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The committee met to take up and consider the following bills.
 
CSHB 1794 – Geren, Relating to maximum penalties for certain environmental violations.

  • HB 1794 generally requires showing of intentional conduct to asses penalty on top of TCEQ’s authority, imposes statute of limitations on past violations, implements policy consistent with prompt remediation (clean-up), and provides consistency in policy by ceasing penalty assessments after a violation has been reported which encourages self-reporting and remediation
  • HB 1794 does not change or address TCEQ’s authority to bring actions for violations of environmental laws, does not restrict local government from bringing an action against an alleged polluter, and does not restrict local government from bringing an action for actual damages
  • Substitute addresses a number of the concerns likely to be heard from testimony, including striking the requirement that State prove violator intended to violate environmental regulations and readjusting penalty schedule

 
George Christian, Texas Civil Justice League, for HB 1794

  • “Perfect bill”
  • HB 1794 has been heavily negotiated, TCJL became involved because this was an area of law with no cap on penalties and damages and with no statute of limitations on actions
  • Penalties may be assessed even against parties remediating or complying with judgments and can be assessed against subsequent owners of violating properties
  • HB 1794 sets penalty cap to $4.3 mil, also enacts review standards similar to TCEQ standards
  • Many legacy problems in state, many problematic properties are acquired without knowledge of environmental issues
  • Rep. Eddie Rodriguez – Could you explain the rational of 120 days limitation?
    • Substitute has removed this, was deemed too complicated and implemented overall cap of $4.3 mil per violation
  • Rep. Phil King – How do these lawsuits occur, if someone buys a property and coordinates with TCEQ on a remediation plan, are they still walking into lawsuits?
    • Answer is yes on some of them, current trigger for litigation is simply a violation
  • Phil King – Is there no defense to litigation if you have entered into a remediation agreement with TCEQ?
    • No
  • Should there be?
    • Tried to account for that in HB 1794 by saying that civil penalties would not accrue while under remediation plan and complying, as well as statute of limitations triggering from notification to or from TCEQ of violation

 
Jackie Young, San Antonio River Coalition, against HB 1794

  • San Jacinto Waste Pit Case – many waste pits were dug on the banks of the San Jacinto river and filled with Dioxin, a toxic chemical, once filled to capacity the pits were abandoned, subsequent purchasers of the managing company did not alert TCEQ, many residents are presenting with cancers associated with Dioxin exposure 50 years after the initial dumping
  • Penalty limitation and 5 year statute of limitations proposed in HB 1794 are “ludicrous”
  • Emphasis must be placed on companies whose carelessness exposes local communities to serious public health issues

 
Steve Hupp, Bayou Preservation Association, against 1794

  • HB 1794 will handicap ability of local governments to clean up local waterways
  • Rodriguez – Can you explain how this will handicap local governments specifically?
    • HB 1794 upsets efforts to clean waterways where enforcement efforts by local governments are not on par with state

