JD Key Consulting Logo
Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB2037

Regular Session

Relating to permit application review and contested case procedures for environmental permits involving a project to construct or modify a liquefied natural gas export terminal; authorizing a fee.

Government Affairs & Regulatory Compliance Analysis

SB2037: Government Affairs Overview

Senate Bill 2037 establishes a voluntary, fee-based "fast-track" permitting process specifically for Liquefied Natural Gas (LNG) export terminals. This legislation mandates strict deadlines for the Texas Commission on Environmental Quality (TCEQ) regarding public comment responses and compresses the timeline for State Office of Administrative Hearings (SOAH) proceedings, fundamentally accelerating project development schedules effective September 1, 2025.

Sen. Kevin Sparks·Senate Bill·Regular Session

Moderate
Medium Cost
Effective:2025-09-01
Business Impact

Who SB2037 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

⚡

Energy

Affected business types:

  • Power generators
  • Electric utilities
  • Renewable energy developers
  • Battery storage operators
View all energy legislation

Key Operational Considerations

  • 1Technical Staff: Internal engineering teams must be prepared to support TCEQ staff on an overtime basis (funded by the new fee) to draft technical responses to public comments rapidly.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

SB2037
Moderate
Relating to permit application review and contested case procedures for environmental permits involving a project to construct or modify a liquefied n...
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
SOAHTCEQ
Primary Author: Sen. Kevin Sparks
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: Immediate for any application filed on or after September 1, 2025. Applications filed prior to this date remain under former law.
  • Agency Rulemaking: TCEQ must adopt rules to establish the specific surcharge amount and administrative process for the expedited review. Expect a "regulatory gray zone" in late 2025 where the statutory right exists, but the fee mechanism is not yet operational.

Immediate Action Plan

  • Audit Project Pipeline: Identify any permit applications scheduled for filing in Q3 2025; delay filing until September 1, 2025, to ensure eligibility for the expedited track.
  • Update CapEx Models: Insert a placeholder line item for "Expedited Permitting Surcharges" in 2025-2026 project budgets.
  • Monitor Rulemaking: Assign regulatory counsel to track the TCEQ docket regarding the fee structure to ensure the final rule provides cost certainty.
  • Brief Outside Counsel: Notify external litigation counsel immediately regarding the 60-day SOAH preliminary hearing deadline to adjust litigation strategies.

Operational Changes Required

Contracts

  • Environmental Consultants: Amend Master Service Agreements (MSAs) to align consultant deliverables with the new statutory deadline requiring TCEQ to respond to comments within 120 days. Include penalties for consultant delays that jeopardize the expedited timeline.
  • EPC Agreements: Update "Permit Issuance" definitions and "Notice to Proceed" triggers in Engineering, Procurement, and Construction contracts to reflect the accelerated regulatory timeline, preventing misalignment on mobilization dates.

Hiring/Training

  • Legal Counsel: Litigation teams must be trained on the compressed SOAH schedule; the Preliminary Hearing must now occur within 60 days of case referral. Standard delay tactics and extended discovery windows are no longer viable.
  • Technical Staff: Internal engineering teams must be prepared to support TCEQ staff on an overtime basis (funded by the new fee) to draft technical responses to public comments rapidly.

Reporting & Record-Keeping

  • Application Election: You must affirmatively elect the "Expedited Permit Application Review Process" at the time of filing the initial application (likely via a checkbox on Form PI-1 or similar).
  • Standing Challenges: When defending against contested case hearing requests, legal teams must document whether the protestant "specified each reason" for their affected person status. Vague assertions are now statutorily insufficient and should be moved for dismissal immediately.

Fees & Costs

  • Expedited Surcharge: Budget for a new, non-refundable surcharge. The amount is currently TBD but is statutorily authorized to cover TCEQ overtime and contract labor costs. This will be an addition to standard application fees.

Strategic Ambiguities & Considerations

  • Fee Structure: The statute allows fees to cover "costs incurred," including overtime, but does not set a cap. We must monitor TCEQ rulemaking to advocate for a fixed fee schedule rather than an unpredictable "cost-plus" model.
  • Service Guarantee: The law authorizes the fee but does not explicitly mandate a refund if TCEQ fails to meet the expedited deadlines due to staffing shortages.
  • "Affected Person" Interpretation: It remains unclear how strictly SOAH will interpret the new requirement for protestants to "specify each reason" for standing. Initial rulings will be critical in determining if this effectively curbs frivolous protests.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 7, 2025
Passed Senate
Apr 24, 2025
Passed House
May 21, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsEnergyEnergy--generalEnvironmentEnvironment--generalOil & GasPermitsAdministrative Hearings, State Office ofEnvironmental Quality, Texas Commission OnFees & Other Nontax RevenueFees & Other Nontax Revenue--state
03

Senate Authors

Sen. Kevin SparksRepublican · Primary Author
Coauthors (3)

House Sponsors

Rep. Jared PattersonRepublican · Primary Sponsor
Joint Sponsors

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Sen. Kevin Sparks

View all bills by Sen. Kevin Sparks

Related by Topic

View more Energy legislation
Quick Reference

Frequently Asked Questions

Common questions about SB2037

Q

What does Texas SB2037 do?

Senate Bill 2037 establishes a voluntary, fee-based "fast-track" permitting process specifically for Liquefied Natural Gas (LNG) export terminals. This legislation mandates strict deadlines for the Texas Commission on Environmental Quality (TCEQ) regarding public comment responses and compresses the timeline for State Office of Administrative Hearings (SOAH) proceedings, fundamentally accelerating project development schedules effective September 1, 2025.

Q

Who authored SB2037?

SB2037 was authored by Texas Senator Kevin Sparks during the Regular Session.

Q

When was SB2037 signed into law?

SB2037 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB2037?

SB2037 is enforced by State Office of Administrative Hearings (SOAH) and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in SB2037?

The regulatory priority for SB2037 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB2037?

The cost impact of SB2037 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does SB2037 address?

SB2037 addresses topics including energy, energy--general, environment, environment--general and oil & gas.

Q

What are the key dates for SB2037?

Key dates for SB2037: Effective date is 2025-09-01. Rulemaking: Establish the expedited permit application review process and determine the specific fee amount required to cover expedited review costs. (Prior to implementation (Post-Sept 1, 2025)). Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB2037?

SB2037 primarily affects energy companies and power generators. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026