By Patrick Gleason
Like their counterparts in many other state capitals, Tennessee lawmakers recently passed a reform, Senate Bill 2077, that will stop local politicians from interfering with pipelines and other energy infrastructure projects through local regulation and taxation. Senator Ken Yager (R), sponsor of SB 2077, which passed out of the Tennessee Senate on March 24 and now awaits House consideration, explains the motive behind this effort to preempt local regulation of energy infrastructure:
“These lines go across many several counties in this state, and at its worst case, if you allow micromanaging by each local level, sadly some of which who may have political agendas, you would end up with patchworks of regulations that would only serve to hurt our Tennessee economy,” said Senator Yager.
SB 2077 and similar preemption bills enacted in other states prohibit local governments from regulating or taxing various economic activities, transactions, products, and industries. Despite amendments intended to address concerns, local officials and environmental organizations are working to defeat SB 2077, which is now working its way through the Tennessee House. The Tennessee House Ways & Means is scheduled to take up HB 2246, the House companion to SB 2077, during an April 19 hearing.
“We think that cities and counties, people concerned with protecting public safety and protecting the environment, have made this bill better, but it’s still unnecessary to preempt local government,” said Scott Banbury, spokesman for the Sierra Club’s Tennessee chapter. “I know we do a lot of preemption up here, but this a very serious scenario where it could potentially have very devastating effects in someone’s neighborhood,” added Senator Raumesh Akbari (D).
Though it is not a new phenomenon, preemption legislation continues to garner intense opposition and has caused some policymakers to be conflicted. An example of that conflict was on display in Texas a few years ago. In 2015, Texas lawmakers and Governor Greg Abbott enacted a reform that, as the legislative language made clear, “expressly preempts regulation of oil and gas operations by municipalities and other political subdivisions.” That bill came about in response to efforts by some local officials in Texas to ban hydraulic fracturing.
“We have sued the federal government multiple times because of the heavy hand of regulation from the federal government – trying to run individuals’ lives, encroaching upon individual liberty,” Governor Abbott said when signing that preemption bill. “At the same time, we are ensuring that people and officials at the local level are not going to be encroaching upon individual liberty or individual rights.”
Yet even pro-fracking conservatives in and outside the Texas Legislature were conflicted over that 2015 reform. “I agree … that banning fracking is a bad idea,” said Mark Davis, a popular Dallas-based radio host, “but I also believe in local control. Shouldn’t local towns be able to do what they want?”
In response to such quandaries, preemption supporters point out that “local control” is not a magical term that should cause conservative state lawmakers to stand down in the face of onerous taxation and regulation proposed at the municipal level.
“Local governments are at least as capable as the feds of passing laws and ordinances that violate the presumption of liberty in the Constitution,” said Tom Giovanetti, president of the Institute for Policy Innovation, a Dallas-based think tank, in response to Davis’s remarks. “Tyranny isn’t OK just because it is approved by a majority of your fellow townsfolk. Rule of law, not local control, must be the governing principle.”
If SB 2077 gets signed into law by Governor Bill Lee (R) this spring, Tennessee would be joining more than just Texas in preempting local regulation of fossil fuels and energy infrastructure. In 2021 alone, the governors of Florida, Texas, Georgia, Missouri, and Ohio signed into law legislation preempting local regulations that restrict or prohibit natural gas hookups from being included in any new construction. Take HB 17 in Texas, a more recent preemption bill signed in to law by Governor Abbott in 2021 that “would restrict utility service connection or reconnection based on the type of energy source.”
A 2021 bill signed by Florida Governor Ron DeSantis (R), meanwhile, bars local governments “from restricting fuel sources distributed and used by electric and gas utilities, power generators, pipeline operators and propane dealers.” The 2021 reform enacted by Georgia Governor Brian Kemp (R) bars localities “from adopting a policy that prohibits electric, gas or propane utility connections or reconnections, as well as propane sales.” Meanwhile legislation signed into law by Missouri Governor Mike Parson (R) last July “barred any Missouri subdivision from adopting an ordinance, resolution, regulation, code or policy that prohibits a utility connection or reconnection based on the type of service.”
Thus far, 19 states have enacted legislation that preempts local regulations banning natural gas hookups in new construction. “Those states accounted for nearly one-third of U.S. residential and commercial gas consumption in 2019,” S&P Global reports. “Some of the biggest consumers — Ohio, Texas and Indiana — have passed such laws in recent months.”
As red states enact legislation to preempt local regulation of fossil fuels, localities in Democrat-run states continue to adopt ordinances seeking to regulate or ban fossil fuels. In California, for example, 45 cities and towns have passed ordinances prohibiting natural gas hookups or mandating the electrification of buildings’ heating and cooling systems.
Preemption debates that continue to play out in state capitals extend far beyond the realm of energy policy and fossil fuels. Demonstrating this is legislation now pending in Missouri, Senate Bill 1158, that would “preempt any local laws, ordinances, orders, rules, or regulations enacted by a county, municipality, or other political subdivision of the state regulating the sale of tobacco products, alternative nicotine products, or vapor products.”
Should that bill be enacted, Missouri would not be the first state to preempt local regulation of tobacco and vape products. Likewise, a number of states have preempted local regulation of home-sharing services like Airbnb and most states have preempted local measures that regulate ride-sharing services like Uber. Even blue states that are not as keen on preemption laws as red states sometimes recognize the utility of statewide uniformity laws. In what will come as a surprise to many who are familiar with California’s political landscape, Golden State legislators enacted a law in 2018 that prohibits the enactment of new local soda tax hikes and bars any increases to already existing local soda taxes, at least until 2031.
The sanctity of “local control” will continue to be invoked in opposition to state legislation that preempts local regulatory and taxing powers. But, as the aforementioned numbers make clear, it has not stopped the spread of state preemption laws and is not as powerful of an argument as it once was. Given their lack of legislative success, expect opponents of certain statewide preemption measures to make lawsuits a greater piece of their strategy moving forward.