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House Environmental Regulation met on March 22 to discuss a number of bills. This report covers discussions concerning HB 753 (Cain), HB 2072 (Lambert), and HB 2692 (Landgraf). Part one of the hearing can be found here and part two can be found here.

 

HB 753 (Cain) (CS) – Relating to municipal solid waste management services contracts; limiting the amount of a fee

  • Many municipalities utilize franchise fee structure to waste services; these fees tend to vary widely between different areas in the state; 5% in Sugarland
  • Fees are passed on to existing charges as the customer pays the company to haul their trash away; can significantly raise the price that tenants are charged
  • Many cities use revenue from the apartments and commercial properties to provide free trash services to homeowners in residential communities; apartment renters are paying for themselves and homeowners across town
  • Bill amends the Texas Health and Safety code to cap the charge with a franchise fee at 2% of the gross receipts of the franchisee
  • CS removes section two from the original bill, which restricted the right of an entity to enter a contract with only municipal service providers; change made after speaking with stakeholders

 

David Lehfeldt, Corpus Christi – Against

  •  Strongly oppose arbitrary 2% cap on franchise fees; a one size fits all solution is not workable in such a diverse state
  • Proper oversight of waste management requires 24/7 effort, no short cuts
  • Decisions should be made at local level
  • Franchise fee is an opportunity to get revenue from those who are not already contributing to help fund the services that are being provided

 

Mark Vickery, Waste Management of Texas – Against

  • Have not seen the CS, if it removes section F2, which said an entity could opt out of the franchise, we would be neutral

 

Stephen Minick, Republic Services – Against

  • Against bill as filed; talked to Cain’s office about substitute and have no opposition
  • Goodwin – Could you explain why you were against the bill and the change that has made you neutral?
    • The bill, as filed, disrupts the ability for a municipality to provide a consistent, predictable service
    • I could put together a tight proposal for a city bid if I knew the population, what services they need, where they are, etc.
    • If entities can opt out, my ability to predict effort or capital investment goes out the window; I would have to submit a bid on less reliable information
    • Cities are obligated provide basic services, like water and waste, at the lowest cost and highest efficiency
  • Goodwin – Does the bill still reduce the fee?
    • It reduces the franchise fee the city can assess

 

Christa Lopez Reynolds, Solid Waste Group – Against

  • In Fort Worth, a franchise fee is assessed for commercial entities, outside what we would assess for a residential user
  • Assessing a franchise fee to commercial solid waste users and recycling services removes the unfair burden that our residential users take on
  • Ch 363 and 364 mandate that a municipality provide solid waste services to people in its jurisdiction, not something to opt out of
  • We raised the fee from 5% to 10% after looking at program costs, which were jaded unfairly to residential users
  • If we undid this, our residents would incur a monthly increase
  • Goodwin – Residents vs commercial are paying different rates for the service of trash removal?
    • Yes, commercial haulers pay the grant of privilege fee, not paying the rate that is assessed to residents through their water bill

 

Michael Rice, City of Abilene – Against

  • Cap on the franchise fee is unreasonable because it assumes that the fee only pays for the collection and transportation of solid waste
  • Not a service that a resident or business can choose to purchase or ignore
  • Fees pay for collection of solid waste, including equipment, personnel and the containers, but also pay for citizen demanded solid waste programs such as illegal dumping, tires, recycling, electronic waste management, brush and yard waste, etc.
  • Private companies do not have ability to consistently enforce payment
  • Should be handled at local level instead of state level
  • Dominguez – Do cities use this fee to support other things besides the infrastructure of their city?
    • Every city is different; some cities provide all services themselves, others franchise
    • Not a one size fits all
  • Dominguez – Seems, from testimonies, that you like the fee so we do not have to raise taxes to fulfill shortfall in budget?
    • Fair interpretation
  • Dominguez – We do not assume that these companies will be incurring this fee to the detriment of their own profits, we assume they pass this cost to their customers. The public is already paying for these fees, taxed through the fees on top of the pay rate. Residents of the city cannot avoid paying this?
    • It is a fee for the services that are provided
    • Whether they live in an apartment, own a house, or own a business, yes they will pay

