BILL ANALYSIS Senate Research Center S.B. 3016 By: Creighton Business & Commerce 4/16/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT The 88th Legislature passed H.B. 2127, the Texas Regulatory Consistency Act, to create a more uniform regulatory environment by preempting certain local ordinances that conflict with state law. The bill voided municipal and county regulations that conflicted with or were not explicitly authorized under the Agriculture, Business & Commerce, Finance, Insurance, Labor, Local Government, Natural Resources, Occupations, and Property Codes. S.B. 3016 builds on that effort by adding Titles 2 and 7, Subtitle C, of the Local Government Code to the preemptions, as well as introducing a stronger enforcement mechanism to ensure cities and counties are following the law. As proposed, S.B. 3016 amends current law relating to state preemption of certain municipal and county regulation. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Provides that the legislature finds that the state has historically been the exclusive regulator of many aspects of commerce, trade, elections, and criminal justice in this state; in recent years, several local jurisdictions have sought to establish their own regulations that are different than the state's regulations; and such local regulations have led to a patchwork of regulations that apply inconsistently across this state. SECTION 2. Provides that the purpose of this Act is to provide additional statewide consistency by returning sovereign regulatory powers to the state where those powers belong in accordance with Section 5 (Cities of More than 5,000 Population: Adoption or Amendment of Charters; Taxes; Debt Restrictions), Article XI (Municipal Corporations), Texas Constitution. SECTION 3. Provides that this Act is prohibited from being 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; is prohibited from being 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 in its corporate limits; does not affect the authority of a municipality or county to conduct a public awareness campaign; and 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. Amends Title 5, Civil Practice and Remedies Code, by adding Section 120A.0025, as follows: Sec. 102A.0025. LIABILITY FOR CERTAIN REGULATION. Provides that 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 Sections 40.001 or 250A.001, Local Government Code, a nonprofit organization, or a trade association representing the person has standing to bring and is authorized to bring an action against the municipality or county. SECTION 5. Amends Chapter 102A, Civil Practice and Remedies Code, by adding Sections 102A.008, 102A.009, 102A.010, 102A.011, 102A.012, 102A.013, and 102A.014, as follows: Sec. 102A.008. DEFINITIONS. Defines "local government" and "no-new-revenue tax rate." Sec. 102A.009. ATTORNEY GENERAL INVESTIGATION AND ACTION. (a) Authorizes the attorney general to investigate an alleged violation of Chapter 102A (Municipal and County Liability for Certain Regulation) by a local government. (b) Authorizes the attorney general, if, after conducting an investigation under Subsection (a), the attorney general determines a local government adopted, enforced, or maintained an ordinance, order, or rule in violation of the provisions listed in Section 102A.002 (Liability for Certain Regulation), to bring an action in the name of the state against a local government for the violation. Sec. 102A.010. ENFORCEMENT ACTIONS DURING PENDENCY OF ACTION. Provides that, during the pendency of an action brought under Section 102A.009, with respect to a local government defending the action: (1) the Comptroller of Public Accounts of the State of Texas (comptroller) is required to withhold payment of any money due to the local government under Section 321.502 (Distribution of Trust Funds) or 323.502 (Distribution of Trust Funds), Tax Code, as applicable; (2) the local government is prohibited from adopting an ad valorem tax rate that exceeds the local government's no-new-revenue tax rate; and (3) the local government is prohibited from receiving state grant funds and any pending application for such funds is required to be denied. Sec. 102A.011. BURDEN OF PROOF; INITIAL HEARING. (a) Provides that a local government defending an action brought under Section 102A.009 has the burden of proof to establish by a preponderance of the evidence that the local government complied with the law the alleged violation of which is the subject of the action. (b) Requires the court of original jurisdiction to set an action brought under Section 102A.009 for an initial hearing not later than the 30th day after the date the local government defending the action was served with process for the action. Sec. 102A.012. RESOLUTION OF ACTION IN FAVOR OF ATTORNEY GENERAL. (a) Provides that, if the attorney general prevails in an action brought under Section 102A.009: (1) the local government defending the action is prohibited from, during the five state fiscal years following the year in which the judgment becomes final, adopting an ad valorem tax rate that exceeds the local government's no-new-revenue tax rate or receive state grant funds; and (2) the court issuing the final judgment resolving the action is required to provide in the judgment that the state is entitled to recover from the local government defending the action a penalty equal to the balance of the suspense account maintained for the