Intrastate Commerce Improvement Act

aka: Act 137 of 2015

In response to the 2014 passage of a broad antidiscrimination ordinance by the city council in Fayetteville (Washington County), barring discrimination in the city on the basis of sexual orientation or gender identity, Senator Bart Hester, a Republican of Cave Springs (Benton County), introduced Senate Bill 202 in the 2015 regular session of the Arkansas General Assembly. A parallel version of the legislation was sponsored in the House of Representatives by Representative Bob Ballinger, a Republican of Hindsville (Madison County). This legislation barred local governments in Arkansas from passing any ordinance that “creates a protected classification or prohibits discrimination on a basis not contained in state law.” The stated goal of the legislation was “to improve intrastate commerce by ensuring that businesses, organizations, and employers doing business in the state are subject to uniform nondiscrimination laws and obligations.” The bill, however, did allow localities to pass broader antidiscrimination policies that applied only to municipal employees.

The Senate bill was introduced in early February 2015 and quickly worked its way through the legislative process. In the Senate debate, proponents focused on preventing a “mishmash” of civil rights laws across the state. Senator Hester justified the legislation by arguing that inconsistency in antidiscrimination laws across the state would create a barrier to a vibrant statewide economy in that employers would be forced to operate under different laws in different communities.

In the House, the issue of LGBTQ (lesbian, gay, bisexual, transsexual, and queer) rights entered the debate more explicitly. In the House committee debate, Ballinger criticized the Human Rights Campaign (HRC), the nation’s largest LGBTQ rights organization, for its lobbying efforts against the bill, saying that the HRC wants to make Arkansas a “little more like New York and California.” On the House floor, where the bill ultimately passed by a 57–20 vote, the debate became more intense, with Representative Mary Bentley, a Republican of Perryville (Perry County), emphasizing her concern about “little businesses out there, a baker or a pastor…that hold a conviction that says gay marriage is wrong.” Bentley continued, “A baker who loves the word of God…should not have his or her business destroyed if someone who is transgender is trying to marry somebody else.”

Despite his concerns about its intrusion into local control of decision-making, Governor Asa Hutchinson allowed the bill to become law. It became Act 137 of 2015. Because no emergency clause was passed for the legislation, its effective date was July 2015.

Interestingly, as the legislation was being considered but before it had worked its way through the lawmaking process, the city of Eureka Springs (Carroll County) passed an expansive antidiscrimination ordinance and placed it on the ballot for consideration by the city’s voters in May 2015. Ordinance 2223 was affirmed by just over seventy percent of the city’s voters after an intense and high-profile campaign in the small Ozarks community.

After Act 137 was passed in the legislature, the city of Fayetteville approved a second non-discrimination ordinance in June and referred it for a September 2015 vote of the people. This second ordinance protected against discrimination based on sexual orientation or gender identity in housing, public accommodations, and employment although it did allow a broad exception when employers or landlords had religious objections. As was the case in Eureka Springs, the Fayetteville ordinance was upheld by the city’s voters, with fifty-three percent voting to sustain the measure.

More limited ordinances covering discrimination on the basis of sexual orientation and gender identity were passed by a number of municipalities and counties in the state during 2015; subsequently, one—in the city of Texarkana (Miller County)—was overturned by a voter referendum. These ordinances covered not only the city or county employees, as was explicitly allowed by Act 137, but also covered entities with which these local governments contracted. Little Rock (Pulaski County) City Attorney Tom Carpenter developed an analysis of such legislation, arguing that because state’s antibullying legislation protected students from bullying on the basis of sexual orientation and gender identity, more-expansive ordinances actually were still appropriate under Act 137. One of the legislation’s architects, Rep. Ballinger, stated that the bills covering businesses with which cities were contracted were in a legal gray area.

The Fayetteville ordinance (Ordinance 5781), however, has been the subject of an array of legal challenges. In early 2017, in a case brought by local plaintiffs and the state, the Arkansas Supreme Court overturned a circuit court ruling that had accepted the logic of Little Rock’s city attorney Carpenter that the antibullying legislation and two other state laws referencing sexual orientation were sufficient to allow Fayetteville’s ordinance as appropriate under Act 137. The Court, in a unanimous decision, found that the focus should be on the state civil rights laws and therefore deemed Act 137’s application in the Fayetteville case and remanded it. The circuit court, however, permitted another party to intervene and to raise a new claim that Act 137 was unconstitutional. The lower court denied the appellant’s request for an injunction, and the plaintiffs appealed again to the state Supreme Court. In early 2019, the state Supreme Court rejected that appeal, stating that the ordinance should be void. Whether Act 137 will be found to be unconstitutional—either in the eyes of Arkansas Constitution or U.S. Constitution—remains an open issue.

For additional information:
Act 137 of 2015. Arkansas State Legislature. http://www.arkleg.state.ar.us/assembly/2015/2015R/Acts/Act137.pdf (accessed February 8, 2020).

Barth, Jay. “Fayetteville Ordinance: The Good vs. the Perfect.” Arkansas Times, August 27, 2015.Online at https://arktimes.com/columns/jay-barth/2015/08/27/fayetteville-ordinance-the-good-vs-the-perfect (accessed February 8, 2020).

Boozer, Chelsea. “LR Board to Weigh Widening Anti-Bias Rules for Employees.” Arkansas Democrat-Gazette, April 15, 2015.

DiPippa, John M. A. “Bias in Disguise: The Constitutional Problems of Arkansas’s Intrastate Commerce Improvement Act.” University of Arkansas at Little Rock Law Review 37.3 (2015): 469–493. Online at https://lawrepository.ualr.edu/lawreview/vol37/iss3/3/ (accessed February 8, 2020).

“Intrastate Commerce Improvement Act (Act 137).” Harvard Law Review 129 (December 2015). Online at https://harvardlawreview.org/2015/12/intrastate-commerce-improvement-act-act-137/ (accessed February 8, 2020).

Lauer, Claudia. “State Panel Supports Anti-Bias Law Ban.” Arkansas Democrat-Gazette, February 12, 2015.

Moritz, John. “Justices Again Hear Sides on Anti-Bias Edict.” Arkansas Democrat-Gazette, January 18, 2019.

Protect Fayetteville v. City of Fayetteville (2017). Arkansas State Supreme Court.

Protect Fayetteville v. City of Fayetteville (2019). Arkansas State Supreme Court.

Walsh, Joel. “Future Unclear for Fayetteville’s Latest Anti-Discrimination Law.” Arkansas Democrat-Gazette, June 17, 2015.

Wickline, Michael R. “Senate Approves Ban on Localities’ Anti-Bias Laws.” Arkansas Democrat-Gazette, February 10, 2015, pp. 1A, 6A.

Jay Barth
Hendrix College

Last Updated: 02/08/2020