June 5, 2015, Number 23

Download the full June 5, 2015 Number 23 (PDF) update.

Eighty-Fourth Texas Legislature Adjourns: Local Control Took Some Hits But Mostly Survived

Somewhere in the files of a corporate-funded think tank, there is no doubt a memo from a public relations firm outlining a lobbying campaign to overturn city ordinances by state laws. The age-old battle to undermine local control traditionally has been waged every session behind closed doors in the Capitol. But this year, some groups unveiled new rhetoric from their spin doctors and wrapped themselves in the banner of “liberty!”

Armed with a shiny new populist slogan, the assault on local control came out of the shadows and unleashed a tidal wave of bills to limit the ability of citizens to influence the laws governing their neighborhoods and their cities.

Fortunately, reason and good judgment prevailed over the new sound bite. A majority of legislators in both chambers continue to understand that local control builds prosperity rather than hinders it. A majority still understands that the so-called “patchwork” of local regulations is actually good because it recognizes that Texans don’t like being told there’s only one way of thinking or one way of living. In fact, people who live in Fort Stockton may be proud that their city ordinances are different than those in Fort Worth, and vice versa. That diversity is what gives us identity and makes this state great.

Considering the onslaught of detrimental bills, cities emerged from this regular session relatively intact. We took some body blows, but we remain standing. Case in point? City officials were not able to overcome the power and influence of the state’s oil and gas industry, which succeeded in limiting - but not eliminating - local rules governing oil and gas development.

Political reality made it clear from the very beginning of the session that more than two-thirds of legislators would vote to prohibit cities from banning fracking. However, legislative leaders made it clear they support long-standing city regulations designed to protect health and safety in residential neighborhoods. Accordingly, H.B. 40 by Rep. Drew Darby (R - San Angelo) contains a clear list of permissible surface regulations, including commercially reasonable setbacks. Oil and gas companies that attempt to misuse the legislation to challenge those regulations will meet strong resistance from the League. (The League will create a clearinghouse to monitor legal challenges to existing drilling ordinances.)

On most other issues, cities completely fended off the assault on local control:

• Harmful revenue caps were proposed in both the House and Senate, but did not pass. These caps, which got more traction than in recent sessions, would have put a hard four % cap on property tax increases by requiring a mandatory citizen election to raise taxes.
  
  In lieu of revenue caps, SB. 1760 by Senator Brandon Creighton (R - Conroe) requires a 60% vote of any governing body, including a city council, to adopt a tax rate that exceeds the effective tax rate. The bill will affect cities with councils of seven, nine, or eleven-plus voting members by requiring one additional “aye” vote to pass a tax increase. But the bill also gives cities extra time to publish notice of such tax rates when the appraisal district is late in providing the appraisal role. (A separate bill, H.B. 1953 by Representative Dennis Bonnen (R - Angleton), did the same thing). This extension of time was one of the League’s legislative priorities.
• Harmful legislation that would have limited city debt also failed to pass. Instead, H.B. 1378 by Representative Dan Flynn (R - Van) will require cities to file a financial report annually containing, among other things, information about city debt loads. The League’s legal department will educate city officials about the bill’s requirements in the coming months.
• Legislation that would have ended home rule annexation authority progressed further than it has in over a decade, dying on a point of order in the House and passing the Senate too late in the process to meet House deadlines. In the interim, the League will be busy reemphasizing the importance of annexation to the success of the Texas economy in preparation for what’s sure to be continued assault in 2017.
• Meanwhile, beneficial transportation legislation passed in the form of SJ.R. 5 by Senator Robert Nichols (R - Lake Jackson). The bill initially dedicates $2.5 billion in sales tax revenue to highway construction, and possibly additional motor vehicle sales taxes in future years. It requires an amendment to the Texas Constitution that must be passed by voters this November.
• The state budget, H.B. 1, restored local parks funding to previous historic funding levels of approximately $15 million per year and includes an additional $12 million to fund parks in certain cities. Cities can also expect additional mixed beverage tax reimbursements over the next biennium due to a new tax calculation formula.
• One of the League’s priorities was passing legislation that would permit Internet publication of certain notices in lieu of newspaper publication, but once again the newspaper lobby killed the idea. On a positive note, however, H.C.R. 96 directs the speaker of the House of Representatives and the lieutenant governor to create a joint interim committee to study the issue of advertising public notices on the Internet.

