Recap of the Regular Session of the 86th Texas Legislature

by Ty Embrey and Troupe Brewer

The Regular Session of the Texas Legislature ended on May 27th when the Legislature adjourned Sine Die. The Legislature kicked off on January 8th with the election of a new Speaker of the Texas House, Dennis Bonnen. Speaker Bonnen is a Republican from Angleton who has served as a state representative for 22 years. Speaker Bonnen held a joint press conference on January 9th with Governor Abbott and Lieutenant Governor Patrick during which Governor Abbott declared that the three leaders “are here today to send a very strong, profound and unequivocal message — that the governor, lieutenant governor and speaker are working in collaboration together on a very bold agenda that will be transformative for the state of Texas.”

In the days before the start of the Regular Session, State Comptroller Glen Hegar announced a biennial revenue estimate of nearly $120 billion, and stated that Texas’ “Rainy Day Fund” was at an all-time high of nearly $15 billion. With those financial resources at their disposal, the Legislators addressed several significant issues facing Texas. A total of 7,541 bills and joint resolutions were filed during the Regular Session, 58 bills were vetoed by Governor Abbott, and 1,383 bills and joint resolutions became effective as Texas law. The Legislature passed legislation addressing issues significant with state-wide implications, such as legislation that makes reforms to the public school finance and property tax systems, helps Texas deal with disaster relief preparation for the next natural disaster, and funds the Texas state government for the next 2 years (through the adoption of a biennial state budget).

This article summarizes the major legislation that impacted disaster relief and preparedness, groundwater, water utilities, and solid waste.

I. Disaster Relief and Preparedness

The Legislature passed a significant package of bills related to Disaster Relief and Preparedness. Governor Abbott cited some $1.6 billion going towards flooding relief, planning, and mitigation projects. The bills below are the major pieces of legislation that accomplished that objective:

• SB 6 (Kolkhorst) – Relating to emergency and disaster management, response, and recovery. This bill requires the Texas Department of Emergency Management (“TDEM”) to develop a disaster response model guide and a wet debris study group for local communities. It also creates a disaster recovery loan program for communities that suffer significant infrastructure damage during flooding and related weather events.

• SB 7 (Creighton) – Relating to flood planning, mitigation, and infrastructure projects. This bill establishes two new funds, the Texas Infrastructure Resiliency Fund and the Flood Infrastructure Fund, to address the effects of Hurricane Harvey and prepare for future flooding and disasters.

• SB 8 (Perry) – Relating to state and regional flood planning. This bill creates a framework for a “state flood plan” through a network of regional flood planning groups, similar to the regional water supply planning process.

• HB 5 (Phelan) – Relating to debris management and other disaster recovery efforts. This bill requires TDEM to develop a catastrophic debris management plan and related training programs, as well as creates a work group to advise local governments on how they can assist with recovery efforts.

• HB 7 (Morrison) – Relating to disaster preparation for state agencies and political subdivisions. This bill requires the Governor’s office to maintain a list of regulatory statutes and rules that may require suspension during a disaster. It also requires TDEM to develop a plan to assist political subdivisions in executing contracts for services following a disaster in an expeditious manner.

• HB 26 (Metcalf) – Relating to the notification of affected persons of certain releases of water from certain dams. This bill would require the owner or operator of a state ­regulated dam that has a spillway with gates used to regulate flood waters to notify local emergency operation centers in downstream communities when spillway releases are made to regulate floodwaters, according to Texas Commission on Environmental Quality (“TCEQ”) action plan guidelines. Emergency operation centers must then provide prescribed information to the public. A notice may not be considered an admission of liability and may not be used in any suit related to the releases. Not later than 1/1/2020, the TCEQ shall provide guidance for developing a notification plan through a dam owner’s emergency action plan.

• HJR 4 (Phelan) – Proposing a constitutional amendment providing for the creation of the flood infrastructure fund to assist in the financing of drainage, flood mitigation, and flood control projects. This bill would ask the Texas voters to amend the Texas Constitution to create a new flood infrastructure fund. If passed, the Texas Water Development Board (“TWDB”) would administer and use money from the fund for drainage, flood mitigation, or flood control projects, including: (1) planning and design activities; (2) work to obtain regulatory approval to provide nonstructural and structural flood mitigation and drainage; or (3) construction of structural flood mitigation and drainage infrastructure.

• SB 500 (Nelson) – Relating to making supplemental appropriations and reductions in appropriations and giving direction, including direction regarding reimbursement, and adjustment authority regarding appropriations. This bill is the supplemental appropriations bill and has multiple provisions and funding mechanisms addressing flood-related issues, including flood planning, flood mapping, and flood projects.

II. Groundwater

• HB 720 (Larson) – Relating to appropriations of water for use in aquifer storage and recovery projects (“ASR”). This bill amends various chapters of the Texas Water Code (“TWC”) to allow the appropriation, storage, or diversion of state water for “aquifer recharge.” It provides that TCEQ may authorize an appropriation for ASR if it determines the water is not needed to meet downstream or freshwater inflow needs, and clarifies that TCEQ has exclusive jurisdiction over Class V injection wells.

