Rural Texas Industrial Compatibility Act:
By: ______________________________ ______.B. No. ______
A BILL TO BE ENTITLED AN ACT
relating to the siting of certain industrial facilities on rural land, including utility-scale renewable generation, energy storage, and data centers; requiring a state compatibility permit; authorizing fees and administrative and civil penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act may be cited as the Rural Texas Industrial Compatibility Act.
SECTION 2. Title 7, Local Government Code, is amended by adding Chapter 248 to read as follows:
CHAPTER 248. RURAL INDUSTRIAL COMPATIBILITY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 248.001. DEFINITIONS. In this chapter:
(1) “Affected neighbor” means:
(A) the owner or lawful occupant of a habitable structure any part of which is located not more than one mile from the project boundary; or
(B) the owner or lawful occupant of land that is located not more than one mile from the project boundary and that is appraised under Subchapter C or D, Chapter 23, Tax Code, or is used for the raising or keeping of livestock.
(2) “Commission” means the Texas Commission on Environmental Quality.
(3) “Covered project” means a new facility, or an expansion of an existing facility that increases the facility’s aggregate capacity, peak electrical demand, equipment floor area, or developed acreage by 25 percent or more, that is:
(A) a solar power facility, as defined by Section 302.0001, Utilities Code, with a nameplate capacity of 10 megawatts or more;
(B) a wind power facility, as defined by Section 301.0001, Utilities Code, with a nameplate capacity of 10megawatts or more;
(C) an energy storage facility, including a battery energy storage facility subject to Chapter 303, Utilities Code, with a nameplate capacity of 10 megawatts or more;
(D) a data center; or
(E) a combination of two or more uses described by Paragraphs (A) through (D), or of equipment that would constitute those uses if it met a standalone threshold, if the uses are on the same site or under common ownership or control and share a project boundary, substation, point of interconnection, water system, or access road, and if:
(i) the sum of nameplate capacities of solar, wind, and energy storage equals 10 megawatts or more;
(ii) the sum of those nameplate capacities plus the estimated peak electrical demand of any data processing, storage, mining, training, or transmission load equals 20 megawatts or more;
(iii) equipment floor area used for data processing, storage, mining, training, or transmission equals 50,000 square feet or more; or
(iv) developed acreage for the combined uses equals 50 acres or more.
(4) “Data center” means a facility, building, hall, or portion of a facility a substantial purpose of which is the housing of computer systems and associated electrical, cooling, and network infrastructure for data processing, storage, mining, training, or transmission, and that:
(A) has an estimated peak electrical demand of 20 megawatts or more;
(B) will contain 50,000 square feet or more of equipment floor area; or
(C) is part of a combination described by Subdivision (3)(E).
(5) “Department” means the Department of Agriculture.
(6) “Habitable structure” means a structure occupied as a residence, including a manufactured home, or used as a place of worship, a school, a hospital, or a licensed care facility.
(7) “Independent qualified professional” means a person who holds a license or professional registration appropriate to the study the person prepares, is not an employee of the applicant or of an affiliate of the applicant and has no financial interest in the covered project other than a fixed fee paid through the commission.
(8) “Industrial-compatible site” means a tract that, on the date an application under this chapter is filed:
(A) is zoned by a municipality for industrial use, heavy commercial use, or an equivalent use;
(B) lies wholly within a municipally designated industrial park or a county industrial overlay designated under Section 248.101; or
(C) has been in lawful, continuous industrial or mining use, other than oil and gas well operations standing alone, for at least the five years preceding that date.
(9) “Livestock” has the meaning assigned by Section1.003, Agriculture Code.
(10) “Project boundary” means the outer perimeter of all land used for the covered project, including equipment yards, substations, stormwater facilities, collector lines, and access roads constructed primarily to serve the project.
(11) “Reasonable interconnection distance” means 15 miles measured from an existing or certificated transmission line of 69 kilovolts or greater, or a shorter distance set by commission rule.
