stating that the Supreme Court has “completely foreclosed any claim that the nondiscriminatory imposition of costs on private entities that pass them on to States . . . unconstitutionally burdens state . . . functions”
How later courts described this case
- stating that the Supreme Court has “completely foreclosed any claim that the nondiscriminatory imposition of costs on private entities that pass them on to States . . . unconstitutionally burdens state . . . functions”
- holding that a federal law removing a tax exemption from state-issued bonds did not violate Intergovernmental Tax Immunity because the tax was “imposed on and collected from bondholders,” and not from the states
- stating that the requirement that bearer bonds be registered in order to be eligible for a federal income tax exemption applied to “local governments, the Federal Government, [and] private corporations”
- stating that "Garcia left open the possibility that some extraordinary defects in the national political process might render congressional regulation of state activities invalid, . . . ."
Written by the judges who cited it.
The opinion
Chief Justice Rehnquist,
concurring in the judgment.
Today the Court reaches two results regarding § 310(b)(1) of TEFRA that I believe are analytically distinct. First, the Court finds that § 310(b)(1) does not violate the Tenth Amendment by compelling States to issue bonds in registered form. Second, the majority concludes that the statute *529 also does not contravene the doctrine of intergovernmental tax immunity; in doing so, the majority overrules our decision in Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429 (1895). While I agree that the principles of intergovernmental tax immunity are not threatened in this case, in my view, the Court unnecessarily casts doubt on the protective scope of the Tenth Amendment in the course of upholding §310 (b)(1).
The Special Master appointed by the Court made a number of factual determinations about the impact that the TEFRA registration requirements would have upon the States. Most notably, the Special Master found that the registration requirements have had no substantive effect on the abilities of States to raise debt capital, on the political processes by which States decide to issue debt, or on the power of the States to choose the purpose to which they will dedicate the proceeds of their tax-exempt borrowing. After an exhaustive investigation, the Special Master summarized: “TEFRA has not changed how much the States borrow, for what purposes they borrow, how they decide to borrow, or any other obviously important aspect of the borrowing process.” Report of Special Master 118.
This well-supported conclusion that § 310(b)(1) has had a de minimis impact on the States should end, rather than begin, the Court’s constitutional inquiry. Even the more expansive conception of the Tenth Amendment espoused in National League of Cities v. Usery, 426 U. S. 833 (1976), recognized that only congressional action that “operate[s] to directly displace the States’ freedom to structure integral operations in areas of traditional governmental functions,” runs afoul of the authority granted Congress. Id., at 852 . The Special Master determined that no such displacement has occurred through the implementation of the TEFRA requirements; I see no need to go further, as the majority does, to discuss the possibility of defects in the national political process that spawned TEFRA, nor to hypothesize that the Tenth Amend *530 ment concerns voiced in FERC v. Mississippi, 456 U. S. 742 (1982), may not have survived Garcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528 (1985). Those issues, intriguing as they may be, are of no moment in the present case and are best left unaddressed until clearly presented.