 
Kathy Cisque, Harris County, against HB 1794

  • Phil King – If you have a local entity bring the case and the State is joined as a necessary party, damages are limited to the action brought by the local entity correct?
    • Correct, understanding is that TCEQ is precluded from assessing administrative penalty in action brought by States
  • Phil King – Under what circumstances would TCEQ be joined as a necessary party?
    • Under statute TCEQ must join when local governments file for administrative penalties
  • Phil King – So if TCEQ brought a suit, what damages may they pursue?
    • Up to $25k a day per violation
  • Phil King – So if HB 1794 passes the local government is going to be capped at $4.3 mil
    • Correct
  • Phil King – Is TCEQ a necessary party when a local government begins litigation?
    • Yes
  • Phil King – So when TCEQ joins as necessary party is $4.3 mil still the ceiling?
    • Yes
  • Phil King – So if TCEQ joins it does not lift ceiling?
    • Correct
  • Phil King – And what if EPA comes in? Or do they do that?
    • They do not, it is state and local government action
    • Absolutely certain that caps remain in place if TCEQ joins actions
  • Phil King – Flip it around, if TCEQ brings an action and local government brings an action
    • We do not, if TCEQ brings an action no law requires local government as necessary party
    • Have never joined TCEQ action, do not think local government has the right to join as a party
  • Action by Harris county enforcement reserved for more serious violations, multiple violators or serious harm
  • HB 1794 sets out the penalty range for juries, facts weigh on jury determination, “happy” to have statutory backing for topics for jury consideration
  • “Committed to voluntary compliance,” >90% have been resolved without litigation
  • San Jacinto Waste Case – Defendants were forced to clean property when EPA enforced a unilateral order, need a “hammer” in these situations
  • Identified a few problems with HB 1794 substitute that are “minor,” one is the cessation of penalties when the commission is notified of a violation, but HB 1794 as substituted looks “very promising”
  • Rep. Ron Reynolds – Penalty is per day?
    • Yes, up to $4.3 million
  • Reynolds – Does Harris county have a plan for assistance or a clean-up for these areas
    • Yes, 50% of penalty fees go to county and 50% go to state, there is a plan to use funding to help with the San Jacinto clean up “one way or another”
  • Phil King – Are you familiar with the “Brio” site in Harris?
    • Barely
  • Phil King – Do you know if Harris filed suit in that instance?
    • Incident was before my time
  • Rodriguez – If cost of compliance is higher than $4.3 mil, how do you address that?
    • “Not crazy” about the cap, some language could be inserted referencing the cost of compliance, but burden would be on local government to prove cost

 
Jack Cagle, Harris County Commissioner

  • Three principles; local control, Harris county’s prior approach, and commerce friendly environment
  • State is mandatorily joined when Harris county begins an action, but State is not required to  join county when the State brings an action, perhaps better if county is joined to ensure “one full resolution”
  • HB 1794 is important to be able to enforce violations within the growing Harris county community
  • As long as they maintain Harris county community standards, Harris can attract businesses, local control is the best way to maintain these standards and Harris is “commerce friendly”
  • Rep. Jose Lozano – When counties file these penalty lawsuits, how are attorneys typically compensated?
    • Normally done through county attorney’s office, have done contingency fees in specific cases
  • Lozano – Is the San Jacinto case still ongoing?
    • Yes, case is resolved in part, but difficult to present before the legislature while appellate processes are ongoing
  • Lozano – Perhaps punishing people as a “legacy,” e.g. punishing later owners for the violations of prior owners
    • Asks that legislature allow local authority to investigate and find out if new owners knew about environmental violation and proceed accordingly
    • By law, 50% of penalty proceeds assigned by county
  • Reynolds – Do you think these types of penalties deter violators?
    • Absolutely
  • Reynolds – Do you believe substitute HB 1794 provides for a loophole?
    • Did not get a chance to read fully
  • Lozano – Given HB 1794 only addresses penalties, could State still sue for damages?
    • Believes local entities are only allowed to bring penalty actions
  • Lozano – Legally, negligence actions should give cause for damages actions
    • Originally law restricted actions for damages, but would have to defer to attorneys, believes that penalty actions are the only actions available to countie
  • Phil King – Is there anything in HB 1794 preventing suit by individuals?
    • Individuals could bring actions for damages, no prohibitions against that in HB 1794

 
Sam Braham, San Jacinto River Coalition, against HB 1794

  • Worried that reduced penalties would allow companies to escape discipline
  • Local government should have the authority to protect public health and environment

 
Donald Lee, Executive Director Texas Conference of Urban Counties, against HB 1784

  • Worry amongst local government that they will lose the “tools” to deal with environmental violations
  • Lozano – Counties can sue for damages, correct?
    • Would defer to attorneys
  • Lozano – In 2010, Harris county sued over the Deepwater Horizon incident, cites article purporting to show Harris sued for damages
    • Not a lawyer and could not answer
  • Phil King – Are you aware of any current lawsuits in Harris County?
    • Not personally aware, penalty actions are a tool of “last resort”