(12) “Rural land” means real property that is located outside the corporate boundaries of a municipality and is not an industrial-compatible site.
(13) “Wildlife agency” means the Parks and Wildlife Department.
Sec. 248.0015. ANTI-SEGMENTATION. Capacity, demand, floor area, and acreage under Section 248.001(3) are additive. A person may not avoid this chapter by dividing a project into phases, parcels, affiliates, or separate applications, by assigning generation, storage, and load to different legal entities that share a site, interconnection, or operator, or by treating a use as below threshold because that use, standing alone, does not meet Section 248.001(3)(A), (B), (C), or (D).
Sec. 248.002. APPLICABILITY. (a) This chapter applies to a covered project proposed to be constructed or operated on rural land.
(b) This chapter does not apply to:
(1) a covered project located entirely on an industrial-compatible site;
(2) generation or energy storage installed primarily to serve a single on-site agricultural, residential, or ranching use and not operated as a wholesale generation or storage resource;
(3) a facility owned and operated by a municipality on land owned by the municipality; or
(4) an activity that consists solely of oil and gas exploration, development, or production regulated under Title 3, Natural Resources Code.
(c) This chapter does not limit municipal zoning authority under Chapter 211. A municipal zoning or special use approval does not excuse compliance with this chapter for a project located on rural land.
Sec. 248.003. PERMIT REQUIRED. (a) A person may not construct, interconnect for commercial operation, take electric service as a large load, or place in service a covered project on rural land unless the person holds a rural industrial compatibility permit issued by the commission under this chapter. This subsection applies whether or not the project interconnects to the ERCOT transmission system or to another grid.
(b) A permit issued under this chapter runs with the land and binds each successor, assign, and operator.
(c) For purposes of this section, construction includes site clearing, mass grading, and installation of foundations or equipment pads.
(d) Approval of a plat under Chapter 232 does not authorize a covered project on rural land.
SUBCHAPTER B. APPLICATION AND STUDIES
Sec. 248.011. ADMINISTRATION; RULES. (a) The commission shall administer this chapter.
(b) The commissioners court of each county in which any part of a covered project is proposed is a party to the permit proceeding, is entitled to a complete copy of the application and each study and shall appoint members to the local review panel as provided by Section 248.021.
(c) The commission shall adopt rules and forms to implement this chapter not later than December 1, 2027, in consultation with the department, the wildlife agency, the Public Utility Commission of Texas, the Texas Water Development Board, the Texas Department of Transportation, the state fire marshal, the Railroad Commission of Texas, and the Texas Military Preparedness Commission.
(d) The commission shall maintain a roster of independent qualified professionals eligible to prepare studies under Section 248.013. The commission shall remove from the roster a person who submits a study that the commission finds, after notice and opportunity for hearing, to be materially false or to conceal a disqualifying interest.
Sec. 248.012. APPLICATION. An application must include:
(1) the legal description of each parcel in the project boundary, the current tax appraisal category of each parcel, and a map identifying each habitable structure, each tract used for livestock, and each well known to the applicant within one mile of the project boundary;
(2) a written statement of why the project is not proposed for an industrial-compatible site, including each alternative site within a reasonable interconnection distance that was considered and the reason the site was rejected;
(3) each independent study required by Section 248.013;
(4) a nuisance-mitigation and livestock-protection plan;
(5) a water-supply plan that identifies each source of water, the maximum annual and peak daily volume from each source, each drought contingency measure, each cooling method for a data center, and each groundwater conservation district with jurisdiction;
(6) an emergency-response plan coordinated in writing with the county fire marshal and, for an energy storage facility, filed in compliance with Chapter 187, Utilities Code;
(7) proof of financial assurance required by Chapter 301, 302, or 303, Utilities Code, and, if any part of the project is on land appraised under Subchapter C or D, Chapter 23, Tax Code, or is a data center, financial assurance sufficient to restore agricultural soils and remove project improvements as required by the land-and-soils study;
(8) a list of each federal, state, and local authorization required for the project and the status of each authorization, including any Federal Aviation Administration filing and any pipeline or well regulated by the Railroad Commission of Texas within 500 feet of the project boundary;
(9) if the project uses a state highway or farm-to-market road, a proposed road-use plan; and
(10) the fees required by Section 248.042.
