Interstate compacts are contracts between states.

Just as a contract joins two or more parties in a business deal, interstate compacts unify two or more states with a set of common provisions. In occupational licensure compacts, the provisions are the requirements a practitioner must meet to receive an occupational license.

Compacts are subject to the principles of contract law and are protected by the Constitution’s prohibition against laws that impair contractual obligations. Additionally, compacts have the force and effect of statutory law and take precedence over conflicting state laws, regardless of when those laws are enacted. Once enacted, compacts may not be unilaterally renounced by a member state, except as provided by the compacts themselves.

Congress and the courts can compel compliance with the terms of interstate compacts, making compacts one of the most effective means of ensuring interstate cooperation.

Occupational licensing serves as a way for states to help ensure the protection of public health and safety where there exists the potential for physical, emotional or financial harm. Each state maintains the authority to structure the scope of practice, education and other training requirements necessary for an individual to be granted the right to practice a certain profession. However, given the independence of licensing regulations between states, licensure portability can be particularly difficult to achieve without other supporting policy provisions. Further, achieving and maintaining licensure can require significant time and financial investments and thereby decrease the current availability of practitioners.

Navigating the various state licensing requirements, rules, regulations and fee structures can present significant challenges for workers. To address these challenges, states and professions have turned to occupational licensure interstate compacts. These compacts create reciprocal professional licensing practices between states, while ensuring the quality and safety of services and safeguarding state sovereignty.

Practitioners benefit from greater opportunity to practice and provide services, streamlined licensure requirements, unified dispute resolution procedures, reduced costs and fees associated with obtaining multistate licenses, and the creation of systems that allow electronic application and processing of interstate licenses.

Licensure boards benefit by maintaining control over scope of practice and state licensure processes, centralized disciplinary action records, access to FBI fingerprint-based criminal background checks and from economies of scale that reduce administrative costs.

Consumers benefit from a more efficient distribution of services, increased availability of highly qualified practitioners, and elevated quality and safety standards.

CSG, the nation’s only organization serving all three branches of state government, created the National Center for Interstate Compacts (NCIC), a policy program dedicated to assisting states in the creation of compacts that address multi-state issues.

Specifically, CSG has been involved in the development and implementation of every recent occupational licensure interstate compact, including the:

• Interstate Medical Licensure Compact (IMLC)
• Enhanced Nurse Licensure Compact (eNLC)
• Physical Therapist Compact (PTC)
• Emergency Medical Technicians Compact (REPLICA)
• Psychologist Interstate Compact (PsyPact)

Additionally, CSG has participated in the creation of numerous compacts that count all 50 states as members, including the:

• Interstate Compact for Adult Offender Supervision
• Interstate Compact for Juveniles
• Interstate Compact for the Placement of Children
• Emergency Management Assistance Compact
• Military Children’s Interstate Compact

Compacts are versatile policy tools that can be leveraged for any issue where states have a need to coordinate. For example, existing compacts are used to reduce burdens for military families in transition, solve boundary disputes, manage shared natural resources and build resilience to natural disasters.

There are more than 250 active compacts in the U.S., and, on average, states are members of about 40 to 50.

Fourteen professions have active interstate compacts for occupational licensure:

Interstate Medical Licensure Compact (IMLC)

Nurse Licensure Compact (NLC)

Advanced Practice Registered Nurse Compact (APRN Compact)

Recognition of Emergency Medical Services Personnel Licensure Compact (The EMS Compact)

The Physical Therapy Compact (PT Compact)

The Psychology Interjurisdictional Compact (PSYPACT)

Audiology and Speech-Language Pathology Interstate Compact (ASLP-IC)

The Occupational Therapy Licensure Compact (OT Compact)

The Counseling Compact

The Interstate Teacher Mobility Compact (ITMC)

The Social Work Compact

The Interstate Massage Therapy Compact (IMPact)

The Dental Compact

The Interstate Compact for School Psychologists (ICSP)

Dietitian Licensure Compact

State entrance into a compact requires the state legislature passing and the governor signing legislation containing compact language substantially similar to the model language. The authorizing language in each state’s compact legislation must be the same for the compact to be enforceable.

For compacts to function, at least two states must enter into the agreement. Some compacts may be regionally focused and only have a few member states, while other compacts may include every U.S. state and even some territories. Compacts may require a certain threshold of member states to be operational. Most occupational licensure compacts have an activation threshold of seven to 10 states.

Compacts are powerful, durable and adaptive tools for promoting and ensuring cooperative action among states.

Compacts:

• Provide state-developed solutions to shared and complex public policy problems.
• Settle interstate disputes.
• Respond to national priorities in consultation or partnership with the federal government.
• Help states maintain sovereignty in matters traditionally reserved for the states in place of federal inaction or inflexible and unfunded mandates.
• Create economies of scale to reduce administrative costs.
• Address regional issues that affect multiple states.
• Prevent the need for a state to act unilaterally.

Compacts do not change a state’s governing authority within its own borders. Compacts promote shared sovereignty among compact member states through agreed upon rules that apply only to a specific policy area.

The interstate compact system is a constitutionally authorized means of implementing and protecting federalism and the role of states in the federal system.

The U.S. Constitution (Article 1, Section 10, Clause 3) grants states the right to enter into multistate agreements for their common benefit. Congress must approve any compact that would increase state political power in a manner that would encroach upon federal authority. No compacts for occupational licensure portability have needed to acquire congressional consent.

When entering a compact, states must adhere to state constitutional requirements. In 1951, the U.S. Supreme Court affirmed in West Virginia v. Sims that states have the authority to enter compacts and delegate authority to an interstate agency.

Compacts establish uniform guidelines, standards and procedures for agencies in compact member states.

Compacts are governed across states by a statutorily created administrative entity (such as an interstate commission) as authorized by member states through the terms of the compact. Compact commissions address issues related to the compact more effectively than a state agency acting independently or when no state has the authority to act unilaterally.

Each member state typically appoints one or more delegates to the interstate commission. The delegates from each state serve as the compact administrators. Compacts are controlled by member states.

1. Development — Through a deliberative process, stakeholder groups examine issues, current state policies, best practices and alternative structures. Based on recommendations from the stakeholder groups, compact language is drafted.
2. Education and Enactment — Once the compact language is finalized, states individually consider the compact through the legislative process, supported by educational and technical assistance from organizations such as The Council of State Governments (CSG) National Center for Interstate Compacts.

• Transition and Operation — After the enactment threshold of states is met, a compact commission is created to administer the compact.

Because compacts incorporate many stakeholders in the development process, need state legislative approval and require the establishment of an interstate commission, the entire process may take three to six years before the compact’s provisions take effect. However, once compacts become operational, they remain durable and adaptable tools for the benefit of states.

Compacts require funding for development and administration. Specifically for occupational licensure compacts, they must maintain a compact data system which facilitates licensure portability. Licensure compacts can generate revenue from license fees, state assessments, donations, grants and in-kind services.