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States Increasingly Targeting Local Laws

A fight between the state of Alabama and its largest city over which has the right to set a minimum wage made headlines in March highlighting a little noticed trend that is creeping up in the states: state preemption of local law. In recent years, the recycling industry has increasingly faced questions of law on state preemption, with several notable wins in state court.

The fact is that as politics becomes more polarized, the states are facing increasing pressure to act on matters where Congress does not, and as they do so, localities are rebelling which has forced state legislatures to consider preempting local law. The Alabama minimum wage case is just the latest instance that may be reflective of similar struggles over local control that have quietly occurred across the country in the past few years.

City of Birmingham vs. State of Alabama

The starting gun in the race between the city of Birmingham and the Alabama legislature sounded last August when the city council voted to raise the hourly minimum wage for private employees in Birmingham.  When lawmakers returned to the state capital early this year, they introduced legislation to preempt — essentially block — Birmingham’s planned wage increase. In response, the council sped up its ordinance’s timeline and voted to make the planned $10.10 hourly minimum wage in Birmingham effective immediately. Two days later, the legislature passed, and Governor Bentley (R) signed, legislation (AL HB 174) blocking Birmingham or any other local government from enacting its own minimum wage.

A legal challenge is anticipated, but the state is expected to prevail. Local governments are free to exercise only the powers granted by the state. Thus, when a municipality passes an ordinance that conflicts with a state statute on the same subject matter, the state law preempts (and invalidates) the local ordinances (unless, of course, the state constitution provides localities with express authority in the area).

Local Action Generates Confusion for Employers

Minimum wage levels are far from the only disagreement between state and local governments. For the recycling industry, materials theft is a prime example of the conflict as are issues such as recycling rates, plastic/paper bag bans, and solid waste rules.  ISRI has long held that differing local actions create a confusing patchwork of compliance requirements. Furthermore, they can create artificial and unfair competitive advantages/disadvantages based on jurisdictional boundaries, not to mention interfere with the flow of materials and markets. Industry advocates have argued increasingly for the need to level the playing field by enacting statewide law that local government cannot touch, or at least make more stringent.  It has traditionally been a hard uphill battle, but the tide may be turning.

There is an increasing push by the business community in general to highlight and seek resolution of the problematic nature of patchwork laws.  Not only is compliance a problem, but enforcement and even public safety is being jeopardized.  As a result, states are stepping up efforts to preempt local government from enacting more restrictive laws, an option that was once deemed not only unattractive but often completely unattainable without major concessions to large jurisdictions. 

For instance, ISRI chapter and state advocates have achieved notable success in recent years with efforts to obtain state preemption of local materials theft laws.  According to the ISRI Materials Theft State Law database, there are 18 states that have some form of preemption.  While some of the preemption provisions are limited to particular aspects of the law, they all prohibit local government from enacting conflicting or more restrictive provisions than those in state law.  On employment law matters, approximately 15 states have taken action to preempt local ordinances that mandate employer benefits, minimum wages, or both, that exceed state and federal requirements. Proponents of preemption point to the economic benefits of keeping a unified and predictable environment for employers throughout the state.

States Playing Whack-a-Mole

Beyond materials theft and labor law requirements, localities have passed their own bans on disposable plastic/paper bags and conflicting solid waste rules among other things. In response, state lawmakers have had to address each issue and move to block new local mandates as they surface. It is not the most efficient manner in which to handle the trend, but at least states are becoming less afraid to support doing so – at least in public as the Birmingham case might indicate.

The push to eliminate plastic and paper shopping bags is a great example of the “whack-a-mole” approach in dealing with instances when local government finds itself increasingly at odds with the state.  For instance, while Louisiana currently preempts conflicting local laws on materials theft, the state doesn’t have general preemption rights so it must address preemption for other matters on a case by case basis.  This year, Louisiana HB192 was introduced to restrict local governments from adopting ordinances that restrict the use of plastic bags. And this is not an isolated case.  In fact, five other state legislatures are considering or have approved similar measures, including local efforts to tax the use of plastic bags or other “auxiliary containers” (AZ, ID, IN, SC, WI). In each of these cases, all but Idaho have preemption for metals theft.

Going back to the Alabama example mentioned earlier, a few years ago ISRI members achieved getting preemption for materials theft while other important business concerns remained subject to local authority.  For instance, last year the state passed a preemption bill (AL HB 360) blocking localities from mandating certain paid employee leave. However, the legislature neglected to include wage increases in the 2014 legislation, which prompted the quick passage of this year’s law. And if Birmingham or any other city in the state decides to pass a predictive scheduling mandate, a plastic bag ban, or any other ordinance the state dislikes, the legislature will have to act once again (if it deems these local actions unwarranted).

The Future of Local Preemption

The concept of preemption is not new and the fact is that states have quietly passed laws preempting local ordinances for years.  However, state legislators have generally avoided direct conflicts with cities by grandfathering local ordinances already on the books and passing legislation before local action had much traction. We see evidence of this, for example, in numerous states that have carve outs for large cities in the state materials theft law where it is evident that political pressure from large jurisdictions prevailed over the state’s goal of uniformity.  It’s not yet clear whether the recent high-profile episode in Alabama will result in additional attention to local preemption and if that will lead to a slow-down or embolden state efforts.  Regardless, the increasing introduction of legislation aimed at stopping local government from moving beyond state law is likely indicative of a changing tolerance of local rule to some extent.  For ISRI members, this can be viewed as a positive development and hopefully will spark conversation on the potential opportunities to level the playing field with more consistent state law.

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