 
Brian Blevins, President of Texas Trial Lawyers Association, neutral on HB 1794

  • Originally opposed to HB 1794 as filed, but work by Rep. Geren has fixed procedural problems, role of juries and strict liability, e.g. legal concepts are preserved in substitute HB 1794
  • Phil King – If a county brings an action under substitute HB 1794 and there is a final judgment on that litigation, private citizens can still bring an action, correct?
    • Believes this is true
  • Phil King – Assuming Harris county succeeds in litigation, nothing prevents TCEQ from bringing action
    • At least under HB 1794 nothing prevents TCEQ action, under existing law, if TCEQ was joined as necessary party then they would be unable
  • Phil King – If penalty is assessed and judgment rendered, but violations continue, could a county bring another action?
    • If a new violation occurs, would allow new litigation
  • Phil King – Is there anything preventing TCEQ or State from bringing actions for continuing violations?
    • Would need a new action, failure to comply with judgment could be a new violation and new grounds for an action
    • Local government is allowed to claim for civil penalties, injunction, or both
    • Certainly possible to enforce injunctive relief, could also be criminal penalties
  • Phil King – Having trouble seeing how a cap on penalties prevents clean-up enforcement
    • Clearly under present law, unlimited nature of penalties and limitations creates a “hammer,” perhaps this “hammer” creates a quicker response
  • Rep. Ken King – What would it take to get you for HB 1794?
    • Problems with the bill were more procedural, penalty rates and caps are more an issue of local concern
  • Rodriguez – Does the $4.3 mil cap limit the ability of county to recover litigation costs?
    • Thinks that county could recover costs
    • Certainly county could bring an action for damages, penalty is an avenue for counties to avoid needing to bring actions for damages
  • Rodriguez – Would this limit private actions?
    • No impact on private actions

 
John Odom, General Counsel Harris County Attorney’s Office

  • Reynolds – Do you feel the $4.3 mil cap is sufficient?
    • Short answer is no, but would like to consult with other county officials
  • Reynolds – Are there any other aspects of the bill you are uncomfortable with
    • Substitute took care of many of the problems Attorney’s Office had with the bill

 
Terrence O’Rourke, Special Assistant Harris County Attorney’s Office

  • Previous testimony covered much of what he wanted to say

 
Ryan Fite, Travis County Attorney’s Office, against HB 1794

  • Afraid of what HB 1794 does to the State, any time a violation occurs and there is a possibility of $0 penalty,  HB 1794 does not cure the violation and puts delegation programs in jeopardy
  • Travis county is concerned some county authority is being hampered, also worried authority across state is being hampered
  • Rodriguez – How would HB 1794 lead to a $0 Penalty?
    • HB 1794 provision allows for cessation of penalties upon notice of violation given to State
  • Phil King – Can county and State sue for additional damages even when alleging penalties?
    • Yes, if State owns the land damaged, important to drawn line between civil penalties and damages – under Tort law must prove damages to receive judgment
  • Phil King – Do violators ignore remediation orders?
    • Vast majority ignore the order, and many do not pay penalties
    • Nothing to collect in many cases, violators tend to have no money to pay penalties
  • Phil King – $4.3 mil max is still a good threat for small violators, can understand why $4.3 mil isn’t a threat for larger companies, but court order should enforce properly
    • “Large players typically do what they should do”
  • Phil King – Does anything preclude a new lawsuit for continuing violations?
    • When I was at the AG’s office, there were many cases pursued for continuing violations

