The newest dangerous proposal filtering through Congress is H.R. 2887, the "No Regulation Without Representation Act of 2017." Packaged as a prohibition on states regulating outside of their borders, the bill is a Trojan horse that usurps the states' role in the federal system and threatens their ability to protect their own citizens from harm. The House Committee on the Judiciary's Subcommittee on Regulatory Reform, Commercial and Antitrust Law is taking up the bill in a hearing today, July 25, and Center for Progressive Reform Member Scholars have submitted a letter opposing the bill.
Poor drafting obscures impact
The bill itself is challenging to read. It is poorly drafted and hides its true impact behind generic terminology and rabbit-hole definitions. Here is a summary of the key language – after which a concrete example helps demonstrate its meaning.
The bill contains a prohibition: states may not regulate a person's activity in interstate commerce unless that person is physically present in the state when the regulation is imposed. (The bill also includes a tax prohibition, which is not addressed in this post.) The term "regulate" is defined as imposing a "standard or requirement on the production, manufacture or post-sale disposal of any [out-of-state] product sold or offered for sale in interstate commerce as a condition of sale" when the standard or requirement is "in addition to" federal law or that of the state where the product was produced (emphases added). "Products" include both goods and services, tangible and intangible.
So how does the prohibition work? Suppose State A requires that all eggs sold within its borders must come from chickens housed in pens at least two feet long on all sides. This law applies neutrally – anyone wishing to sell eggs in State A must comply, regardless of their state of origin. Now suppose State B allows egg producers within its borders to keep chickens in smaller pens. Typically, the impact of this difference is that egg producers in State B have a choice: they may comply with State A's requirements and sell in State A. Or they may choose not to comply with State A's requirements and sell their eggs elsewhere, including in State B. By the way, if State A's egg prices rise because of the stricter standards, it's up to State A's voters to decide whether the increase is worthwhile.
There is nothing inherently remarkable about this difference in the two states or the egg producers' choices. It happens all the time. But the effect of H.R. 2887 is both simple and dangerous: State A's law is prohibited because it imposes a "requirement" of "production" that is "in addition" to that of State B.
Prohibition violates fundamental constitutional principles of federalism
Why is the prohibition a problem? It violates basic principles of our constitutional framework. The framers of the U.S. Constitution erected a system of government that preserves for states the power to protect the health, safety, and other needs of their citizens. For nearly 200 years, the Supreme Court has applied the common-sense principle that "there is a residuum of power in the states to make laws governing matters of local concern which nevertheless in some measure affect interstate commerce, or even, to some extent, regulate it." This is a critical way that H.R. 2887 goes astray ...