A landmark local government preemption bill cleared its second hurdle Tuesday as House Bill (HB) 2127 was passed by the Texas Senate, with a few amendments.
Dubbed the “Texas Regulatory Consistency Act,” the bill prohibits municipalities from approving regulations that exceed state law in nine different sections of code: Agriculture, Business & Commerce, Finance, Insurance, Labor, Local Government, Natural Resources, Occupations, and Property.
The bill states that any regulation specifically enumerated in state code is regulatable by municipalities, and anything else is not, a strategy called “field preemption.” Up until this session, the state had opted for “conflict preemption,” a strategy of addressing specific policies adopted by localities after the fact.
It’s the difference between blasting with a shotgun and firing with a rifle.
HB 2127 allows individuals or associations in the county of potentially offending regulation to sue the locality for abridging this prohibition.
The bill, authored by Rep. Dustin Burrows (R-Lubbock) and sponsored by Sen. Brandon Creighton (R-Conroe), was passed by the House about a month ago, where it received eight votes from Democrats in the lower chamber. From there, it moved to the Senate Business & Commerce Committee, where it passed six to two.
On Monday, the Senate passed its version with three amendments; Sen. Robert Nichols (R-Jacksonville) was the only GOP “nay” on the bill. The vote was the same on Tuesday’s final passage.
Those amendments include a “loser pays” provision, placing the burden of payment for a frivolous lawsuit with the person or group who brought the suit; a limitation that a suit may only be brought against the offending political subdivision, not individual elected officials of that locality who were liable to be sued under the House version; and the tacking on of a prohibition against local governments halting evictions.
Plaintiffs must provide three months’ notice to the locality of an impending suit, intended as a grace period within which the potential violation can be revoked.
That eviction language comes from Senate Bill (SB) 986, which appears to have stalled out in the lower chamber. That bill is aimed at what big cities in Texas tried to do — but were stopped by courts — in ordering eviction moratoriums during the COVID-19 pandemic.
Creighton said in a statement after the bill’s passage, “The Texas Regulatory Consistency Act, the most pro-business, pro-growth bill of the 88th session has passed the Senate.”
“HB 2127 gives Texas job creators the certainty they need to invest and expand by providing statewide consistency and ending the days of activist local officials creating a patchwork of regulation outside their jurisdiction. Local governments acting as lawmakers in a patchwork of varying anti-business ordinances result in job killing outcomes.”
Gov. Greg Abbott has backed the bill, shedding little doubt over whether he will sign it into law once it reaches his desk.
Critics of the proposal — namely municipalities, their lobbyists, and labor unions — have suggested the field preemption would eliminate their ability to regulate as they see fit. The preemption effort is mainly aimed at the big blue cities, which have increasingly tried to implement more and more progressive policies on issues like energy and the climate, labor, and business operations.
Most of the questioning from Senate Democrats focused on these suggestions by those certain interest groups — Sens. Sarah Eckhardt (D-Austin) and John Whitmire (D-Houston) called it the “end of local control.”
Creighton countered, “We’re not in any way eliminating local control. We’re eliminating local ‘out-of-control.’ Texas businesses deserve the certainty this bill delivers.”
The National Federation of Independent Businesses (NFIB), which has been pushing hard for the legislation, lauded its passage, saying, “For more than five years, as cities stepped outside their jurisdiction, the pandemic pumped the brakes on our economy, and uncertainty plagued the business environment, our small business owners have done their best to keep their doors open, take care of their employees, and serve their customers.”
“[HB 2127] will give small business owners relief from the current patchwork of regulations across our state and make it easier for them to do what they do best.”
The Texas Democratic Party criticized it, stating, “We trust that community leaders know their communities far better than Texas Republicans at the Capitol do, and local decisions should be made by local school districts, cities, and counties — local leaders, mayors, and county judges who know their jurisdictions best.”
Eckhardt objected to the state wanting to set both the regulatory floor and ceiling and that localities should be able to regulate as they see fit on issues where state code is silent.
“I think you’re really going to disrupt the golden goose that’s caused so much [prosperity] to come to Texas,” Whitmire said on the floor during debate.
One of the arguments cited by Creighton and Burrows in support of the legislation is that businesses face a “regulatory patchwork” across the state from city to city.
Sen. Nathan Johnson (D-Dallas) asked Creighton whether the bill would preempt localities from passing things such as “Sanctuary Cities for the Unborn” ordinances — local policies adopted in recent years that prohibit abortion within a city’s boundaries. The Health and Safety Code where abortion is regulated is not among the nine preempted codes, and on top of that, the Texas Heartbeat Act specifically permits any regulations “at least as stringent” as what the state allows.
With the bill passed in the upper chamber, it now moves back to the House, where the members must either accept the Senate version with its amendments or reject them and trigger a conference committee.
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