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The committee met to hear testimony on HB 1865, HB 1113, and HB 1247 concerning TCEQ permitting processes and contests to those permits.
 
HB 1794
Rep. Charlie Gerren, laying out bill substitute

  • Substitute clarifies that bill does not limit state’s ability to assess civil penalties, addresses all concerns
  • Rodriguez – So the $4.3 million cap has not changed, correct?
    • It has not, it is the maximum amount a governmental entity will receive
  • Substitute adopted and voted out, 7 ayes, 1 nay

 
HB 1146
Rep. Kyle Kacal

  • Voted out, 9 ayes

 
HB 1865
Chair Geanie Morrison, laying out bill and substitute

  • Uncertainty surrounding contested cases lengthens TCEQ’s permitting process and causes Texas to be less competitive in some areas than other states
  • Substitute directs SOAH to complete contested cases in no more than 180 days from the date of the preliminary hearing, codifies current case law on TCEQ factors for “affected person” standard, and presumes that draft permits filed meet all state and federal regulations

 
Hector Rivera, Texas Chemical Council, for HB 1865

  • Companies must go through permit process before business may be conducted, HB 1865 will speed the contested case process and the permit process
  • Rep. King (Phil?) – Under substitute, what is an affected person?
    • Currently protestants are required to describe how they are an affected person
  • Rep. Jason Isaac – How would some exploit the contested case system for financial gain?
    • Have seen a “rash” of contested case requests that are “boiler-plate” objections from people who do not participate in permit comment process, subsequently offer to withdraw contested case objection if donations are made to certain groups
  • Isaac – I understand that less than 1% that work their way through are very large economic drives, economic delay what is it?
    • Not every permit is contested, but every major development project is at risk of being contested
  • Isaac – What does Louisiana have?
    • Does not have a contested case process, result is 70 billion dollars in investment
  • Isaac – Does EPA have contested case process?
    • No
  • Rep. Ed Thompson – Are a lot of these permits expansions or new plants?
    • Large number are expansion projects, though there are a number of “completely new investments,” contested case process stalls these
  • Thompson – So expansions can be stalled by this process?
    • Absolutely, and this is one of the concern over abuse of the system
  • Thompson – Do you have numbers on how many jobs are created via these projects
    • Over 10,000 direct employees, 30,000-40,000 construction jobs
  • Rep. Jose Lozano – Currently, ideally how long does the contested case process take?
    • Can’t speak to what legislature intended process to be, problem is that permit process including contested case issue could take 3 years

 
Christina Wisdom, Texas Association of Manufacturers, for HB 1865

  • Texas process goes “above and beyond” what EPA requires
  • HB 1865 does not address permit process or abrogate local voice in permitting process, nor does it harm the discovery process during contested case hearings, judges may extend the 180 day limit if “due process” requires
  • Does require that permit be consistent with EPA regulations, allows contested party to enter all evidence at the beginning of the contested case process
  • King (Phil?) – What is affected person?
    • Gives current definition, “personal, justiciable interest”
  • King – Would municipality have standing as affected person if project was in their city
    • Local government does not automatically have affected person status
  • King – What about traffic and public health issues?
    • Traffic is not within TCEQ purview
  • King – So TCEQ may not take into account traffic issues for trucks etc.?
    • TCEQ has purview to review technical and legal requirements only
  • King – If a school was within a quarter mile of a waste transfer station, under this definition are they an affected person?
    • Hard to speculate, probably have a good chance
  • King – What about residential communities within a quarter mile?
    • Distance is a factor, but one of many and not dispositive
  • King – Is there a distinction between being in a city or outside?
    • Not that I am aware of
  • King – Understand urgency over construction projects, trying to understand urgency over waste transfer station, HB 1865 seems to put these under same standard as new projects
    • They are under the same standard, but HB 1865 does not change TCEQ requirements and review
  • Rep. Kyle Kacal – Does this bill change opportunities for public comment?
    • No it does not
  • Rep. Eddie Rodriguez – So cases are now prima facie presentation?
    • Correct
  • Rodriguez – That does shift the burden of proof, correct?
    • No, it just allows respondent to enter draft permit into record to meet case requirements
  • Rodriguez – What is the current standard?
    • Person challenging permit must prove by a preponderance of evidence
  • Rodriguez – But the burden is higher now, right?
    • No