• HB 721 (Larson) – Relating to the duty of the TWDB to conduct studies of and prepare and submit reports on aquifer storage and recovery and ASR projects. This bill requires the TWDB to work with certain specified stakeholders to conduct studies of aquifer storage and recovery projects and aquifer recharge projects identified in the state water plan or by interested persons and to report the results of each such study to regional water planning groups. It also requires the TWDB to conduct a statewide survey to identify the relative suitability of various major and minor aquifers for use in ASR projects or aquifer recharge projects based on consideration of certain specified factors.

• HB 722 (Larson) – Relating to the development of brackish groundwater. This bill amends Chapter 36 of the TWC to allow a groundwater conservation district (“GCD”) over a designated “brackish groundwater production zone” (“BGPZ”) to adopt rules to govern the issuance of permits for production with a BGPZ on its own volition or upon receipt of a petition to do so. If a rulemaking is initiated, then the bill provides specific required rules related to the permit term, monitoring requirements, well field design, etc. The bill specifically clarifies that the authorized BGPZ production is in addition to the MAG of a given GCD.

• HB 1066 (Ashby) – Relating to extensions of an expired permit for the transfer of groundwater from a groundwater conservation district. This bill amends TWC, Chapter 36 as it pertains to export permits, requiring a GCD to extend an export permit to a term no shorter than the term of the related operating permit. The bill also clarifies that approval/denial of an extension is based only on rules that were in effect at the time the application was submitted.

Bills that failed to pass:

• HB 726 (Larson) – Relating to the regulation of groundwater.

• HB 2123 (Harris) – Relating to authorizing petitions to change certain rules adopted by groundwater conservation districts.

• HB 2125 (Burns) / SB 851 (Perry) – Relating to the award of attorney’s fees and other costs in certain suits involving a groundwater conservation district.

• SB 1010 (Perry) – Relating to rules adopted by groundwater conservation districts overlying a common aquifer.

• SB 2027 (Perry) – Relating to the standard of judicial review for a suit involving a groundwater conservation district.

• SB 2026 (Perry) / HB 2122 (Harris) / HB 2249 (Lucio III) – Relating to regulation of the production of retail public utility wells by a GCD.

III. Water and Water Utilities

• HB 3339 (Dominguez) – Relating to requirements for programs of water conservation and water conservation plans. This bill amends TWC Chapters 15, 16, and 17 to require political subdivisions or water supply corporations (“WSC”) to include a water conservation plan in an application for financial assistance to the TWDB. Such a plan must incorporate certain practices, techniques, and technologies; address local conditions; and include five- and ten-year targets for water savings. The bill also provides for discretionary elements an applicant may include in the plan, and it provides exceptions to plan requirement in certain circumstances.

• HB 3542 (Phelan) – Relating to the provision of water and sewer services by certain retail public utilities. This bill amends TWC, Chapter 13 to require a utility that provides retail water or sewer service to less than 10,000 taps or connections to report its financial, managerial, and technical capacity to the Public Utility Commission (“PUC”) within three years of violating certain TCEQ orders. The bill provides the triggering events and process for establishing the temporary management of such violators. Lastly, the bill outlines the process to determine the fair market value of a utility, which includes appraisals by three utility valuation experts from a list to be maintained by the PUC.

• SB 530 (Birdwell) – Relating to civil and administrative penalties assessed or imposed for violations of laws protecting drinking water, public water supplies, and bodies of water. This bill amends Chapter 341 of the Texas Health and Safety Code (“THSC”) to amend the range of civil penalty for violating Subchapter C (sanitary standards of drinking water, protection of public water supplies, and bodies of water) from $50 to $5,000 (previously capped at $1,000 per violation).

• SB 700 (Nichols) – Relating to the regulation of certain classes of retail public water utilities. This bill amends Chapters 5 and 13 of the TWC, to redefine Class B and C utilities and to create a new class of utility, Class D (for utilities with fewer than 500 connections). The bill also authorizes the PUC to issue emergency orders and to establish reasonable compensation for a related emergency interconnection.

• SB 2272 (Nichols) – Relating to the procedure for amending or revoking certificates of public convenience and necessity issued to certain water utilities. This bill amends TWC, Chapter 13 to address CCN decertification requirements. The bill prohibits a new retail public utility from rendering service in a decertified area unless just and adequate compensation has been paid to the decertified retail public utility. The bill also provides that a certificate holder may not initiate an application to borrow money under a federal loan program after the date a decertification petition is filed until the PUC issues a decision on the petition.

