Senate Intergovernmental Relations Releases Interim Report

The Senate Committee on Intergovernmental Relations has released its interim report to the 86th Legislature.

The report covers multiple topics, including housing needs following a natural disaster, federal disaster relief fund distribution, debris removal, Extraterritorial Jurisdiction of cities, housing affordability, Special Purpose District reform, and Municipal management District Uniformity. For full details and conclusions from the committee, please see the complete report.

Spotlight on Recommendations

In order to improve the coordination of rebuilding housing and infrastructure following a natural disaster, the committee recommends the following:

• The legislature should consider reforms that improve the state’s response to disasters by building on a policy that better ensures the advanced positioning and access to recovery assets that would be essential in recovery, such as MHUs, direct repair teams, and contracts.
• The legislature should consider enhancing existing synchronization at the county and regional level by strengthening essential legal structures and arrangements (e.g., contracts, performance clauses, warranties on goods and services, remedies, recourse and alternative arrangement for non-compliance) and establish better market price-points for contractors to do business with the state for response and recovery efforts.
• The legislature should consider developing a Disaster Recovery Strike Team to better assist any community impacted by a disaster that lacks the capacity to accommodate and move quickly through the challenges confronted in recovery efforts.
• The legislature should consider building on the effectiveness of the GLO’s qualified list of vendors and work with local communities that are in regions that are prone to being impacted by natural disaster (e.g., Gulf Coast region impacted by hurricanes and flooding) and consider directing the appropriate state agency to work with local communities, and interested parties, and develop a similar qualified list of vendors comprised by entities from each region that can afford units of government the procurement of local firms.
• The legislature should consider maximizing existing resources, such as Texas A&M University’s AgriLife Extension Service and Hazardous Mitigation Centers, and work with state, region, and local leaders to better assist communities plan and establish protocols before disasters strike so that they will be better equipped to undertake recovery and rebuilding efforts.
• The legislature should consider building on Texas A&M University’s College of Architecture’s outreach organization, Texas Target Communities and expand its efforts to better assist communities and regions of the state that are prone to be impacted by disasters in developing infrastructure resiliency, including drafting recovery and reconstruction protocols and plans that would be activated after a disaster strikes.
• The legislature should consider improving the state’s effort to address the need for temporary housing after future disasters occur by supporting and instituting initiatives that increase the capacity, strengthen coordination, and streamline regulatory requirements in regions that are prone to be impacted by disaster.
• The legislature should consider directing the appropriate state agencies to review their environmental permitting efforts and proactively work with FEMA and HUD before a disaster occurs to determine to what extent a better synchronization of permits can be achieved prior to a disaster occurring that could better assist a victim of the disaster in streamlining or shortening the delay that is currently experienced through different layers of federal and state bureaucracy.
• The legislature should consider requiring every state agency and local unit of government involved in response and recovery efforts and existing ongoing disaster programs to undertake an After-Action-Review, or Incident Critique, to better understand what was effective and what needs improvement and report their findings to the state so that the appropriate state agencies can develop short- and long-term plans to improve the state’s recovery efforts.
• The legislature should consider directing the appropriate state agencies, along with affiliated partners from the private and nonprofit sectors, to assess the short- and long-term needs stemming from the latest disasters along the Texas Gulf region and develop the appropriate recommendation and reforms so that the time frame in which victims of disasters return to normalcy is significantly improved.
• The legislature should consider developing an expedited manner by which victims of natural disasters can clear clouded title issues in order to speed up reconstruction effort and overcome existing impasses in drawing down and accessing federal CDBG disaster recovery monies.

