In the United States, a charter city is a city in which the governing system is defined by the city's own charter document rather than by general law. In states where city charters are allowed by law, a city can adopt or modify its organizing charter by decision of its administration by the way established in the charter. These cities may be administered predominantly by residents or through a third-party management structure, because a charter gives a city the flexibility to choose novel types of government structure.
For example, in California, cities which have not adopted a charter are organized by state law. Such a city is called a General Law City, which will be managed by a 5-member city council. A city organized under a charter may choose different systems, including the "strong mayor" or "city manager" forms of government. As of 22 February 2013, 121 of California's 478 cities are charter cities. A few examples include Norco, Oakland, Newport Beach, Palo Alto, Huntington Beach, Alameda, San Francisco, San Luis Obispo, Irvine, Los Angeles, San Jose, Merced and the capital, Sacramento.
Under Texas law, unless a city charter is passed, cities have only those powers granted under the Texas Constitution and the general laws of the state, and no more.
Once city reaches a population of 5,000, the voters may petition an election for a city charter. If the charter is approved by the voters, the city is governed under home rule status, which allows the city to pass any ordinance which is "not inconsistent" with either the Texas Constitution or the general laws of the state. This has caused some turmoil between cities seeking to pass laws and the Legislature attempting to keep them from doing so; examples include plastic bag bans (or plastic bag fees) and bans on oil and gas drilling within city limits. The city may retain home rule status even if the population subsequently falls below 5,000.
Texas law does not allow counties or special districts (other than school districts) to operate under a charter, their powers are strictly limited to those under the Texas Constitution and general law. School districts may petition for a charter; however, no school district has done so.
Economist Paul Romer has proposed a new type charter city, in which a guarantor from a developed country would create a city within a developing host country. The guarantor would administer the region, with the power to create their own laws, judiciary, and immigration policy outside of the control of the host country.
According to Romer, international charter cities would be a benefit to citizens by giving them an additional option about what system of economic polices they want to live under. In his vision, charter cities would adopt more pro-business polices than the host county, including lower taxes, less regulations, and protection of property rights, which would encourage international investment. Romer gives Hong Kong as an example, which he argues encouraged economic growth.
Thus far, two countries have at one point been receptive to Romer's idea. After a meeting of Romer with president Marc Ravalomanana of Madagascar in 2008, Ravalomanana considered the idea of creating two charter cities. However, the plan was scrapped when the political leadership that supported the idea was removed from power. In 2011, the government of Honduras considered creating a charter city, though without the oversight of a third-party government. Romer served as chair of a "transparency committee", but resigned in September 2012 when the Honduran government agency responsible for the project signed agreements with international developers without knowledge of the committee. In October 2012 the Honduran Supreme Court declared charter cities to be unconstitutional because the laws of Honduras would not be applicable there.
|journal=(help) Discussion of Dillon's rule, charter cities and home rule in New Mexico.