Sec. 248.013. INDEPENDENT STUDIES. (a) The studies required by this section must be prepared by independent qualified professionals selected from the roster maintained under Section 248.011. The applicant shall pay the cost of each study. The professional’s contract is with the commission and not with the applicant. A report prepared by or solely for the applicant does not satisfy this section.
(b) An application must include:
(1) an air study of construction and operational emissions, including backup generation, concrete batching, and fugitive dust, and a demonstration that the applicant will not segment sources to avoid major-source review;
(2) a land-and-soils study that maps prime farmland and farmland of statewide importance using Natural Resources Conservation Service data, inventories subsurface drain tile, assesses erosion and compaction risk, and states a restoration standard sufficient to return disturbed land to a tillable condition reasonably comparable to preconstruction conditions;
(3) a water study of surface-water and groundwater demand and return flows, aquifer effects measured against applicable desired future conditions, stormwater and spill risk, and reasonably foreseeable effects on domestic and livestock wells within one mile of the project boundary;
(4) a biological study of habitat, migratory corridors, and species of greatest conservation need, in a form usable by the wildlife agency; and
(5) a nuisance and agricultural-compatibility study that models noise, including low-frequency noise, glare and lighting, construction and operational traffic, dust, and reasonably foreseeable effects on livestock health, breeding, and grazing on adjoining land, based on published veterinary or agricultural sources and site conditions.
(c) Each study must identify data gaps, state each material assumption, and be signed by the independent qualified professional who prepared the study. A person who signs a study under this section is subject to Section 37.10, Penal Code.
(d) The commission shall reject a study that is not prepared by a person on the roster or that is prepared by a person with a disqualifying interest.
Sec. 248.014. NOTICE. (a) Not later than the 30th day after the date the commission declares an application administratively complete, the applicant shall:
(1) mail written notice to each affected neighbor, the county judge of each affected county, each groundwater conservation district with jurisdiction, each school district in which any part of the project is located, the department, and the Texas Department of Transportation if a state highway or farm-to-market road will be used;
(2) publish notice once a week for two consecutive weeks in a newspaper of general circulation in each affected county; and
(3) post notice at the county courthouse and at two public places in the vicinity of the proposed site.
(b) Notice must describe the project, identify where the application and studies may be inspected, state the date, time, and place of the local hearing, and describe the right to request party status.
SUBCHAPTER C. REVIEW, STANDARDS, AND DECISION
Sec. 248.021. LOCAL REVIEW PANEL; CONTESTED CASE. (a)The commission shall convene a local review panel for each application. The panel is composed of:
(1) two members appointed by the commissioners court of the county in which the greater part of the project boundary is located, or one member appointed by each commissioners court if the project is located in more than one county;
(2) one member appointed by the department;
(3) one member appointed by the commission; and
(4) one member appointed by the wildlife agency.
(b) The panel shall hold at least one public hearing in a county in which the project is proposed after notice under Section 248.014. An affected neighbor may present evidence and question an independent qualified professional who prepared a study for the application. The panel shall file a written recommendation with the commission. The commission shall address the recommendation in its order.
(c) If an affected neighbor, a county in which the project is proposed, a groundwater conservation district with jurisdiction, or the department files a protest that is not withdrawn, the commission shall refer the application to the State Office of Administrative Hearings for a contested-case hearing under Chapter 2001, Government Code. The commission may not issue a permit until the administrative law judge issues a proposal for decision.
Sec. 248.022. STANDARDS FOR DECISION. (a) There is a rebuttable presumption that a covered project proposed on rural land is incompatible with surrounding uses if:
(1) any part of the project is located on land appraised under Subchapter C or D, Chapter 23, Tax Code; or
(2) any part of the project boundary is within 2,500 feet of a habitable structure or of land used for the raising or keeping of livestock.