 

Robin Schneider, Texas Campaign for the Environment – Against

  • Hosted a study on the issue of franchises, focused on Dallas and Fort Worth
  • Number of cities were providing more comprehensive services as a result of having the franchise agreements, cities can provide more unified services
  • We see this as a way for communities to have more service options
  • Franchises can lock out smaller players
  • If there is no franchise, two different companies can charge vastly different amounts for the same service
  • Less air pollution with a franchise truck and transportation system
  • Cities should have the right to entertain and try franchises

 

Valerie Berry, City of Houston’s Administration and Regulatory Affairs Department – Against

  • Telecomm providers, cable and video providers and solid waste haulers benefit from the ability to access the city’s 647 square miles of public right of way, which costs millions of dollars to maintain
  • Currently, 272 solid waste hauler companies that operate in Houston; Houston has collected franchise fees since 2002
  • After months of review, reached consensus of 4% solid waste franchise fee and created regulatory framework that benefits the hauler and the citizen and has remained unchanged for 18 years
  • We have received no complaints from industry or public about the fees or the services provided
  • Each year, we receive $8 million in waste franchise fees; this bill would reduce our revenue by $4 million

 

Cain, in closing: Was helpful to listen to testimony

  • A fee charged by the municipality should only be the cost incurred by the municipality
  • Higher burden on apartment renters
  • 2% is not arbitrary, mentioned in tax code 46 times
  • Dean – The substitute flipped some to neutral, could you explain specifically what that change entails?
    • Section 2 would have allowed a commercial property owner to opt out of the exclusive franchise agreement and use another waste hauler of their choice
  • Dean – The biggest objection that we have heard from the cities using these fees was the infringement on revenue, not the inability to maintain budget
    • Yes
  • Difficult to assume that the fees will be transferred to citizens one way or the other, especially with commercial businesses
  • For example, a Burger King cannot raise the price of a Whopper because it costs more to take out the trash. It would affect their bottom line instead of citizens

HB 753 left pending

 

HB 2072 (Lambert) – Relating to the expiration of the dry cleaner environmental response program.

  • 2003, the legislature passed a remediation program administered/regulated through the TCEQ for Texas drycleaner owners and operators to mitigate the adverse use of dry-cleaning solvents
  • Allows cleanup of contaminated site and established dry cleaner facility registration, requirements, fees, performance standards and revenue disbursement
  • Dry cleaners would otherwise assume insurmountable liability for the contamination of soil and property
  • Critical to stability and vitality of dry cleaners throughout Texas
  • Bill would extend the program until 2041

 

Allan Cripe, Advisory Council for DCRP – For

  • Unusual and special to have this team do their best while maintaining a respectful relationship with the business owners they oversee
  • 227 sites listed in DCRP; 89 sites have been completely remediated, close to 12 sites a year
  • Fund has around $20 million, TECQ is allocated $3-4 million for DCRP per year
  • DCRP is self funded by Texas business owners, no tax payer funds
  • There is currently no insurance carrier that will write a pollution policy for retroactive pollution events, this fund is the last lifeline for hundreds of small business owners
  • If this goes to Sunset, there will inevitably be contamination sites that will remain without remediation as a consequence and businesses could easily go under

 

Danny Bahlman, Southwest Dry Cleaners Association – For

  • I am an owner of a dry cleaner, second generation
  • This bill will ensure a smooth transition by providing protections
  • Describes cleaning process and use of perchloroethylene
  • No large corporate dry cleaners in Texas, all mom and pop, proud Texas business owners

HB 2072 left pending

 

HB 2692 (Landgraf) (CS) – Relating to the regulation of radioactive waste; reducing a surcharge; reducing a fee

