Rep. Phil King (R-Weatherford) has filed a pair of bills designed to make it much more difficult for cities to adopt municipal ordinances limiting or prohibiting oil and gas activities inside city limits. HB 539 would require a city adopting such an ordinance to reimburse the state for any cost to the state resulting from the ordinance. Prior to adopting an ordinance, the city must request from the Legislative Budget Board a comprehensive fiscal analysis of the proposed ordinance’s impact on state and local governments. Some of the items that must be contained in the analysis include:
- the fiscal implications of the proposal to the state and local governments;
- the probable cost to the state that will result from the measure, including loss of tax revenue, fees, licenses, royalty income, and the diversion of state funds to cover such losses;
- the probable cost to political subdivisions in the area affected by the proposed ordinance;
- the fiscal impact of the proposal on the school finance system, particularly in school districts that would lose property value and require additional state aid; and
- the amount of reimbursement the city must pay to the state as a result of the ordinance.
For each hearing at which the city will consider the proposed ordinance, it must provide public notice that includes the LBB’s fiscal analysis and the amount and specific sources of the city’s reimbursement to the state. If the city conducts an election on the ordinance, it must include a copy of the information in the ballot proposition.
HB 540 would require a city whose charter allows voters to petition for an election proposing a new ordinance or repealing an existing ordinance to submit, prior to calling the election, the proposition to the Attorney General for review. The Attorney General must determine within 90 days of submission whether (1) the proposed ordinance violates the federal or Texas constitution, law or rule, and (2) the proposed ordinance will result in a governmental taking of private property requiring the payment of compensation. If the Attorney General finds that the proposition violates the law or would result in a governmental taking, the city may not hold the election.