According to the Legislative Budget Board (LBB), the fiscal implications of SB 2037 cannot be precisely determined at this time, primarily due to uncertainty about the number and timing of expedited liquefied natural gas (LNG) terminal permit applications that would be submitted under the new process. While the bill authorizes the Texas Commission on Environmental Quality (TCEQ) to charge an additional fee for expedited permit review, the amount of revenue this would generate depends on voluntary participation by permit applicants—a variable that remains unknown.

The bill creates a dedicated special account within the General Revenue Fund to receive these new fees. Funds deposited into this account would be used exclusively to administer the expedited permit review process. Although this mechanism establishes a new revenue source and enables potential appropriations, it does not in itself appropriate any funds. Any appropriation from this account would require legislative action and be subject to the Legislature’s funds consolidation review process.

Despite the uncertain revenue implications, the agencies involved—namely the TCEQ and the State Office of Administrative Hearings (SOAH)—indicate that any associated administrative costs could be absorbed using existing resources. SOAH projects that three LNG-related contested cases could occur in FY2026, with one case per year from FY2027 through FY2030. Each case is expected to require an average of 385 staff hours to complete. However, no significant impact is anticipated for local governments.

In summary, while SB 2037 could lead to increased administrative activity and fee collections associated with LNG permitting, the actual fiscal impact on the state remains indeterminate without additional data on applicant participation.

SB 2037 represents a strategic effort by the Texas Legislature to support the state’s liquefied natural gas (LNG) industry by streamlining the environmental permitting process for the construction or modification of LNG export terminals. The bill’s policy objective is clearly stated in the bill analysis: to enhance Texas’s competitive position in the global energy market by mitigating delays in permitting, particularly those arising from the state’s contested case hearing procedures. These delays, as noted, can extend approval timelines for even minor permit amendments to several years—placing Texas at a disadvantage relative to other energy-producing states like Louisiana.

The bill does this by establishing a rulemaking mandate for the Texas Commission on Environmental Quality (TCEQ) to create an expedited permit application review process, including a fee-based system to fund faster review. It also imposes a structured and transparent process for contested case hearings. The administrative law judge at the State Office of Administrative Hearings (SOAH) is limited to evaluating whether a party is an "affected person" only on the basis of clearly stated criteria in the hearing request and responses from the permit applicant. These provisions are crafted to reduce procedural ambiguity and limit litigation-related delays while preserving the public’s opportunity to comment and contest where appropriate.

While the fiscal note acknowledges uncertainty in the financial impact due to unknown fee revenue and application volume, it also concludes that any implementation costs could be absorbed by agencies using existing resources. The bill’s structure ensures that new fees will be deposited in a special account and used only to administer the expedited process, further supporting a fiscally responsible approach.

Given its targeted reform, alignment with liberty principles, and positive economic implications, Texas Policy Research recommends that lawmakers vote YES on SB 2037.

• Individual Liberty: The bill does not significantly alter the broader scope of individual freedoms or civil liberties. While it narrows the criteria for who can initiate contested case hearings, it does not eliminate public participation in environmental permitting. Instead, it channels that participation through a more defined and transparent process. Because it does not interfere with personal choices, expressive rights, or freedom of association, its net effect on individual liberty is neutral.
• Personal Responsibility: By requiring contested case hearing requestors to clearly articulate why they qualify as an "affected person," and by allowing permit applicants to formally respond within a set timeframe, the bill enforces accountability on both sides of the permitting process. The procedural clarity encourages responsible, good-faith participation in environmental permitting rather than speculative or obstructive litigation tactics. It demands due diligence from all parties, reinforcing the idea that individuals and businesses alike must be prepared to justify their claims or development plans under structured rules.
• Free Enterprise: The bill is primarily aimed at removing procedural inefficiencies that impede economic activity, especially in the growing liquefied natural gas (LNG) sector. By establishing an expedited permit review process through the Texas Commission on Environmental Quality (TCEQ), it enables LNG developers to proceed with construction or modification projects more predictably and efficiently. This kind of regulatory streamlining reduces time-to-market delays and administrative overhead for businesses, thus promoting economic competitiveness and private investment—especially vital as global LNG demand grows and Texas seeks to maintain a leadership role in exports​.
• Private Property Rights: The bill enhances property rights by reducing barriers to land use for lawful industrial purposes, such as LNG export terminal development. For private landowners and leaseholders, quicker regulatory timelines mean they can exercise their development rights without undue delay caused by extended administrative proceedings or prolonged litigation. The bill ensures a reasonable opportunity for affected parties to be heard but narrows standing in contested cases to those who clearly demonstrate relevant impacts, which limits the use of procedural tools to block otherwise lawful land uses.
• Limited Government: The legislation reflects a restrained view of government by mandating procedural efficiency rather than expanding state regulatory power. It does not create new regulatory burdens or expand enforcement authority; instead, it clarifies responsibilities, tightens deadlines, and defines the scope of participation in contested cases. Importantly, it creates a self-funding mechanism for expedited reviews through user-paid fees, rather than relying on new tax revenues. These are classic limited-government mechanisms: more efficiency, less red tape, and no unfunded mandates.

Protecting Texas LNG: Key Legislative Findings and Future Recommendations

• HB 3997 (Same As)