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Background: The federal Environmental Protection Agency (EPA) asserts that it has authority under the Clean Air Act to regulate greenhouse gas (ghg) emissions. Under this asserted authority, the EPA has created a lengthy and expensive permitting process for large industrial ghg emitting projects. Texas sued EPA on the grounds that the Clean Air Act does not grant the agency authority to regulate ghg. Texas won the lawsuit at the appellate level but lost at the appeals level (DC Circuit Court of Appeals). The Court decided that the EPA does have the authority to regulate ghg but that emissions can be regulated at the state level in lieu of the EPA. The lawsuit is now headed to the United States Supreme Court. In the meantime, the regulation continues.
The effect of the EPA’s regulatory regime has been to sit on 64 permit applications submitted by Texas companies for projects that would pour millions of dollars into the economy and employ thousands of Texans. Texas currently no statutory basis for any state agency to regulate ghg emissions and issue permits. Texas businesses are stuck in an EPA permitting process that seems designed to never issue a permit, causing some to consider relocating to permit issuing states.
Summary: HB 788 amends the Health and Safety Code by authorizing the Texas Commission on Environmental Quality (TCEQ) to issue permits for ghg emissions. HB 788 would allow the TCEQ to take over the EPA's permitting role and bring the process down to the state level. This would allow the permits to be processed more efficiently and at less cost, providing greater regulatory certainty for Texas businesses and removing an incentive for some businesses to consider relocating outside of Texas.
Analysis: This bill presents a number of conflicts with TPPA’s liberty principles. Under ordinary circumstances we would not support what looks on its face to be a new state regulatory permitting regime for a substance that is not scientifically proven to be harmful or in need of regulation.
However, this bill must be considered within its proper context. The EPA already regulates ghg. HB 788 would simply transfer the regulatory jurisdiction from the EPA to TCEQ.
The administrative benefit of HB 788 is that it would allow permit applications to be processed in a timely manner by an agency that does not have a political agenda that is best served by stalling or refusing to issue permits. The economic benefit of HB 788 is that Texas businesses would be able to move forward with their projects and in the process hire thousands of people.
To be clear, we reject the EPA’s assertion that it has the authority to regulate greenhouse gasses. In fact, Congress has considered explicitly giving such authority to the EPA and has rejected the idea every time, including during the time when Nancy Pelosi was Speaker of the House. The EPA has clearly overstepped its authority in this area. And yet, the reality is they continue to regulate these emissions with judicial approval.
Texas cannot afford for regulatory delay to stymie growth, innovation, and economic development. The state must take the regulatory role away from the EPA so our businesses can have their permit applications processed and so that we can attract new business in our state.
One important provision of HB 788 is that in the event the Supreme Court strikes down the EPA regulations and removes the federal law, the state level regulations will be removed as well. The TCEQ regulations would only exist for as long the EPA’s regulation stands. Should the Supreme Court decide in Texas’ favor, or should Congress intervene, TCEQ would be required to rescind any regulations promulgated under the authority granted by this legislation.
Bearing this broader context in mind, we support HB 788 and encourage legislators to vote in favor of passage.