HBA-MPM C.S.S.B. 766 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 766 By: Brown Environmental Regulation 4/19/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Current law requires a person to obtain a permit from the Texas Natural Resource Conservation Commission (TNRCC) prior to beginning work on the construction of a new facility or modification of an existing facility which may emit air contaminants. C.S.S.B. 766 authorizes TNRCC to adopt rules to set de minimis levels of air contaminants, below which no air quality presconstruction authorization would be necessary. This bill establishes procedures for TNRCC to issue standard permits outside the rulemaking process and creates a voluntary emission reduction process for unpermitted, grandfathered facilities with a September 1, 2001 permit application deadline. This bill also authorizes TNRCC to issue multiple plant permits for multiple existing facilities owned or operated by the same person. 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 2 (Section 382.051, Health and Safety Code), SECTION 3 (Section 382.05101, Health and Safety Code), SECTION 5 (Sections 382.05193, 382.05194, 382.05195, and 382.05196, Health and Safety Code) and SECTION 9 of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subdivision (9), Section 382.003, Health and Safety Code, to include a multiple plant permit, in addition to a flexible permit, where a physical change in, or change in the method of operation of, a facility takes place among those terms that are not included under the definition of "modification of existing facility." SECTION 2. Amends Sections 382.051(a) and (b), Health and Safety Code, as follows: (a) Authorizes the Texas Natural Resource Conservation Commission (TNRCC) to issue a permit to operate an existing facility under a voluntary emissions reduction permit. (b) Authorizes TNRCC, to assist in fulfilling its authorization provided by Subsection (a), to issue a general permit, rather than a general permit developed by rule, for numerous similar sources subject to Section 382.054 (Federal Operating Permit), Health and Safety Code; and a standard permit, rather than a standard permit developed by rule, for similar facilities, rather than numerous similar facilities. Deletes text stating that these similar facilities are subject to Section 382.0518 (Preconstruction Permit), Health and Safety Code. Authorizes TNRCC to issue a permit by rule for types of facilities that will not significantly contribute air contaminants to the atmosphere and a multiple plant permit for existing facilities at multiple locations subject to Section 382.0518 or 382.0519, Health and Safety Code. Redesignates existing Subdivision (b)(5) to Subdivision (b)(7). SECTION 3. Amends Subchapter C, Chapter 382, Health and Safety Code, by adding Section 382.05101, as follows: Sec. 382.05101. DE MINIMIS AIR CONTAMINANTS. Authorizes TNRCC, by rule, to develop criteria to establish a de minimis level of air contaminants for facilities or groups of facilities below which no permit under Section 382.0518 or 382.0519, Health and Safety Code, standard permit under Section 382.05195, Health and Safety Code, or permit by rule under Section 382.05196, Health and Safety Code, will be required. SECTION 4. Amends Sections 382.0511(a) and (c), Health and Safety Code, as follows: (a) Authorizes TNRCC to consolidate into a single permit standard permits and permits by rule. Deletes the stipulation that any permits special permits or exemptions for a facility of federal source be issued by TNRCC before December 1, 1991, and deletes from those permits TNRCC is authorized to consolidate into a single permit any permit issued on or after December 1, 1991, with any permits, special permits, or exemptions issued or qualified for by that date. (c) Authorizes TNRCC, rather than authorizes it "by rule," to authorize changes in a federal source to proceed before the owner or operator obtains a federal operating permit or revisions to a federal operating permit if the changes are de minimis under Section 382.05101 or the owner or operator has obtained a preconstruction permit or permit amendment required by Section 382.0518, Health and Safety Code, or is operating under a standard permit under Section 382.05195, Health and Safety Code, a permit by rule under Section 382.05196, Health and Safety Code, or an exemption allowed under Section 382.057 (Exemption), Health and Safety Code. SECTION 5. Amends Subchapter C, Chapter 382, Health and Safety Code, by adding Sections 382.0519, and Sections 382.05191-381.05196, as follows: Sec. 382.0519. VOLUNTARY EMISSION REDUCTION PERMIT. (a) Authorizes the owner or operator of an existing, unpermitted facility not subject to the requirement to obtain a permit under Section 382.0518(g), Health and Safety Code, to apply for a permit to operate that facility under this section before September 1, 2001. (b) Requires TNRCC to grant within a reasonable time a permit under this section if, from the information available, including that presented at any public hearing or through written comment, TNRCC finds that the facility will use an air pollution control method at least as beneficial as that described in Section 382.003(9)(E)(ii) (definition of "modification of existing facility"), Health and Safety Code, considering the age and remaining useful life of the facility. (c) Prohibits TNRCC from granting a permit under this section if it finds that the emissions from a facility will contravene the standards under Subsection (b) or the intent of this chapter, including protection of the public's health and physical property. (d) Provides that a person planning the modification of a facility previously permitted under this section must comply with Section 382.0518, Health