Air Quality Related Bills to Watch in the 86th Texas Legislative Session

“Check out Kristin’s updated article What Happened: Air Quality Bills to Watch in the 86th Texas Legislative Session“.

As discussed in The 86th Texas Legislative Session: The Process and Implications for Texas Facilities with Air Permits, every two years, the Texas House and Senate members converge upon Austin for a 140-day legislative session (session).  We’re currently in the middle of the 86^th Texas Legislative Session which runs from January 8 to May 27, 2019.  This article addresses several key air quality related bills to keep an eye on.  For perspective, over 7,000 bills have been introduced in the first 60-day period of this session.  Typically, a quarter to a third of bills are passed.  On the environmental front, 250–300 bills are introduced including 50–60 air quality related bills.  In this article, we’ll look at several air quality permitting bills regarding expedited permitting and “commencing” construction.

Commencement of Construction

Air quality permits are typically required “pre-construction”, that is, construction cannot begin until a final permit is issued by TCEQ.  Issuance of certain air quality permits in Texas often take many months or a year or more depending upon the location and complexity of the project.  With the time it takes to get an air quality permit in Texas, namely new source review (NSR) permits and amendments, “commence construction” is always a hot topic.

Senate Bill 1501 (SB1501) relates to the commencement of construction of a project following the issuance of a draft permit for an amendment to an air quality permit.  The bill would amend Section 382.004 of the Health and Safety Code to address at risk commencement of construction for permit amendment applications, where commencement of construction would be allowed for amendments upon issuance of a draft amended permit.  While 382.004 currently addresses “commence construction” it was unable to be implemented as written due to an EPA interpretation of the statute.

SB1501 was introduced and filed in the Senate on March 5, 2019, read for the first time on March 14, 2019 and referred to the Senate Natural Resources & Economic Development Committee where it is currently pending.

Similarly, the bill was also filed in the House, as HB2726, on February 28, 2019 and was read on March 11, 2019 and referred to the Environmental Regulation Committee.  Numerous events occurred on March 26, 2019 including a public hearing and committee consideration/testimony.  On April 4, 2019 the bill was considered in formal meeting and a substitute was made by the committee.  The substitute (CSHB2726) added a stipulation that the commission shall adopt rules to implement this section.  On April 10 and 11, 2019, respectively, the committee report was filed and distributed.  With a 7-2 vote, the bill is currently out of House Committee.

The next step is a vote by the House.  Industry will want to keep an eye on this bill as it will certainly provide ‘at risk’ needed flexibility for commencing construction for those amending permits (if adopted).  Should the bill be passed, it would be effective January 1, 2020.

Expedited Permitting – Current Fiscal Biennium

For the reasons cited above under commence construction, Texas initiated an expedited permit program in 2014.  The program is quite popular with industry and is subject to TCEQ resource availability, a surcharge, and demonstration that the purpose of the application will benefit the Texas or regional economy.  SB500, relating to making supplemental appropriations and reductions in appropriations and giving direction, including direction regarding reimbursement, and adjustment authority regarding appropriations, was filed on January 15, 2019 and was referred to the Senate Committee on Finance.  The bill (entitled an Act in this case) covers many programs and specific to Expedited Permitting, it provides additional funding above the amounts previously appropriated for the fiscal biennium ending August 31, 2019.  There is a current cap for the two-year period that has already been reached and the program needs additional funding to keep the program running through late August.  This Act allows for funds that have already been paid by industry to expedite their permit application above the current cap.

On March 11, 2019 it left the Senate Committee (as CSSB500) with a 14-0 vote and passed the Senate on March 13, 2019.  The House Appropriations Committee passed the bill 24-0 on March 19, 2019 and the House passed the bill on March 28, 2019.  The Act is with the Governor and the Expedited Permitting portion of the Act would be effective immediately.

Expedited Permitting – Future Years

The expedited permitting option has proven to be a popular option for industry to pursue in Texas.  However, expedited permitting could be considered “too popular” and issues around the availability of staff and fiscal resources could limit/are limiting the future effectiveness of the program.   On February 7, 2019, SB698 was filed and was read/referred to the Senate Natural Resources and Economic Development Committee on March 1, 2019. The bill would amend Section 382.05155. Expedited Processing of Application, of the Health and Safety Code.  The bill adds language including:

• Allowing the surcharge to cover costs of full-time equivalent (FTE) commission employees to support the expedited processing of air permit applications as well as allow full-time equivalent commission employees to support the expedited processing of air permit applications.
• Designating that money from the surcharge collected under this section may be used to support the expedited processing of air permit applications under this section.
• Allowing the commission to pay full-time equivalent commission employees supporting the expedited processing of air permit applications as well as set the rate for overtime compensation for the FTEs.

Numerous events occurred on March 20, 2019, including a public hearing and committee consideration/testimony.  The bill passed the committee on March 21, 2019, 11-0, and the full Senate on March 26, 2019, 31-0.

The bill is currently with the House. It was referred to the House Environmental Regulation Committee on April 1, 2019.  It was considered in public hearing on April 9, 2019 and received favorable response (8-0) without need for amendment.   After leaving the House Committee, the bill will be voted on by the House.  Should the bill be passed, it would be effective on September 1, 2019.

Also amending Section 382.05155, HB1747 was filed on February 13, 2019 and was read/referred to the House Environmental Regulation Committee on March 4, 2019.  The bill adds language that allows the commission to be appropriated any revenue from fee revenues collected and deposited to the account from expedited permit review surcharges assessed in accordance with this section.  A public hearing was scheduled for March 13, 2019 and subsequently withdrawn.  The bill remains with the House Committee.

Industry should continue to track the progress of these bills (as well as SB698 related bills: identical HB1688 and duplicate HB1708) as the authority for the fees collected to be allocated for the expedited permitting program as well as the addition of FTE staff to the expeditated permitting program should help alleviate current bottlenecks.

These are just a few of the many air quality related bills that the Texas legislature is considering.  Check back for updates as these bills make their way through the system over the next month.  Have questions?  Reach out to Houston Office Director, Kristin Gordon, at kgordon@all4inc.com or 281.937.7553 x301.