What you should know about the compact clause. Clark L. Snelson Utah Assistant Attorney General San Antonio, October 6,7 2015

“Without the consent of congress…. No state shall….” “enter into any agreement or compact with another State, or with a foreign Power…..”

Prohibition is not absolute…. U.S. Steel V. Multistate tax Commission Prohibits only compacts that encroach on Federal sovereignty or enlarge State Powers

IS IFTA a Compact? Three indicia of a compact: 1. Creation of a joint organization for regulation/ administration. 2. Conditional consent by member states in which each state is not free to modify or repeal its participation unilaterally. 3. Requires reciprocal action for effectiveness.

What does IFTA Do? It has the three indicia of a compact, It is an agreement between States, It is an agreement with a Foreign power, It does allow the States to do something they could not do otherwise.

It may be a compact that requires Federal consent…..!

No specific form of consent is required… "The consent of Congress was given by ratification after the two states had acted, but that is not a good ground of objection. 'The Constitution makes no provision respecting the mode or form in which the consent of Congress is to be signified, very properly leaving that matter to the wisdom of that body, to be decided upon according to the ordinary rules of law and of right reason. The only question in cases which involve that point is: Has Congress by some positive act in relation to such agreement, signified the consent of that body to its validity' (Green v. Biddle, 21 U.S. 1, 85)"

Congress has given consent …. Congress has indicated consent –Twice! ISTEA Federal Bankruptcy recodification

What does it mean to be a Federally approved compact?

It may mean a lot……… Some implications are: May be “Federal Law” supremacy clause may apply. It may supersede state attempts to unilaterally alter its provisions. It may be considered both state law and a contract between the parties. Compact law may govern changes to the agreement.

In joining IFTA States have surrendered their sovereignty, at least to some degree. That is a big deal, and something we should all be aware of……