  • Committee Substitute allows the bill to become effective immediately upon 2/3 approval in the House and 2/3 approval in Senate
  • US Nuclear Regulatory Commission is currently considering an application to allow for the storage of high-level radioactive waste at a site in Andrews County; 2692 bans the storage of high-level waste in Texas
  • Bill bans the new storage and used fuel within the boundaries of our state
  • Ultimate objectives with this bill are two-fold: keep high level radioactive waste out of Texas and protect the state from having to take over operations of the existing low level facility
  • Since 1998, federal law has required Texas to operate a facility for the disposal of low-level radioactive waste generated in this state
  • State’s only low-level waste facility is in Andrews county, situated on red clay; when the facility was established in compliance with the agreement, the legislature contracted a private operator to avoid significant cost to state and tax payers
  • It was assumed that there would be a steady stream of imports from the states, but because of decommissioning delays, this is not the case
  • It has become difficult for the operator to maintain viability that was originally envisioned
  • If the operator can no longer maintain the storage facility, Texas will assume responsibility and liability for the waste
  • To keep the designated operator, the legislature must adjust the ratio of low-level waste sources every session
  • Bill eliminates the need to conflate the phantom menace of high-level radioactive waste by banning it, and therefore making it irrelevant to the issue of low-level storage competition

 

Lon Burnam, Tarrant Coalition for Environmental Awareness – Against

  • Bill does not specifically prohibit importation of high-level radioactive waste, does not include tying the proposed giveaways to a requirement that the company withdraw the illegally filed application before the NRC
  • Bill does not include provision that repeals the giveaways if the monopoly vendor withdraws the current application and then reapplies to the NRC, as has been done in the past
  • Currently in their second illegal application to the NRC
  • Bill is more trojan horse than a solution
  • Incredible giveaways to monopoly, though they facilitate false fiscal notes; an accurate fiscal note could reflect the millions of dollars lost to the state if this bill is enacted
  • This company is not at risk for going under; an honest economic analysis would reflect that this company has cried wolf every session since 2005, but no one has done the analysis
  • We do not want this company to go out of business; we do not want the high-level radioactive waste
  • The bill needs a rewrite, none of the stakeholders were involved in the process, we have offered half a dozen rewrite
  • Landgraf – If you have suggestions, it would be helpful to send them to the bill author; I have not received anything
    • We had an extensive meeting with your chief of staff and got the impression that you would at least consider them
  • Landgraf – That was last week, two business days ago?
    • We did not expect this bill to be the first one you considered
  • Landgraf – This bill does not do what it reports to do; I’m reading on page four and it indicates very clearly that a person or entity, including the compact waste disposal facility license holder, may not dispose of or store high level radioactive waste or spent nuclear fuel in this state
    • You want, in writing from the company, that they will withdraw their application to the NRC
  • Landgraf – Sounds like your issue is more with the application to the NRC rather than the ban
    • We do not believe that ban is going to work; put giveaway in statute tied with withdrawal of application to NRC
  • Maybe carry amendments with you to the stand, but the language does not suffice
  • Who is going to fight this in court for us?
    • Landgraf – can you explain how this does not ban the storage of radioactive waste?
    • The implementation of the law and the law are often two different things and if you put in the statue that you are tying the breaks to the withdrawal of the application, it would be an acceptable bill
  • Dominguez – Have you seen the committee sub?
    • Yes, I have a copy and all it does is change the dates and require you to have 100 members vote for the bill to change date
  • Dominguez – That is not my reading of the committee sub, but thank you for your words
  • Dean – You think that language is ambiguous?
    • I think it will end up in court
  • Dean – Sounds like your biggest concern is CWS and the giveaways; wondering if there is something more behind your objection, would be helpful to share with us. You know in this job there will be unintended consequences, many opportunities for legal opportunities
    • This will inevitably end up in court, and one way to solve that is to tie these big tax advantages to their withdrawing of the application
    • If it has made clear that they can continue operating they can have those breaks and profits, as long as they never apply again
    • Not about the company, it is about the industry as a whole
  • Dean – With the language presented in the bill, do you still think they have to remove their application?
    • Their application is current, can be approved this year. The withdrawal would ensure they CWS does not go through process to get approved for the high-level waste
    • If they want these huge breaks financially, they should have to withdrawal
  • Dean – If they can not store high level waste because of this law, why would they want to file for a permit for something they cannot store?
    • They have already filed it, spent millions of dollars on this project. The second filing may be decided this year
    • We are looking for a clear, more definitive statement like the Governor gave almost two years ago: we do not want high level waste, we are not prepared to become a centralized interim storage for high level waste in the country
  • Landgraf – You keep mentioning breaks that are given, can you point to the specific mention in the bill?
    • Page 7, line 19
    • Talking about not collecting the 20% that the state of Texas is entitled to
  • Landgraf – That will be reduced to 5%?
    • Correct, which will amount to millions of dollars in loss to Texas
    • If we change this, we will lose millions per plant in the low-level waste stream
    • Do not give financial break to this monopoly, they do not have to compete
  • What about other types of waste that they do have to compete for?
    • They have one competitor with one set of waste and the rates are comparable
  • Landgraf – Should the rate for the low-level facility in Texas be comparable to other facilities throughout the country?
    • I think it is competitive
  • Landgraf – should it remain that way?
    • Why not? Sure, I am in favor of remaining competitive. Most of the waste types do not have a competitor, only one
  • Landgraf – In terms of volume, which type of waste do they have competition elsewhere in the country?
    • It is a large volume
  • Landgraf – Is it the largest type of waste that is deposited at that facility? My understanding is that it is
    • I do not know, cannot answer
  • Landgraf – Does there need to be a competitive facility? When talking about breaks, it is a fee instead of tax break. Tax break has a completely different implication
    • It is not a tax break, I used the wrong term, but we are extracting fees to do business
  • Landgraf – Is your organization in favor of high-level radioactive waste storage in Texas?
    • No; thank you for offering this bill but it does not cover the full scope
  • Landgraf – If it does not cover all that you want it to, but there is no current high level radioactive ban in Texas, and there never has been, seems like this is a step in the right direction. And you are still opposed to it?
    • It is step in the right direction, but I want it to be air tight bill, so it is not construed at the national level
  • Landgraf – So even if it is not perfect, according to Lon Burnham, you would rather have no steps at all
    • Today, we are against the bill as written and we hope to see amendments moving forward that address our concerns
  • Morrison – In substitute, with certain exceptions, a person, including the compact waste disposal facility license holder, may not dispose of or store high level radioactive waste or spent nuclear fuel in the state; to me, that means it is prohibited
    • I understand your interpretation
    • For instructions to the NRC, it needs to be more explicit; needs to say in order to receive the fee breaks, they will withdrawal their application
    • We want it in the statute that they will withdrawal to receive economic benefits
  • Landgraf – One reason that has been excluded is that this applies to everybody, not just one license holder; making this a ban on one entity instead of every human in Texas
    • The enacted legislature in 2003 established one vendor in the state of Texas, so clearly the amended legislation can be written for the one vendor

