Relating to state preemption of certain municipal and county regulation.

89(R) SB 2858 - House Committee Report version - Bill Text

By: Creighton, et al.

S.B. No. 2858

(Bell of Montgomery)

A BILL TO BE ENTITLED

AN ACT

relating to state preemption of certain municipal and county

regulation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The legislature finds that:

(1) the state has historically been the exclusive

regulator of many aspects of commerce, trade, elections, and

criminal justice in this state;

(2) in recent years, several local jurisdictions have

sought to establish their own regulations of commerce, trade,

elections, and criminal justice that are different than the state's

regulations; and

(3) the local regulations have led to a patchwork of

regulations that apply inconsistently across this state.

SECTION 2. The purpose of this Act is to provide additional

statewide consistency by returning sovereign regulatory authority

powers to the state where those powers belong in accordance with the

Texas Constitution, including Section 5, Article XI, of that

constitution.

SECTION 3. This Act:

(1) may not be construed to prohibit a municipality or

county from building or maintaining a road, imposing a tax, or

carrying out any authority expressly authorized by statute;

(2) may not be construed to prohibit a home-rule

municipality from providing the same services and imposing the same

regulations that a general-law municipality is authorized to

provide or impose;

(3) does not affect the authority of a municipality or

county to conduct a public awareness campaign; and

(4) does not affect the authority of a municipality or

county to repeal or amend an existing ordinance, order, or rule that

violates the provisions of this Act for the limited purpose of

bringing that ordinance, order, or rule in compliance with this

Act.

SECTION 4. Chapter 102A, Civil Practice and Remedies Code,

is amended by adding Subchapter A, and a heading is added to that

subchapter to read as follows:

SUBCHAPTER A. PRIVATE ACTION

SECTION 5. Sections 102A.001, 102A.002, 102A.003,

102A.004, 102A.005, and 102A.006, Civil Practice and Remedies Code,

are transferred to Subchapter A, Chapter 102A, Civil Practice and

Remedies Code, as added by this Act, and amended to read as follows:

Sec. 102A.001. DEFINITION. In this
subchapter
[
chapter
],

"person" means an individual, corporation, business trust, estate,

trust, partnership, limited liability company, association, joint

venture, agency or instrumentality, public corporation, any legal

or commercial entity, or protected or registered series of a

for-profit entity.

Sec. 102A.002. LIABILITY FOR CERTAIN REGULATION. Any

person who has sustained an injury in fact, actual or threatened,

from a municipal or county ordinance, order, or rule adopted or

enforced by a municipality or county in violation of any of the

following provisions or a trade association representing the person

has standing to bring and may bring an action against the

municipality or county:

(1) Section 1.004, Agriculture Code;

(2) Section 1.109, Business & Commerce Code;

(3)
Section 1.023, Election Code;

(4)
Section 1.004, Finance Code;

(5) Section 1.006, Health and Safety Code;

(6)
[
(4)
] Section 30.005, Insurance Code;

(7)
[
(5)
] Section 1.005, Labor Code;

(8)
[
(6)
] Section 229.901, Local Government Code;

(9)
[
(7)
] Section 1.003, Natural Resources Code;

(10)
[
(8)
] Section 1.004, Occupations Code;

(11) Section 1.08(b), Penal Code;
or

(12)
[
(9)
] Section 1.004, Property Code.

Sec. 102A.003. REMEDIES. (a) A claimant is entitled to

recover in an action brought under this
subchapter
[
chapter
]:

(1) declaratory and injunctive relief; and

(2) costs and reasonable attorney's fees.

(b) A municipality or county is entitled to recover in an

action brought under this
subchapter
[
chapter
] costs and reasonable

attorney's fees if the court finds the action to be frivolous.

Sec. 102A.004. IMMUNITY WAIVER. Governmental immunity of a

municipality or county to suit and from liability is waived to the

extent of liability created by this
subchapter
[
chapter
].

Sec. 102A.005. NOTICE. A municipality or county is

entitled to receive notice of a claim against it under this

subchapter
[
chapter
] not later than three months before the date a

claimant files an action under this
subchapter
[
chapter
]. The

notice must reasonably describe:

(1) the injury claimed; and

(2) the ordinance, order, or rule that is the cause of

the injury.

Sec. 102A.006. VENUE. (a) Notwithstanding any other law,

including Chapter 15, a claimant may bring an action under this

subchapter
[
chapter
] in:

(1) the county in which all or a substantial part of

the events giving rise to the cause of action occurred; or

(2) if the defendant is a municipality, a county in

which the municipality is located.

(b) If the action is brought in a venue authorized by this

section, the action may not be transferred to a different venue

without the written consent of all parties.