(b) The applicant may rebut the presumption only by proving, by a preponderance of the evidence in the independent studies required by Section 248.013, that:
(1) no industrial-compatible site within a reasonable interconnection distance can host the project;
(2) effects on air, land, and water will be mitigated so as not to cause a significant adverse effect on neighboring wells, soils, or air quality; and
(3) nuisance effects on affected neighbors, including effects on livestock, will be reduced to the maximum extent practicable by setbacks, operational limits, and design.
(c) Except as provided by a recorded written waiver from each owner of the protected feature, a permit may not authorize:
(1) a solar array or energy storage container nearer than 1,000 feet to a habitable structure or 300 feet to a property line of nonparticipating land used for livestock;
(2) a wind turbine nearer than 3,000 feet to a habitable structure or 1,500 feet to a nonparticipating property line; or
(3) a data-center building, cooling yard, or substation wall nearer than 1,000 feet to a habitable structure or 500 feet to land used for livestock.
(d) The commission shall deny an application if:
(1) a study required by Section 248.013 is incomplete or is not independent;
(2) the water-supply plan relies on a source that the groundwater conservation district with jurisdiction, or the Texas Water Development Board if no district has jurisdiction, finds is not sustainable under current desired future conditions;
(3) the project would convert more than 100 acres of prime farmland, as mapped by the Natural Resources Conservation Service, unless the applicant demonstrates that no feasible alternative site exists within a reasonable interconnection distance and that topsoils will be segregated and restored;
(4) for an energy storage facility, a fire safety and emergency operations filing required by Chapter 187, Utilities Code, is incomplete;
(5) the applicant has, within the five years preceding the application date, been found in a final commission order to have submitted a false study or report under this chapter; or
(6) the applicant has failed to pay a fee or hearing charge required by Section 248.042 or 248.043.
(e) The commission shall grant the application, grant the application with conditions, or deny the application not later than the 180th day after the later of:
(1) the date the application is declared administratively complete; or
(2) the date the administrative law judge issues a proposal for decision, if a contested-case hearing is held.
(f) The failure of the commission to act in the time prescribed by Subsection (e) is not an approval of the application.
Sec. 248.023. PERMIT CONDITIONS. A permit issued under this chapter must include:
(1) noise, lighting, and glare limits measured at the property line of each tract owned or occupied by an affected neighbor;
(2) limits on hours of construction;
(3) livestock-protection measures, including fencing that does not unreasonably impede the movement of livestock on adjoining land and a complaint protocol that requires the operator to respond within 72 hours;
(4) preconstruction and annual monitoring of designated neighboring wells identified in the water study;
(5) drain-tile repair and soil-restoration standards consistent with the land-and-soils study;
(6) a prohibition on treating an operator affidavit, standing alone, as proof of compliance;
(7) the compliance-review schedule required by Section 248.031; and
(8) if the project uses a public road, a road-use condition, which may include a bond payable to the county or to the Texas Department of Transportation.
SUBCHAPTER D. COMPLIANCE REVIEW
Sec. 248.031. PERIODIC INSPECTION. (a) The commission shall inspect each project permitted under this chapter:
(1) at least once during construction;
(2) not later than the 180th day after the date commercial operation begins; and
(3) at least once every three years after the inspection under Subdivision (2) for the life of the project.
(b) An inspection must include field measurement of each permit condition capable of measurement, review of operating logs, and, if the project uses water, a comparison of actual withdrawal to the volumes stated in the water-supply plan.
(c) The operator shall file operating data required by commission rule. An operator certification is evidence of compliance only if accompanied by the underlying measurements.
Sec. 248.032. COMPLAINTS. An affected neighbor or a county in which the project is located may file a complaint with the commission alleging a violation of this chapter or of a permit. The commission shall investigate a complaint that alleges a measurable violation and shall issue a written finding not later than the 30th day after the date the complaint is received.
