Waco is joining other Texas cities challenging a new state law they say creates broad uncertainty about the powers of local government.
The city filed a letter of support last week in the city of Houston’s case against the state of Texas, contending that the Legislature’s recently passed House Bill 2127 should be declared unconstitutional.
The bill, set to take effect Friday, is known as the Regulatory Consistency Act to its supporters and the “Death Star” bill to its detractors.
The legislation aims to create consistency among Texas cities by preempting their ability to pass certain regulations.
However, critics of the bill say the state’s preemption law violates the Texas Constitution’s Home Rule Amendment of 1912, backtracking on more than 100 years of constitutional law allowing elected city leaders to govern their own residents.
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House Bill 2127 purports to fix “a patchwork of regulations that apply inconsistently across the state,” returning regulatory authority in a myriad of legislative areas back to the state.
The bill broadly preempts local municipalities’ ability to pass regulation in areas regulated by the state’s Agriculture, Business and Commerce, Finance, Insurance, Labor, Natural Resources, Occupations and Property codes.
Waco City Attorney Jennifer Richie said while the Legislature was probably trying to deal with specific problems, “this is just maybe a little broader than many cities would like.”
“I have spoken to lots of city attorneys and I think there is widespread concern among city attorneys and city officials regarding the possible unintended consequences of this bill,” she said.
The bill also opens the door to lawsuits against cities from individuals or entities who believe a city ordinance has gone too far.
Waco’s brief, filed alongside the cities of Plano, Denton and Arlington, supports the city of Houston’s lawsuit against the state that claims the new law conflicts with the Texas Constitution’s Home Rule Amendment and cities’ ability to self-govern. The letter of support declares that the bill is unconstitutional in its attempts to circumvent home rule, and that its scope is so broad it is unenforceable.
San Antonio and El Paso joined Houston’s suit initially filed early last month.
Waco’s state legislative delegation — Sen. Brian Birdwell, R-Granbury; Rep. Angelia Orr, R-Itasca; and Charles “Doc” Anderson, R-Waco — all voted for the bill.
Waco Mayor Dillon Meek said he understands the frustration that the state’s “patchwork of laws” can cause and knows that not all ordinances passed by cities are perfect, “but the Texas Constitution envisioned this patchwork and envisioned cities in a vast large state with different cultures and geographies and needs to be able to respond to their voters and craft different laws that affect the health, safety and well-being of the citizens.”
Texas’ home-rule authority gives cities with more than 5,000 residents the ability to create ordinances that fit their jurisdiction’s demography, density, environment and public safety issues, which may vary vastly from city to city.
As a training guide from the Texas Municipal League puts it: “A home rule city may do anything authorized by its charter that is not specifically prohibited or preempted by the Texas Constitution or state or federal law.”
A home rule city’s charter document is like a municipal constitution that is voted on and adopted by residents, setting out its form of local government, elections and limits of power.
“We’re the local government, the government that’s closest to the residents, and so we have these localized issues that come up, and we want to be able to respond quickly and efficiently to the concerns of our citizenry,” Richie said. “And this bill, because it is so broad and vague, will at least cause us pause in responding as quickly to our residents.”
Meek said certain cities may pass unwise ordinances, but there is a “democratic process” to repeal the local government’s decisions, including voting council members in or out of office and speaking during public hearings.
“The benefit is if one city or one culture or one people want to have a set of laws that another city doesn’t have, there’s freedom in that,” Meek said. “And so while it could be frustrating, I actually think local control makes a lot of sense, because different cities have different needs and issues. So hopefully, cities are responding to what the residents want and need, and if the residents don’t like it they can vote that city council out of office.”
The bill strikes down ordinances such as ones in Dallas and Austin that provide construction workers the right to regular water and shade breaks. It also removes cities’ ability to enforce ordinances to prevent evictions, such as those that kept renters housed during the pandemic.
Waco’s own code includes an escarpment ordinance, which protects the unstable bluffs around Lake Waco and prevents people from doing excavation that might destabilize them. The neighboring city of Woodway has its own ordinance regulating the escarpment, but such a rule is not necessary all over the state.
“Not every city needs that kind of ordinance because not every city has an escarpment like that,” Richie said. “But we do, and it wasn’t very many years ago where we had to take some enforcement action with regard to a property owner that was, without engineering, trying to do a whole bunch of landscaping down the side of the escarpment. … That’s the kind of ordinance that we worry about that this bill may affect.”
Meek was on the city council in 2016 when it passed an ordinance intended to restrict payday lending practices, with his vocal support. That measure would not be allowed under the current bill, but is grandfathered in as written.
“When you look at the complexities of financial insecurity, I believe that unregulated payday lending is often predatory because of the exorbitant interest rates that get charged on desperate people in financial insecurity,” Meek said.
The ordinance limits renewals of payday loans and limits the size of the loan based on the borrower’s income. Auto title and payday lenders in Waco collected $10 million in interest in 2014, as the short-term, small-dollar loans sometimes carried an annualized interest rate of more than 500%, the Tribune-Herald reported at the time.
Meek said the payday lending regulation was an attempt to inform residents and also protect them from predatory interest rates.
“In an ideal scenario Texas would have adopted regulations to ensure that predatory interest rates were not allowable and there wasn’t a patchwork of different … rules throughout the state,” he said.
Many council members, local leaders and the city manager at the time voiced reservations about the city’s ability to regulate lenders. City leaders at the time expressed a wish that the state would do more to regulate payday lenders and urged people to lobby the Legislature for statewide rules.
Richie said although Waco’s payday lending ordinance is allowed to stay under the new state preemption law, it casts doubts on the city’s ability “to move with the times” and amend the ordinance as lending practices change.
The broadness of the preemption law presents problems for city governments, as “it’s hard to know exactly until somebody sues us what is going to be affected until it’s litigated,” Richie said.