SECTION 6. Chapter 102A, Civil Practice and Remedies Code,

is amended by adding Subchapter B to read as follows:

SUBCHAPTER B. ATTORNEY GENERAL ENFORCEMENT

Sec.

102A.051.

DEFINITION. In this subchapter,

"no-new-revenue tax rate" means the no-new-revenue tax rate

calculated under Chapter 26, Tax Code.

Sec.

102A.052.

ATTORNEY GENERAL INVESTIGATION AND ACTION.

(a)

The attorney general may investigate an alleged violation of a

law described by Section 102A.002 by a municipality or county.

(b)

The attorney general may bring an action for injunctive,

declaratory, or mandamus relief against a municipality or county if

the attorney general determines after conducting an investigation

under Subsection (a) that the municipality or county violated a law

described by Section 102A.002.

(c)

Notwithstanding any other law, including Chapter 15,

the attorney general may bring an action under this section in:

(1)

the county in which all or a substantial part of

the events giving rise to the cause of action occurred; or

(2)

if the defendant is a municipality, a county in

which the municipality is located.

Sec.

102A.053.

EFFECTS OF PENDENCY OF ACTION. (a)

During

the pendency of an action brought under Section 102A.052, with

respect to a municipality or county defending the action:

(1)

the comptroller shall withhold payment of any

money due to the municipality or county under Section 321.502 or

323.502, Tax Code;

(2)

the municipality or county may not adopt an ad

valorem tax rate that exceeds the municipality's or county's

no-new-revenue tax rate;

(3)

the municipality or county may not adopt a budget

that exceeds the total expenditures of the budget under which the

municipality or county is operating at the time the attorney

general brings the action under Section 102A.052; and

(4)

the municipality or county may not receive state

grant funds and any pending application for such funds shall be

denied.

(b)

Section 109.004(a)(1), Local Government Code, does not

apply to a municipality if the comptroller is withholding payments

from the municipality in accordance with Subsection (a)(1).

(c)

Notwithstanding Section 120.002, Local Government Code,

a county may not hold an election under that section if the

comptroller is withholding payments from the county in accordance

with Subsection (a)(1).

(d)

Notwithstanding Subsection (a)(4), a municipality or

county may receive state grant funds for grants provided for the

purpose of:

(1)

responding to a disaster declared under Chapter

418, Government Code, if:

(A)

for a municipality, the municipality is

located in a county or a county adjacent to a county that includes

an area specified in the disaster declaration; and

(B)

for a county, the county or a county adjacent

to the county includes an area specified in the disaster

declaration; or

(2)

providing financial assistance to a municipal

police department, sheriff's department, constable's office,

district or county attorney's office, fire department, municipal or

county jail, or other municipal or county department providing law

enforcement or emergency response services.

Sec.

102A.054.

ACTION PROCEDURES. (a) A municipality or

county defending an action brought under Section 102A.052 has the

burden of proof to establish that the municipality or county

complied with the law that is the subject of the action.

(b)

The trial court shall set an action brought under

Section 102A.052:

(1)

for an initial hearing not later than the 30th day

after the date the municipality or county defending the action was

served with process for the action; and

(2)

for a trial on the merits not later than the 90th

day after the date the municipality or county defending the action

was served with process for the action, unless:

(A)

the municipality or county and the attorney

general agree to a later date; and

(B)

the court determines that holding trial at a

later date is in the interest of justice.

Sec.

102A.055.

APPELLATE JURISDICTION; EXPEDITED APPEAL.

(a) The Fifteenth Court of Appeals has exclusive intermediate

appellate jurisdiction of an action brought under Section 102A.052.

A party must appeal the action not later than the 30th day after the

date the judgment is signed.

(b)

An appellate court shall expedite an appeal of an action

brought under Section 102A.052.

Sec.

102A.056.

RESOLUTION OF ACTION IN FAVOR OF ATTORNEY

GENERAL. (a)

If the attorney general prevails in an action brought

under Section 102A.052:

(1)

the municipality or county defending the action

may not, during the five fiscal years following the year in which

the judgment becomes final:

(A)

adopt an ad valorem tax rate that exceeds the

municipality's or county's no-new-revenue tax rate; or

(B) receive state grant funds; and

(2)

the court issuing the final judgment resolving the

action shall provide in the judgment that the state is entitled to

recover from the municipality or county defending the action a

penalty equal to the balance of the suspense account maintained for

the municipality or county under Section 321.501 or 323.501, Tax

Code, as applicable, that exists on the date the judgment is signed,

less the amount the comptroller may retain under Subsection (b) of

this section.

