Brian Christian Consulting

On June 4^th, I published an article that speculated on what the next Regular Session of the Legislature could look like if we are still grappling with the COVID-19 Pandemic.  With almost three more months of this under our belts, we know a little bit more about what might happen, though far more is still unknown than known.

We know, for example, that the Comptroller is projecting a budget shortfall for this biennium of $4.58 billion.  Several folks I talked to were somewhat relieved by that number (it was lower than they and I had feared it would be).  That sliver of good news, however, came with Comptroller Hegar’s admonition that the numbers are shrouded in uncertainty.  We just simply do not know what the last two quarters will hold, and will that figure prove too optimistic?

We know that for now, state agencies are not being asked to reduce their Legislative Appropriations Requests beyond the five percent cuts they made for this biennium.  The LBB appears to be keeping its options open, however, with an additional directive that agencies identify their top priorities and describe potential impacts from further reductions.  I saw a headline suggesting state agencies had dodged a bullet.  Let us hope so, but we will see.

We also know that the Legislature is grappling with how to conduct its business.  A few weeks ago, a friend texted me a picture of the plexiglass being installed on House members’ desks.  The House Administration Committee also released a poll of House Members that show wide agreement on several issues (such as mask requirements), but closer margins on others (e.g. admission of outside groups).  So, there is a diversity of viewpoints that will have to be sorted and considered.

Additionally, the Sunset Commission’s recent experience illustrates how difficult it will be to even agree on how to conduct open meetings.  Their August 4^th organizational meeting adjourned without adopting commission rules, and their scheduled August 19^th meeting (which was to include Texas Parks and Wildlife) was canceled entirely, reportedly over concerns about in-person testimony.

On the House side, interim committees have been given guidance on how they can make progress on their charges.  While they cannot hold traditional hearings, their options include holding virtual webinars or “town halls”, issuing formal requests for written input on their charges, and/or issuing updates through the House website.

Within the natural resources realm, the House Committee on Natural Resources issued a call for comments that are due September 25^th.  The Articles VI, VII, and VII Subcommittee for House Appropriations issued their call for written testimony, with a due date of September 30^th.  It is unclear, however, how many other committees may utilize one or more of these options.  One interim committee of interest is the Committee on Aggregate Production Operations.  Just before the outbreak, the committee was planning several hearings.  It will be interesting to see whether and how it adapts to this new normal.

On the Senate side, Senate Finance has already issued their interim report.  So, different approaches, thus far.

Finally, and most seriously, at least two Legislators have contracted the virus, likely bringing the issue close to home for members.

So, a lot to unpack, sort through, and figure out.  What effects could these developments have on session?  Additionally, what environmental issues that a year ago seemed a sure thing to come up again might get deferred?  Here are some thoughts, based partly on osmosis, discussions with fellow consultants, a read of recent events, and history.

A Focus on a Handful of Issues.

There seems to be a growing consensus that when Legislators arrive in early January, they will be laser focused on only a handful of urgent priorities—the budget, COVID fallout, and responses to certain current events.  Additionally, school funding and preserving the property tax actions from last session will be of the utmost importance.  Consequently, entities that want to pass anything that does not deal directly with those limited items may have a tougher row to hoe than usual.  They will have to demonstrate their issue is mission critical, and that may not be enough anyway this time around.

How About the Budget?

Earlier this summer, I wondered if they would defer writing the biennial budget until next summer.  I still believe that is an option and would give more time for an economic recovery to take hold.  Recently, there has been speculation that they could adopt a one-year budget during the Regular Session and finish the biennium somewhere down the line.  Assuming there is not some constitutional prohibition (which I cannot find), this seems to also have the benefit of allowing more time for a recovery, thereby reducing any deficit, and avoiding steep budget cuts.

A Fiscal Note = D.O.A.  Well, for most things I would think.  It is hard enough to pass a bill with a cost during the best of times.  With so much uncertainty around the state’s fiscal condition, members may be even more averse to even filing a bill with a cost on it.

To Meet or Not to Meet?

That is the question.  The struggle of the Sunset Commission highlights the divide over how to conduct in-person business.  Members will be extremely sensitive to the fact that there has been pressure on universities and public schools to reopen, and many will feel duty-bound to conduct the people’s business at the capitol to the maximum extent possible.  In exchange, outside access to the capitol may be limited, and could even feature a reservation system of some kind.  On the other hand, other members may be deeply reluctant to reopen the capitol even on a limited basis and argue for more virtual options.  The first few days of session—the Speaker election, the adoption of rules, etc.—will be interesting.  At the very least, I think the entire House and Senate will convene relatively rarely and only to tackle mission critical items.

Something More Akin to a Special Session?  I posed this option in my last article on what session could look like.  Under this scenario, the Governor designates just a few items as emergencies, and only a handful of members and committees meet to hash things out.  If all goes smoothly, the Legislature could adjourn sine die well within 140 days.  Under this scenario, special sessions become more important.  We already know there will be one for redistricting next summer, so there could be pressure for items to added to that call, or for there to be more specials stretching into 2022.

So as these things play out, what about environmental issues?  My New Year’s article highlighted some potential future issues worth keeping an eye on.

I speculated that the seeming rash of plant accidents in 2019, coupled with the NGOs’ full-court press calling for more regulation of emissions events, could mean a run at expanding TCEQ’s authority over above ground storage tanks and other industrial facilities.  Given the bi-partisan concern over the plant accidents expressed at the time, I figured something would ultimately pass.  Now, I think this issue would be a candidate for deferral until TCEQ’s Sunset Review during the 2022-2023 cycle.  On the other hand, just in the last two-weeks we have seen high-profile industrial accidents again, so perhaps something will at least be filed.

Circling back to the Aggregate Production Operations Committee, I would not be surprised to see several bills filed regardless of whether there is an overall mood to focus on certain issues.  A lot will depend on the committee’s activities the remainder of the year.  If it is active, we should learn more.  If nothing comes to pass this time around, I will look for this to be a major issue in TCEQ’s Sunset Review as well.

What about the Texas Emissions Reduction Plan?  You may recall that a bill was passed last session (House Bill 3745) to establish a TERP Trust Fund outside of the Treasury.  Interestingly, late in the process, the effective date of this change was shifted from September 1, 2019 to September 1, 2021.  Given the budget situation, will they shift that date again?

Finally, what about Sunset?   The current Sunset Cycle (view the schedule here) presents a full plate.  The Sunset Commission has acknowledged that the pandemic has put them behind the eight ball.  There will undoubtedly be changes to the schedule.  Less certain is whether they will simply shift everything two years into the future, or more drastically reconfigure things.  Whatever the case, I cannot see the 2022-2023 schedule, which includes TCEQ, the Water Development Board, and other natural resource agencies, going unaffected.

This is still a volatile and evolving situation.  The COVID numbers seem to be trending the right direction, but there could be another spike this fall and winter.  The next inflection point could the be election, when we will know whether the House flips (I do not see it, personally).  At the very least, the Speaker race may come into sharper relief.

Whatever happens, the stakes will be unimaginably high, and not only because of the ravages of COVID—the 2021 Session will also mark the beginning of the 2022 campaign.  Now that is something to ponder!