 
Maureen Taylor, Alliance for a Clean Texas, against HB 1865

  • “Not that many permit applications” that are affected by contested case process, 10 out of 1000 in a recent year
  • General increase in permit application since 2005, but contested cases and SOAH referrals have decreased
  • Other states – 93 days permit process in Texas, Louisiana and Oklahoma take longer
  • Majority of permits go uncontested, Texas is competitive economically

 
Tom Smith, Public Citizens Texas, against HB 1865

  • Similar bills have come up session after session, HB 801 in a prior session simplified this process dramatically after meetings between citizens and industry
  • TCEQ answering public comment has drastically lowered contests to permits
  • Contested cases happen “very infrequently,” filed against cases that will have enormous environmental impact
  • Goal of permitting process is to protect Public Health, not to promote economic growth, Texas permitting process does not adversely affect economic growth

 
Richard Mason, Shintech, for HB 1865

  • Shintech chose to invest in Louisiana due to “certainty” over permit process, uncertainty over whether contested case hearings would be filed influenced decision
  • Thompson – It was pointed out in previous testimony that not many permit applications were affected, but is it the uncertainty rather than the number that influences your decisions?
    • Biggest issue is the uncertainty, impacts ability to predict financing concerns
  • Rodriguez – if this bill had been the law when you made the decision to invest in Louisiana, would it have made a difference?
    • In this Case, no
  • Rodriguez – So what were the other factors?
    • Permitting process

 
Eric Almon, against HB 1865

  • HB 1865 would confuse judicial review process, Louisiana has protections in the permitting process Texas does not
  • King – So you’re representing Willow Park, what is the status of that case?
    • In front of Austin court of appeals
  • King – What is the issue?
    • Concerns about economic impact
  • One impact of HB 1865 is that it judges TCEQ’s decision to be discretionary, makes it difficult for courts to overturn TCEQ decisions
  • Also required to file comments to contest case, sometimes citizens do not know about comment process
  • King – What was the reason for lack of standing in the Willow Park case?
    • SOAH level judge, applicant had challenged the authority of city mayors to seek standing etc., procedural problems, no showing of “justiciable interest”
  • King – If this law passes, what would be the impact on cases like that?
    • Possible that litigation would be affected
  • King – I support HB 1865 in regards to large projects, but I do not want it to affect local concerns for things like waste transfer stations. Is there a way to amend this?
    • Several ways, Louisiana has safeguard processes
  • King – In the Willow Park case, is the “affected person” standard the largest issue?
    • Yes

 
Derek Seal, Texas Oil and Gas Association, for HB 1865

  • TCEQ application process is very onerous, not in applicant’s best interest to submit subpar application or rely on application in permitting litigation
  • Contested case goes “above and beyond” EPA requirements, so no risk of challenges
  • HB 1865 allowance to file application and related documents will cut down on hearing times
  • Thompson – What permits does this affect?
    • Air permits, waste permits, and water permits, 1,500 or 1,800 applications a year are under threat of contested case hearings
  • Thompson – How many are not “under threat”?
    • Many different types of permits, those that are not deemed to pose potential environmental impacts, essentially the “bigger” permits are subject to contested case hearings
  • Morrison – Is traffic any part of the process?
    • May depend on the type of the permit, HB 1865 does not change substantive requirements applicants must meet
  • Morrison – Would HB 1865 change affected party requirement?
    • No
  • Morrison – So HB 1865 does not change standards, merely limits actual hearing time to 180 days?
    • Correct

 
Jen Powell, Herself, against HB 1865

  • Environmental rules for Texas are primarily public health rules
  • In prior case, car accident caused a delay in litigation, HB 1865 does not seem to allow for these delays
  • In some small communities comment process is difficult and evaluation and litigation preparation is difficult, not protective of “robust” local participation process
  • Morrison – None of the permit comment process is changing, merely 180 days for hearing
    • Requirement to list name and address of affected person complicates process for local communities

