Texas Supreme Court Clears the Air: Houston Ordinance Preempted by State Law

In BCCA Appeal Group, Inc. v. City of Houston, 496 S.W.3d 1 (Tex. 2016), the Texas Supreme Court held that certain provisions of a Houston city ordinance related to air-quality standards were unenforceable because they were preempted by the Texas Clean Air Act (the “Act”).

The Court held that Houston Ordinance’s provisions (1) providing for criminal enforcement for violations of the Act and (2) requiring that certain facilities register with the City were preempted, and thus, unenforceable. In contrast, the Ordinance’s provision adopting the Texas Commission on Environmental Quality’s (“TCEQ”) rules and any future amendments was upheld.

Years ago, the City of Houston had a harmonious relationship with the TCEQ in regulating air-quality standards of facilities within the city that were not otherwise regulated by the TCEQ. The City of Houston and the TCEQ contracted with one another to ensure enforcement and regulation until the contract ended in 2005. At that time, the City of Houston decided to enforce the regulations on its own, “due to what it perceive[d] to be TCEQ’s lax enforcement efforts.” In 2007 and 2008, the City of Houston passed the Ordinance at issue in this case, essentially replacing the TCEQ as the enforcement authority on air-quality standards within the city. The Ordinance required facilities to register with the city, even if they were already permitted by the TCEQ, and gave the city authority to criminally enforce the regulations through municipal court actions and the issuance of fines.

The issues facing the Court in this case were: (1) whether the Act preempted criminal enforcement and registration provisions of the Ordinance; and (2) whether the Ordinance could constitutionally incorporate TCEQ’s rules in their current form and as amended in the future.

Generally, home-rule cities have broad authority to self-govern. These powers can be limited by the Legislature, but only when limited with “unmistakable clarity.” The Act has an “unmistakable” limitation on a home-rule city: “(a) a municipality has the powers and rights as are otherwise vested by law in the municipality to: … (2) enact and enforce an ordinance for the control and abatement of air pollution, or any other ordinance, not inconsistent with this chapter or the [TCEQ’s] rules or orders.” Tex. Health & Safety Code § 382.113 (emphasis added).

Because of the limitation on home-rule cities—they could enforce air quality ordinances, so long as they were consistent with TCEQ rules and orders—was unmistakably clear, the Court next analyzed whether the enforcement and registration provisions were consistent with TCEQ’s rules and orders.

The Ordinance’s Criminal Enforcement Provisions

The Court determined that the Ordinance’s criminal enforcement provisions were inconsistent with TCEQ’s rules and orders.  For example, the Court noted that under the Act, a local government, in coordination with the TCEQ, could pursue criminal enforcement of the Act if specific requirements were met.  But the Ordinance would allow the city to criminally enforce the Act without involving or coordinating with TCEQ at all or meeting certain requirements provided in the Act.  The Court thus concluded:

The Legislature enacted specific requirements for criminal prosecution of a violation of the Act or TCEQ rules, orders, or permits. The Ordinance allows the City to circumvent those requirements, creating a parallel enforcement mechanism without deference to the TCEQ’s statutorily mandated discretion. The Legislature’s intent that administrative and civil remedies be applied whenever possible and at the discretion of the TCEQ is thwarted by the Ordinance’s discretionless criminal enforcement provisions.

Consequently, the enforcement provisions were preempted.

The Ordinance’s Registration Provisions

Next, the Court assessed whether the registration requirement—essentially a “concurrent permitting process” that required facilities to register with the City of Houston—was also preempted.  The Court likewise found this provision problematic, because a TCEQ-permitted facility failing to register with the City could face fines imposed by the Ordinance, noting, “the City’s requirement that a facility must register to operate lawfully effectively moots the effect of a TCEQ permit that has been issued and allows a facility to operate lawfully.” 

Consequently, the Court determined the registration requirement is also preempted by the Act. Finally, the Court analyzed whether the Ordinance could adopt, by reference, TCEQ’s rules “as they currently are and as they may be changed from time to time . . . as if written word for word in this section.”  The Court determined that this incorporation was permissible and “does not unconstitutionally delegate the city council’s lawmaking power.” As a result, the Court upheld these incorporation provisions.

This case, in combination with the Texas Legislature’s enactment of Tex. Nat. Res. Code § 81.0523 in response to the City of Denton ban on hydraulic fracking, deliver a strong message that municipal governments should think twice before imposing additional regulations upon industries already subject to state or federal regulation.  To the extent a municipality or local government is imposing a regulatory burden in excess of TCEQ requirements—inconsistent with the state law—those regulations risk immediate challenge, and summary preemption.