 

Dale Bullah, Self – Against

  • Bill could cost the state hundreds of millions and residents would not be protected from Class C waste
  • Surcharge and state fees that would be eliminated would reduce GR funds and funds to cover clean-up; Texas has 6,200 uncapped wells and clean up for these sites is around $117 billion

 

Pat Bullah, Self – Against

  • Texas should not be a dumping ground; bill does not protect Texans from radioactive waste
  • Bill does not include the greater than Class C waste; Governor has written about his concerns of a permanent geologic repository

 

Robert Singleton, Citizens Organized to Defend Austin – Against

  • Asked if the fiscal note was only submitted today?
    • Landgraf – Was submitted when the entities who prepare it were done with it
    • Seems like it was submitted on short notice
  • WCS gets unlimited space in which to present their point of view; this part should be cleaned up

 

Carolyn Croom, Self – Against

  • Bill only benefits one entity, not the state; will cause Texas to lose hundreds of millions
  • Governor has written a letter about his concerns for such matters
  • The bill does not include greater than Class C waste
    • Landgraf – Notes he has worked with the Governor’s office on this bill
    • Did not know that
  • Goodwin – What are examples of greater than Class C Waste?
    • Some comes from metal where rods are
  • Goodwin – Is some disagreement on what is safe and what is not?
  • Landgraf – Yes, there is some disagreement; is a clear distinction between high-level and low-level; Class C is still considered “low level”