Terrell Graham, Himself, against HB 1865

  • Against this bill and “any others” that would make it difficult for landowners to protect land
  • Personal case, TCEQ would allow waste water to flow through drainage on property, waste could affect cattle grazing and health of residents, TCEQ granted permit
  • Court set contested case timeline at 6 months, was not enough time to match ability of TCEQ and applicants to litigate
  • HB 1865 concerns property rights and overreach of government agencies
  • Morrison – When were you made aware of the process and how?
    • Mailed notice because we were personally affected
  • Lozano – What made you feel like TCEQ was on the side of the applicant?
    • TCEQ modified applicant description, so they add facts beyond the application
  • Lozano – Would HB 1865 change the application?
    • Do not know that it would, but time limits would, would also curtail “affected person” standard
  • Morrison – So you felt like you did not receive the ruling you were looking for from the TCEQ?
    • No, and the court ruled in favor of landowner on several issues, TCEQ opposing on many different matters
  • Morrison – So the process actually worked for you?
    • Testifying to make sure process works for other landowners

 
Andrew Dobbs, Texas Campaign for the Environment, against HB 1865

  • HB 1865 modification to waste permits in order to help Texas compete against other States does not make sense, Texas manages its waste easily and transfer stations will not relocate
  • 180 day time limit for landfill that will be there for “centuries” does not make sense, these facilities need strong review
  • Permit process must push industry to work with citizens
  • Morrison – HB 1865 simply says that applicants have met all state and federal standards
    • If there were not cases where application information was inaccurate this would be fine
  • Morrison – HB 1865 does not alter the application
    • But HB 1865 does presume draft application information to be true
  • Morrison – Is this not the current process?
    • No

 
Cathy Sisk, Harris County, against HB 1865

  • Harris County attorney believes HB 1865 timeline is “too compressed”
  • Rodriguez – Is there a timeframe you would feel more comfortable with?
    • Have not discussed with Harris County attorneys, but 180 days, especially in waste permitting area, is a very compressed timeframe
    • Contested case process has been reduced so much that landfill cases are the chief concern

 
David Weinberg, Texas League of Conservation Voters, against HB 1865

  • Clear that there is a strong interest in speeding up permit process for business, parts of HB 1865 do this and parts do not
  • Issue with timeframe is that is tries to fit all issues
  • Original HB 1865 had due process language, committee substitute removed this language
  • Morrison – Asks for his points in written format
  • Isaac – Do you represent anyone in litigation?
    • No
  • Rodriguez – Should waste be looked at differently?
    • Trying to contest landfill cases in 180 days is difficult
  • Rodriguez – So the issue with HB 1865 trying to cover all issues, would that be a primarily a landfill concern?
    • Yes, reservoirs would be another concern, but not in HB 1865

 
Elise Wood, Stop Dripping Concrete, HB 1865

  • Notification for project affecting Dripping Springs was made in a paper the community did not read
  • Difficult for a small community like Dripping Springs to raise funds and procure witnesses to contest cases
  • Isaac – Have you had financial gain from being involved in the contested case process?
    • No

 
Leigh Thompson, Texas Public Policy Foundation, for HB 1865

  • HB 1865 will not affect ability of municipality to litigate and will help Texas compete against other gulf coast states

 
Cyrus Reed, Lone Star Chapter of the Sierra Club, against HB 1865

  • TCEQ gives permits, by law, “to pollute”
  • Concerning air permits, out of 1,474 permit requests, there were 65 contests and 10 went to SOAH, shows that many contests reach agreements
  • TCEQ does not investigate applications sufficiently, prima facie draft application evidence burdens contests
  • Isaac – Have you been the financial beneficiary of settlements in contested cases?
    • Unaware, costs a lot to get lawyers and witnesses together, on enforcement cases Sierra Club has not received direct benefit, but other have
    • Will check and get an answer to the committee
  • Isaac – Curious over Sierra Club’s involvement on cases that went to SOAH and cases that were settled