In evaluating cost effective options for FEMA to utilize in providing direct housing assistance immediately following a disaster, the committee recommends the following:

• The legislature should consider offsetting future delays in disaster recovery by establishing the framework for an expedited hazard recovery process that builds on pre-disaster planning, increased coordination of local units of government and state partners, and temporary to permanent housing programs.
• The legislature should consider requesting its congressional delegation encourage reforms be instituted that ensure more cost-effective housing options are made available through federal funding streams in order to maximize resources, assistance, and effectiveness. This includes the reduction of waste and needless tax payer spending caused by federal regulations that fail to take into account the plight of disaster victims and concerned local officials trying to assist them acquire temporary housing that transitions into permanent housing more effectively, including allowing for more effective utilization of multifamily housing.
• The legislature should consider building on the existing 10-year affordability term on CDBG disaster related housing, both rental and single-family, and continue to assist victims of disasters ensure that their housing continues to be affordable.
• The legislature should consider building on the success of SB 521 of the 78th Legislative Regular Session and develop a mechanism to enable innovative disaster recovery housing solutions, like RAPIDO, that are first undertaken as temporary housing to be titled in the state as personal property (temporary and moveable, as required by the Stafford Act) and then be titled as real property, which is permanent housing in order to maximize the use of federal disaster monies that meets both temporary to long-term housing needs.
• The legislature should consider supporting legislative efforts that allow local units of government the necessary authority to begin pre-planning and work with the appropriate state agencies in vetting their post disaster recovery plans in order to better assist Texans who are victims of a natural disaster, such as SB 1376 and SB 1673 by Senator Lucio from the 84th and 85th Legislative Regular Sessions, respectively.
• The legislature should consider ensuring that all homes that participate through the GLO’s PREPS program must go through a post-recovery evaluation with informed consent of final inspection criteria with the homeowner.
• The legislature should consider requiring state agencies in charge of disaster recovery to begin engaging in future disaster housing recovery options for temporary, short- and long term housing that will enable local and regional officials to become better engaged. Negotiation with federal counterparts is recommended to be implemented for disaster regions with the goal of providing transparency, flexibility, stability, resiliency, and greater choice to Texans and their families.
• The legislature should consider encouraging the state’s lead disaster recovery agency to maximize engagement with FEMA and HUD so that the eligibility requirements set-forth after a disaster are well-aligned with the needs of Texans who are victims of disaster. This will enable Texas to realize the full potential of FEMA and HUD to more quickly deliver assets and resources (e.g., the State of Louisiana).

In order to better disseminate information to survivors of disasters, the committee recommends the following:

• The legislature should consider requiring all state agencies involved in disaster recovery efforts to be part of an advisory entity that will meet to develop and design a one-stop web portal with all necessary assistance information for disaster victims and help maintain the portal. The web portal should be developed in a manner that protects confidential information (including protected information under HIPAA or other similar laws).
• The legislature should consider directing the appropriate state agencies to undertake a housing needs assessment so that policy is made to better understand the nature of housing needs (single- and multi-family) in order to be more effective immediately after a disaster.
• The legislature should consider directing the appropriate state agency to develop an information campaign in regions of the state that are prone to disasters occurring providing residents with a better understanding of FEMA and clarify any misconceptions that it may be an insurance company, and explain, with the assistance of the Texas Department of Insurance, the importance of flood insurance.
• The legislature should consider developing a permanent disaster hotline for local government officials so they may get immediate help and receive consistent information in order to prevent delays in the paperwork.

In order to better facilitate rebuilding, the committee recommends the following:

• The legislature should consider strengthening recovery and rebuilding efforts by automatically waiving local permitting fees in regions of the state covered by a state declaration of disaster.
• The legislature should consider that when the Governor issues a disaster declaration and it has been determined that the public’s health is threatened by the need to clear debris which may spread diseases through different vectors, for the state to automatically waive any regulations that may impede a local unit of government from addressing the debris removal or control of vectors (i.e., mosquitoes and other organisms that carry disease), implemented in a way that would not negatively impact federal reimbursements.
• The legislature should consider updating the appropriate state code that requires the installation of arc fault interrupters in order to facilitate cost-effective rebuilding efforts once a disaster declaration has been issued.
• The legislature should consider requesting its congressional delegation to amend the appropriate federal statute to provide for an emergency procurement process that can waive existing procurement regulations that lead to delays in reconstruction efforts.

