Limits on State Regulatory & Taxing Power

Question 1

Supremacy Clause LNG

Answer 1

Article 6 Section2 –>US Con and all fed laws are supreme over any state or local laws that conflict with a valid fed law must be struck down

Question 2

DCC

what is it generally?

Answer 2

The Court has held that the Commerce Clause prohibits certain state economic regulation that unduly burdens interstate commerce

Question 3

If Congress has not enacted legislation in a particular area of interstate commerce, then the states are free to regulate, so long as the state or local action does not:….

Answer 3

….Discriminate against out of state commerce

OR Unduly burden interstate commerce

OR Regulate wholly out of state activity

Question 4

If the state or local law is facially discriminatory–>

RULE

Answer 4

–>use strict scrutiny test

Question 5

A state law that expressly discriminates against out of staters–>

Strict scrutiny test

Answer 5

…will only be upheld if necessary to achieve a legitimate gov purpose and uses the lease restrictive means. So must show:
} Strong presumption against the validity of the state law
} State must carry the burden of proof
} If less discriminatory alternative is available –> the state action is almost always unnecessary

Question 6

Pike Balancing Test

Where a state statute regulates even-handedly to effectuate a legitimate local public interest and its effects on interstate commerce are only incidental–>

Answer 6

–>it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.

Question 7

Under the Pike Test,

Answer 7

A state may not discriminate against interstate commerce if reasonably nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available.

Question 8

DCC on state tax

what is it generally?

Answer 8

the DCCD applies to state laws that substantially affect interstate commerce, even if the regulated conduct is local

Question 9

DCC State Tax TEST

Answer 9

A tax is valid under the Commerce Clause if:
a. the tax does not discriminate against interstate commerce;
b. there is a substantial nexus between the activity taxed and the taxing state;
c. the tax is apportioned;
§ Tax is based on extent of the taxable activity or property in the state
d. AND the tax fairly relates to services or benefits provided by the state.
§ There is an exchange in return for benefit to state & party

Question 10

Field Preemption RULE

Answer 10

A pervasive scheme of Fed regulation exists w/ no room for state regulation

so must use four factor test

Question 11

Field Preemption

4 factor test

Answer 11

1) If area has historically been regulated by the states or fed govt

2) If Congress expressed an intent in the text of the law to have fed law be exclusive:

3) if the more similar the state & fed law–>the more state law uncon

4) if theres a pervasiveness of fed regulation–>state law uncon

Question 12

Conflict preemption
RULE

Answer 12

1)Compliance w/ both Fed. & State law is impossible

2)OR State laws is an obstacle to Fed. purpose

Question 13

Floor vs. Ceiling Model RULE

Answer 13

o if fed level seen as ceilingthat is as high as you can gostates can regulate and allow entities to go up to that fed celing

o if fed creates a floorfed is saying these are minimum requirements, so states can require something more but cannot go anymore min than what fed law says