HBA-JRA H.B. 2390 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2390 By: Maxey Environmental Regulation 3/23/1999 Introduced BACKGROUND AND PURPOSE When the Texas Clean Air Act passed in 1971, all industrial facilities in existence or under construction at the time were exempted from the new pollution control requirements. Currently, more than 40 percent of the state's approximately 2,500 active industrial plants are at least partially grandfathered in this manner. According to the Texas Natural Resource Conservation Commission, grandfathered facilities are responsible for more than a third of all industrial air pollution. Seven counties are now in violation or near violation of federal air quality laws. Continuing to exempt these facilities from pollution control requirements increases the likelihood of more counties violating federal air quality laws and the imposition of more costly pollution controls on idividuals and other businesses, may increase the risk of losing federal highway funds, and may give grandfathered facilities an unfair competitive advantage should restructuring of the electric power industry take place. H.B. 2390 requires grandfathered facilities to come into compliance with current permitting procedures by June 1, 2001, eliminates the cap on emissions fees, and allows the increased revenue to be used for air quality programs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Natural Resource Conservation Commission in SECTION 1 (Section 382.0519, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter C, Chapter 382, Health and Safety Code, by adding Section 382.0519, as follows: Sec. 382.0519. EMISSIONS PERMIT FOR FACILITY FORMERLY EXEMPTED. (a) Prohibits a person from operating a facility that was exempted from permit requirements under Section 382.0518(g), as that section existed on May 31, 2001, on or after June 1, 2001, without an emissions permit for the facility issued under this section or another appropriate permit issued under this subchapter. (b) Requires the Texas Natural Resource Conservation Commission (TNRCC), by rule, to provide a process for applications for and contested hearings regarding an emissions permit under this section. Provides that the rules must provide for at least one hearing, to be held in the locality of the facility for which the permit application is made, for public comments on each application if requested by an affected party. Requires TNRCC to grant a permit to a facility exempted from permit requirements under Section 382.0518(g), as that section existed on May 31, 2001, if after a hearing TNRCC finds that the facility will use at least the best available control technology, considering the technical practicability and economic reasonableness of reducing or eliminating the emissions resulting from the facility, and no indication that the emissions from the facility will contravene the intent of this chapter, including protection of the public's health and physical property. (c) Requires TNRCC, in considering the issuance, amendment, or renewal of an emissions permit, to consider the results of a review of the facility's emissions on the public health, as provided by TNRCC rules. Authorizes TNRCC to consider an adjudicated decision or compliance proceeding during the five years prior to the application being filed that addressed the applicant's past performance and compliance with the statutes, rules, and regulations of this state, another state, or the United States governing air contaminants or any permit or order issued by TNRCC. (d) Prohibits TNRCC from granting a permit if it finds that the emissions from the proposed facility will contravene the standards under Subsection (b) or will contravene the intent of this chapter and requires TNRCC to set out its specific objections to the submitted plans of the proposed facility in a report to the applicant. (e) Requires TNRCC to grant the permit if the applicant makes alterations in the plans and specifications to meet TNRCC's specific objections. Prohibits TNRCC from granting the permit if the person fails or refuses to alter the plans and specifications. Authorizes TNRCC to refuse to accept a person's new application until its objections to the previous plan are satisfied. (f) Requires TNRCC to take final action on a permit application within 24 months of receipt of an administratively complete permit application that was originally filed between September 1, 1999, and June 1, 2001; and within 18 months of receipt of an administratively complete application filed on or after June 1, 2001. (g) Authorizes an applicant to obtain judicial review under Section 382.032 (Appeal of Commission Action) if the commission fails to take final action within the specified time. Authorizes a reviewing court to order TNRCC to act on the application without additional delay if it finds that its failure to act is arbitrary or unreasonable. (h) Requires TNRCC, by rule, to provide for an emissions permit to be conditioned on the facility completing all equipment improvements and achieving all emissions reductions within two years of the issuance of the permit; provide a process for extending the time limit if TNRCC determines improvements and reductions are not feasible within the time limit but can be accomplished expeditiously; provide that a facility that does not accomplish the required improvement and reductions the facility must cease operation until they are complete; establish a maximum terms of 10 years for an emissions permit; set a renewal deadline which precedes the expiration date of a permit; adopt general requirements for a permit renewal application; and establish procedures for reviewing and acting on renewal applications. (i) Requires TNRCC to provide written notice to the permit