In order to strengthen rebuilding efforts, the committee recommends the following:

• The legislature should consider codifying the use of COGs in regions of the state that are prone to natural disasters and institute initiatives that encourage greater collaboration, regionalism, and cooperation in order to improve the state response to future disasters and build regional capacity.
• The legislature should consider strengthening the local capacity of COGs in disaster-prone regions by assisting them in the initial hiring of public assistance firms that can assist local units of government work with FEMA, including handling paperwork and associated accounting.
• The legislature should consider instituting a statutory framework that fosters greater regional cooperation and partnership development that maximize existing resource and assets so that regions can become more resilient and be better assisted in their disaster recovery efforts. The state should also consider building partnerships with nonprofits and private foundations in these efforts.

In order to ensure the timely dissemination of disaster relief funds by state entities to local governments for reconstruction efforts and eliminate delays in the use of those funds, the committee recommends the following:

• Prior to future disasters, the legislature should consider assisting local units of government in disaster-prone areas build their capacity so that they are better equipped in accessing recovery monies, including consulting local governments prior to designing any program and before entering negotiations with the federal government on finalizing program restrictions. In this regard, initiatives that Texas takes to the federal government for approval are more responsive to the operational needs of local government by being custom built around the capacity and capability of local governments (e.g., taking into account their resources such as upfront cash flow, or the lack thereof, which is needed in a program reimbursement design) so that program delivery and assistance to victims of disaster are provided without delay which could have been easily avoided.
• The legislature should consider establishing the necessary statutory and programmatic framework for future disaster recovery that is built on the state having a pre-established, state-administered environmental review process and a pre-arranged “block grant” approach with executed memorandums of understandings with local units of government, as well as nonprofit partners, to serve as methods of delivery which can be activated immediately after a disaster declaration has been issued.
• The legislature should consider encouraging local governments in disaster-prone regions to engage in pre-disaster planning, and determine what type of post-disaster housing recovery system would best meet the needs of their local communities, including prioritization of temporary and multifamily housing options, so that they are better equipped to begin delivery of housing recovery after a disaster occurs.
• The legislature should consider assisting local units of government in disaster-prone areas in addressing their lack of recovery staffing for future disasters by providing resources that would facilitate the initial hiring and training of local permanent disaster coordinators that would be trained and be familiar with recovery efforts before the next disaster occurs.
• The legislature should consider establishing a permanent, statewide official whose sole statutory purpose is to be responsible full-time for the coordination of all disaster recovery efforts to better coordinate every facet of the recovery process providing greater assistance to regions of the state coping with disaster and who every state agency and local officials can be accountable to.
• For disaster-prone regions, the legislature should consider establishing a minimum statewide standard in disaster recovery efforts by:
  • Establishing minimum levels of resources and capacity that should be maintained in advance of disasters and that engenders faster, more efficient deployment of resources in disaster response and recovery efforts;
  • Establishing and maintaining minimum levels of expertise and knowledge in disaster planning, response, and recovery management, as well as grant application process expertise;
  • Hiring and maintaining emergency management local directors within local jurisdictions;
  • Facilitating in establishing increased regional cooperation and collaboration that maximizes the use of existing local assets and expertise; and
  • Providing ongoing disaster training in response and recovery efforts.
• The legislature should consider building on the ongoing efforts of regional COGs and assist those in disaster-prone areas by providing greater training in grant application management and process, including assisting in identification of grant opportunities and coordinating data acquisition necessary for grant applications, to better build the capacity of these regions so they may become more self-sufficient.
• The legislature should consider establishing a state coordinator who can better assist smaller and rural units of government manage contractors and execute contracts on their behalf to expedite the recovery process before disaster occurs and can be better situated to ensuring that the necessary accounting and supporting documents are in order to increase the reimbursement levels and decrease denial claims by the federal government.
• The legislature should consider creating a revolving loan fund similar to those administered by the TDWB where rural and smaller units of government in disaster-prone regions may borrow necessary funds to address initial cash flow needs for initial expenses and, once reimbursement is received, pay back the outstanding loan.

