Citing health concerns, City X is considering ...

Prohibiting X from Y is correct idiomatic usage, hence answer must be (B)

The sentence as written contains a usage error. The proper idiomatic form is prohibiting X from doing Y, not prohibiting X to do Y.

A quick scan of the choices reveals a 3-2 split on the first words, with (A), (B), and (C) using "prohibiting," while (D) and (E) drop "prohibiting" and use "that."

(A) can be eliminated immediately for using the idiomatically incorrect form "prohibiting ... to."

(C) also uses "prohibiting" incorrectly. Prohibiting that is simply not proper idiomatic usage.

(D) drops the word "prohibiting," leaving the law without a verb. The city is considering a law that ... what? The sentence should describe a law that says something or a law that does something. (D) says what the thrift stores cannot do under the law, but proper usage requires that the law have a verb. (D) must be eliminated.

(E), like (D), drops the word "prohibiting," leaving the law without a verb. In fact, (E) is just like (D) except it switches to passive voice, which is generally avoided on the GMAT. Get rid of (E).

(B) uses the correct idiomatic form, "a law prohibiting ... from accepting." (B) adds no new errors and is therefore the right answer.

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OFFICIAL KAPLAN EXPLANATION

Read the Original Sentence Carefully, Looking for Errors:

The sentence as written contains a usage error. The proper idiomatic form is prohibiting X from doing Y, not prohibiting X to do Y.

Scan and Group the Answer Choices:

A quick scan of the choices reveals a 3-2 split on the first words, with (A), (B), and (C) using "prohibiting," while (D) and (E) drop "prohibiting" and use "that."

Eliminate Wrong Answer Choices:

(A) can be eliminated immediately for using the idiomatically incorrect form "prohibiting ... to."

(C) also uses "prohibiting" incorrectly. Prohibiting that is simply not proper idiomatic usage.

(D) drops the word "prohibiting," leaving the law without a verb. The city is considering a law that ... what? The sentence should describe a law that says something or a law that does something. (D) says what the thrift stores cannot do under the law, but proper usage requires that the law have a verb. (D) must be eliminated.

(E), like (D), drops the word "prohibiting," leaving the law without a verb. In fact, (E) is just like (D) except it switches to passive voice, which is generally avoided on the GMAT. Get rid of (E).

(B) uses the correct idiomatic form, "a law prohibiting ... from accepting." (B) adds no new errors and is therefore the right answer.

TAKEAWAY: There is no logic to idioms, which often involve what preposition to use with a given verb. They simply must be memorized, so make sure to learn the ones the GMAT frequently tests.