Sec. 248.033. MODIFICATION, SUSPENSION, OR REVOCATION. The commission may modify, suspend, or revoke a permit if the permit holder materially violates a permit condition, materially deviates from the water-supply plan or the nuisance-mitigation and livestock-protection plan, refuses an inspection required by this subchapter, or makes a false statement in a study or report required by this chapter.
SUBCHAPTER E. ENFORCEMENT AND FEES
Sec. 248.041. ENFORCEMENT. (a) A person who constructs or operates a covered project on rural land without a permit required by this chapter, or who violates a condition of a permit, is subject to an administrative penalty of not less than $5,000 and not more than $25,000 for each violation. Each day a violation continues is a separate violation.
(b) The commission may enforce this chapter as provided by Chapter 7, Water Code.
(c) The attorney general, or the county or district attorney of a county in which the project is located, may bring an action for injunctive relief to restrain a violation of this chapter, including a temporary restraining order against continuing construction.
(d) An affected neighbor who prevails in an action to enforce a condition of a permit issued under this chapter is entitled to recover reasonable attorney’s fees and court costs.
Sec. 248.042. FEES. (a) The commission by rule shall establish application, study-oversight, inspection, and other fees under this chapter. The commission shall set and adjust the fees at least once each fiscal year in an amount the commission projects is sufficient, together with money already in the account created under Section 248.043, to recover the commission’s costs of administering this chapter for that year, including a reasonable reserve.
(b) A fee under this section may not be waived.
(c) The commission shall publish the proposed fee schedule not later than July 1 of each year and adopt the schedule not later than September 1. The first fee schedule must be adopted not later than the date rules are adopted under Section 248.011.
(d) An application is not administratively complete until each required fee has been paid.
Sec. 248.043. RURAL INDUSTRIAL COMPATIBILITY ACCOUNT; SOAH PASS-THROUGH. (a) The rural industrial compatibility account is a dedicated account in the general revenue fund.
(b) The account consists of fees collected under Section 248.042, reimbursements collected under Subsection (e), penalties collected for a violation of this chapter except as otherwise provided by Chapter 7, Water Code, interest earned on money in the account, and appropriations, gifts, grants, and donations.
(c) Money in the account may be appropriated only to the commission to administer and enforce this chapter, including amounts necessary to pay the State Office of Administrative Hearings under Subsection (e) and to reimburse the department and the wildlife agency for costs of serving on a local review panel.
(d) Sections 403.095 and 404.071, Government Code, do not apply to the account.
(e) If an application is referred to the State Office of Administrative Hearings under Section 248.021, the applicant shall pay the actual costs of the referral. The commission shall require a deposit set by rule before the referral is forwarded, shall pay the office from that deposit and from the account, and shall refund any unused deposit or assess any remaining actual charges, including administrative law judge hours, travel, transcript and record costs billed to the commission, and related case expenses.
(f) Failure to pay a deposit or assessment under Subsection (e) not later than the 20th day after the date of the commission’s notice is a ground to suspend processing or to deny the application. A permit may not be issued until each amount due under this section is paid.
(g) Costs under Subsection (e) are in addition to fees under Section 248.042 and may not be waived.
SUBCHAPTER F. LOCAL AUTHORITY; OTHER LAW
Sec. 248.101. COUNTY INDUSTRIAL OVERLAY. (a) A commissioners court may, after notice and a public hearing, designate one or more industrial overlay districts in the unincorporated area of the county for covered projects.
(b) Designation of an overlay under this section is not zoning of other land uses and does not authorize the commissioners court to prohibit a lawful use other than as provided by this chapter.
(c) Land located wholly within an overlay designated under this section is an industrial-compatible site for purposes of Section 248.001.
(d) This section is an express grant of authority and is not limited by Chapter 231.
Sec. 248.102. RELATION TO OTHER LAW. (a) This chapter does not limit a municipal ordinance that imposes a stricter standard inside the corporate boundaries of the municipality.
(b) A county may not prohibit a covered project for which a permit has been issued under this chapter. A county may enforce this chapter, and the conditions of a permit issued under this chapter.
