Brian Christian Consulting

Bill filing starts November 9^th. OK, I’ll let that sink in for a bit….

And we’re back. You read that right. Bill filing starts the Monday after the election. So, while we may not know the outcome of the election (at least nationally) by the 9^th, we can say with certainty that there will be bills to read.

Ah, but which ones? And how many will be filed between November 9^th and the filing deadline of March 12, 2021? Those are the million-dollar questions. The answers will be highly dependent on how session is conducted. As important will be the individual members’, and the collective bodies’, bandwidths against the backdrop of a Global Pandemic that has turned almost everything upside down. And that’s not even considering if the House majority switches parties.

This is the third article (hence the headline) that will speculate on what the upcoming session will look like (production of this threequel was slightly delayed because I was writing for clients—hopefully, you will see some of that work during session). This time, however, I will drill down into the environmental and natural resource issues that could come up.

But first a quick recap of what I covered in parts one and two of this series:

• Comptroller Hegar is projecting a budget shortfall for the current biennium of $4.58 billion. The 87^thLegislature will have to grapple with that shortfall, as well as any projected for the next . We will know more when the Comptroller issues a revised revenue estimate in early January.
• Speaking of grappling, the Legislature has also continued to work on what session will look like. Will masks be required? Will there be daily temperature checks? Will the public be allowed into the building? Will they meet somewhere else (a la the Senate meeting in the Clements (Jukebox) Building in 1993)? There is still a lot of uncertainty on these questions, though a clearer picture should appear shortly after the election.
• The Regular Session can and could be less than 140 days, and there could be a series of Called Sessions (we already know there will be one for redistricting) throughout the remainder of 2021 and 2022.
• Rumors continue to be strong that the Legislature will focus on just a handful of issues: the budget, covering the progress they made on school finance and tax reform last session, policing/civil unrest, and COVID liability protection. The Governor’s emergency powers vis-à-vis the Legislature’s constitutional role may also be on the table. While low in total number, all these issues are fraught and time-consuming, and they could derail a session held in the best of times.

Even with the limitations on money, time, and priorities mentioned above, I do believe a number of environmental bills will still be filed. Just because there is a pandemic does not mean certain issues go away. Additionally, some of the non-governmental organizations, or NGOs, have been issuing reports, which telegraph the issues they will be pushing. Finally, there are residual issues from last session that will no doubt schedule a return engagement. Let’s dive in, shall we?

Article VI Budgets

Article VI of the Appropriations Bill is comprised of the natural resource agencies. The Legislative Budget Board (LBB) instructed all state agencies to submit budget requests that were 95 percent of what they were appropriated for the current biennium. At this point, no further reductions have been requested, and state agencies could still make “exceptional item requests” for funding above their baselines. Since the budget is policy, it is instructive to review some of these requests.

To meet the five percent reduction mandated by state leadership earlier this year, the Texas Water Development Board (TWDB) reduced the General Revenue state match for the Drinking Water State Revolving Fund. While workable in the short-term, the agency is requesting a restoration of approximately $3.4 million for the biennium to fund the state match for this vital program. The Board is also requesting additional staff positions to help implement several programs, including the Interregional Planning Council, which helps with coordination among water planning groups (an important function when one region’s water plan relies in part on another region’s water).

Speaking of staff resources, the Texas Commission on Environmental  Quality’s (TCEQ) sole exceptional item request is $5.8 million for the biennium for salary dollars to retain investigators, permit writers, engineers, and attorneys. TCEQ quite reasonably points out in its LAR that the starting salaries for Houston and Harris County investigators range from $46,000 to $50,000, whereas TCEQ’s folks start at $39,000 (or, put another way, roughly what I started at…in 1994). The funding would not come from General Revenue. Rather, the methods of finance would be some of the TCEQ’s GR-dedicated accounts—Clean Air, Water Resource Management, Waste Management, Hazardous Waste Remediation, PST Remediation, and Air Operating Permits.

Similar to TWDB, the Railroad Commission is requesting the restoration of funding it reduced this biennium. $7.2 million would be provided for site remediation; approximately $963,000 would be restored for vehicle replacement. The method of finance would be the General Revenue Fund.

I have long argued that the budget bears close monitoring, even in the best of times. I think it will be even more important this year.