(b)

Except as provided by this subsection, the comptroller

shall, on receipt of a copy of the final judgment in an action

brought under Section 102A.052, deposit the balance of the suspense

account maintained for the municipality or county defending the

action under Section 321.501 or 323.501, Tax Code, as applicable,

as of the date the judgment is signed to the credit of the general

revenue fund. The comptroller may retain in the suspense account

maintained for the municipality or county an amount not to exceed

five percent of the balance of the suspense account as of the date

the judgment is signed for the purpose of making refunds for

overpayments to the suspense account or redeeming dishonored checks

and drafts deposited to the credit of the suspense account. Not

later than the fourth anniversary of the date the comptroller

retains an amount in a suspense account under this subsection, the

comptroller shall deposit the balance of that retained amount, if

any, to the credit of the general revenue fund.

(c)

Section 109.004(a)(1), Local Government Code, does not

apply to a municipality subject to a final judgment in an action

brought under Section 102A.052 for six state fiscal years following

the date the judgment is signed.

(d)

Notwithstanding Section 120.002, Local Government Code,

a county may not hold an election under that section if the county

has been the subject of an adverse final judgment in an action

brought under Section 102A.052 before the sixth anniversary of the

date the judgment is signed.

Sec.

102A.057.

RESOLUTION OF ACTION IN FAVOR OF

MUNICIPALITY OR COUNTY. If a municipality or county prevails in an

action brought under Section 102A.052, the comptroller shall

immediately send to the municipality or county any balance of the

suspense account maintained for the municipality or county under

Section 321.501 or 323.501, Tax Code, as applicable, being held

under Section 102A.053(a)(1) as of the date the final judgment

resolving the action is signed, including any interest that accrued

on the balance of the suspense account during the period the balance

was withheld.

SECTION 7. Chapter 1, Election Code, is amended by adding

Section 1.023 to read as follows:

Sec.

1.023.

PREEMPTION. Unless expressly authorized by

another statute, a municipality or county may not adopt, enforce,

or maintain an ordinance, order, or rule regulating conduct in a

field of regulation that is occupied by a provision of this code.

An ordinance, order, or rule that violates this section is void,

unenforceable, and inconsistent with this code.

SECTION 8. Chapter 1, Health and Safety Code, is amended by

adding Section 1.006 to read as follows:

Sec.

1.006.

PREEMPTION. Unless expressly authorized by

another statute, a municipality or county may not adopt, enforce,

or maintain an ordinance, order, or rule regulating conduct in a

field of regulation that is occupied by a provision of this code.

An ordinance, order, or rule that violates this section is void,

unenforceable, and inconsistent with this code.

SECTION 9. Section 1.08, Penal Code, is amended to read as

follows:

Sec. 1.08. PREEMPTION.
(a)
No governmental subdivision or

agency may enact or enforce a law that makes any conduct covered by

this code an offense subject to a criminal penalty. This
subsection

[
section
] shall apply only as long as the law governing the conduct

proscribed by this code is legally enforceable.

(b)

Unless expressly authorized by another statute, a

municipality or county may not adopt, enforce, or maintain an

ordinance, order, or rule regulating conduct that is otherwise

prohibited by a provision of this code. An ordinance, order, or

rule that violates this subsection is void, unenforceable, and

inconsistent with this code.

SECTION 10. Subchapter B, Chapter 102A, Civil Practice and

Remedies Code, as added by this Act, applies only to a cause of

action that accrues on or after the effective date of this Act.

SECTION 11. Every provision, section, subsection,

sentence, clause, phrase, or word in this Act, and every

application of the provisions in this Act to every person, group of

persons, or circumstances, are severable from each other. If any

application of any provision in this Act to any person, group of

persons, or circumstances is found by a court to be invalid,

preempted, or unconstitutional, for any reason whatsoever, then the

remaining applications of the Act to all other persons and

circumstances shall be severed and preserved and shall remain in

effect. All constitutionally valid applications of the provisions

in this Act shall be severed from any applications that a court

finds to be invalid, preempted, or unconstitutional, because it is

the legislature's intent and priority that every single valid

application of every statutory provision be allowed to stand alone.

The legislature further declares that it would have enacted this

Act, and each provision, section, subsection, sentence, clause,

phrase, or word, and all constitutional applications of the

provisions of this Act, irrespective of the fact that any

provision, section, subsection, sentence, clause, phrase, or word,

or applications of this chapter were to be declared invalid,

preempted, or unconstitutional.

SECTION 12. The Texas Supreme Court has exclusive and

original jurisdiction over a challenge to the constitutionality of

this Act or any part of this Act and may issue injunctive or

declaratory relief in connection with the challenge.

SECTION 13. This Act takes effect September 1, 2025.