(c) Chapter 251, Agriculture Code, does not bar an action to enforce this chapter or a permit issued under this chapter.
(d) Except as provided by the Act enacting this chapter, Chapter 245 does not exempt a covered project on rural land from this chapter.
SECTION 3. Subchapter A, Chapter 232, Local Government Code, is amended by adding Section 232.0028 to read as follows:
Sec. 232.0028. COVERED PROJECTS ON RURAL LAND. Approval of a plat under this chapter does not authorize a covered project, as defined by Section 248.001, on rural land, as defined by that section, without a permit required by Chapter 248.
SECTION 4. Subchapter D, Chapter 37, Utilities Code, is amended by adding Section 37.0562 to read as follows:
Sec. 37.0562. INTERCONNECTION OR SERVICE OF CERTAIN RURAL INDUSTRIAL PROJECTS. (a) In this section, “covered project” and “rural land” have the meanings assigned by Section 248.001, Local Government Code.
(b) The commission, an electric utility, an electric cooperative, or a municipally owned utility may not approve or allow interconnection of, or commencement of retail or wholesale electric service to, a covered project located on rural land, including interconnection as a generation resource, an energy storage resource, or a large load, and including a behind-the-meter or private-use arrangement, unless the applicant files:
(1) a final rural industrial compatibility permit issued under Chapter 248, Local Government Code; or
(2) a determination by the Texas Commission on Environmental Quality that the project is not subject to that chapter.
SECTION 5. Section 23.55, Tax Code, is amended by adding Subsection (a-1) to read as follows:
(a-1) If the chief appraiser determines that land receiving an appraisal under this subchapter is being converted to a covered project as defined by Section 248.001, Local Government Code, the chief appraiser shall notify the Texas Commission on Environmental Quality, the comptroller, and the commissioners court of the county in which the land is located not later than the 10th day after the date of the determination.
SECTION 6. Section 36.113, Water Code, is amended by adding Subsection (d-2) to read as follows:
(d-2) In considering an application for a permit to supply water to a covered project as defined by Section 248.001, Local Government Code, a district shall consider the independent water study prepared under that chapter, if one has been prepared, and may not rely solely on a statement by the applicant of demand or availability.
SECTION 7. (a) Chapter 248, Local Government Code, as added by this Act, applies only to a covered project that, on June 1, 2028, has not both:
(1) acquired an enforceable right to use the site; and
(2) filed a complete interconnection request with the applicable independent system operator, electric utility, electric cooperative, or municipally owned utility, or a complete application with the Texas Commission on Environmental Quality for a construction authorization.
(b) A covered project that meets both criteria prescribed by Subsection (a) of this section is not required to obtain a rural industrial compatibility permit. If the project is located on rural land as defined by Section 248.001, Local Government Code, as added by this Act, the project is subject to Section 248.031, Local Government Code, as added by this Act, beginning January 1, 2028.
(c) A person may not begin construction of a covered project on rural land on or after January 1, 2028, without a permit required by Chapter 248, Local Government Code, as added by this Act.
SECTION 8. SEVERABILITY. (a) If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application.
(b) Without limiting Subsection (a), if a court holds invalid:
(1) the application of Chapter 248, Local Government Code, as added by this Act, to a particular class of covered project, the chapter remains in effect for every other class of covered project;
(2) a setback, presumption, study requirement, fee, penalty, or interconnection condition, the remainder of that chapter remains in effect; or
(3) Section 37.0562, Utilities Code, as added by this Act, Chapter 248, Local Government Code, as added by this Act, remains independently enforceable.
(c) The legislature declares that it would have enacted this Act, and each provision of this Act, regardless of the invalidity of any other provision.
SECTION 9. This Act takes effect September 1, 2027.
One Pager:
Rural Texas Industrial Compatibility Act
Nancy White 469-595-1691 Nancy.White.Consulting@proton.me
Rural counties cannot zone. Utility-scale solar, wind, battery storage, and data centers are being sited on farm and ranch land next to homes and livestock with no statewide compatibility review. This draft creates that review.
