Urgent Updates
Once more: Does the governor’s “stay home/work home” order
“expire” on Friday?
No, it does not. In spite of various media headlines about
the “governor’s stay home order expiring on Friday (May 1),” his newest order (Executive Order GA-18) has similar stay home/work home
language as previous orders:
“In accordance with guidance from DSHS Commissioner Dr.
Hellerstedt, and to achieve the goals established by the President to reduce
the spread of COVD-19, every person in Texas shall, except where
necessary to provide or obtain essential services or reopened services, minimize
social gatherings and minimize in-person contact with people who are not in the
same household. People over the age of 65, however, are strongly
encouraged to stay at home as much as possible; to maintain appropriate
distance from any member of the household who has been out of the residence in
the previous 14 days; and, if leaving the home, to implement social distancing
and to practice good hygiene, environmental cleanliness, and sanitation.”
(Emphasis added.) The highlighted language means that
Texans should stay home/work home, unless an exception applies (e.g., accessing
essential services or activities, retail-to-go, re-opened businesses, or
religious services).
Have additional Texas cities and counties been sued based on
their COVID-19 orders?
Yes. State Representative Briscoe Cain (R – Deer Park) and
another attorney, on behalf of several businesses (e.g., vape shops, a drag strip,
an axe-throwing facility, hair salons, a gym, and a martial arts and yoga
studio), two individuals, and all those “similarly situated” filed a “petition for writ of mandamus” with the Texas Supreme Court
yesterday (April 29). The lawsuit comes on the heels of others filed by
vape shops against the cities of McAllen, San Antonio, and Dallas.
A writ of mandamus is, in plain English, a request to the
court to order government officials to stop some action that is alleged to be
such an abuse of discretion that immediate, emergency action by the state’s
highest court should be taken. Instead of going to a trial court, appealing
to an appeals court, and then asking the Texas Supreme Court to review the
case, the writ is filed directly with the Texas Supreme Court. That court
can then decide quickly whether to issue a command that is binding on local
officials.
According to the petition, the plaintiffs “seek a writ of
mandamus and injunction to enjoin local authorities from enforcement of vague
executive orders masquerading as Texas law, particularly when they are enforced
unequally and arbitrarily…many Texans find themselves with the uneasy
recognition that they have lost rights held inviolate only weeks ago, and are
now threatened by fine and imprisonment for acts that are constitutionally
protected.”
The petition alleges that the following local officials, through
various enforcement actions that are representative of others across the state,
violated the governor’s order, the Texas Disaster Act, and other laws:
Dallas County Judge Clay Jenkins
Dallas Mayor Eric Johnson
Kaufman County Chief Appraiser Sarah Curtis
Cleburne Mayor Scott Cain
Henderson County Judge McKinney
Smith County Judge Nathaniel Moran
Tarrant County Judge Glen Whitney
Hurst Mayor Henry Wilson
Abilene Mayor Anthony Williams
Snyder Mayor Tony Wofford
Scurry County Judge Don Hicks
San Antonio Mayor Ron Nirenberg
The petition also alleges that the governor’s order does not, in
fact, order any business to close. Rather, the lawsuit claims, it provides
only that people shall avoid those businesses. In addition, it claims that
the Texas Disaster Act provisions authorizing a mayor or county judge to
control ingress and egress to an area, and to regulate occupancy of premises,
are arbitrary and violate state law and the Texas Constitution. As an
example, the petition states that:
“Condom Sense is allowed to operate in Dallas and other
jurisdictions, albeit by curbside service. The Court is invited and requested
to take judicial notice that condoms are available at many grocery stores.”
The lawsuit claims the proper approach to deal with COVID-19 is
to call an immediate special session of the legislature to deal with the
emergency. Of course, courts in other states, such as one in Michigan just
this week, have held that reasonable, emergency pandemic measures are allowable
and generally don’t violate constitutional protections against due process and
equal protection.
The League will monitor and report on the case as information
becomes available.
Are there any updates on future federal legislation that
provides funding to local governments?
Discussions continue in Congress about the general framework of
another round of disaster relief legislation, this time to assist state and
local governments facing significant budget shortfalls. Although no legislation
has yet been filed, the National League of Cities (NLC) has engaged in
discussions with the U.S. House of Representatives regarding a proposal for
funding local governments. The basic structure of NLC’s draft proposal
includes:
-$250 billion in direct funding for local governments
nationwide.
