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  • Writer's pictureRic Armstrong

New Texas Law Aims to Reduce Regulatory Uncertainty for Small Businesses

The Texas Regulatory Consistency Act (TRCA), also known as House Bill 2127, is a law that was passed by the Texas Legislature in 2023 and signed into law by Governor Greg Abbott. The objective is to promote economic growth by reducing regulatory uncertainty for businesses and simplify compliance requirements. The proponents argue that the law does this by preempting cities and counties from enacting local ordinances, orders, or rules that exceed or conflict with numerous Texas codes—unless expressly allowed by another statute.

The TRCA specifically identifies the following state codes as preempting local action:

  • Agriculture Code

  • Business and Commerce Code

  • Finance Code

  • Insurance Code

  • Labor Code

  • Local Government Code

  • Natural Resources Code

The TRCA also creates a private cause of action, meaning that a person or trade association can sue a city or county for an ordinance, order, or rule that violates one of the above-mentioned field preemption clauses.

The TRCA has been met with mixed reactions. Supporters of the law argue that it will reduce regulatory uncertainty for businesses, simplify compliance requirements, and promote economic growth. Opponents of the law argue that it will give the state too much control over local governments and that it will limit the ability of cities and counties to address local concerns.

The TRCA is a significant piece of legislation that will have a major impact on local governments in Texas. It is important to carefully consider the potential benefits and drawbacks of the law before forming an opinion.


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