What the draft does:
– Requires a TCEQ rural industrial compatibility permit before site clearing, interconnection, large-load service, or commercial operation on unincorporated rural land.
– Requires independent studies of air, soil, water, wildlife, and effects on neighbors and livestock; not developer self-studies.
– Sets numeric setbacks from homes and livestock unless the owner records a waiver, and a water plan that must be sustainable under desired future conditions.
– Bars PUC, utilities, co-ops, and municipalities from hooking up a covered project until the permit is issued. Fees fund the program.
What it does not do:
– It does not ban a landowner from leasing or selling.
– It does not give counties general zoning power or rezone anyone’s land.
– It does not regulate oil and gas, on-farm power that is not a wholesale resource, or projects inside city industrial zoning or a county industrial overlay.
Ask:
Will you have Legislative Council review this draft and consider pre-filing a version after November 9 for the 90th session? I am not asking you to file this text unchanged.
I can meet with you for 20 minutes when available and would appreciate the opportunity to discuss this further and answer any questions.
Fiscal Note:
FISCAL NOTE — WORKING DRAFT
Rural Texas Industrial Compatibility Act
90th Legislature, Regular Session, 2027
For member packet use. Not an official Legislative Budget Board note.
Bill: Relating to the siting of certain industrial facilities on rural land; requiring a state compatibility permit; authorizing fees and penalties.
Agencies: Texas Commission on Environmental Quality (TCEQ); State Office of Administrative Hearings (SOAH); Department of Agriculture (TDA); Parks and Wildlife Department (TPWD); Public Utility Commission of Texas (PUC).
Local: Counties (review panel and local hearing).
ESTIMATED TWO-YEAR NET IMPACT TO GENERAL REVENUE RELATED FUNDS
Net GR impact through August 31, 2029: about $2.1 million in FY 2028 only, if a startup appropriation is made before fee collections begin. After FY 2028 the program is designed to be fee-supported from the Rural Industrial Compatibility Account.
Failure of TCEQ to act is not permit approval. Construction without a permit is barred beginning January 1, 2028, if the tightened transition dates are used.
ASSUMPTIONS (MID CASE)
New applications per year after FY 2029: 40
Share referred to SOAH: 40 percent (16 cases)
Inspection inventory by FY 2031: 150 sites
Inspections per year: 70
TCEQ FTEs: 14.0 in FY 2028; 16.0 from FY 2029
SOAH rate: $175 per ALJ hour; 120 hours per contested case
Rule deadline: December 1, 2027
Permit duty / no construction without permit: January 1, 2028
Fees under proposed Sec. 248.042 may not be waived. SOAH costs are billed to the applicant under proposed Sec. 248.043.
ALL FUNDS — MID CASE
FY 2028
TCEQ program: $2,203,000
SOAH (gross): $50,000
SOAH billed to applicants: ($20,000)
Estimated fee revenue: ($200,000)
Net GR / GR-D need: $2,033,000
FY 2029
TCEQ program: $2,203,000
SOAH (gross): $496,000
SOAH billed to applicants: ($496,000)
Estimated fee revenue: ($3,200,000)
Net GR / GR-D need: ($1,000,000)
Biennium
TCEQ program: $4,406,000
SOAH (gross): $546,000
SOAH billed to applicants: ($516,000)
Estimated fee revenue: ($3,400,000)
Net GR / GR-D need: $1,036,000
FY 2030 and after: TCEQ about $2.18 million; SOAH about $0.50 million, fully offset by applicant deposits and annual fees if collections are enforced.