 
Christina Wisdom, Texas Association of Manufacturers, for HB 1794

  • HB 1794 provides very necessary “regulatory certainty”
  • Statute would largely prevent “double-dipping” on penalties
  • Rodriguez – Does HB 1794 limit recovery for actual costs or attorney’s fees?
    • HB 1784 does not change the current statutory ability to do so
  • Rodriguez – EPA said differently
    • Substitute HB 1794 cures these problems
  • Rodriguez – So allegation that $0 penalty could be assessed is incorrect?
    • Under this bill, that it is incorrect

 
Tom Smith, Director of Public Citizen Texas, against HB 1794

  • “Bad bill for a number of reasons”
  • TCEQ is a “toothless tiger,” would like HB 1794 to give counties the ability to go after big polluters
  • One issue is that HB 1794 provides a 5 year statute of limitation, but only provides for 4 years of penalty assessments
  • Once you file a notice of violation, appears to stop penalty assessment, this question needs to be resolved
  • 5 year Statute of Limitations prevents ability to fully investigate problems, such as carcinogen issues
  • While HB 1794 does not limit ability of individual to sue for environmental issues, other pieces of legislation do and this is a significant legal hurdle
  • Cap makes it unlikely that private attorney would undertake cases under this bill as there are not enough funds to pay their fees
  • Companies will pay $4.3 mil penalty and continue violating, their attorneys are able to ward off claims for damages as well, legislature should consider this and focus on public health

 
Cyrus Reed, Lone Star Chapter of the Sierra Club, against HB 1794

  • Against HB 1794 and substitute, but appreciate that HB 1784 is getting better
  • Factors to consider for HB 1784 penalties are deterrence and ensuring violators did not reap economic benefit, cap in HB 1794 does not allow authorities to fully utilize those factors
  • “Double-dipping” is not allowed under water code, either State or counties proceed with litigation, but not both

 
Rep. Geren, Closing

  • No delegation problem in HB 1794
  • Penalties and problems are fixed in substitute
  • HB 1794 Pending

 
HB 1269 – Springer, Relating to supplemental environmental projects implemented by certain local governments in lieu of administrative penalties assessed by the Texas Commission on Environmental Quality.

  • Counties below 50k population, equalize treatment for citizens living in small counties relating to funds from TCEQ, e.g. TCEQ fine allocation amongst citizens
  • Takes fine funds collected and allocates them to environmental projects in communities

 
Bryan Grimes, City Manager for Ballinger, Texas, for HB 1269

  • “Common sense” bill for small towns, allows city to address problem that they have been fined for
  • Fines from TCEQ typically run $25k-$30k, hard for small communities to gather these funds and thus restricts ability to address the violation
  • Rodriguez – How many counties are we talking about?
    • Does not know

 
Rep. Springer, Closing

  • Does not have exact number of counties, 3-5% population-wise
  • HB 1269 allows State to address environmental concerns
  • Shamrock, Texas had to consider firing a member of the police department in order to pay a TCEQ fine
  • HB 1269 Pending

 
HB 281 – Simmons, Relating to a limitation on the expansion of certain landfills.

  • HB 281 concerns municipal solid waste landfills in cities of >600,000 people where these landfills are owned by one municipality, located on the land of a second municipality, and within 500 feet of a third municipality
  • Given such a landfill, TCEQ is currently not required to consider opinions of the second and third municipalities
  • HB 281 would directly affect a landfill in Denton county that is looking to expand 200 feet vertically (owned by Farmers Branch, located in Lewisville, near Carrollton)
  • HB 281 looks to fix this issue, local comments and local permitting restrictions should be considered
  • Intending to introduce a committee substitute to avoid “unintended consequence”
  • Rep. Thompson, Have there been any environmental issues
  • Current landfill has had environmental issues, court recently ordered slurry wall additions to prevent seepage

