Brian Christian Consulting

In January 2020, before the world turned upside down, I speculated what a Democratic takeover of the Texas House (remember when that was a thing?) might look like, including whether Republicans would stage a walk-out to block some legislation.  Well, I got the strategy right, anyway.

With House Democrats slowly melting away during the evening of May 30^th, effectively killing Senate Bill 7 (the election bill), the 87^th Regular Session of the Texas Legislature is ending in rather dramatic fashion.  Predictably, there are banner headlines in the New York Times and The Washington Post, using words such as “stunning setback.”

A better phrase is “temporary setback.”  An elections bill will eventually pass, and Democrats know that.  The last time they staged a mass walk-out in 2003 (over redistricting), it took three full called sessions, but Republican leadership ultimately got its redistricting plans.  I think the only question now is how many called sessions it might take to get it done.  Additionally, Republican leadership has already taken grassroots fire for giving Democrats a say in selecting the House Speaker, appointing Democratic chairs, and even giving their bills oxygen.  Will there be more fall-out from the walk-out?  We shall see.

OK, enough politics.  Let us get to business (and the original first paragraph of this article).

If you had told me exactly one year ago that I would be writing an end-of-session wrap-up of where major environmental legislation landed by sine die, I am not sure I would have believed it.  Put me in the camp with the others who genuinely wondered how the Legislature would pull-off a Regular Session without some major changes to how it does business and what it would even take up.

Were there differences this session?  Of course, but they were mostly physical.  Masking and testing requirements, social distancing in the gallery and hearing rooms (though, can I get some agreement that the elbow room was kind of nice?), and plexiglass barriers (though those eventually came down) were the most obvious signs that things were out of the ordinary.  In the end, however, the Legislature did not have to do any major procedural or constitutional contortions, and several thousand bills were still filed.

Of those several thousand bills, what of environmental legislation?   Well, I think it looked like any other session, frankly.  Approximately 340 Article VI (Natural Resources) agency bills were filed, which is roughly five percent of the total bills and joint resolutions printed out on paper this session.  That is a typical proportion.

Looking closer, you saw the usual suspects—concrete batch plants, the Texas Emissions Reduction Plan (TERP), water planning, localized concerns about waste management, low-level radioactive waste, and issues environmental groups have been telegraphing for nearly two years, such as emissions events and TCEQ penalties.  The Legislature also fulfilled a promise made two years ago to take a serious look at the regulation of above-ground storage tanks.  A little inside baseball?  Maybe, but in the wake of storms and accidents, important.

So, let us take a look at what passed…and what did not, though much of the latter will serve as a preview of the Sunset review looming on the horizon.  Bear in mind that the veto period ends June 20^th.

The Budget.  The LBB, in its usual fashion, posted this helpful summary, but the bottom line is they passed a $249 billion biennial budget.  There remains to be had a discussion of COVID relief money, but that will be for another day (the Governor promises in the Fall when they take up redistricting).  As I expected, they fully funded public education, following through on their commitment from last session.

Narrow-casting a bit to the environment, TCEQ made out very well.  The agency will receive almost $6 million in new money to fund targeted pay raises for high-turnover positions, including inspectors (we all want experienced investigators).  Also included is money to support air quality monitors deployed during the current biennium.  There are also contingency riders that will help the agency respond to new law (more on that below).  Overall, across all of Article VI (Natural Resource Agencies), there was a $69 million dollar increase from 2020-2021.  Not bad for an article that has often been a bit of a backwater.

Sunset.  This is near the top of this article because those of us who work on environmental policy need to now pivot to the interim on this one.  If you will recall, we need to watch the Sunset bills because they evolve throughout the process.  As expected, this year was no exception.  The bill to review is SB 713.  There was a brief period of hostage-taking that necessitated a two-year extension for some agencies, but overall Sunset issues appeared relatively straightforward (for example, Parks and Wildlife).  Not surprisingly, the Public Utility Commission (PUC) got moved to the 2022-2023.  It will be interesting to see how the review of that agency flanges with reforms enacted this session, and whether there will be  a holistic review of that agency’s operations vis-a-vis TCEQ.  SB 713 briefly included sweeping across-the-board recommendations that were stripped out in conference.  Among them was a requirement to clearly distinguish between the policy-making functions of an oversight body (such as a commission) and the executive who carries out day-to-day operations.  Other provisions would have enacted extremely strict conflict-of-interest requirements.  Though excluded for now, I think these issues will come up again in the context of the reviews of Article VI agencies.

Aggregates and Allied Industries. Despite several dozen bills being filed, only two passed.  This included HB 1544, which is narrowly bracketed and applies only to properties that lease to sand mining operations but want to maintain their agriculture exemption; and SB 952, which statutorily memorializes what is already required by TCEQ rule and has already been signed by the Governor. Another pending item is a rider amendment added to the conference committee report for the budget (see Article IX, Section 17.39) that requires TCEQ to adopt best management practices for noise and light at rock quarries and other holes in the ground.  I think reasonable questions are how this will work without any underpinning in an organic TCEQ statute, and whether this represents general lawmaking through the budget, but we shall see.

