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SOUTHEAST TEXAS RECORD

Saturday, May 4, 2024

Texas town lacks lacks authority to impose trash hauling fee, justices find

State Court
Scotx

FORT WORTH - The Town of Westlake lacks authority as a general-law municipality to impose a percentage-of-revenue licensing fee on construction trash-hauling companies, according to the Texas Supreme Court’s May 20 opinion.  

The Town of Westlake is a general-law municipality with around 2,000 residents near Fort Worth. 

The high court’s opinion stems from a lawsuit brought by Builder Recovery Services - a company that hauls trash away from construction sites. 

According to the opinion, BRS wants to operate within Westlake. The town has a long “franchise agreement” with Republic Services. Republic pays the town an annual fee of 12 percent of its gross revenue generated in the town.  

Court records show Westlake enacted Ordinance 851, which governs solid waste disposal services. The ordinance required licenses for trash haulers like BRS that required a monthly fee of 15 percent of a company’s gross revenue generated within the town. After the ordinance was adopted, BRS began operating in the town, but it did not obtain a license or pay the fee. The town cited BRS for operating without a license and BRS responded by filing suit.

During the litigation, Westlake informed the court that it had amended the ordinance to decrease the license fee from 15 percent to 3 percent of gross revenue. 

Court records show the district court rendered declaratory judgment, rejecting most of BRS’s arguments but declaring that the 15 percent license fee “is invalid and unlawful” under the Health and Safety Code. The court awarded attorney’s fees of $8,523 to BRS. Both sides appealed. 

An appellate court held that BRS’s challenge to the fee was moot because Westalke had replaced the 15 percent fee with a new 3 percent fee.

The Supreme Court found that the fee exceeds the town’s authority. 

“The Town contends that its percentage-of-revenue fee—in both its 15% and its 3% iteration—covers only the cost to the Town of regulating construction trash haulers like BRS,” the high court’s opinion states. “But regardless of how much money a percentage-of-revenue fee is generating at any given point in time, such a fee is tethered only to the market price of trash-hauling services, not to the Town’s cost of regulating. 

“The Town does not regulate the price of trash hauling. How much BRS charges its customers to haul their trash is none of the Town’s concern, and this privately negotiated, fluctuating amount has nothing to do with how much money the Town needs to administer its trash-hauling regulations.” 

Case No. 21-0173 

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