New Section 1.004 of the Occupations Code Limits Local Regulatory Power in Certain Fields

Introduction.

This post will discuss a portion of one of the most hard-fought and controversial bills from the 88th Legislative Session of Texas - the Texas Regulatory Concsistency Act (“TRCA”). This bill, which is set to have far-reaching impacts on municipal and county regulatory powers and is currently the subject of a lawsuit between the State of Texas and several cities. Whether you refer to this statute as the TRCA or its more popular moniker, the “Death Star Bill,” it became effective on September 1, 2023 and is currently the law of the land in Texas.

New Language and Preemptive Effect.

As it relates to towing and vehicle storage, the TRCA added Section 1.004 to the Texas Occupations Code. That language states:

“Sec. 1.004. PREEMPTION. (a) 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.

(b) Subsection (a) may not be construed to affect municipal or county authority to regulate a massage establishment in accordance with Section 455.005. This addition introduces a significant preemption clause that limits the scope of local ordinances, orders, or rules in areas already governed by the provisions of this code.”

Essentially, the preemption clause of §1.004 states that unless another statute explicitly grants permission, local entities like municipalities or counties are barred from adopting, enforcing, or maintaining any regulation in fields that are already covered by the Texas Occupations Code. In essence, if a state-level provision exists in a particular regulatory field, local regulations in the same area are deemed void, unenforceable, and inconsistent with state law.

The licensed activities of towing and vehicle storage facility operation are governed by Chapters 2308 and 2303 of the Texas Occupations Code, respectively. While certain sections of Chapter 2308 delegate some regulatory authority to political subdivisions, there is no such delegation in Chapter 2303 (the “VSF Act”). Thus, while a city or county may be able to argue its ability to regulate towing companies, it is clear that their ability to regulate in the field of vehicle storage facilities has come to an end in light of the TRCA.

Conclusion

The TRCA marks a significant shift in the balance of regulatory power from local to state government. Its provisions, particularly those involving civil liability under the Texas Civil Practice and Remedies Code, underscore the need for municipalities and counties to carefully review their existing ordinances and adjust their regulatory activities to align with state law. The TRCA’s message is clear - cities and counties should steer clear of fields of regulation occupied by the state or risk having local ordinances declared null and void.