local government under Section 321.501 (Trust Account) or 323.501 (Trust Account), Tax Code, as applicable, that exists on the date the judgment is signed. (b) Requires the comptroller, on receipt of a copy of the final judgment in an action brought under Section 102A.009 that includes a provision described by Subsection (a)(2), to deposit the balance of the suspense account maintained for the local government 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. Sec. 102A.013. RESOLUTION OF ACTION IN FAVOR OF LOCAL GOVERNMENT. Requires the comptroller, if a local government prevails in an action brought under section 102A.009, notwithstanding any other law, to immediately send to the local government the balance of the suspense account maintained for the local government under Section 321.501 or 323.501, Tax Code, as applicable, as of the date the judgment resolving the action is signed. SECTION 6. Amends Title 2, Subtitle C, Local Government Code, by adding Chapter 40, as follows: CHAPTER 40. PREEMPTION. Sec. 40.001. PREEMPTION. Prohibits a municipality, unless expressly authorized by another statute, from adopting, enforcing, or maintaining an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of Subtitle C (Municipal Boundaries and Annexation). Provides that an ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this subtitle. SECTION 7. Amends Title 7, Subtitle C, Local Government Code, by adding Chapter 250A, as follows: CHAPTER 250A. PREEMPTION. Sec. 250A.001. PREEMPTION. Prohibits a municipality or county, unless expressly authorized by another statute, from adopting, enforcing, or maintaining an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of Title 7 (Regulation of Land Use, Structures, Businesses, and Related Activities). Provides that an ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this title. SECTION 8. Makes application of Section 102A.0025, Civil Practices and Remedies Code, as amended by this Act, Section 102A.009, Civil Practice and Remedies Code, as added by this Act, Section 102A.014, Civil Practice and Remedies Code, as added by this Act, and Section 22.220, Government Code, as amended by this Act, prospective. SECTION 9. Severability clause. SECTION 10. Provides that the Supreme Court of Texas has exclusive and original jurisdiction over a challenge to the constitutionality of this Act or any part of this Act and is authorized to issue injunctive or declaratory relief in connection with the challenge. SECTION 11. Effective date: upon passage or September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 3016
By: Creighton
Business & Commerce
4/16/2025
As Filed
Senate Research Center
S.B. 3016
By: Creighton
Business & Commerce
4/16/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
The 88th Legislature passed H.B. 2127, the Texas Regulatory Consistency Act, to create a more uniform regulatory environment by preempting certain local ordinances that conflict with state law. The bill voided municipal and county regulations that conflicted with or were not explicitly authorized under the Agriculture, Business & Commerce, Finance, Insurance, Labor, Local Government, Natural Resources, Occupations, and Property Codes.
S.B. 3016 builds on that effort by adding Titles 2 and 7, Subtitle C, of the Local Government Code to the preemptions, as well as introducing a stronger enforcement mechanism to ensure cities and counties are following the law.
As proposed, S.B. 3016 amends current law relating to state preemption of certain municipal and county regulation.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Provides that the legislature finds that the state has historically been the exclusive regulator of many aspects of commerce, trade, elections, and criminal justice in this state; in recent years, several local jurisdictions have sought to establish their own regulations that are different than the state's regulations; and such local regulations have led to a patchwork of regulations that apply inconsistently across this state.
SECTION 2. Provides that the purpose of this Act is to provide additional statewide consistency by returning sovereign regulatory powers to the state where those powers belong in accordance with Section 5 (Cities of More than 5,000 Population: Adoption or Amendment of Charters; Taxes; Debt Restrictions), Article XI (Municipal Corporations), Texas Constitution.
SECTION 3. Provides that this Act is prohibited from being 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; is prohibited from being 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 in its corporate limits; does not affect the authority of a municipality or county to conduct a public awareness campaign; and 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. Amends Title 5, Civil Practice and Remedies Code, by adding Section 120A.0025, as follows:
Sec. 102A.0025. LIABILITY FOR CERTAIN REGULATION. Provides that 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 Sections 40.001 or 250A.001, Local Government Code, a nonprofit organization, or a trade association representing the person has standing to bring and is authorized to bring an action against the municipality or county.
SECTION 5. Amends Chapter 102A, Civil Practice and Remedies Code, by adding Sections 102A.008, 102A.009, 102A.010, 102A.011, 102A.012, 102A.013, and 102A.014, as follows:
Sec. 102A.008. DEFINITIONS. Defines "local government" and "no-new-revenue tax rate."