and Safety Code, before work is begun on the construction of the modification. (e) Provides that a permit issued by TNRCC under this section may defer implementation of the requirement of reductions in the emissions of certain air contaminants, provided that the applicant will make substantial emission reductions in other specific air contaminants. Requires the deferral to be based on a prioritization of air contaminants by TNRCC as necessary to meet local, regional, and statewide air quality needs. Sec. 382.05191. VOLUNTARY EMISSION REDUCTION PERMIT: NOTICE AND HEARING. (a) Requires an applicant for a permit under Section 382.0519, Health and Safety Code, to publish notice of intent to obtain the permit in accordance with Section 382.056 (Notice of Intent to Obtain Permit or Permit Review; Hearing), Health and Safety Code. (b) Authorizes TNRCC to authorize an applicant for a permit for a facility which constitutes or is part of a small business stationary source as defined in Section 382.0365(g)(2) (Small Business Stationary Source Assistance Program), Health and Safety Code, to provide notice using an alternative means if TNRCC finds that the proposed method will result in equal or better communication with the public, considering the effectiveness of the notice in reaching potentially affected persons, cost, and consistency with federal requirements. (c) Requires TNRCC to provide an opportunity for a public hearing and the submission of public comment and sent notice of a decision on an application for a permit under Section 382.0519 in the same manner as provided by Sections 382.0561 and 382.0562, Health and Safety Code. (d) Authorizes a person affected by a decision of TNRCC to issue or deny a permit to move for rehearing, and entitles the person to judicial review. Sec. 382.05192.VOLUNTARY EMISSIONS REDUCTION PERMITS: REVIEW AND RENEWAL. Requires review and renewal of permits issued under Section 382.0519, Health and Safety Code, to be conducted according to Section 382.055 (Review and Renewal of Preconstruction Permit), Health and Safety Code. Sec. 382.05193, EMISSIONS PERMITS THROUGH ENVIRONMENTAL MITIGATION PROJECT. (a) Authorizes TNRCC to issue a permit under Section 382.0519, Health and Safety Code for a facility: _that makes a good faith effort to make improvements and emissions reductions to meet the requirements of that section. _that cannot reduce the facility's emissions to the degree necessary for the issuance of the permit, and _the owner or operator of which acquires a sufficient number of emissions reduction credits to offset the facility's excessive emissions under the program established under Subsection (b). (b) Requires TNRCC, by rule, to establish a program to grant emissions reduction credits to a facility if the owner or operator conducts a special environmental project to offset the facility's excessive emissions. Provides that the rules must establish two categories of projects eligible for credits under the program, including emissions reduction projects and environmental protection projects. (c) Provides that a project included in the emissions reductions projects category must reduce net emissions from one or more sources in this state in an amount an type sufficient to prevent air pollution to a degree comparable to the amount of reduction in the facility's emissions that would be necessary to meet the permit requirement. Provides that the emissions reduction projects category must include specific types of programs. (d) Provides that a project included in the environmental protection projects category must benefit, preserve, or protect environmental quality in this state to a degree that the value of the project to the status of the state's environment is comparable to the value to the environment of reducing the facility's emissions to the extent necessary to meet the permit requirements. Provides the environmental protection projects category must include the creation of certain environmental projects or remediation or preservation of existing projects. (e) Provides that a permit issued under Section 382.0519 for a facility participating in the program established under this section must be conditioned on the successful and timely completion of the project or projects for which the owner or operator acquires the credits. (f) Requires TNRCC to require the owner or operator of a facility to have made certain improvements and reductions or to have acquired additional program credits in order to renew the permit of a facility permitted under Section 382.0519, Health and Safety Code. (g) Provides that reduction credits acquired under the program established under this section are nontransferable. Sec. 382.05194. MULTIPLE PLANT PERMIT. (a) Authorizes TNRCC to issue a multiple plant permit for multiple plant sites that are owned or operated by the same person or persons under common control if TNRCC finds that: (1) the aggregate rate of emission of air contaminants to be authorized under the permit does not exceed the total of the rates authorized in the existing permits for previously permitted facilities and rates that would be authorized under Section 382.0519, Health and Safety Code, for existing unpermitted facilities not subject to the requirement to obtain a preconstruction authorized under Section 382.0518(g), Health and Safety Code, or for facilities authorized under Section 382.0519; and (2) there is no indication that the emissions from the facilities will contravene the intent of this chapter, including protection of the public's health and physical property. (b) Prohibits a permit issued under this section from authorizing emissions from any facilities authorized under the permit that exceed the facility's highest historic annual rate or the levels authorized in