Bills Vetoed by Governor Abbott:

• HB 1059 (Lucio III) – Relating to a biennial report on stormwater infrastructure in this state. This bill would have required the TCEQ to appoint a Green Stormwater Infrastructure and Low Impact Development Report Group each state fiscal biennium to prepare a report on the use of green stormwater infrastructure and low impact development in this state.

• HB 1806 (King) – Relating to the use of water withdrawn from the Edwards Aquifer by certain entities. This bill would have provided new exceptions to the rule that water withdrawn from the Edwards Aquifer must be within the boundaries of the Edward Aquifer Authority for a retail public utility and a municipally owned utility owned by San Antonio Water System.

• SB 1575 (Alvarado) – Relating to governmental immunity for and adjudication of claims arising from a local governmental entity’s disaster recovery contract. This bill would have given municipalities governmental immunity to suit and from liability for a cause of action arising from a declaration of disaster for an unspecified period.

Bills that failed to pass:

• HB 1506 (Perez) – Relating to authorizing a regulatory authority to establish reduced water and sewer utility rates funded by donations for the benefit of certain low-income customers.

• HB 1868 (Lozano) – Relating to the creation of the Texas Rural Water Advisory Council.

IV. Solid Waste

• HB 61 (White) – This bill is the “Slow Down To Get Around” legislation. The bill contains language that establishes, when approaching a stationary vehicle used exclusively to transport municipal solid waste, as defined by Texas Health and Safety Code (“THSC”) § 361.003, or recyclable material, as defined by THSC § 361.421, while being operated in connection with the removal or transportation of municipal solid waste or recyclable material from a location adjacent to the highway, an operator, unless otherwise directed by a police officer, shall vacate the lane closest to the vehicle when driving on a highway with two or more lanes traveling in the direction of the vehicle; or slow to a speed not to exceed: 20 miles per hour less than the posted speed limit when the posted speed limit is 25 miles per hour or more; or five miles per hour when the posted speed limit is less than 25 miles per hour. A violation of the Slow Down To Get Around provisions of the Texas Transportation Code would result in a misdemeanor, and the severity of the misdemeanor and its punishment would be determined by the extent of damage that occurred – either property damage or bodily injury.

• HB 1331 (Thompson, Ed) – This bill authorizes the TCEQ to charge an applicant for a permit for a municipal solid waste facility an application fee of $2,000.

• HB 1435 (Thompson, Ed) – This bill establishes a requirement in the THSC for the TCEQ to inspect the facility or site before a permit for a proposed municipal solid waste management facility is issued, amended, extended, or renewed. TCEQ to adopt rules prescribing information to be included in permit applications to confirm inspections have occurred.

• HB 1953 (Thompson, Ed) – This bill amends THSC, Chapter 361 to add new definitions and provisions related to recycling post-use polymers and recoverable feedstocks. The bill prohibits the TCEQ from treating post-use polymers or recoverable feedstocks as solid waste if the substances are converted (by using pyrolysis or gasification) into other valuable products and requires the TCEQ to promote the development and use of pyrolysis and gasification processes, facilities, and related technology. The bill also requires the TCEQ to study the use and proliferation of these processes, and submit the study to the legislature within two years of the effective date of the bill.

• SB 649 (Zaffirini) – This bill amends THSC, Chapter 361 to require the TCEQ to produce a plan to, “stimulate the use of recyclable materials as feedstock in manufacturing.” The plan must identify and/or estimate: (1) quantity and type of recyclable materials that are/not being recycled; (2) current economic benefits of recycling; (3) location and processing capacity of existing manufacturers that use recyclable materials as feedstock; (4) barriers to increasing the use of recyclable materials as feedstock for manufacturers; and (5) type of manufacturing facilities necessary to consume the existing and potential volumes of recyclable materials. The plan must recommend institutional/financial/administrative processes that could be applied to increase the use of recyclable materials and to stimulate the use of those materials by manufacturers; and, the plan must be updated every five years.

The bill also requires the TCEQ to develop an educational program outlining all the ways that recycling provides economic benefits to the state; spotlighting collectors and processors of recyclable materials and manufactures that are using recyclable materials as feedstock; and detailing the detrimental effects of contamination in the recyclables materials stream and the need to reduce those effects.

Conclusion

It does not appear likely that Governor Abbott will call the Texas Legislature into a special session in the near future. The state Legislators will start working on preparing the list of issues and subject matters the Legislators would like to study and hold public hearings on during the legislative interim time period. The Legislators will use the information they gain during their interim committee work to prepare legislation for the next Regular Session of the Texas Legislature, which will begin in January 2021.

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Ty Embrey is a Principal in the Firm’s Water and Districts Practice Groups and Troupe Brewer is an Associate in the Firm’s Water, Litigation, and Districts Practice Groups. If you have any questions concerning legislative issues or would like additional information concerning the Firm’s legislative tracking and monitoring services or legislative consulting services, please contact Ty at 512.322.5829 or tembrey@lglawfirm.com, or Troupe at 512.322.5858 or tbrewer@lglawfirm.com.