I too would have chosen the answer that considers the changing law. Even though the project will be complete before the new law goes into effect, we must evaluate how the new law may affect the product/service/result of our project and, the project itself. Why the latter (impact on the project itself)? Let's say an unknown risk occurs that causes our schedule baseline to be revised, pushing out the completion date such that the project is still executing, while the new law has taken effect. Can there be anything in the new law that would require us to change the way we are executing our project, e.g. our project may have team members from other country working on it and the new law requires us to have only US Citizens working on the project? This could have severe implications on the project itself.
Also, what if the new law renders the product/service/result of our project obsolete, or non-compliant with the current law? What a waste of money and resources would that be - something that could have been easily prevented, if we were proactive in our approach. It is our Responsibility to evaluate the impact of the new law.
In my opinion, we MUST at the least, re-validate the business case, vis-a-vis the new law. It may or may not have any impact on the project or the project outcome, but even if it does, the cost to make changes will be lowest at this (initiating) stage, compared to any other stage of the project.
~R