TCEQ Compliance and Enforcement

How TCEQ monitors and enforces environmental regulations is a frequent source of controversy. In the wake of large-scale industrial accidents that occurred in the Spring of 2019 (and a few since), multiple facets of the agency’s authority are again being scrutinized. Thus, I would not be surprised to see a suite of bills filed to address such issues as penalties, compliance history, and emissions events.

It has long been argued in some quarters that the penalties assessed by TCEQ are not a deterrent and, indeed, are treated merely as a cost of doing business. Try telling that to a small business (the largest bloc of regulated entities), but I digress. In October of this year, TCEQ proposed changes to its penalty policy that, overall, could lead to higher assessed penalties. The proposal also enhances penalties for emissions events.  Whether this initiative holds off a run this session at the organic statutes remains to be seen, but, if adopted, the changes could be the most consequential in years.

Speaking of emissions events, the NGOs and others are again arguing that the affirmative defense in enforcement is a huge loophole in the law. I think we could also see a move to increase penalties for “excessive” emissions events. Additionally, giving TCEQ expanded authority (e.g. inspection frequency) over such facilities as large, above-ground storage tanks could be in the offing. Finally, TCEQ’s utilization of its enforcement discretion during the pandemic drew controversy, and that authority could be examined.

Interim Charges

Before COVID put a full-stop on everything, House Environmental Regulation and Senate Natural Resources were going to examine some pretty meaty stuff. HER was going to look at the aforementioned above-ground tank issue. SNR was going to look at eminent domain, among other issues. I already said to expect something on tanks—I would expect another eminent domain bill as well.

Aggregates

Aggregate production operations (APOs), and their related industries (concrete batch plants, rock crushers, etc.), have long been controversial.  Over the last 10 or so sessions, multiple bills to restrict their locations and/or enhance the regulation of their operations have been filed.  By my count, more than 40 bills affecting the industry were filed in 2019 alone. These bills ranged from expanding buffer zones to transferring jurisdictional authority from TCEQ to the Railroad Commission.

Additionally, a special interim committee was appointed to examine myriad issues, including groundwater impacts and reclamation. While the committee’s work was interrupted by the Capitol shutdown, a request for public input was posted on September 18^th, and Facebook townhalls on the subject were held in September and October.

Common concerns include noise, light, traffic, and nuisance dust; as well as the operations’ proximity to schools, churches, and residences.   Bills that would change who can be granted a contested case hearing on a concrete batch plant permit (currently limited to a radius of 440 yards) are also perennial. The adequacy of TCEQ’s enforcement also comes up in this context. I would expect many of the same bills to be filed again in 2021.

The Texas Emissions Reduction Plan

Last session, House Bill 3745 (Bell of Montgomery/Birdwell) created the framework for a new TERP trust fund outside of the Treasury, with TCEQ as trustee. The fund would not be subject to appropriations, which could increase the funding available for use.  At the end of each biennium, any unencumbered fund balances would be transferred to the TERP account. Pretty nifty idea. The Trust Fund, however, would not come into existence until September 1, 2021, which would give the Legislature the ability to revisit the concept. Given the expected state of the budget, we will see if they do.

Radioactive Waste

Last session, two bills intended to address the long-term economic viability of the low-level radioactive waste (LLRW) disposal site in Andrews County were filed but did not pass. An 11^th-hour amendment to an unrelated bill to at least continue reduced surcharges paid by the licensee to the State led to a Governor’s veto. The long-term operation of the site, and what would happen if it closed for any reason, have been widely discussed during the interim.  Beyond LLRW, there are other blue-chip radioactive waste-related issues floating around, including a pending application with the feds to allow the interim storage of high-level radioactive waste at the Andrews facility. Will these issues emerge during the coming session?  It is a pretty safe bet. (Disclosure:  I work on LLRW issues and monitor it and the surrounding issues pretty closely.)

And Then There’s Sunset

While these issues may come up, some, most, or all may not go anywhere because of the COVID Session. But here’s the thing: barring a change in the schedule (which could very well happen), TCEQ, the Water Development Board, and other natural resource agencies will be up for Sunset Review during the next biennium. Based on my experience with two Sunset Reviews, that work could start as soon as the summer after the Regular Session.  All of these issues—as well as contested case hearings, toxicological effects screening levels, and environmental monitoring—will be fair game. It will be vitally important to keep an eye on the Sunset Safety Net bill.

What do you think will come up? Did I miss anything? Let me know and we can compare notes. In the meantime, please stay safe, all the best to you and your families, and I will see many of you (I hope) around the Capitol!