The Texas Emissions Reduction Plan.  Starting this September 1^st, the TERP Trust Fund will exist outside of the State Treasury.  Because revenue will feed directly into the fund outside of the appropriations process, TCEQ stands to access more funding than ever before.  Consequently, this session saw a number of bills to add new or expand current programs.  Additionally, the Legislature had to revisit the Trust Fund concept to address some constitutional issues raised by the Comptroller.  In the end, lawmakers found an elegant, and hopefully long-term, solution to the funding stream that is constitutional, invests significantly in vital infrastructure and congestion mitigation and air quality improvement projects, expands air monitoring, and incorporates flexibility in the use of the funds.  The omnibus bill is HB 4472.  Other TERP bills on their way to the Governor include HB 963 and HB 2361.

Winter Storm Uri.  I have not written very much about the bills addressing the fall-out from the February storm, but one notable bill is SB 3, which affects both the Railroad Commission and TCEQ.  Just to scratch the surface of a very comprehensive bill, provisions include a new Texas Energy Reliability Council to foster communication and planning among relevant agencies and regulated entities, with the Chairs of the Railroad Commission and TCEQ serving as members.  The Railroad Commission is also empowered to designate “critical natural gas facilities and entities.”  Finally, the TCEQ’s authority to review emergency preparedness plans for affected public water utilities is drastically expanded from certain population centers to the whole state.  The agency estimated this will involve several thousand entities, and the budget bill includes a contingency rider granting 17 new full-time-equivalent positions and appropriating about $2 million from the Water Resources Management Fund (GR-D 153).  The Railroad Commission is getting 130 FTEs.

Other bills expanded the membership of the PUC and restructured ERCOT.  As mentioned above, PUC will be under Sunset Review, so stay tuned for more changes to that agency.

Storage Vessel Safety.  Late in the 2019 session, the Legislature made clear that it would review the safety of above-ground storage tanks in the wake of Hurricane Harvey and several industrial accidents.  They made good on that promise with the passage of SB 900.  The TCEQ will have to establish performance standards to protect groundwater and surface water in the event of an accident or natural disaster. Owner/operators will have to register with the agency, and the bill requires TCEQ to conduct on-site inspections at least once every five years.  The TCEQ estimated that the bill will impact about 36,000 tanks.  The budget bill includes a contingency rider appropriating approximately $240,000 in General Review for two (2) FTEs.

Waste and Remediation.  Compared to last session, there were fewer waste/remediation-related bills filed this session, but some notables made it to the Governor’s desk.  HB 2708 would allow funding from the Hazardous Waste and Solid Waste Remediation Account (GR-D 550) to be used to remediate the old Exide site in Frisco through 2027.  SB 1818 has already been signed by the Governor.  It provides a defense under the Solid Waste Disposal Act for certain scrap metal recycling transactions and reflected the interim work of TCEQ and interested stakeholders.  SB 872 is also law.  It extends the Dry Cleaner Environmental Response Program until 2041.

Water.  A number of bills tackled oil and gas waste, as well as the Railroad Commission’s jurisdiction, this session.  The potential beneficial uses of fluid oil and gas waste was the subject of SB 601.  The creates the Texas Produced Water Consortium to be hosted by Texas Tech and comprised of multiple Article VI agencies (TCEQ and Railroad Commission, natch) and multiple interests (including environmental).  HB 1284 will consolidate the regulation of Class VI underground injection control wells (used for CO2 injection) under the Railroad Commission, ending the current bifurcation of responsibilities between it and TCEQ.  HB 2201 will formalize a process through which the Railroad Commission evaluates the placement of oil and gas disposal pits, and HB 3516 will also encourage the treatment and beneficial use of oil and gas waste.

Toilet to tap also came up.  SB 905 will require TCEQ to develop and make available a regulatory guidance manual to explain commission rules that apply to direct potable reuse.

What did not pass…but we will meet again.  If you have been able to read my earlier session dispatches, you will recall that there were a whole host of other bills that addressed environmental issues.  In the end, bills on environmental justice, the importation of low-level radioactive waste for disposal in Andrews County, emissions events, and TCEQ penalties were put in the hopper but did not make it over the finish line.

Additionally, several dozen bills affecting aggregate production operations and their allied industries were filed.  They expanded TCEQ’s authority (noise and light), transferred regulation from TCEQ to the Railroad Commission, broadened who could request a contested case hearing on concrete batch plants, and attempted to give Houston and Harris County concrete batch plant permit preemption authority.  A few were heard in committee, and the noise and light provisions made it into SB 1 (see above), but most died.

One notable bill—HB 3477—took a novel approach of terminating a business entity’s existence for causing an “environmental disaster.”  The bill actually made it to the House floor but failed to pass by a vote of 64-79.  Another was HB 4146, which would have prohibited the direct discharges of wastewater in several river basins around the state.  The bill made it out of the House after a lengthy debate but was never referred to a Senate Committee.

As I have said before, all of these issues will be on the table during TCEQ’s Sunset Review.  That process will be gearing up shortly.  No rest for the weary!

In Closing.  This was my 16^th Session, which is a little hard to believe.  I gather that many found this session to be a trial, and I understand.  It began under a great deal of uncertainty and anxiety and appears to be ending…under a great deal of uncertainty and anxiety.

But I believe it is also fair to reflect on how far we have come since January, and how much the Legislature accomplished over a difficult 140 days.  In the end, important work got done.  Not everyone got what they wanted, but that is how it works.  I remain convinced that, when you look at the alternatives (hello, Congress), we do take care of business in the Great State of Texas.  Now, to those of you reading this who worked this session, get some well-deserved rest.  There is much still to do.

xxx