 

Richard Halpin, Green Sanctuary Ministry – Against

  • Need to keep nuclear waste from coming to Texas; bill should ban all high-level nuclear waste
  • Will need the funds from the fees for future infrastructure projects

 

Bridgett Hyde, Self – Against

  • Does not understand why the 5% state fee is eliminated; bill is confusing and puts Texans in a bad position
  • Landgraf – Has been misleading conversations about this bill; notes the Health and Safety Code is not in plain language
  • Landgraf – Section two does provide the ban on high-level waste, and the subsequent section discusses what is defined as low-level waste
  • Does not understand why low-level does not have its own bill; both types should not be in the same bill
  • Landgraf – Are plenty of surcharges that go towards the state; fees are being adjusted/reduced in order to operate under a private operator

 

Patrick Herndon, Self – Against

  • Bill lacks clarity; plants already have waste material on their property and are not doing a good job storing it properly
  • Materials cannot be safely stored in a facility and could be stolen

 

Becky Halpin, Green Sanctuary Ministry – Against

  • Nuclear plants are decommissioning, and the federal government would own the waste
  • Federal government have argued they are not an entity
  • State funds are decreasing each year, and the bill makes safety assertions that are not supported
  • Goodwin – A possibility to take out the word “person” to clarify the state will not take high-level waste?
    • Landgraf – Anything is a possibility, but the word “person” is the most all-encompassing
  • Dominguez – Is a law that a corporation is a “person” for all legal purposes

 

Tom Smith, Self – Against

  • Bill does not prepare Texas for the future; one section of the bill gets things right in banning high-level radioactive waste
  • Issue is all of it is shipped primarily by rail or truck; bill says we are going to bring in more
  • Asks to drop the reduction of fees; notes natural disasters could affect storage of this waste
  • Landgraf – Believes their testimony is misleading, you are saying more waste will come into the state, but that will not generate revenue for the state?
    • Did not mean to say it would not generate revenue; is 5% adequate, or is the 20% legislatures from before have set

 

Edward Selig, Advocates for Responsible Disposal – For

  • Supports the efforts to provide disposal for low-level waste
  • Bill sets disposal fees; support any approach that preserves the best possible pricing for in compact generators
  • Proposed legislation supports the current rate setting process at TCEQ, which establishes a price ceiling for in compact price generators
  • Would recommend modification of section 2.01 to ensure exception would also apply to decommissioning waste, but not the companies who do carry it
  • State will lose money because of a lack of forward thinking

 

Suzie Bell Gosley, Self – Against

  • Thanks reducing surcharges and fees do not help Texas; is confusing the bill bans high-level radioactive waste

 

Tommy Taylor, Fasken Oil and Ranch, Ltd. – Against

  • Was previously in favor of the bill, but has changed their position
  • Discussed the company’s low level radioactive site; is clear the chairman is walking a tightrope between protecting the low-level permits and pleasing his constituents
  • Storing low-level can be done safely if it is done under stringent regulations the legislature put in place when the site was originally approved
  • State needs to pass a ban on all high-level radioactive waste, WCS has made it clear they will not stop pursuing their federal permit
    • Landgraf – Notes their disappointment of their change in support
    • Your leadership is critical, need to stop prioritizing WCS
    • Landgraf – This is not a WCS bill, worked with you more than them; want to bridge the gap that protects the interests involved
  • Kacal – How many of the Fasken family live on the ranch?
    • Family members do not live there, about 7 individuals do
  • Goodwin – Your main concern is there is still a permit out there for the NCR have high-level come into the state?
    • Yes, the bill will send a signal the state is against it; WCS is close to getting that permit
    • Goodwin – Is there a timeline on this permit?
    • COVID-19 set it back, but believe they will get it in the summer/early fall
    • Notes a mine that has already become contaminated
    • Would like WCS to withdraw from the permit