TCEQ COST DETAIL
FY 2028
Salaries (14 FTEs): $1,260,000
Benefits (about 28 percent): $353,000
Travel, vehicles, meters: $180,000
IT, docketing, public notice: $250,000
Furniture / equipment: $120,000
Roster administration: $40,000
TCEQ subtotal: $2,203,000
FY 2029 and after
Salaries (16 FTEs): $1,440,000
Benefits (about 28 percent): $403,000
Travel, vehicles, meters: $220,000
IT, docketing, public notice: $80,000
Furniture / equipment: $20,000 in FY 2029, then $0
Roster administration: $40,000
TCEQ subtotal: $2,203,000
Suggested FTEs: 1 program supervisor; 6 permit technical staff; 4 inspectors; 2 attorneys; 1 admin/roster/fees; plus 2 term staff in FY 2028 for rules and forms.
Method of finance: new GR-Dedicated Rural Industrial Compatibility Account. FY 2028 may need a GR cash-flow advance, repaid from fees by August 31, 2029.
SOAH
Contested land-use cases are billed to TCEQ, then passed through to the applicant.
Mid case: 16 cases x 120 hours x $175 = about $336,000, plus transcripts of about $160,000.
No standing GR appropriation for hearing volume if Sec. 248.043 is enacted as drafted.
OTHER STATE AGENCIES
TDA: panel seat, protest rights, ag review. About 1.0 FTE / $130,000. Reimbursable from the account.
TPWD: panel seat, biological-study review. About 1.0 FTE / $130,000. Reimbursable from the account.
PUC: interconnection check under proposed Sec. 37.0562. Absorb or 0.5 FTE.
TWDB: DFC consult where no GCD. Absorb.
TxDOT / State Fire Marshal / RRC: notice and existing programs. Absorb.
LOCAL GOVERNMENT
No state appropriation to counties.
Per application:
Uncontested local hearing: about $3,000 to $8,000
County as a party at SOAH: about $15,000 to $50,000
Statewide at 40 applications / 16 contests: about $0.4 million to $1.0 million per year, paid locally.
The account may reimburse TDA/TPWD panel costs. It does not automatically pay county attorney fees.
No significant fiscal implication to municipalities. The chapter does not limit city zoning inside city limits.
SUGGESTED FEE SCHEDULE (FIRST YEAR)
Application: $75,000 base plus $250 per acre over 100 acres
Study oversight: actual TCEQ cost, billed quarterly
Inspection: $15,000 construction; $8,000 start-up; $6,000 periodic
SOAH deposit if protested: $25,000, true-up to actual hours
Forty applications at the base fee produce about $3.0 million before acreage add-ons and inspection fees.
REVENUE / PENALTY NOTE
Administrative penalties are $5,000 to $25,000 per violation per day. Penalty revenue is indeterminate and should not be used to score the bill as a revenue raiser.
RIDER LANGUAGE (TCEQ PATTERN BILL)
Rural Industrial Compatibility Account. Amounts appropriated above include an estimated $2,203,000 in fiscal year 2028 and $2,203,000 in fiscal year 2029 from the Rural Industrial Compatibility Account for administration of Chapter 248, Local Government Code. In addition, TCEQ is appropriated all fees and reimbursements deposited to the account during the biennium, not to exceed actual collections. TCEQ shall set fees each fiscal year to recover program costs. Unexpended balances as of August 31, 2028, are appropriated for fiscal year 2029. TCEQ shall collect SOAH costs from applicants and may not use General Revenue to pay those hearing costs except as a same-year cash-flow advance repaid from applicant deposits.
Contingency start-up. Contingent on enactment, $2,100,000 in General Revenue is appropriated to TCEQ for fiscal year 2028 to establish the program. TCEQ shall repay that amount to General Revenue from the account not later than August 31, 2029.
LBB ONE-PARAGRAPH SUMMARY
The bill creates a TCEQ permitting, inspection, and independent-study program for certain industrial facilities on rural land. TCEQ cannot absorb this with existing staff. Estimated need is 16.0 FTEs and about $2.2 million per year, plus SOAH costs passed through to applicants. Fees may not be waived. After FY 2028 the dedicated account is intended to cover the program. Counties will incur panel and hearing costs. No significant ongoing General Revenue impact is expected if fees are set at full cost.
Estimates only. Replace with agency submissions when LBB requests fiscal implications. Not legal or budget advice.
