CHAPTER 7 MUNICIPAL AND COUNTY REGULATION OF NATURAL RESOURCES DEVELOPMENT: HOW FAR CAN LOCAL REGULATION GO?

• Jurisdiction: United States

Mineral Development and Land Use
(May 1995)
CHAPTER 7
MUNICIPAL AND COUNTY REGULATION OF NATURAL RESOURCES DEVELOPMENT: HOW FAR CAN LOCAL REGULATION GO?
Patricia C. Tisdale and Erin M. Smith
Holme Roberts & Owen LLC
Denver, Colorado

I. INTRODUCTION

This paper explores the relationship between local and state authority over the development of natural resources such as oil and gas, and gravel. In the last several years in Colorado, the extent to which a local governmental entity (home rule city, statutory city or county)¹ may impose regulations on mineral extraction activities has surfaced as a major issue for local governments and the oil and gas and mining industries alike. This paper analyzes the law in the areas of preemption, local control over local matters, and home rule authority, attempting to reconcile these issues in the mineral extraction context, and then comments on the likely course of the law in this area in the future.

As a part of any preemption analysis, it is necessary to examine the differences between a home rule city and a statutory entity, such as a statutory city or county. Depending upon an individual state's recognition of home rule powers, the home rule city may possess substantially greater powers to effect local regulation of mineral development. This paper will focus on Colorado. Colorado's Constitution authorizes home rule for its municipalities, and therefore, its case law is well developed in this area. In addition, this paper will focus its attention on oil and gas and gravel extraction. A brief examination of other western states' case law is included within the scope of this analysis.

However, any regulation of extraterritorial lands is beyond the scope of this paper. Similarly, the question of whether a specific local regulation may or may not be preempted by state law is likewise beyond the scope of this analysis.

II. BASIS OF LOCAL REGULATORY AUTHORITY IN GENERAL

In general, the police power is an inherent attribute of sovereignty. The police power empowers the state to regulate the conduct of its subjects toward each other and the manner in which each person shall use his own property when regulation becomes necessary for the public good.² When and as conferred by the state, the police power also belongs to cities, counties, or other

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subordinate governmental agencies or divisions of the state.³ This delegation of the police power to municipal corporations may occur by statute or municipal charter, either in expressed terms or by implication.⁴

There can be no doubt, then, that local governments, through the exercise of their police power, have authority to regulate the use of one's property in accordance with the protection of the public health, safety and welfare. Indeed, local land use enactments often regulate, through zoning, the location in which mineral extraction activities may be conducted. Local regulations may also include permitting requirements for mineral extraction. Finally, local regulations may impose certain performance standards, setbacks, and other conditions upon mineral extraction activities. All of these regulations are justified by local governments on the ground that, like any other use of land, mineral extraction activities require regulation to protect the public health, safety and welfare.

A. Authority for Local Regulation in Colorado.

Statutory Entities. A county, being a creature of statute, and a subdivision of the state, possesses only those powers that are expressly, or by necessary implication, delegated to it by the general assembly.⁵

Similarly, non-home rule cities, generally referred to as statutory cities, have only such powers as are expressly or impliedly delegated to them by the general assembly.⁶

Nevertheless, both statutory cities and counties in Colorado possess substantial authority to exercise their police power in regulating land use. Colorado statutes specifically authorize statutory cities to exercise a broad range of municipal powers⁷ and cities are specifically authorized to exercise planning and zoning powers.⁸ Counties are likewise authorized to engage in planning and zoning⁹ and the grant of authority contained in the County Planning Code is

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sufficiently broad to authorize a county to establish mineral conservation districts.¹⁰ The general assembly has specifically delegated to counties the right to engage in flood control.¹¹

Both statutory cities and counties may rely on Colorado's Local Government Land Use Control Enabling Act¹² for authority to