In order to expedite debris removal, the committee recommends the following:

• The legislature should consider establishing pre-disaster removal contracts with reputable bidders who the state can have prequalified and bonded in order to ensure that price gauging or overpromising do not occur after a disaster.
• The legislature should consider building on the experience of past disaster recoveries along the Gulf region and develop a debris removal plan of specific types of debris only found along the Gulf Coast (e.g., boats) so that the removal of that debris is undertaken in a more expedited manner. State agencies may be encouraged to work with the Texas Department of Insurance and private insurance providers to address the myriad of paperwork that is engendered when trying to address debris that may or may not be insured (e.g., boats with insurance).
• The legislature should consider providing TCEQ the necessary statutory framework and authority after a disaster declaration has been issued to allow Type IV construction and demolition landfills to be authorized through a registration or permit-by-rule process, rather than through the traditional permit process.

In order to address existing disaster training opportunities for local officials in disaster-prone regions, the committee recommends the following:

• The legislature should consider addressing the need that exists in less populous counties for regular technical training, information, mentoring, and assistance by establishing initiatives that will help local leaders establish a standard knowledge on how to prepare for, and respond to, a disaster and better assist local governments to successfully qualify for federal and state aid.
• The legislature should consider establishing an initiative that builds on the regional networks of regional COGs and undertake regular, weekly webinars to provide video-based and online training for disaster response and recovery efforts.
• The legislature should consider working with the regional COGs in an outreach campaign to encourage local and regional officials to undertake FEMA certification.
• The legislature should consider establishing a minimum criteria of training that local emergency management coordinators should undergo, and encourage basic standardization of education, training, and experience, including a state set curriculum, so that local emergency coordinators are better prepared for future disasters.

Interim Charge 1 – ETJ Limitations and Notice

• The legislature should encourage greater interaction in the planning phase of growth in municipalities in order to have better guided growth and to safeguard local and regional economies.
• The legislature should consider continuing to monitor the implementation of the 85th Legislative Special Session’s annexation overhaul legislation (SB 6) to better determine its impact on municipalities in order to better provide municipalities with the ability to revitalize themselves and attract industry, retail businesses, and curtail urban migration.
• The legislature should consider codifying the Dallas Court of Appeals’ ruling in regards to a city’s ability to enforce its building codes in their ETJ.
• In order to afford Texans greater transparency and certainty, the legislature should consider revisiting and supporting the passage of legislative initiatives from the 85th Legislative Regular Session that provided greater notice when a municipality is considering expansion of their ETJ, such as SB 655 by Senator Bettencourt.
• The legislature should consider revisiting and supporting the passage of legislative initiatives from last session that provide better ballot language guidance, such as SB 488 by Senators Bettencourt and Lucio.
• The legislature should consider reviewing non-annexation agreements to address any ambiguity that may exist in order to clarify whether non-annexation agreements extend a city’s ETJ, and whether these agreements can be considered for the purposes of calculating the boundaries of an ETJ.

