State Preemption: Arizona vs. Local Control

by Micah Berman — Monday, Sept. 5, 2016

This blog tends to focus on federal regulation or state regulation, but local regulation is also particularly important in some areas of law – particularly public health law, my area of focus.

Recently, there have been coordinated efforts to limit local regulation through the use of state-level preemption.  Recent examples from my home state of Ohio have included state efforts to prevent local governments from banning trans-fatslimiting where guns can be carried, or using red-light cameras.

Two relatively new laws in Arizona—though not explicitly directed at public health—exemplify this trend (and perhaps take it to new levels).

First, Arizona Governor Doug Ducey signed SB 1487 in March. This law provides that a state legislator can file a complaint with the State Attorney General if a town, city, or county passes a law that “violates state law or the constitution of Arizona.”  If the AG agrees that the local law conflicts with state law, the city (or other locality) has 30 days to rescind the law.  If it fails to do so, the AG is to instruct the State Treasurer to withhold state funds from the city.

The funds are withheld until the city withdraws the law or the State Supreme Court “resolve[s] the issue” in the city’s favor (such disputes are given original jurisdiction in the State Supreme Court).   However, the city must post a bond “equal to the amount of state shared revenue paid to the…city…in the preceding six months” while the case is reviewed by the State Supreme Court – and it would likely be impossible for many jurisdictions to post such a bond.  As reported by the Arizona Republic, “For some cities, state-shared revenue equals half or more of their revenue.”

There is no doubt that this law will chill local regulation.  A complaint from one state legislator—on any topic—can now start a process that could decimate a local government’s funding.  Of course Arizona cities were never permitted to pass laws that “violate state law or the constitution of Arizona.”  But because state law is not always clear, now localities will have to think long and hard before considering any law that could be remotely perceived as raising a potential preemption issue.  (It seems that the law may have be prompted in part by a dispute over local gun laws – where Tucson’s City Council and the State AG disagreed about the scope of local authority.)

Second, Governor Ducey signed SB 1524 in March. This law states in part:

Unless authorized by federal, state or local law a city or town may not take any action that materially increases the regulatory burdens on a business unless there is a threat to the health, safety and welfare of the public that has not been addressed by legislation or industry regulation within the proposed regulated field.

Needless to say, this is quite vague and subjective – and it could be used to argue that nearly any local regulation is invalid.  Regulated industries will almost always argue that their own self-regulation is adequate to address health or safety concerns.  Again, it seems that the vague language of the law will serve to chill local regulation.  (A parallel provision puts a nearly identical limitation on state administrative agencies.)

Later parts of the law make clear the law’s real target: local regulation of online marketplaces such as Airbnb or Uber.  Indeed, Airbnb was behind this bill, versions of which have also been passed in other states.  But some the broad language is not limited to regulations of the “sharing economy.”

These are just two of the many examples of laws limiting local control just in Arizona in the last legislative session.  At least some of these bills have been pushed by ALEC, the corporate-backed group that promotes its model laws around the country.

Battles over state preemption are likely to intensify in future years, as debates about local regulation of the minimum wage, paid leave, fracking, LGBTQ rights and more continue to heat up.  One can debate the theoretical benefits of local control vs. state uniformity, but as these Arizona examples suggest, “preemption is often a ‘power play’ in which an industry uses its superior influence to preempt . . . local authority.”  Those seeking to preserve local control need to quickly determine how they can mobilize to respond.

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