[Regulate] development and activities in hazardous areas;...[protect] lands from activities which would cause immediate or foreseeable material danger to significant wildlife habitat and would endanger a wildlife species; ... [regulate the establishment of] roads on public lands administered by the federal government;...[regulate] the location of activities and developments which may result in significant changes in population density; ... [provide] for phased development of services and facilities; ... [regulate] the use of land on the basis of...[its] impact...on the community or surrounding areas; ... and [regulate] the use of land so as to provide [for its] orderly use ... and the protection of the environment in a manner consistent with constitutional rights.¹³

With respect to statutory cities and counties, however, nothing in the terms of the Local Government Land Use Control Enabling Act is intended to "diminish the planning functions of the state."¹⁴

Therefore, Colorado's general assembly has provided specific authority to statutory municipalities to regulate the use of land for the public good.

Home Rule Cities. In addition to possessing any power generally granted to statutory cities, home rule cities derive special police powers directly from the Colorado constitution,¹⁵ which authorizes the creation of home rule cities, thus affording home rule cities a constitutional vesting and defining of their police power. Thus, in contrast to statutory municipalities, home rule cities are not bound by the so-called "Dillon's Rule" which limited the powers of municipalities to those

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granted by the legislatures. A separate constitutional provision¹⁶ "prevent[s] a legislative commission from intruding upon a city's right of self-government in matters of local concern."¹⁷ The effect of these constitutional grants is that home rule cities are constitutionally granted "every power possessed by the General Assembly as to local and municipal matters, unless restricted by the terms of the city's charter."¹⁸ This grant of power includes authority over the regulation of land use within a city.¹⁹

Therefore, a home rule city does not depend upon a legislative grant of authority to exercise its police power in favor of the public good; that power flows directly from the Colorado constitution.²⁰

B. Bases of Authority to Exercise the Police Power—Other States.

Colorado is not alone in according plenary power over local matters to certain municipalities. For example, the California constitution addresses the home rule powers of charter cities:

It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and resolutions in respect to municipal affairs, subject only to the restrictions and limitations provided in their several charters and in respect to other matters they should be subject to general laws. City charters adopted pursuant to this Constitution shall supersede any existing charter, and with respect to municipal affairs shall supersede all laws inconsistent therewith.²¹

Thus, a city charter provision may supersede conflicting state law unless the state law addresses a matter of statewide concern, is reasonably related to resolution of that concern, and is narrowly tailored to limit incursion into legitimate municipal interests.²² A conflict exists if an

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ordinance duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.²³

Similarly, in Idaho, home rule powers are extended by the constitution, which provides that "Any county or incorporated city or town may make and enforce, within its limits, all such local police, sanitary and other regulations as are not in conflict with its charter or with the general laws."²⁴

A city cannot act in an area which is so completely covered by the general law as to indicate that area is a matter of state concern. Nor may a city act in an area where, to do so, would conflict with the state's general laws.²⁵

Special charter cities²⁶ are permitted to regulate matters of purely local concern; the legislature is prohibited from regulating in those areas and preempting the authority of the city.²⁷

The New Mexico legislature adopted the Municipal Charter Act²⁸ as authorized by the home rule amendment to the New Mexico constitution.²⁹ "A municipality which adopts a charter may exercise all legislative powers and perform all functions not expressly denied by general law or charter."³⁰ "The purpose of this Section is to provide for maximum local self-government. A liberal construction shall be given to the powers of municipalities."³¹

Home rule municipalities do not look to the legislature for the grant of power to legislate, but look only to statutes to determine whether there are any expressed limitations which may have been placed on that power.³² In order for a statute to override an enactment of a home rule

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municipality, the statute must relate to a matter of statewide concern.³³ One test under New Mexico law to determine whether an activity is of local concern or of general concern, is whether it is proprietary or governmental in character.³⁴ When an activity is carried on by the municipality as an agent of the state, it is of general or public concern. If it is exercised by the city in its proprietary capacity...