 
Harold Froehlich, Councilman Farmers Branch, against HB 281

  • Originally Farmers Branch purchased land from an unincorporated area
  • Zoning and city lines changed by 1996
  • Lewisville contains 3 landfills, Camelot Landfill (Farmers Branch owned), DFW Landfill, and Lewisville Landfill, both DFW and Lewisville landfills were granted permission for expansion
  • Slurry wall additions were agreed upon with TCEQ during the expansion permitting process
  • Major concern is availability of disposal if expansion does not occur

 
Shane Davis, City Administrator for Farmers Branch, against HB 281

  • Argues that current introduction of HB 281 bypasses the typical permitting process

 
Steve Carr, Republic Services, against HB 281

  • Camelot landfill in a very unique position
  • This unique position is not a legislative issue, rather a negotiation issue, negotiation has stalled due to slurry wall litigation
  • Passage leads to the danger of HB 281 expanding or changing in focus in later sessions
  • Rodriguez – But you just said this is a very unique situation
    • Yes, but nothing prevents subsequent changing of the bill
  • Rodriguez – That is the same for any bill though, who are you with?
    • Republic services runs the landfill for Farmers Branch
  • City officials have ample opportunity to comment on new and expanding landfills

 
Stephen Minick, Texas Association of Business, against HB 281

  • Trying to address the local issue through legislation creates a dangerous precedent, concerns question of the line between State and local authority
  • Passage of HB 281 sets the precedent of the State to address similar local issues through State legislation
  • Permitting process in this case has not yet “run its course,” urges committee to let the process continue
  • HB 281 would affect at least one pending permit application, would affect other sectors of the business industry and investments made in the application process
  • TAC not necessarily concerned with local landfill issue, but rather the precedent set by passage of HB 281

 
Scott Hudson, Environmental Services Director for Carrollton, Texas, for HB 281

  • Landfill expansion has wide-ranging impact, not just on municipality it is located in, but also pollution and skyline issues for surrounding municipalities
  • TCEQ does not require specific notifications for communities surrounding the landfill’s municipality, limits the voice of other municipalities
  • Looking for cities to have “an even playing field”

 
Jeff Andonian, City Councilman for Carrollton, Texas, for HB 281

  • HB 281 is “considerate” and “neighborly” bill that meets the needs of the people in Carrollton and Lewisville

 
R. Neal Ferguson, Deputy Mayor Pro Tem. for Lewisville, for HB 281

  • HB 281 requires TCEQ listen to the local governments where landfills are located
  • Other state agencies are prone to listen to local governments and consider local impact when making changes
  • Camelot expansion request is very onerous and risky considering previous problems and the requested double-volume height, and is profit-motivated rather than community-serving

 
Arden Kemmler, Lone Star Chapter of the Solid Waste Association of North America, against HB 281

  • Numerous ways for a city to address concerns with landfills in Texas law, chiefly TCEQ permitting process

 
Robin Schneider, Executive Director Texas Campaign for the Environment, for HB 281

  • Subtitle D landfills (such as Farmers Branch’s Camelot landfill) are expandable regardless of necessary safeguards against environmental effects
  • Average capacity of 62 years throughout Texas landfills, some with 100+ years, plenty of landfill space
  • TCEQ does not consider need when expanding landfills, however, State is currently in a position to caution against expansion especially given environmental concerns
  • Not bad precedent, many previous bills have been bracketed to county landfills, though it would be a good time to take a “big picture” look at the state of Texas landfills

 
Byron Frederick, Resident of Caldwell County, for HB 281

  • Caldwell faces a similar problem with an expanding landfill, such expansion would “undermine [the] rural way of life,” cause health problems, and affect property values
  • Local authorities are kept out of important decisions affecting the quality of life of the residents of counties
  • Even with TCEQ permitting process, local authorities have limited power to combat business-minded landfill expansion
  • Those against HB 281 are only interested in exploitation of local counties

 
Chris Macomb, Governmental Affairs Manager for Waste Management of Texas, against HB 281

  • Has spoken with Rep. Simmons and believes all issues will be addressed in substitute

 
Burt Solomons, City of Lewisville, for HB 281

  • Law is not very clear on relation of landfills to urbanization
  • Wishes to direct TCEQ to talk to city where applicant is located and consider municipality concerns, currently notification and comment-taking process ignores such consideration
  • HB 281 starts the process of fixing TCEQ’s issues

 
Rep. Simmons, Closing

  • HB 281 is about a unique situation in a burgeoning urban area where municipalities should have a say in landfill expansion
  • HB 281 Pending

 
HB 1284 – Simmons, Relating to the review by certain governmental entities of a permit application for a solid waste facility.

