SB2037

The Texas Commission on Environmental Quality must adopt rules for expedited review of applications to construct or modify a liquefied natural gas (LNG) export terminal. Applicants who choose that process must pay an additional fee set by TCEQ to cover expedited-review costs. The fee becomes part of the application fee and follows that fee’s deposit and use rules; the final act does not create the separate special account proposed earlier. The air-permit provision expressly applies these requirements to the specified construction/modification permits and renewals under Health and Safety Code 382.055. Final law, new Water Code 5.559 and Health and Safety Code 382.056(n-1).

TCEQ may use overtime, additional full-time-equivalent employees supporting expedited reviews, or contract labor. That authorized staffing is excluded from the otherwise allotted employee-count calculation. TCEQ may pay the specified compensation and set overtime rates. These are staffing powers, not a stated appropriation or a requirement to hire a particular number of people. Final law, 5.559(c)–(d).

For the covered construction/modification applications and renewals, the executive director must provide the required responses to relevant and material public comments within 120 days after the public-comment period closes. This is a response deadline, not a 120-day permit-approval deadline. The act adds it to both the Water Code comment-response provision and the specified air-permit provision; it is not conditioned in those provisions on paying for expedited review. Final law, sections 1 and 3; Existing comment-response duty; Existing air-permit notice and comment process.

A party requesting a covered contested-case hearing must state each reason it is an “affected person.” The incorporated definition requires a personal legal or economic interest; an interest shared by the general public alone is insufficient. In a covered contested case, an administrative law judge must conduct the preliminary hearing within 60 days after the executive director refers the application to the State Office of Administrative Hearings. The judge may grant one extension of up to 15 days at a party’s request. That is a preliminary-hearing deadline, not a deadline to finish the entire case. Final law, 5.559(e)–(f); Affected-person definition.

The existing hearing-request and direct-referral procedures remain relevant; SB2037 changes the air-law wording from “public” to “contested case” hearing in the cross-reference, while retaining the separate federal-operating-permit exception. It does not grant a contested-case hearing to anyone merely because they ask, remove the ordinary affected-person requirements, or repeal the underlying air-permit approval standards. Applications already pending on September 1, 2025 remain governed by the earlier law. Final law, sections 3–5; Hearing-request rules; Direct referral; Separate federal-operating-permit hearing process; Air-permit approval standards.

Changes during passage: The original bill proposed a 30-day preliminary hearing, mandatory referral on a hearing request, and a restriction limiting the judge to the requester’s stated affected-person reasons. The Senate substitute added renewal/air-permit provisions, changed the 30-day requirement to setting a hearing date, and proposed a special fee account and an applicant-response procedure. Sparks’s adopted Senate amendment replaced the special account with ordinary application-fee treatment. Johnson’s adopted amendment removed the restriction on the judge’s affected-person evidence and the special applicant-response deadline, while retaining the requester’s duty to state its reasons. Introduced; Senate substitute; Sparks amendment; Johnson amendment; Senate-passed.

The House substitute required actually conducting the preliminary hearing within 60 days, with one possible 15-day extension, and expressly applied the new requirements to the specified air permits and renewals. Patterson’s adopted House amendment added the staffing and overtime powers and removed the specific Water Code 5.701 fee cross-reference, leaving the general application-fee treatment. All three floor amendments were checked; the Senate concurred May 26. The removed evidence restriction, special account and 30-day scheduling language are not the final rules. House substitute; House amendment; Amendment index; Version index; Final law.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Developers can choose to pay for faster agency processing, and all parties in covered cases gain clearer response and preliminary-hearing timetables. Nearby residents and other hearing requesters still need to establish their qualifying interest and prepare for the faster schedule. TCEQ gains staffing flexibility but must administer the fee and process. The act does not establish a project’s environmental safety, guarantee a permit, eliminate other approvals or prove jobs, export gains or reduced pollution. Current rules, individual permits and actual processing times were not verified here. Final law.

The final fiscal note says the fiscal impact is indeterminate because application volumes, timing and fees are unknown. It assumes agency costs can be absorbed and expedited-review costs paid from fees, with no significant local-government impact. Its planning assumptions—13 existing/planned facilities, three referred cases in 2026 and one yearly in 2027–30, averaging 385 staff hours each—are forecasts, not actual permit or case counts. The act makes no appropriation. Final fiscal note.

The fiscal note continues to describe deposits into Water Resource Management Account 153 under section 5.701, but Patterson’s final amendment removed the specific statutory cross-reference. The enacted rule is to deposit and use the extra fee like the underlying application fee; the note’s account discussion should not be treated as a universal new statutory dedication for every covered permit. The introduced note’s “no significant” estimate and the committee note’s proposed special account likewise must not replace the final text. Final law; Final fee amendment; Existing fee framework; Introduced estimate; Senate-substitute estimate.