Interim Charge 2 – Housing Affordability

• The legislature should consider building on the success of urban land banks and consider encouraging more local units of government to engage in land banking by increasing opportunities of converting tax foreclosed property into affordable housing.
• The legislature should consider encouraging more local units of government to work with their building communities and develop initiatives, such as the waiving of impact fees, to address affordable housing needs.
• The legislature should consider building on the success of state housing entities and consider encouraging more public-private partnerships, especially with local units of government, to address affordable housing needs.
• The legislature should consider providing communities that are economically distressed and that are predominantly rural, the ability to have better guided growth by providing them the necessary statutory structure to prevent dilapidated housing conditions from spreading within their jurisdictions and incurring millions of tax dollars cost in mitigating public health threats.
• The legislature should consider examining the structure of housing bond projects in the state and work with the appropriate governing agencies to ensure flexibility and better assist Texas developers maximize bond financing.
• The legislature should consider establishing some basic state guidelines that provide better notice and transparency in the local permitting process (e.g., working with interested parties in setting a maximum amount of time a city may delay in making a determination of whether or not a building permit will be issued) and consider protecting property owners who have already obtained the necessary permits required to begin development or construction from being imposed new permit requirements after the initial permit was already acquired.
• The legislature should consider the need for homeowners and the building industry to have greater transparency in the regulation of housing development and provide greater consistency by supporting initiatives that strengthen uniformity in the development of ordinances and permitting standards.
• In order to find a better balance between property rights of homeowners and development needs of municipalities, the legislature should consider developing a means by which land use regulation better adheres with the model of development that provides a basic template that cities can use to reassess their existing land use regulations and provide greater opportunities for the development of affordable housing options within their jurisdiction.
• In developing greater consistency, the legislature should consider undertaking a review of regulations promulgated by state agencies, such as the Texas Department of Transportation (TxDOT) and the Texas Commission on Environmental Quality (TCEQ), that impact development (e.g., right-of-way policies), and work with the appropriate stakeholders to better implement agency policies that are more cognizant of the needs of the home building industry.
• The legislature should consider building on the success of urban land banks and statutorily provide counties with the necessary authority to engage in a county land bank program.
• In order to better assist the public, private, and nonprofit communities that are the backbone of developing housing that addresses the housing needs in the state, the legislature should consider developing a task force to evaluate the state’s LIHTC program and ensure that it operates under a consistent set of rules that emphasize quality and availability of housing to meet housing demands in Texas. The legislature should consider directing the Task Force to develop reforms and initiatives that better guide LIHTC with consistent and seamless implementation that provide greater consideration to construction cost allowances which develop better housing development opportunities.
• The legislature should consider supporting the passage of legislation that provides more upfront notifications and transparency in the municipal budget process, especially in regard to fee increases, and provides greater electronic access to concerned residents such as envisioned in SB 737 of the 85th Legislative Regular Session.
• The legislature should consider supporting opportunities that encourage cities and counties to engage in pre-emergency planning and direct them to develop reconstruction and recovery plans that may be pre-approved by state government as part of their charter.
• The legislature should consider supporting the ability of local governments to provide incentive programs and infrastructure investment projects that benefit workforce and affordable housing.
• The legislature should consider supporting the creation of greater opportunities for local units of government to develop affordable housing opportunities through the creation of Neighborhood Empowerment Zones, compiling foreclosed property, undertaking land trusts, and strategically limiting building permit and impact fees such as the successful undertakings by the Cities of San Antonio, Bryan, and Austin.
• The legislature should consider encouraging local governments to adopt building codes, permit process and systems that speed up development and building processes without lowering quality.
• The legislature should consider providing a manner by which incorporated areas make available residential locations that are appropriately zoned and affordable for people with modest means.
• The legislature should consider supporting efforts to address the growing affordable housing needs in the state through a designated source to assist the developing of housing opportunities, including assisting developers with their impacts fees if the housing that is being produced is for affordable housing.
• The legislature should consider supporting innovative state and private partnerships that provide increased resources to support financial literacy that will benefit existing and prospective homebuyers.

Interim Charge 3 – Special Purpose District Bond Reform

• Testimony indicated that the high level of TCEQ oversight and financial scrutiny over MUD bonds has been successful with no defaults since the current TCEQ review process has been implemented. This gives assurances to the bond market that the MUD ad valorem tax bond sector is very stable, resolute, and has worked remarkably well in Texas.
• Testimony indicated that city standards that are required to go to market on PID bonds exceed the state MUD requirements put on by TCEQ and that there were no PID defaults.

Interim charge 4 – Municipal Management District Uniformity

• Testimony indicated that there exists no problem or consensus to justify an MMD template for creation legislation.