The Important Numbers

Over 400 more bills were filed in 2015 than in 2013, 6,476 compared to 6,061. At one point in the session, the League was tracking 1,600 of those bills, each of which would have affected city authority.

In 2013, lawmakers passed 23.7% of bills filed. This year, only 20.5% made the cut. This was ultimately a relatively “quiet” session, which is surprising in light of the “liberty vs. local control” dynamic.

Total Bills Introduced

Includes bills and proposed Constitutional amendments; regular session only.

Looking Ahead

City officials will need to think deeply during the interim about what this year’s philosophical attack on local control really means. If local control were no longer a good thing (we’re still a ways from that being so), what would happen to the “Texas Miracle?” Stay tuned.

City-Related Bills

The following sections contain summaries of the major city-related bills passed by the 84^th Legislature. The governor has until June 21 to sign bills, veto them, or let them become law without his signature. The effective date of each bill is noted in a parenthetical following each bill described below. Some of the bills will become effective as soon as they are signed (e.g, “effective immediately”), others (unless vetoed) will become effective on September 1, and a few have special effective dates.

Future issues of the TML Legislative Update or Texas Town and City magazine will provide additional details on some of the bills described here, may include summaries of “straggler” bills that for various reasons weren’t summarized at the time of printing, and will provide other updates as appropriate.

The text of any bill is available at the Texas Legislature’s website.

Property Tax
Sales Tax
Purchasing
Elections
Open Government
Other Finance and Administration
Municipal Courts
Community and Economic Development
Personnel
Public Safety
Transportation
Utilities and Environment

The Cutting Room Floor

How small, of all that human hearts endure,
That part which laws or kings can cause or cure.

Samuel Johnson

Hundreds of harmful initiatives that would have done serious damage to Texas cities were defeated through the efforts of the League and individual cities. Among them were bills that would have:

1. Eliminated the concept of “home rule” cities
2. Preempted any city regulation not expressly authorized by state law
3. Preempted city ordinances related to bans on plastic bags and payday/auto title lenders
4. Reduced the current cap on annual increases in residential appraisals from 10% to some lesser amount, applied the cap to all real property; or capped city revenues
5. Limited the ability of cities to issue debt
6. Eliminated municipal annexation authority
7. Eliminated or restricted the ability of cities to enforce tree preservation ordinances
8. Eliminated the ability of city officials to lobby or to join an association that lobbies on their behalf
9. Required a city to pay money damages for a violation of the permit vesting law
10. Required expensive cost-benefit analysis and reporting prior to the adoption or amendment of building codes

Perhaps the biggest news of the session was the all out assault on “local control” in the name of “liberty.” The League created the “Big Government Index” mid-session to illustrate the scope of that assault. Ben Sargent, a well-known editorial cartoonist, illustrated the issue this way:

The good news is that the vast majority of bills in the index didn’t pass, and many never even received a hearing. In fact, only five bills on the index became law:

1. H.B. 40 preempts some city regulations relating to oil and gas development (but preserves a good deal of city authority);
2. S.B. 267 prohibits a city ordinance from forcing a landlord to accept federal housing vouchers
3. H.B. 905 prohibits a city from regulating knives;
4. S.B. 1766 prohibits a local government from regulating a small honey bee operation; and
5. H.B. 2049 prohibits a city from imposing a duty to defend in a construction contract with an architect or engineer.

Some initiatives, other than those summarized in this update, would have been beneficial to cities. Despite the efforts of the League and individual cities, many didn’t make it through the process.

Disclaimer

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.