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Texas law requires many regulatory agencies to be periodically reviewed by the Legislature. The reviews can result in legislation that eliminates, or “sunsets” an agency; or in the alternative, adds new duties and functions and continues that agency in existence for up to twelve 12 more years. The Sunset review of the Texas Commission on Environmental Quality (TCEQ) began in September 2021.  Sunset staff interviewed all levels of agency management, considered TCEQ’s own input through its “Self-Evaluation Report,” (SER) toured regulated facilities, held confidential meetings with regulated stakeholders, and attended “town hall” style meetings hosted by environmental non-governmental organizations (NGOs). TCEQ is currently developing responses to Sunset recommendations, and we will forward these as completed.

On May 25, 2022, Sunset released its staff review of TCEQ focusing on five issues: 1) transparency and opportunity for public input, 2) monitoring and enforcement of regulated entities, 3) oversight of state water resources, 4) processes for OPIC rule recommendations and outside technical assistance, and 5) continuation of TCEQ. While the five Sunset issues are expected to form the basis of legislation during the 88th Session, legislators also often consider issues brought forth by the agency in the self-evaluation report (SER).

TCEQ previously identified 17 issues in its September 2021 SER, covering transparency, authority of TCEQ, possible future account funding problems, workforce needs, and facility needs.

Detailed below are the May 2022 Sunset issues and recommendations*, the September 2021 TCEQ issues and possible solutions, if provided, and potential areas of overlap. (*The May 2022 Sunset Issues and recommendations are bolded below for ease of reading).

Agency Functions

TCEQ Sunset Issue #2 (pg. 3) – TCEQ’s compliance monitoring and enforcement processes need improvements to consistantly and equitably hold regulated entities accountable.

  • Recc: Require TCEQ’s compliance history rating formula to consider all evidence of noncompliance while decreasing the current emphasis on site complexity and direct the agency to regularly update compliance history ratings.
  • Recc: Require TCEQ to consider all violations when classifying an entity as a repeat violator.
  • Recc: Require TCEQ-regulated entities with temporary or open-ended permits to annually confirm their operational status.
  • Recc: Direct TCEQ to reclassify recordkeeping violations based on the potential risk and severity of the violation

TCEQ Issue #4 (pg.4) – TCEQ and OPIC lack certain transparent and efficient processes for OPIC to more effectively represent the public’s interest.

  • Recc: Direct OPIC to consider developing and using umbrella contracts to procure expert assistance
  • Recc: Direct TCEQ commissioners to take formal action on OPIC’s rulemaking recommendations

Raw Water

TCEQ Sunset Issue #3 (pg. 4) – TCEQ’s Oversight of Water Could Better Protect the State’s Scarce Resources

  • Rec: Remove the abolishment clause for the Environmental Flows Advisory Group and Environmental Flows Science Advisory Committee, and require the advisory group to adopt a biennial statewide work plan for adaptive management updates of environmental flow standards
  • Recc: Direct TCEQ to conduct a comprehensive study of its water usage data and initiate cancellation proceedings for water right permits with nonuse over 10 years
  • Recc: Require TCEQ to hold its annual meeting regarding priority groundwater management area studies in a public setting

Drinking Water

TCEQ SER Major Issue #1 (pg. 595) – Currently, 84% of Texas’ 7,053 public water systems serve a population of less than 3,300. TCEQ is responsible for enforcing the federal Safe Drinking Water Act, which requires a public water system to provide safe and adequate drinking water supplies to the public. Most of Texas’ public water systems are classified as a community water system. This means the system serves the same people on a year-round basis. Of the 4,641 community water systems, 3,483 serve a population of less than 3,300.

Small systems face the greatest challenge in supplying water of adequate quality and quantity because of the difficulty in developing or accessing the financial, managerial, and technical resources needed to comply with the increasing number and complexity of EPA regulations and rising customer expectations.

In the last 30 years, the number and complexity of drinking water regulations has significantly increased, for systems of every size and type of water source. Currently, small systems account for 92% of the community water systems that have outstanding health-based violations. Health-based violations in Texas are largely due to naturally occurring contaminants such as arsenic, nitrates, fluoride, and radionuclides.

Although TCEQ and other state agencies and organizations provide financial, managerial, and technical assistance to these systems, the needs of small systems often outweigh the available capacity of state agencies and supporting organizations.