 
Former Judge, Herself, against HB 1865

  • HB 1865 will limit rights of citizens to contest permits
  • Draft permits should not be considered prima facie evidence of anything, destroys notions of “fair play”
  • In transferring cases to SOAH, legislature attempted to ensure concerns would be heard and addressed
  • Goal should not be to issue permit within a specific time frame, goal should be to issue environmentally sound permits
  • Thompson – Other states do not have the SOAH process, what is the issue with Texas not having this?
    • Permitting process that includes rights for citizens to address all concerns is the heart of US legal system
  • Thompson – So you’re saying other states do not do this?
    • I do not know, but this is an important point Texas has always recognized

 
James Williams, Himself, against HB 1865

  • Has never had contested case hearing delay any project he has been involved in
  • TCEQ is pro-business, HB 1865 is pro-business
  • TCEQ employees do not get in trouble for granting permits, but they do get in trouble for denying permits
  • Contested cases do not burden permit process, no reason to “gut” contested cases

 
Lon Burnham, Himself, against HB 1865

  • Has been “trying to get the State to do its job,” bad circumstances when House Environmental Regulation is actually an economic development committee
  • HB 1865 another example of committee not protecting public health
  • Morrison – Pollution problems are 80% due to cars
    • Absolutely

 
Madeline Crozat-Williams, Houston Peace and Justice Center, against HB 1865

  • Very concerned that House Environmental Regulation represents primarily big industry
  • Contested case process allows advocates for lower income neighborhoods to properly combat health concerns
  • Limit on rights to protest permits is an “injustice”

 
Adrian Shelley, Air Alliance Houston, against HB 1865

  • Texas needs the process because Texas permits more projects than other states and these projects affect more people
  • Heavy burdens for public participation already; language of notice given as example
  • Permits are given for facilities that already exist, undermines the process
  • Morrison – How is Air Alliance funded?
    • Primarily through grants and fundraising events, but does not represent contested case parties and has not financially benefitted
  • Thompson – Houston has no zoning, what is the city’s responsibility in these issues?
    • Some safeguards in place at city level, some of these are “under attack” and citizens need all layers of protection possible

 
Stuart Henry, Himself, against HB 1865

  • Private landowners are the primary party affected by contested case modifications
  • HB 1865 does change the burden of proof, under bill protestants must disprove prima facie evidence presented by applicants
  • Isaac – Landowner concerns over pollution are very serious
    • Private property rights generally should stop at the property line, pollution and emissions should not be allowed to cross, HB 1865 would allow TCEQ and landowners to “gang up” on landowners

 
Josephine Frederick, Herself, against HB 1865

  • Agrees with prior testimony
  • Difficult for citizens to understand the issues involved, 180 days is severely limiting

 
Allison Sliva, Herself, against HB 1865

  • Contested case process is one of the rare tools to influence TCEQ permitting, it is not currently abused and allows citizens to become informed about the issues

 
Karen Darcy, Herself, on HB 1865

  • Participated in 2 SOAH contested case hearings, committee should “carefully consider” any change to the process

 
Elizabeth Riebschlaeger, Charity of the Incarnate Word, against HB 1865

  • HB 1865 favors industry and burdens voice of the people, “[crunching] the time” for citizens is contrary to democratic principles

 
Myron Hess, against HB 1865

  • 180 days burden information gathering, discovery process, and case building
  • HB 1865 codifies bad public policy in modifying affected person standard as TCEQ can assume permits protect environment and do not affect interested parties
  • Texas should strive to make better decisions regarding the environment than other states

 
Stephen Minick, Texas Association of Business, for HB 1865

  • Permitting process should make sure every law that passes and rules adopted are reflected in every permit
  • Most issues testified on are not in TCEQ’s purview, HB 1865 has no impact on public comment process or notification process
  • Wastewater permits that allow drainage do not convey property rights
  • Business owners and private landowners have equally important property rights

 
HB 1865 Pending
 
HB 1247
Smith, laying out bill

  • Requires protestant to address specific parts of the draft permit

 
HB 1247 Pending
 
HB 1113
Clardy, laying out bill

  • Adds “abuse of discretion standard” to water rights cases

 
HB 1113 Pending
 
Committee recessed