 

Morse Haynes, Andrews Economic Development – For

  • Bill provides a needed service to industries around the state; reads letters of support from staff from the city of Andrews

 

Cyrus Reed, Lone Star Chapter of Sierra Club – On

  • Supports the language change that would ban the high-level waste
  • Have been trying to intervene in the high-level case with WCS
  • Current law up to 30% of the waste can come from imported un-compacted waste, the bill changes to 66%
  • Concerned about the fees and surcharge changes; perpetual account can be used for cleanup throughout the state
  • Is a potential compromise between Class A and B/C
  • Concern is the removal of the provision that the waste be containerized

 

Karen Hadden, SEED Coalition – Against

  • Goal of the bill is good, but the bill will not get to that goal
  • WCS’s high-level and greater than Class C waste federal license could come this summer
  • This bill needs to include greater than Class C and a requirement for them to withdraw their license application
  • “Person” is meant to include corporations, but the definition in the Health and Safety code, it is not as inclusive as modern-day language
  • Findings portion of the bill needs to be removed completely; especially the “environmentally sound” claim
  • Would support a standalone bill that banned consolidated interim storage of high-level waste or disposal
  • Surcharges from 20% to 5% and cutting the state 5% fee creates a loss of $21 million for one reactor alone; ballpark estimate is a loss of $420 million for 20 reactors and 86 could be sending here
  • No longer requiring containerization of waste is a large concern; contamination clean up can go into the millions or billions
  • Landgraf – Asks about the cost of clean up
    • It varies it the millions or billions cleaning up radioactive waste is very expensive; overviews costs of specific site clean up
  • Landgraf – This is the first bill that has attempted to ban high-level waste, do you want to go against that?
    • Does not believe the ban will be effective
  • Landgraf – Is it that you are so opposed to the low-level site that you would forsake the opportunity to ban high level waste?
    • Do not like the current site, but this is not an effort to kill that site
    • Motivation is to say a ban needs to stand alone and not be connected to other things; WCS will get out of certain regulations
  • Landgraf – Reiterates previous question
    • Attorney General and Governor could act on WCS without this bill; standalone legislation would be the best way to bolster that
    • Reiterates provisions that would make them support the bill
  • Landgraf – What you propose will not apply to anyone else? Would only apply to those who would have withdrawn application?
    • Would make it generic
  • Landgraf and Hadden discuss the definition of “person”

 

Adrian Shelly, Public Citizen – Against

  • Support the high-level ban; issue with greater than Class C is that it must be deposited in a geologic repository, should be included in this
  • Landgraf – If it is already illegal, why include it?
    • Law is a little unclear now, NRC asked the TCEQ for an opinion on this
  • Placement of the section in Health and Safety is strange
  • Landgraf – You think it would be more effective if it were in a standalone section?
    • Would make it clearer it did not apply to only license holders
  • The Environmental Radiation and Perpetual Care Account FY 21 has a $3.6 million balance; potential cost for these accidents is very expensive, not enough in that account
  • Striking of “the compact waste received at the compact facility” creates a broad exemption
  • Reducing the surcharge from 20% to 5%; state could easily be on the hook for hundreds of millions in losses
  • Removing containerizing part is also an additional concern as mentioned in previous testimony
  • Landgraf – Have you ever been to the low-level site? Or Andrews County?
    • No
  • Landgraf – How does Public Citizen feel about you opposing this legislation?
    • Appreciate the distinction that this bill has one good section and more bad sections; cannot support it do to the imbalance
  • Landgraf – Public Citizen has never had a history to support the state’s obligation to operate the low-level site? Would you support the site if there was no law holding it in place?
    • Have supported the Blanco bill last session
    • Understands the state’s effort to support the law; no, does not think it is a good location
  • Landgraf – Where would you rather have it?
    • Have been Geologic studies that say a better site would be near D.C.
  • Landgraf – But nowhere in Texas?
    • Yes

 

Landgraf, in closing

  • Despite what we have heard, trying to protect the interests of the state

HB 2692 left pending