  • Possible Solutions: It would be beneficial to have a state grant program operated by qualified nonprofits for small projects including general infrastructure improvements, emergency repairs, operator training, access to third-party analysis and recommendations from engineers and consultants, and asset management. Availability of easy to access small grants and loans for other supporting activities is also important. These activities could include short and long-term planning, financial education and management, and assistance to resolve legal issues, such as ownership.
  • Possible Solutions: For small ailing systems, a potential funding source could be a fund set in statute such as the previously created Water Utility Improvement Account (WUIA).
  • Possible Solutions: In addition, expanding eligibility requirements for who can be a receiver and providing incentives that will attract receivers to operate abandoned systems are also needed.
  • Possible Solutions: Increased flexibility in existing or new funding to include regionalization support such as feasibility studies, increased outreach and education, legal assistance, funding coordination, and meeting facilitation would be beneficial. Additionally, it could also be helpful to have state funding to increase the economic feasibility of connecting to an existing system, rather than developing a new system, or to incentivize formal and informal private or public partnerships

Border

TCEQ SER Major Issue #17 (pg. 632) – Protecting Texas’ water supplies and air quality are core responsibilities for TCEQ. The challenges to protecting water supplies and air quality are compounded when these resources are shared across an international boundary. TCEQ has several issues in the border area related to water and air. TCEQ has concerns with water deliveries, international reservoir infrastructure and safety, and water and air quality.

  • Possible Solutions: Regarding water, TCEQ continues to engage with USIBWC on issues related to the 1944 Water Treaty including deliveries, salinity, and Amistad Dam.
  • Possible Solutions: Regarding air, TCEQ responded to EPA’s letter on July 26, 2021. In the letter, TCEQ provided additional information and requested that EPA not modify El Paso County’s attainment designation for the ozone standard. The letter also urged that, if EPA does designate the county as a nonattainment area, the area should not be tied to the Sunland Park nonattainment area in New Mexico. EPA is expected to finalize its designation for El Paso County in September 2021. If El Paso County is designated nonattainment, TCEQ would submit a Federal Clean Air Act Section 179B demonstration (i.e., a demonstration that the area would attain the standard but for foreign emissions) to EPA, which would be reviewed along with New Mexico’s demonstration. If the Section 179B demonstration is approved, planning requirements for the nonattainment area would be suspended.

Transparency

TCEQ SER Major Issue #9 (pg. 614) – The only notice provided for the general public is a newspaper which is deficient given 80% of U.S. adults get their news from electronic devices.

  • Possible Solutions: A possible solution to the issue of ensuring continued effectiveness of public notice of permit applications would be to expand TCEQ’s statutory authority to include the option of electronic publication of notice.

TCEQ SER Major Issue #15 (pg. 629) – Language authorizing the TCEQ to hold or require virtual public meeting on permit applications would serve to reinforce the sentiment the public should be allowed to participate in the permitting process without having to leave the county.

  • Possible Solutions: A possible solution that would strengthen the agency’s efforts to reap the benefits of virtual public meetings is a statutory change to expressly authorize the use of virtual public meetings in lieu of in-person public meetings.

TCEQ SER Major Issue #16 (pg.620) – If the agency were provided the flexibility to allow applicants to post applications and draft permits online in lieu of, or in addition to, placing the required documents in a public place; then the agency would see resource saving and convenience for applicants.

  • Possible Solutions: TCEQ recommends amending the statutes to allow flexibility to post applications and draft permits online instead of placing the required documents in a public building.

TCEQ Sunset Issue #1 (pg. 2) – TCEQ’s policies and processes lack full transparency and opportunities for meaningful public input, generating distrust and confusion among members of the public

  • Recc: Clarify statute to require public meetings on permits to be held both before and after the issuance of the final draft permit.
  • Recc: Direct the commission to vote in a public meeting on key foundational policy decisions that establish how staff approach permitting and other regulatory actions.
  • Recc: Direct TCEQ to develop a guidance document to explain how it uses the factors in rule to make affected person determinations.

TCEQ Limited Authority

TCEQ SER Major Issue #2 (pg.600) – TCEQ Does not have the authority to exempt junior water rights from a priority call even if the exemption is needed to protect public health, safety, or welfare.