  • HB 1284 clarifies that TCEQ shall consider municipality comments, which are already required to be collected by law
  • Also allows TCEQ to approve, amend, and deny applications based upon comments
  • Anticipates a substitute to consider industrial landfill concerns
  • Would HB 1284 encompass all landfills
  • HB 1284 would encompass only municipality landfills
  • Would this cover Class 3 landfills
  • Unsure, but happy to work with interested parties

 
Stephen Minick, Texas Association of Business, against HB 1284

  • TCEQ is already required by law to address municipality comments, what frustrates people is that TCEQ is barred by statute from considering things like property values and traffic impacts
  • Thus when TCEQ say they will not consider comments, they are likely saying they have no statutory authority to consider such comments
  • Concerned over precedent, would allow an agency to deny an application before the application is even considered and would affect potential capital investments made before applying for permits

 
Steve Carr, Republic Services, against HB 1284

  • Current comment process which requires advanced notice, posting of signs, mailing of officials etc. properly addresses the concerns of municipalities

 
Scott Hudson, Environmental Services Director for City of Carrollton, Texas, for HB 1284

  • HB 1284 would formalize the fact that State and TCEQ do consider public comments
  • Nothing in HB 1284 compels the State to deny applications, merely directs TCEQ to consider comments collected

 
Jeff Andonian, City Councilman for Carrollton, Texas, for HB 1284

  • Like HB 281, HB 1284 would give citizens of municipalities a voice
  • This issue was a concern for many citizens of Carrollton, many disappointed by the fact that TCEQ would not necessarily consider their comments

 
R. Neal Ferguson, Deputy Mayor Pro Tem. for Lewisville, for HB 1284

  • Addressing comments is not the same as considering comments received by municipalities
  • TCEQ being restricted from considering concerns over quality of life is the central issue of the discussion

 
Robin Schneider, Exec. Director Texas Campaign for the Environment, for HB 1284

  • Would also like notification to water districts etc. for landfill expansion
  • Class 3 landfills take not only construction materials, but those from office buildings that can lead to a “mixed-bag” landfill that can have environmental concerns
  • Extremely frustrating for Texans being told quality of life concerns are not considered for landfill permitting

 
Byron Frederick, Resident of Caldwell County, for HB 1284

  • Citizens expect TCEQ will listen to citizen concerns

 
Lou McNaughton, Herself, for HB 1284

  • Received a pamphlet advertising a new environmental park, but later learned that this was a landfill expansion
  • Expansion was “grandfathered in” with a partial application, citizens had no say in the matter
  • TCEQ did not adequately fact-check the related permit
  • Out of state control over local landfills is very distressing

 
Burt Solomons, City of Lewisville, for 1284

  • Would be helpful to clarify what comments would be needed
  • Does not make sense that anyone without a vested monetary interest would be against HB 1284
  • Land use issues are extremely important considering urbanization

 
Rep. Simmons, Closing

  • HB 1284 very important to Rep. Simmons’ region
  • HB 1284 Pending

 
HB 1146 – Kacal, Relating to persons who may operate a public water supply system.

  • Current TCEQ regulations require operators of public water supply system must be employees of the owner of the system
  • HB 1146 specifies that a volunteer may operate public water supply systems, but does not nullify licensure requirements
  • HB 1146 Pending

 
Committee Adjourned