According to the Compact Clause (Article I, Section 10) of the U.S. Constitution, states have the authority to enter into compacts with each other for any purpose subject only to congressional approval. Interstate compacts take the form of a binding agreement that requires the parties to faithfully execute the terms outlined.
During the early years of the republic, boundary disputes were common among the states. Recognizing this, the Constitution, following procedures outlined in the Articles of Confederation, provided for a means of resolving disputes through the interstate Compact Clause. In early practice, compacts negotiated to resolve a boundary dispute never received congressional approval. In more recent times, however, the subject matter of compacts has changed and congressional assent has become the norm.
|ARTICLE I, SECTION 10, CLAUSE 3|
|No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.|
Congressional approval can also be viewed as an attempt to limit the potential collective power of states to threaten the national government. Thus, the Compact Clause also prohibits states from entering into treaties with foreign nations. Chief Justice Roger B. Taney in Holmes v. Jennison (39 U.S. 540 ) interpreted the clause broadly, arguing that the founders intended a comprehensive ban on state–foreign government interaction and that every agreement finalized by two or more states needed congressional approval. In Virginia v. Tennessee 148 U.S. 503 ), the Supreme Court ruled that unqualified prohibitions on state agreements without congressional consent did not apply to minor agreements, specifically, those agreements that had a relatively minor impact on nonmembers states’ sovereignty.
The Port of New York Authority Compact of 1921 was the first interstate compact involving regulatory power and revenue sources. This groundbreaking compact, however, did not lead to an increase in agreements among the states. Key questions remained regarding state participation. First, in creating a compact commission that has binding authority over the signatory state, to what extent can a state yield its sovereignty to such a commission? Second, are states able to commit financially over an extended period of time to the operations of the compact? In State ex rel Dyer v. Sims (341 U.S. 22 ), the Court effectively ruled that the agency created by the compact was a state agency on par with any other state agency. Furthermore, committing to funding the commission into the future was not prohibited by the state constitution.
In the 1930’s, national interest in exploring regional cooperation to extend and augment the New Deal was high. After the National Industrial Recovery Act was held invalid by the Supreme Court (Schechter Poultry Corporation v. United States, 295 U.S. 495 ) regional attempts were considered a viable substitute for national planning. The main appeal of compacts is the flexible implementation of policies falling into the suprastate, subnational zone. For example, criminal justice is a very fruitful area of cooperation ranging from apprehension to extradition of prisoners. Still, other policy areas are amenable as well—commerce, environmental, educational, and labor legislation, among others.
Some compacts have found disfavor with Congress and/or the president. In the late 1930’s, in response to a devastating flood, several of the New England states concluded a compact to establish flood control. President Franklin D. Roosevelt, however, threatened a veto so that the Federal Power Commission would not lose jurisdiction regarding the two rivers involved. This was not the only compact that threatened the authority of an agency of the federal government. For example, another proposed compact between New York and New Jersey that provided authority and immunity for state militias when aiding other states, including allowing the pursuit of anyone seeking to overthrow the government, was delayed until the FBI was assured it would not be an usurpation of its powers.
Compacts can be classified into five major policy areas: boundary or border dispute resolution compacts, river basin compacts, metropolitan services compacts, industrial compacts, and public services compacts like those pertaining to crime, education, or welfare. The administrative apparatus varies from no commission to a nonregulatory commission to a regulatory agency. Compacts can hide problems in administrative oversight and responsiveness to changing social and economic conditions. The major problem lies in the commitment because a state obligates itself to fulfilling the terms and conditions of the agreement, which over time may impair its ability to act in an independent manner.
Compacts limit state action to act independently and subject states to the actions or inactions of fellow members. Marion Ridgeway argued that by ignoring this political side to diminished state autonomy, many compact proponents fail to understand the importance of the diversion of revenues required for participation, the inevitable preoccupation with its affairs and issues, the imperfect control over planning, and the diminution in state jurisdictional authority.
Once a compact gains congressional approval, the Constitution provides for its enforcement through the Contract Clause against any breach of faith by one or more parties. By insulating compacts from political controls once they are approved, power can potentially flow into the hands of private interests. This is especially problematic in industrial compacts. Compacts negotiated to bury low-level radioactive waste, for example, have been criticized for being controlled by the nuclear power operators who have the most to gain from the successful implementation of the agreement, while the local community that would be the host for the waste facility would have less to gain outside of increased tax revenues.
Compacts are long-term commitments offering great potential for overcoming regional problems. This aspect implies the opportunity to accomplish policy goals and objectives but also the potential for diminished state autonomy. Importantly, compacts need to be monitored by elected officials and the press since in large measure many are separated from the public due to their narrow, limited scope of authority. They are, or at least can be, potentially undemocratic, unrepresentative, and unresponsive to the general public while highly responsive to the select public they supervise. Thus, the very strengths of compacts are also the sources of their weaknesses.
Weldon V. Barton, Interstate Compacts in the Political Process (Chapel Hill: University of North Carolina Press, 1967); Jane Perry Clark, “Interstate Compacts and Social Legislation,” Political Science Quarterly 50, no. 4 (1935): 502–24; Anthony L. Dodson, “Interstate Compacts to Bury Radioactive Waste: A Useful Tool for Environmental Policy?” State and Local Government Review 30 (1998): 118–28; Paul Hardy, Interstate Compacts: The Ties That Bind (Athens: Institute of Government, University of Georgia, 1982); Marion Ridgeway, Interstate Compacts: A Question of Federalism (Carbondale: Southern Illinois University Press, 1971); and Frederick L. Zimmermann and Mitchell Wendell, “New Experience with Interstate Compacts,” Western Political Quarterly 5, no. 2 (1952): 258–73.