  • Possible Solutions: A statutory change could provide TCEQ the authority to protect public health, safety, and welfare during droughts or emergency shortages of water which would enable TCEQ to consider impacts that the suspension or partial curtailment of junior water rights would have on municipal or power generation uses that have no feasible or practical alternatives to augment their surface water supply.

TCEQ SER Major Issue #4 (pg.605) – TCEQ is required by statute to select the lowest cost alternative State Superfund site remedy. Statute does not allow TCEQ to account for site-specific factors that may affect the unsuccessful implementation of the remedy.

  • Possible Solutions: TCEQ recommends THSC Section 361.193 be revised to provide that costs to conduct a remedial action be balanced with the other factors currently provided in statute. Removing constraints to select the lowest cost remedial alternative and allowing TCEQ to balance all statutory factors will ensure the selected remedial action for any state Superfund site will achieve the most advantageous combination of cost, quality, and sustainability.

TCEQ SER Major Issue #5 (pg. 607) – Current Texas law identifies owners or operators of an underground or aboveground petroleum storage tank (PST) system as responsible for any releases from those systems but does not identify landowner responsibility for corrective action for releases from tanks on their property. In those situations where corrective action is necessary and a tank owner or operator is unwilling, unable, or cannot be found, the state must assume responsibility for the cleanup.

  • Possible Solutions: TCEQ recommends amending TWC Chapter 26 Subchapter I to include landowners among the parties considered responsible for corrective action for PST sites. Under this statutory change, the responsibility for corrective action would fall first to the tank owner or operator and then to landowners of commercial properties where the tank owner or operator is unwilling, unable, or cannot be found. Additionally, TCEQ recommends a corresponding change to TWC Section 26.351(c) to explicitly allow TCEQ to conduct corrective action where the owners/operators and landowners are unwilling or unable to take corrective action or cannot be found (e.g., corporate dissolution), or where more expeditious corrective action is necessary.

TCEQ SER Item of Interest (pg. 671) – TCEQ does not have the statutory authority to regulate noise or light despite an amended rider from last session which required TCEQ to adopt and make accessible on their website best management practices for Aggregate Production Operations (APO’s) regarding nuisance issues relating to dust, noise, and light.

  • Possible Solutions: None provided.

Depleted Accounts and Unfunded Mandates

TCEQ SER Major Issue #6 (pg. 608) – The Waste Management Account (0549) is expected to be depleted by the end of FY 2024.

  • Possible Solutions: TCEQ recommends amending the statute to increase the percentage of the Municipal Solid Waste Disposal Fee (tipping fee) deposited to Account 0549 and to decrease the allocation to Account 5000. This recommendation does not result in a fee increase.

TCEQ SER Major Issue #8 (pg. 612) – The Solid Waste Remediation Fees (0550) is expected to be depleted by the end of FY 2024.

  • Possible Solutions: TCEQ recommends amending the statute to allow the agency to set the fee rate by rule. With an increased fee adopted in TCEQ rule, the revenue stream for the account can be stabilized allowing for greater flexibility in long-term planning for current and future obligations related to remediation. If the battery fees are increased by $2 so that each battery with a capacity of less than 12 volts is assessed a fee of $4 and each battery with a capacity of 12 volts or higher is assessed a fee of $5, the annual revenue for Account 0550 would increase by an estimated $15.8 million per year.

TCEQ SER Major Issue #7 (pg. 610) – There are no appropriated amounts to remediate unauthorized MSW disposal sites.

  • Possible Solutions: The program could be funded by the Solid Waste Disposal Fund 5000 by expanding allowances for Fund 5000 cleanups to include cleanups allowed by Fund 0549. THSC Section 361.0145 could be amended to grant TCEQ the ability to run a state-led MSW remediation program, using similar statutory language for cleanups in THSC Section 361.014, funding would come from Fund 5000 instead of Fund 0549.

TCEQ SER Major Issue #3 (pg. 603) – Strengthen the required training for local emergency management and their chain of command.  During certain emergency events (drought, winter storms, hurricanes, etc.), there can be a common, public misconception that TCEQ’s role is in the same category as local first

responders, which it is not. Many local governments also have expectations that TCEQ should take a larger role in on-going emergency response events, beyond that of regulatory oversight and providing technical guidance.

