Opinion: HB 2127 Takes the Handcuffs Off Local Businesses

HB 2127
Small business open sign | Image by giggsy25

House Bill 2127 goes into effect Friday, September 1st. To the Metroplex Civic & Business Association (MCBA), this feels like much-needed regulatory relief for small businesses. Many have called or dubbed this piece of legislation the ‘Death Star’ bill. It effectively ends a significant amount of what many people see as meaningless “over-regulation” by local Municipal Governing bodies. While most media outlets are fearmongering about how this is damaging, let’s take a deeper look into what this Bill actually means.

Here are a couple of key facts:

1) HB 2127 preempts local ordinances & regulations that conflict with or exceed state law in 9 areas

2) Preempted codes and regulations maintained in defiance of the law can be challenged by injured parties, with cities given 90 days to comply with the law

3) Does not require cities to explicitly overturn or reverse ordinances, they can simply stop enforcing them as of September 1st, 2023

4) A wide range of local ordinances and regulations are invalidated, with implications for a wide variety of small businesses

Critics of this bill, such as the Houston Chronicle, have used captions such as, “New Texas bill ending water break mandates is a death sentence for construction workers, experts say,” to push their anti-HB 2127 narrative.

We dug into this claim deeper and found that the Texas Public Policy Foundation had submitted a Public Information Act (PIA) request to the city of Austin to ask whether its ordinance mandating water breaks has ever been enforced. The PIA question specifically asked: “how many violations the city of Austin has recorded since the passage of the city’s Rest Break Ordinance, Ordinance No. 20100729-047? How many citations have been issued, how many fines have been levied, and how much were the fines?”

The city responded to the Texas Policy Foundation with more than 9,000 pages of material (with just a few entries on each page). However, in all those pages of documented code enforcement actions, the city provided documentation for zero citations ever having been issued for violating this specific ordinance. Again, it has no documentation of any enforcement or any fines. So frankly, this ordinance didn’t need to be in place at all, as no one violated it to begin with.

If you look at the data over the last 3 years, so many companies have relocated to Texas from over-regulated cities and states. It’s crystal clear: Texas is open for business, and the large metropolitan areas have been the big winners of relocating companies and residents. Ironically, some of the largest cities in Texas have been losing population, while their suburbs have expanded rapidly. As we mentioned in a previous Dallas Express article, the City of Dallas’ population has declined 3.36% since 2020, during the same period, the Metroplex grew faster and larger than ever before.

You may ask, why is that? The answer can be heard from many of the MCBA Member companies who relocated to DFW from outside the state. They didn’t want to move from one over-regulated area to another. Dallas and many of the other core cities across Texas are following the same unfortunate path as other major cities like Chicago and San Francisco. This process always seems to start by slowly adding frivolous local regulations, which makes it harder and harder for businesses to stay in compliance and be successful. These ordinances make these major cities less desirable for people to live in and will eventually drive businesses out to less regulated areas.

An example of this, is current legislation regulating Landscaping and Tree Operators in the city of Dallas. The City regulates the private planting and maintenance of trees, as well as regulations the city places on tree maintenance and landscape maintenance companies, both those who operate privately and those who do business with the City. The more a city regulates, the harder it is for these small business owners to stay afloat.

The numbers don’t lie! The State of Texas is getting it right, and if it wasn’t, so many companies would not be moving here. The problem is our major cities are constantly getting in their own way, which hinders their growth. HB 2127 is a strong pro-business statement from Austin, which effectively takes the handcuffs off many small business owners.

It’s ironic that we have cities that are up in arms about meaningless ordinances that no one is violating while, at the same time, they are not prosecuting Felony charges. As mentioned earlier, Austin never issued a citation for the Rest Break Ordinance, yet KVUE ABC reports that the Travis County District Attorney’s Office threw out hundreds of Felony cases in 2020. They released these offenders without even seeing a judge. Some of the more serious rejected felony charges include aggravated assault with a deadly weapon, assault of a pregnant woman, aggravated robbery, and more. Reflecting on this more, the more regulations a city creates, the more it complicates and overloads enforcement. There then comes a point when there are too many regulations to enforce them all, and the city will then start to collapse.

It is critical that our major cities create the right environment for their citizens, and it’s clear that over-regulating their population doesn’t work. If you don’t take our word for it, ask any one of the thousands of business owners who have left Chicago, Detroit, Seattle, Portland, San Francisco, Los Angeles, Boston & New York and moved to DFW.

Our recommendation to the City of Dallas when it comes to regulation… Less is More.

