What are the two exceptions where a state can discriminate against out-of-staters?

The correct answer is A, which highlights two specific exceptions where states can discriminate against out-of-state residents. The first exception, congressional consent, refers to circumstances where Congress allows a state to enact specific laws that may preferentially treat local residents over non-residents. This exception stems from the constitutional principle that the states cannot create laws that discriminate against residents of other states without an adequate rationale, but Congress can authorize such legislation when it pertains to the powers given to them under the Constitution.

The second exception, the market participant exception, allows a state to prefer its own residents when it is acting as a market participant rather than as a regulatory entity. When a state engages in commercial activities, such as operating a business or providing services, it can favor in-state residents. This could include scenarios like hiring preferences for state-run enterprises or granting contracts primarily to local businesses. This principle recognizes the state’s right to protect its economic interests when it is directly involved in the market.

The other options do not accurately capture the legal framework governing the specific and limited exceptions in which states may discriminate against out-of-state residents. Statehood and residency requirements typically refer to qualifications for political participation rather than promoting preferential treatment. Federal law approval and local customs do not constitute recognized legal exceptions for