  • Possible Solutions: TCEQ recommends strengthening the required training for local government emergency management officials and their chain of command. This training should result in knowledge and understanding of federal, state, and local government roles and responsibilities for emergency management; emergency operation center operations; unified command operations; and, most importantly, the Incident Command System (ICS) structure that is the center piece for all emergency response events.
  • Possible Solutions: If TCEQ is expected to, or needs to, respond to more major emergency events in coordination with local governments, the agency will require significant additional funding and statutory changes to enhance spills and emissions reporting requirements by regulated entities to TCEQ. These changes would move TCEQ beyond its current regulatory role into that of a first responder.

Workforce

TCEQ SER Items of Interest (pg. 672) – Many IT needs of the agency continue to be deferred or go unmet. IT operations are challenged by funding limitations, continuously emerging and evolving IT needs, and inability to provide compensation competitive with other public and private sector salaries.

TCEQ SER Major Issue #10 (pg. 616) – TCEQ identified several workforce challenges including consistent high turnover, a high-percentage of retirement-eligible staff and difficulties attracting, training and retaining qualified employees.

  • Possible Solutions: TCEQ has requested additional funding to improve salaries along with other internal measures, including recruitment and retention bonuses for key positions. TCEQ has also initiated a comprehensive salary study of all agency classifications to evaluate its competitiveness, identify additional classifications of concern, and recommend strategies and options to competitively recruit, retain, and develop highly competent staff. TCEQ will prioritize and implement its findings within its available budget. TCEQ anticipates that this may require another legislatively-supported appropriation to make these significant investments.

TCEQ SER Major Issue #11 (pg. 618) – The steady decline in the number of licensed water and wastewater operators will result in a significant shortage of licensed water and wastewater operators if the trend continues.

  • Possible Solutions: The Occupational Licensing Program is focusing on several paths to address this issue. One obstacle moving forward with Spanish translation of exams is the limited availability of qualified translators who also have specific industry knowledge. This knowledge is critical to ensure the terminology of the specific industry is translated correctly. An additional obstacle is the lack of designated funding to contract these translators. A second measure is to create a state-wide vocational program for high schools, with cooperation from the Texas Education Agency (TEA).
  • Possible Solutions: TCEQ is also exploring additional assistance to small water systems that have historically had difficulty attracting and retaining qualified operators.
  • Possible Solutions: Another way TCEQ can support small systems would be to establish a statewide program to provide rate and financial accountability assistance.

TCEQ SER Major Issue #14 (pg. 623) – Without an increase in staffing resources, TCEQ anticipates the impact to the number of dams in the Dam Safety Program that can be inspected – which increases each year.

  • Possible Solutions: For the Dam Safety Program to meet 100% of the five-year inspection frequency, it is recommended that the staff level be increased by 11 FTE employees.
  • Possible Solutions: Increase the salaries for all engineering levels to help attract qualified candidates and retain current program staff.
  • Possible Solutions: Continue to use recruitment and retention bonuses to help retain the current program staff.

TCEQ SER Item of Interest (pg. 671) – More TCEQ staff time is required to compile sufficiently detailed responses to address comments for permit applications.

  • Possible Solutions: None provided.

TCEQ SER Item of Interest (pg. 671) – Staff turnover and challenges such as a competitive job market exist in the Houston region and staff turnover within many regional offices and at TCEQ’s Austin headquarters remains a significant concern.

  • Possible Solutions: None provided.

Facilities

TCEQ SER Major Issue #12 (pg. 620) – TCEQ could reduce the annual $3.6 million lease cost for Building F, Park 35 Campus by exiting the lease prior to the August 2027 termination date.

  • Possible Solutions: TCEQ has initiated discussions with TFC to develop an exit strategy from Building F prior to the 2027 lease end date.

TCEQ SER Major Issue #13 (pg. 621) – Houston Regional Office (R12) is not an adequate facility to support TCEQ’s mission-critical compliance and disaster emergency response field activities.

  • Possible Solutions: TCEQ recommends consideration be given for R12 to be housed in an accessible, secure location with appropriately configured space.

TCEQ Continuation Recommended

  • TCEQ Sunset Issue #5 (pg. 5) & Recommendations – Staff noted “With its statewide presence and experience implementing permitting and enforcement programs, TCEQ is the most appropriate agency to carry out this mission and should be continued (for 12 years). Additionally, the agency’s statute should be updated to include certain across- the-board provisions applied during Sunset reviews (board members training and separation of staff and commissioner duties).