needed and sends it 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 to 14 months, with significant staff work and support between sessions.
     
  • 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  compact. Education occurs before and during state legislative sessions.
     
  • Enactment: A majority of interstate compacts do not become active right away. Rather, they typically activate when a predetermined number of states join the compact. For instance, the Interstate Compact for Adult Offender Supervision, known as the Adult Compact, required 35 state enactments before it could become active. This number was chosen for two reasons. A membership of 35 states ensures that a majority of states are in favor of the agreement and that a new compact would not create two conflicting systems. Moreover, a sense of urgency for states was created because the first 35 jurisdictions to join would meet soon thereafter and fashion the operating rules of the compact. Most interstate compacts take up to seven years to reach critical mass. Recent efforts managed by CSG, including the Adult Compact and the Interstate Compact on Educational Opportunity for Military Children, reached 35 states in just 30 months, about two and a half legislative sessions.
     
  • Transition: Following enactment by the required minimum number of states, the new compact becomes operational. Depending on the administrative structure, 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 operates. Typically, transition activities run between 12 and 18 months before the compact body is independently running.
These steps represent the core best practices for compact development and the  developmental framework used by CSG’s National Center for Interstate Compacts (www.csg.org/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 ongoing CSG projects such as the Prescription Monitoring Program Compact and the Interstate Electric  Transmission Line Sitting Compact.
 
The development of an interstate compact should not be entered into lightly. Emphasis should be placed on the development being an inclusive process, getting stakeholder input and  buy-in, and doing considerable 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 compact needs to 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.
 
Resources:
1 Broun, Caroline N., Buenger, Michael L., McCabe, Michael H., & Masters, Richard L. (2006) p 89-90. “The Evolving use and the Changing Role of Interstate Compacts: A Practitioner’s Guide.” Chicago: American Bar Association.
 
For more information, see “The Evolving use and the Changing Role of Interstate Compacts: A Practitioner’s Guide” by Caroline N. Broun, Michael L. Buenger, Michael H. McCabe, & Richard L. Masters. Additional information is also available at www.csg.org/compacts
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