The MCBA reviewed the City of Dallas Ordinances that would be in conflict with HB 2127, a preliminary analysis of which is in the table below:

Index Number Ordinance/City Code Ordinance Number Ordinance Title & Description of HB2127 Impact
1 Agricultural Code Section 19-118.3 Regulation of Pesticides, Herbicides, and Fertilizers

Eliminates local regulations governing the sale, use, and disposal of pesticides, herbicides, and fertilizers. Ceases the city’s role in enforcing compliance with state and federal laws related to these substances. Removes the requirement to present licenses or permits to local authorities. Lifts restrictions on improper disposal that could affect water and soil quality.

2 Agricultural Code Division 51A-10.100 Landscape and Tree Operators

This will overturn the rules regarding private planting and maintenance of trees, as well as regulations the City places on tree maintenance and landscape maintenance companies, both those who operate privately and those who do business with the City.

3 Property Code Chapter 40 Rat and Pest Control

Removes construction requirements, water dumping, and other requirements for businesses meant to aid in rat abatement. Removes the rule requiring concrete or asphalt floors for businesses that serve food.            

4 Property Code Chapter 27 Minimum Property Standards

Removes approximately 135 individual rules for property and unit maintenance related to plumbing, electrical standards, ventilation, flooring, balconies, and walkways. Removes the rules regarding solid waste disposal meant to prevent infestation.

5 Property Code Chapters 32-74 Abandonment of Personal Property

Removes city regulations concerning the abandonment of personal property at the lake or lake shore. Ends the city’s authority to impound unattended items left for more than 48 hours. Eliminates the 90-day reclaim period and associated impoundment charges. Discontinues the city’s role in the sale, destruction, or conversion of abandoned property.

6 Labor Code Section 20-4 et al. Earned Paid Sick Leave Requirements

This will overturn the City-set rules on the accrual of paid sick leave for employees of businesses operating in the City of Dallas. No rules will exist, so this will eliminate the current limit (1 hr. accrued for every 30 hours worked, as well as the annual accrual caps established by the City).

7 Labor Code Section 47A-2.4.2 Transportation for Hire – non-discrimination requirement

Abolishes local regulations that prevent transport service providers from discriminating against passengers based on factors such as race, age, or sexual orientation. Nullifies protections against service refusal for a wide range of demographic groups.

8 Labor Code Section 610.1 Rest Break Requirements

Revokes the ordinance requiring construction workers to receive a minimum of a 10-minute rest break for every four hours of scheduled work. Eliminates worker entitlements to rest breaks at construction sites.

9 Labor Code Sections 34.5 et al. City Personnel Rules

Abolishes various employment conditions for city employees, such as compliance with city rules, membership in retirement funds, and nepotism restrictions. Also removes the subrogation clause regarding injuries sustained during employment.

10 Business & Commerce Code Sections 18.3 & 18.4 Regulating Containers for Municipal Solid Waste Materials

Removes local rules governing the specifications and usage of solid waste containers for residences, duplexes, and commercial establishments. Nullifies local rules concerning the types and capacities of containers, placement for collection, and associated fees.

11 Business & Commerce Code Chapter 43, Article VI, Division 3 Valet Parking

Removes the regulatory framework governing the operation of valet parking services in the city of Dallas. Eliminates the need for a valet parking service license issued by the director for operating within the city. Abolishes the specifications for application procedures, including owner or lessee information, location, hours of operation, and required consents. Ends the role of various city departments in reviewing valet parking service applications. Nullifies the fee structure for valet parking service licenses, both within and outside the central business district, as well as additional fees for signs, curb markings, and valet parking stands. Ceases enforcement of authorized hours and locations for valet services, thereby allowing for unrestricted operation.

12 Finance Code Chapter 40, Article XI Credit Services Organizations & Credit Access Businesses

Removes the regulations governing credit services organizations and credit access businesses in the city of Dallas. Eliminates the requirement for a certificate of registration, thereby allowing these entities to operate without city oversight. Abolishes the standards for application, expiration, and renewal of registration. Ceases the imposition of fines for violations, removing legal deterrents against abusive and predatory lending practices.

13 Finance Code Chapter 43-170 Insurance Requirements

Eliminates all insurance requirements for operators of shared dockless vehicles in Dallas. Removes mandates for liability limits and naming the city as an additional insured. Abolishes provisions for cancellation notifications and subrogation waivers. Lifts bans on self-insurance and ownership interest in insurance companies. Ceases the need for filing insurance policies with the city.

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