11 - Credit Access Business report and ordinance

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a Notice of the Public Hearing on the City website and sent a Notice of the Public Hearing to the Paris News, which was published on December 27, 2022. At the January 9, 2023 City Council Meeting, several representatives from CAB entities addressed the City Council expressing their concern with municipal regulation in light of current state regulation and changes to their business that have occurred since the original TML ordinance came out nearly ten years ago. They expressed a willingness to meet and propose edits. The City Council instructed City Staff to meet with the CABs as well as Texas Appleseed and United Way (those that proposed this ordinance to the City Council) and attempt to work out a compromise version between both parties to then bring back to them, or at least hear and consider edits to the ordinance. From January 2023 until April 2023, the City Manager, City Attorney and Assistant City Manager worked with both parties (CABs and Consumers) in an attempt to negotiate a new draft, a compromise version. This resulted in considerable time spent discussing, considering, researching, editing, etc. The City Council has received numerous emails and updates on this topic throughout this period. During this time, we had opportunity to learn more about case law involving the TML ordinance as well as existing legislation. On February 9, 2023, H.B. 2127 was filed which, if passed and signed into law, would preempt the city from regulating many business, specifically including CABs. A similar bill was introduced in the Senate but was left pending in committee pending House action on H.B. 2127. The House has passed the bill, which includes a "grandfather" clause for ordinances enacted prior to January 1, 2023. We of course had no idea this bill was going to be filed in our previous meetings, nor that there would be a safe harbor for ordinances enacted prior to January I". This bill has been engrossed and is in committee in the Senate. The Senate could pass it as is, or work on a compromise bill with the House. Either way, it is probable that some version of the bill will pass in the Senate and that the Governor will sign it into law. Should that occur, and should the Council pass any version of the ordinance, we would be in a position of needing to repeal it. There have been other bills along similar measures as well as the Texas Attorney General weighing in support of CABs. There is clearly a strong legislative will to prohibit municipalities from regulating business enterprises locally, including specifically CABs. With regard to litigation, we have still not been able to locate a case above the level of a municipal court that has considered the TML ordinance and upheld it on its merits. The primary case on the ordinance concerns the City of Denton, and that case, although decided in favor of the city, turned on a procedural point. In other words, no court (other than a municipal court) that we can find has looked at the ordinance and found that it passes legal muster, and no party has pointed us to one that has. It is more likely that the pending litigation surrounding the Austin and Dallas ordinances will address the merits, and, in the event H.B. 2127 does not become law, it might still be prudent to await the outcome of these cases.