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State C owns and operates a mill that sells reclaimed lumber from state demolition projects. During a shortage, the mill gives State C residents first priority to buy lumber and charges them 20 percent less than nonresidents. The sales contract also requires every buyer, resident or nonresident, to use State C workers on any construction project in which the lumber is later installed.
An out-of-state contractor challenges both the priority discount and the labor condition under the dormant Commerce Clause. Which statement is most accurate?

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The resident discount is invalid, but the downstream labor condition is valid because construction employment is not a commodity. Both provisions are valid only if Congress expressly ordered the state to sell lumber on those terms. The resident discount and priority are more likely valid because the state is selling its own lumber, but the downstream in-state-labor condition is more vulnerable because it regulates a separate market after the sale. Both provisions are invalid unless the state sells the lumber below cost.

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