holder, by registered or certified mail, at least 180 days before the renewal application deadline, that the permit is scheduled for review. Provides that the notice must include a description of the permit renewal application filing procedure and the information that must be included in the application. (j) Requires TNRCC to consider the facility's compliance history and the condition and effectiveness of the facility's emission control equipment and practices in determining whether and under which conditions an emissions permit should be renewed. (k) Requires TNRCC to impose as a condition for renewal of an emissions permit only those requirements it determines to be economically reasonable and technically practicable considering the age of the facility and the effect of its emissions on the surrounding area. Prohibits TNRCC from imposing requirements more stringent than those of the existing permit unless it determines that more stringent requirements are necessary to avoid a condition of air pollution or to ensure compliance with otherwise applicable federal or state air quality control requirements. Prohibits TNRCC from imposing requirements less stringent than those of the existing permit unless it determines that a proposed change will meet the requirements of this section and Section 382.0541 (Administration and Enforcement of Federal Operating Permit). (l) Requires TNRCC, within 180 days of the application for renewal being filed, to renew the permit of a facility that it determines meets the requirements for permit renewal or, if it determines that the facility will not meet the requirements, set out in a report to the applicant the basis for its determination and establish a schedule to which the applicant must adhere in meeting TNRCC's requirements that includes a final date for meeting the requirements and requires completion of that action as expeditiously as possible. (m) Requires TNRCC to renew the permit if the applicant meets the requirements in accordance with the schedule. Provides that the applicant must show in a contested case proceeding why the permit should not expire immediately if the applicant does not meet those requirements in accordance with the schedule. Provides that the applicant's permit is effective until the final date specified by TNRCC's report to the applicant, the existing permit is renewed, or the date specified by a TNRCC order issued following a contested case proceeding held under this section. (n) Provides that a permit expires according to its terms if the holder to whom TNRCC has mailed notice under this section does not apply for renewal within the specified time period. (o) Provides that this section does not affect TNRCC's authority to issue an order under Subchapter L (Emergency and Temporary Orders), Chapter 5, Water Code, or to begin an enforcement action under Chapter 7 (Enforcement), Water Code. SECTION 2. Amends Section 382.0541(c), Health and Safety Code, to make conforming changes. SECTION 3. Amends Section 382.056(a), Health and Safety Code, to make conforming changes. SECTION 4. Amends Section 382.057(a), Health and Safety Code, to make conforming changes. SECTION 5. Amends Section 382.062(a), Health and Safety Code, to make conforming changes. SECTION 6. Amends Section 7.177(a), Water Code, to include intentional or knowing violation of Section 382.0519(a), Health and Safety Code, among the actions which constitute an offense. SECTION 7. (a) Repealer: Section 382.0621(d), Health and Safety Code, prohibiting TNRCC from imposing an operating permit fee for any amount of emissions of an air contaminant regulated under the federal Clean Air Act Amendments of 1990 (Pub.L. No. 101-549) in excess of 4,000 tons per year from any source. (b) Authorizes any increase in the amount of operating permit fees collected that results from the repeal of Section 382.0621(d), Health and Safety Code, to be applied to the small business stationary source technical and environmental compliance assistance program and the costs of public hearings held in the locality of a facility for which a permit application is made under Section 382.0519, as added by this Act, and any other clean air program funded by fees on emissions of air contaminants. SECTION 8. (a) Repealer: Section 382.0518(g), Health and Safety Code, granting an exemption from permitting requirements for a person who has executed a contract or has begun construction for an addition, alteration, or modification to a new or an existing facility on or before August 30, 1971, but not later than February 29, 1972, and who has complied with the requirements of Section 382.060, as it existed on November 30, 1991. (b) Provides that this section takes effect June 1, 2001. SECTION 9. Authorizes a person to continue operating a facility that is subject to Section 382.0519(a), Health and Safety Code, as added by this Act, until final action is taken on the application if on June 1, 2001, the permit application is pending before TNRCC and TNRCC has determined that the application is administratively complete. SECTION 10. (a) Prohibits TNRCC from initiating an enforcement action against a person for an act that violates Chapter 382 (Clean Air Act), Health and Safety Code, or a rule adopted or order issued by TNRCC under that chapter, that is related to the modification of a facility that may emit air contaminants if the person files an application for a permit for the facility under Section 382.0519, Health and Safety Code, as added by this Act, by January 1, 2001. (b) Provides that this section does not apply to an act related to a modification of a facility that occurs after March 1, 1999. SECTION 11. Effective date: September 1, 1999, except as provided by Section 8 of this Act. SECTION 12. Emergency clause.