EPA Closely Watching Bill to Speed State Permits

Texas appears poised to enact environmental legislation that could trigger an unintended consequence: more federal oversight.

Fast-moving bills that would curb opportunities for public protest so state environmental permits can be issued more quickly have drawn the attention of the federal Environmental Protection Agency, long the state’s political punching bag.

The agency says it has concerns about the legislation, and may need to review whether it jeopardizes permitting authority the EPA has granted Texas.

Senate Bill 709 would scale back contested case hearings, a process that allows the public to challenge industrial applications for permits at the Texas Commission on Environmental Quality (TCEQ) — such as those allowing wastewater discharges or air pollution.

Similar versions of the bill pushed by Sen. Troy Fraser, R-Horseshoe Bay, and Rep. Geanie Morrison, R-Victoria, have sailed through the House and Senate, rankling consumer and environmental groups.

Contested case hearings resemble trials in which companies and their critics present evidence and testimony in front of an administrative law judge in hopes of swaying regulators, who have the final say in granting, denying or modifying a permit application. For particularly complicated industrial projects, the process can yield information that the short-staffed TCEQ did not foresee.

Though less than 1 percent of TCEQ permit applications involve such hearings, industry groups say the process takes too long – sometimes years – and breeds uncertainty that prompts manufacturers, chemical plants or landfills to take their business to neighboring states.

Critics argue that scaling back the hearings would stifle everyday Texans’ ability to voice health and safety worries when companies break ground on high-polluting projects in their communities.

Protesters rarely convince regulators or a company to completely withdraw a permit application, but veterans of the process say they often win concessions that shrink a plant or landfill’s effects on the community.

The EPA says it shares concerns about the bill, which would overhaul the hearings process in a variety of ways. It would give the agency sole discretion to determine who is an “affected person” who could ask for a hearing; set an 180-day time limit for the proceedings (with potential exceptions); narrow the issues the public could argue; and arguably shift the burden of proof from the company to the public.

“EPA is concerned that as currently drafted, [the legislation] could be read to impact the applicability of federal requirements to federal permitting programs being implemented by the TCEQ,” David Gray, director of external affairs for the EPA’s Dallas-based regional office, recently wrote to Rep. Eddie Rodriguez, D-Austin, who had asked for input.

Gray called the shift in the “burden of proof” as particularly problematic, adding that the EPA should review the legislation to ensure that it doesn’t “interfere with federal requirements or alter the basis for one or more program requirements.”

Currently, companies at a contested case hearing must bring in experts to prove that a draft permit is acceptable. Under either version of SB 709, a challenged draft would be presumed to meet “all state and federal legal and technical requirements,” forcing the citizen to prove otherwise and likely limiting the facts put before judges.

As it has in other states over the past four decades, the EPA has given Texas the authority to permit and enforce a variety of air, waste, water and mining programs after lengthy and complex negotiations.

“In most cases, it can take years to accomplish, so everyone is very careful and cautious in anything that might threaten it,” Gray told The Texas Tribune in an email.

Gray said he could not recall a time in which the agency completely revoked a state’s program authority, but there have been close calls.

In 2013, for instance, Arkansas lost some of its Clean Water Act authority after its legislature passed a bill changing requirements for discharging minerals into streams. Lawmakers fixed the legislation after several permits were routed to the EPA, Gray recalled.

Officials and other experts could not recall an example where the agency took away Texas’ authority, but the state has faced similar issues.

More than four years ago, the state refused to follow regulations involving “greenhouse gas permits,” delaying dozens of energy projects and prompting a major outcry from the industry. The Legislature relented in 2013 and directed TCEQ to begin issuing the permits.

Rodriguez sited that history last week on the House floor, calling the legislation risky.

Permitting is “going to take longer, and then you bring the feds in,” he said. “We’re giving a lot back to the federal government versus keeping everything right here in Texas where it should be.”

Fraser and Morrison said they weren’t worried about the EPA review, which they called commonplace.

“I welcome a review by the EPA after we pass the bill and TCEQ implements it at the agency,” Fraser told the Tribune in a statement. “I feel confident that it will stand up under their scrutiny since our process goes above and beyond the federal process.”

But Al Armendariz, the former head of the EPA’s Dallas office, said the agency rarely expresses concern about state legislation, and he could recall sending just two or three such letters each year to the five states in his region.

“I think they are probably well-served to take that letter seriously, because it is unusual,” Armendariz, now with the Sierra Club, said about the Legislature and industrial groups. “The ability of the public to engage with the regulatory agencies and the ability for the public to engage in courts are just fundamental bedrocks of these laws.”

Gray said could not speculate on what steps the EPA will take if Gov. Greg Abbott signs SB 709 into law.

“The state legislature has a long history of working with us to prevent withdrawal of a federally delegated program,” he told the Tribune.

Disclosure: The Sierra Club was a corporate sponsor of The Texas Tribune in 2011. A complete list of Tribune donors and sponsors can be viewed here.