89S10126 SCL-F

By: Bell of Montgomery H.B. No. 103

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. Section 102A.001, Civil Practice and Remedies Code, is 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.

SECTION 6. Section 102A.0015, Civil Practice and Remedies Code, as added by S.B. 1008, Acts of the 89th Legislature, Regular Session, 2025, as effective September 1, 2025, and Section 102A.002, Civil Practice and Remedies Code, as amended by S.B. 1008, Acts of the 89th Legislature, Regular Session, 2025, as effective September 1, 2025, are transferred to Subchapter A, Chapter 102A, Civil Practice and Remedies Code, as added by this Act, reenacted, and amended to read as follows:

Sec. 102A.0015. APPLICABILITY OF CHAPTER. In this chapter, a reference to a municipality or county includes a public health district created by one or more municipalities or counties.

Sec. 102A.002. LIABILITY FOR CERTAIN REGULATION. (a) 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 1.007 or [(3-a)] Chapter 437, 437A, or 438, 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.

(b) A person who has sustained an actual or threatened injury in fact from a municipal or county ordinance, order, or rule adopted or enforced in violation of Section 40.001 or 250A.001, Local Government Code, or a nonprofit organization or trade association representing the person, has standing to bring an action against the municipality or county.

SECTION 7. Sections 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.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 8. 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) of this section.

(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) of this section.

(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 9. 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 10. Chapter 1, Health and Safety Code, is amended by adding Section 1.007 to read as follows:

Sec. 1.007. 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 11. Subtitle C, Title 2, Local Government Code, is amended by adding Chapter 40 to read as follows:

CHAPTER 40. PREEMPTION

Sec. 40.001. PREEMPTION. Unless expressly authorized by another statute, a municipality may not adopt, enforce, or maintain an ordinance or rule regulating conduct in a field of regulation that is occupied by a provision of this subtitle. An ordinance or rule that violates this section is void, unenforceable, and inconsistent with this subtitle.

SECTION 12. Subtitle C, Title 7, Local Government Code, is amended by adding Chapter 250A to read as follows:

CHAPTER 250A. PREEMPTION

Sec. 250A.001. 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 title. An ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this title.

SECTION 13. 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 14. 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 15. 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 16. 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 17. This Act takes effect on the 91st day after the last day of the legislative session.