Fourteen months after the White House infuriated state and local officials by issuing a presidential directive on federalism issues without a word of consultation, a new draft--agreed to by everyone after extensive meetings--is finally ready for President Clinton's signature.

The proposed executive order says federal regulations may preempt state and local laws and rules only when Congress expressly dictates they do so or gives the executive agency clear authority to supersede state and local government. It specifies that where state rules directly conflict with federal law, the latter shall be supreme.

The order also would give the Office of Management and Budget authority to enforce it by rejecting major proposed regulations that lack a federalism "impact statement" or have been written without consultation with state and local officials.

The executive order also would make it easier for state and local governments to get waivers from federal rules and requires federal officials to defer to states whenever possible as they weigh setting national standards.

Frank Shafroth of the National Governors' Association (NGA) and William T. Pound of the National Conference of State Legislatures said they and their counterparts in the "Big Seven" state and local government associations were pleased with the outcome.

"It's a long way better than what the White House started out with," Pound said, "and in some ways an improvement on the Ronald Reagan executive order, because this one has accountability and enforcement built into it."

Mickey Ibarra, assistant to the president for intergovernmental affairs, said, "President Clinton views the executive order as strengthening the partnership with state and local government, at the same time it recognizes the need for federal action when dealing with problems of national significance."

Ibarra and Sally Katzen, the White House official most directly involved in drafting the federalism orders, took the brunt of the criticism in the spring of 1998, when Clinton signed the original directive--without notice to the state and local officials.

Critics said that order, supplanting one signed by Reagan in 1987, gave federal agencies broad license to regulate what should be state matters. It was called "wrongheaded and unacceptable" by Utah Gov. Mike Leavitt (R), incoming NGA head, and "a serious step backward" by Philadelphia Mayor Edward Rendell (D), speaking for the U.S. Conference of Mayors. It was suspended without taking effect, and protracted negotiations began.

By signing the new order today, as expected, Clinton ensures himself a warmer welcome when he appears Sunday at the St. Louis meeting of the NGA. It also may ease the September confirmation hearing for Katzen, who has been named OMB deputy director.

Meanwhile, legislation that would go well beyond the executive order and limit conditions where Congress could preempt state and local laws and regulations is moving on Capitol Hill. One bill, sponsored by Sen. Fred D. Thompson (R-Tenn.), cleared the Senate Governmental Affairs Committee Tuesday on a bipartisan 12 to 2 vote. A companion measure sponsored by Rep. David M. McIntosh (R-Ind.) has been sent to the House Government Reform Committee, which postponed a markup scheduled for today.

The Big Seven support the bills, but opposition is gathering from environmental and business groups. A U.S. Chamber of Commerce spokesman said business is concerned that regulations varying by state could in some instances be more cumbersome and expensive than standardized federal rules.