-Of the $250 billion, $125 billion would be allocated to
counties based on population and $125 billion would be allocated to cities,
with 70 percent going directly to Community Development Block Grant (CDBG)
entitlement cities using the existing funding formula, and the remaining 30
percent being sent to the governor to be used for all non-CDBG entitlement
cities based on population.
-Funding used for all expenses related to COVID-19, including
mitigating local government budget shortfalls that result from the economic impacts
of COVID-19.
-Clarification that funding previously provided in the
Coronavirus Relief Fund under the CARES Act can be used to mitigate local
government budget shortfalls.
The NLC proposal would mean over $9 billion in funding for all
Texas cities. It should be stressed, however, that at this point the above represents
only one proposal discussed by NLC and congressional offices. Only time
will tell if this type of a federal funding package gains political traction
when Congress reconvenes.
Further Updates
What is the status of Texas beaches under Executive Order GA-18?
According to the Galveston County Daily News and other media sources, “state
officials say beaches will open on Friday (May 1).”
The Daily News reported that “County and city officials
confirmed they were in direct contact with Abbott’s office and the land office
Wednesday [April 29] and learned about the directive around 2:30 p.m. At
about 5 p.m., the land office sent directions to beach managers across the
state, announcing its stance on opening.”
The League has not yet obtained a copy of the directions, and
they aren’t posted on the GLO website, but the Daily News quoted them as
stating that:
“The GLO is rescinding its approval for local governments to
close beaches due to COVID-19, effective April 30, 2020 at 11:59 p.m.,” the
land office letter stated. “The GLO understands that conditions may change, and
local governments are required to contact the GLO for prior approval for any
future closures of the beach to vehicles or pedestrians, closures of beach
access points, time limitations, or restrictions on particular uses or
activities on the beach.”
The governor had previously said the opening of beaches would be
a part of Executive Order GA-18, but the text of the order did not expressly do
so. Galveston business owners then contacted the governor’s office and reported
they were told beaches would open. Later, the GLO issued its directions to
beach managers.
The beach situation is indicative of confusion surrounding the
application of GA-18. Similar confusion arose when one city’s mayor
declared restaurant patios open prior to GA-18 becoming
effective. According to several media reports, the governor said he understood
the confusion and would issue clarifications to resolve the questions about
GA-18.
Does a federal program exist to purchase short-term debt issued
by Texas cities to manage cash flow issues stemming from the COVID-19
response?
Yes, at least for some cities. Earlier this week, the Federal
Reserve released guidance on the Municipal Liquidity Facility (MLF). The MLF
will offer up to $500 billion nationwide in lending to state and local
governments to help manage cash flow stresses caused by the pandemic. Eligible
cities include cities with populations exceeding 250,000 that maintain at least
BBB-/Baa3 bond rating as of April 8, 2020.
Eligible notes under the MLF are limited to anticipation notes
payable from taxes, revenue, or bonds, with a maturity date of no less than 36
months after issuance. In Texas, cities have the authority to issue these types
of anticipation notes under Chapter 1431 of the Government Code. Anticipation
notes can be used to pay operating expenses or to fund a city’s cumulative cash
flow deficit, so long as the note matures before the first anniversary after
the notes are approved by the attorney general. Tex. Gov’t Code § 1431.009(c).
Eligible cities may use proceeds received from eligible notes
under the MLF to “help manage the cash flow impact of income tax deferrals
resulting from an extension of an income tax filing deadline; deferrals or
reductions of tax and other revenues or increases in expenses related to or
resulting from the COVID-19 pandemic; and requirements for the payment of
principal and interest on obligations of the Eligible Issuer or its political
subdivisions or other governmental entities.”
What about cities under 250,000 in population? Interestingly,
the program authorizes the state government to use proceeds received under the
MLF program to purchase similar notes issued by political subdivisions of the
state. This means that the state could issue an eligible note in order to
receive the funding to purchase notes issued by Texas cities. At this point, it
is unclear if the state has plans to participate in the program at all, much
less issue debt to benefit smaller local governments in Texas. The League will
continue monitoring and report on any developments related to the MLF at the
state or federal level.
Any city considering issuing anticipation notes pursuant to the
MLF program will need to engage bond counsel prior to taking any action.
Where can I find archived issues of the TML Coronavirus Updates?
TML Coronavirus Updates are archived by date here and by subject here.