Sec. 102A.009. ATTORNEY GENERAL INVESTIGATION AND ACTION. (a) Authorizes the attorney general to investigate an alleged violation of Chapter 102A (Municipal and County Liability for Certain Regulation) by a local government.
(b) Authorizes the attorney general, if, after conducting an investigation under Subsection (a), the attorney general determines a local government adopted, enforced, or maintained an ordinance, order, or rule in violation of the provisions listed in Section 102A.002 (Liability for Certain Regulation), to bring an action in the name of the state against a local government for the violation.
Sec. 102A.010. ENFORCEMENT ACTIONS DURING PENDENCY OF ACTION. Provides that, during the pendency of an action brought under Section 102A.009, with respect to a local government defending the action:
(1) the Comptroller of Public Accounts of the State of Texas (comptroller) is required to withhold payment of any money due to the local government under Section 321.502 (Distribution of Trust Funds) or 323.502 (Distribution of Trust Funds), Tax Code, as applicable;
(2) the local government is prohibited from adopting an ad valorem tax rate that exceeds the local government's no-new-revenue tax rate; and
(3) the local government is prohibited from receiving state grant funds and any pending application for such funds is required to be denied.
Sec. 102A.011. BURDEN OF PROOF; INITIAL HEARING. (a) Provides that a local government defending an action brought under Section 102A.009 has the burden of proof to establish by a preponderance of the evidence that the local government complied with the law the alleged violation of which is the subject of the action.
(b) Requires the court of original jurisdiction to set an action brought under Section 102A.009 for an initial hearing not later than the 30th day after the date the local government defending the action was served with process for the action.
Sec. 102A.012. RESOLUTION OF ACTION IN FAVOR OF ATTORNEY GENERAL. (a) Provides that, if the attorney general prevails in an action brought under Section 102A.009:
(1) the local government defending the action is prohibited from, during the five state fiscal years following the year in which the judgment becomes final, adopting an ad valorem tax rate that exceeds the local government's no-new-revenue tax rate or receive state grant funds; and
(2) the court issuing the final judgment resolving the action is required to provide in the judgment that the state is entitled to recover from the local government defending the action a penalty equal to the balance of the suspense account maintained for the local government under Section 321.501 (Trust Account) or 323.501 (Trust Account), Tax Code, as applicable, that exists on the date the judgment is signed.
(b) Requires the comptroller, on receipt of a copy of the final judgment in an action brought under Section 102A.009 that includes a provision described by Subsection (a)(2), to deposit the balance of the suspense account maintained for the local government 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.
Sec. 102A.013. RESOLUTION OF ACTION IN FAVOR OF LOCAL GOVERNMENT. Requires the comptroller, if a local government prevails in an action brought under section 102A.009, notwithstanding any other law, to immediately send to the local government the balance of the suspense account maintained for the local government under Section 321.501 or 323.501, Tax Code, as applicable, as of the date the judgment resolving the action is signed.
SECTION 6. Amends Title 2, Subtitle C, Local Government Code, by adding Chapter 40, as follows:
CHAPTER 40. PREEMPTION.
Sec. 40.001. PREEMPTION. Prohibits a municipality, unless expressly authorized by another statute, from adopting, enforcing, or maintaining an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of Subtitle C (Municipal Boundaries and Annexation). Provides that an ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this subtitle.
SECTION 7. Amends Title 7, Subtitle C, Local Government Code, by adding Chapter 250A, as follows:
CHAPTER 250A. PREEMPTION.
Sec. 250A.001. PREEMPTION. Prohibits a municipality or county, unless expressly authorized by another statute, from adopting, enforcing, or maintaining an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of Title 7 (Regulation of Land Use, Structures, Businesses, and Related Activities). Provides that an ordinance, order, or rule that violates this section is void, unenforceable, and inconsistent with this title.
SECTION 8. Makes application of Section 102A.0025, Civil Practices and Remedies Code, as amended by this Act, Section 102A.009, Civil Practice and Remedies Code, as added by this Act, Section 102A.014, Civil Practice and Remedies Code, as added by this Act, and Section 22.220, Government Code, as amended by this Act, prospective.
SECTION 9. Severability clause.
SECTION 10. Provides that the Supreme Court of Texas has exclusive and original jurisdiction over a challenge to the constitutionality of this Act or any part of this Act and is authorized to issue injunctive or declaratory relief in connection with the challenge.
SECTION 11. Effective date: upon passage or September 1, 2025.