Federal Legislation and Business Decisions
U.S. Federal Legislation
How a Bill Becomes a Law
State Statutes and Business Decisions
In most states, lawmakers propose a bill within the state legislature. All state legislatures except for Nebraska's are bicameral—in other words, they each have two chambers. Legislators vote on the proposed bill, and if it passes, it goes to the governor to sign into law or veto. State legislatures typically have provisions to override a gubernatorial veto. Similarly, state courts have the right to declare a law unconstitutional under the state constitution, the U.S. Constitution, or both. If a federal statute is passed by Congress and signed into law by the president, an action challenging the constitutionality of the statute may be heard by the federal courts, and the courts could decide the law's constitutionality.
The 10th Amendment of the U.S. Constitution reserves to the states any powers not given to the federal government. Many state laws may affect businesses. For example, state tax codes dictate the state taxes a business must pay, and the Uniform Commercial Code is a set of laws governing sales within the state. In addition, states often pass labor laws that dictate how employees must be treated and what rights they have. Most states also have consumer protection laws. Other areas of state law include negligence laws, estate laws, criminal codes, traffic rules, zoning laws, family law statutes, and real estate laws.
Businesses must comply with federal legislation and state legislation. Complying with one does not automatically mean that a business is in compliance with the other. The doctrine of preemption requires that state law be at least as strict as federal law on the same topic. If it is not, then the state law is typically preempted by the federal law.