Construction Debris/Waste Hauling: Texas Supreme Court Addresses Validity of Municipality’s Imposition of Gross Revenue License Fee – JD Supra

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[co-author: Evan Nelson]

The Supreme Courtroom of Texas (“Courtroom”) addressed in a Might Twentieth opinion A drawback arising out of sure licensing and associated requirements imposed by a widespread-regulation municipality on a agency that removes strong waste (typically denominated “enchancment particles”) from enchancment web websites. See Builder Recowly Providers, LLC v. Metropolis of Westlake, Texas, 2022 WL 1591976.

The question addressed was whether or not The Metropolis of Westlake, Texas (“Westlake”) had the authority as a widespread-regulation municipality to impose a proportion-of-income licensing payment on enchancment trash-hauling corporations.

Westlake enacted Ordinance 851 in April 2018. The ordinance ruled strong waste disposal services in Westlake.  It included A bit Referring to enchancment trash haulers.  Ordinance 851 required enchancment trash haulers To buy a license To function in Westlake. 

Licensees’ obligations included:

  • Identification of automobiles and containers
  • Car and container upmaintain
  • Insurance coverage and recordmaintaining
  • Reporting requirements

A key requirement was The obligation to remit a month-to-month license payment of 15% of their gross income generated inside Westlake to the town.

Builder Recowly Providers, LLC (“BRS”) is a enchancment trash-hauling agency working in Westlake.  It collects and removes strong waste from enchancment web websites.  This consists of offering dumpsters To be used all by way of enchancment and hauling loaded dumpsters to landfills.

BRS is paid by private clients Similar to enchancment contractors engaged in residential new enchancment or transforming.

BRS refused to Adjust to Ordinance 851. It filed go well with in district court difficult the validity of Ordinance 851. The regulationgo well with included an allegation that Westlake, as a widespread-regulation municipality, lacked each the statutory authority to require BRS To buy a license to haul enchancment waste and the statutory authority to impose a licensing payment based mostly on a proportion of BRS’s income.

The district court agreed with BRS. It held the 15% license payment was invalid. 

Westlake subsequently decreased the license payment from 15% To three% of gross income. Its rationale for imposition of The three% payment was described as: 

. . . The authorities prices of regulation, enforcement, monitoring, and the associated influence to infraconstruction ensuing from strong waste transport services.

The Second Courtroom of Appeals, Fort Worth, Texas, held that BRS’s problem to the payment was moot as a Outcome of Westlake had changed the 15% payment with The three% payment.

The Courtroom reversed the appellate court’s ruling.  It held that the reducing of the payment Did not render the case moot. 

Westlake was held to lack the authority to impose a proportion-of-income licensing payment of any measurement.  Subsequently, the payment construction was tetright hered solely to the market worth of trash-hauling services Versus Westlake’s value of regulating. 

The Courtroom suggested that Westlake in all probability might have carried out a extra typical, quantity-based mostly payment beneath which Westlake charged fixed portions per license software or per enchancment website to cowl Westlake’s value of regulation.  It remanded The drawback to the appellate court as As to if The The rest of Ordinance 851 Could be severed from the invalid payment and maintain in place.

Subsequently, the Courtroom dominated that Westlake lacked the authority to impose this proportion-of-income licensing payment on enchancment trash-hauling corporations.

A duplicate of the Opinion Could be downloaded right here.

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