the facility's most recent permit. Requires best engineering judgment to be used to demonstrate the facility's highest historic annual rate to TNRCC in the absence of records extending back to the original construction of the facility. (c) Prohibits emissions control equipment previously installed at a facility permitted under this section from being removed or disabled unless the action is undertaken to maintain or upgrade the control equipment or to otherwise reduce the impact of emissions authorized by TNRCC. (d) Requires TNRCC to publish notice of a proposed multiple plant permit for existing facilities in the Texas Register and in one or more statewide or regional newspapers, designated by TNRCC, by rule, that will, in TNRCC's judgment, provide reasonable notice throughout the state. Requires the notice to be published in a newspaper of general circulation in the area to be affected, if the multiple plant permit for existing facilities will be effective for only part of the state. Authorizes TNRCC, by rule, to require additional notice to be given. Provides that the notice must include an invitation for written comments by the public to TNRCC regarding the proposed multiple plant permit and requires it to be published no later than the 30th day before the TNRCC issues the permit. (e) Requires TNRCC, for existing facilities, to hold a public meeting to provide additional opportunity for public comment. Requires TNRCC to give notice of a public meeting under this subsection as part of the notice described in Subsection (d) no later than the 30th day before the meeting date. (f) Requires TNRCC, if it receives public comment relating to the issuance of a multiple plant permit for existing facilities, to issue a written response to comments on the permit at the same time it issues or denies the permit. Provides that the response must be made available to the public, and requires TNRCC to mail it to each person who made a comment. (g) Requires TNRCC to establish, by rule, the procedures for application and approval for the use of a multiple plant permit. (h) Provides that for a multiple plant permit applicable only to existing facilities for which an application is filed before September 1, 2001, the issuance, amendment, or revocation by TNRCC of the permit is not subject to Chapter 2001 (Administrative Procedure),Government Code. (i) Authorizes TNRCC to adopt rules as necessary to implement and administer this section and to delegate to the executive director of TNRCC under Section 382.061 (Delegation of Powers and Duties), Health and Safety Code, the authority to issue, amend, or revoke a multiple plant permit. Sec. 382.05195. STANDARD PERMIT. (a) Authorizes TNRCC to issue a standard permit for new or existing similar facilities if it finds that: (1) the standard permit can be enforceable; (2) TNRCC can adequately monitor compliance with the terms of the permit; and (3) for permit applications for facilities subject to Section 382.0518(a)-(d) filed prior to September 1, 2001, the facilities will use control technology at least as effective as that described in Section 382.0518(b) (Preconstruction Permit), Health and Safety Code. For permit applications filed after August 31, 2001, all facilities permitted under this section will use control technology at least as effective as that described in Section 382.0518(b), Health and Safety Code. (b) Requires TNRCC to publish notice of a proposed standard permit in the Texas Register and in one or more statewide or regional newspapers, designated by TNRCC by rule, that will, in TNRCC's judgment, provide reasonable notice throughout the state. Requires the notice to be published in a newspaper of general circulation in the area to be affected if the standard permit will be effective for only part of the state. Authorizes TNRCC, by rule, to require additional notice to be given. Provides that the notice must include an invitation for written comments by the public to TNRCC regarding the proposed standard permit and must be published no later than the 30th date before TNRCC issues the standard permit. (c) Requires TNRCC to hold a public meeting to provide an additional opportunity for public comment. Requires TNRCC to give notice of a public meeting under this subsection as part of the notice described in Subsection (b) no later than the 30th day before the meeting. (d) Requires TNRCC to issue a written response to public comments related to issuance of a standard permit at the same time it issues or denies the permit, if TNRCC receives public comments. Provides that the response must be made available to the public, and requires TNRCC to mail it to each person who made a comment. (e) Requires TNRCC to establish, by rule, the procedures for application and approval for use of a standard permit. (f) Provides that the issuance, amendment, or revocation of a standard permit by TNRCC is not subject to Chapter 2001 (Administrative Procedure), Government Code. (g) Authorizes TNRCC to adopt rules as necessary to implement and administer this section and to delegate to the executive director under Section 382.061 (Delegation of Powers and Duties), Health and Safety Code, the authority to issue, amend, or revoke a standard permit. Sec. 382.05196. PERMITS BY RULE. (a) Authorizes TNRCC, consistent with Section 382.051 (Permitting Authority of Commission; Rules), Health and Safety Code, to adopt permits by rule for certain types of facilities if it is found on investigation that such facilities will not make a significant contribution of air contaminants to the atmosphere. Prohibits TNRCC from adopting a permit, by rule, authorizing any facility defined as a "major source" under 42 U.S.C., Section 7401 et seq. (Clean Air Act) or regulations adopted under that Act. Provides that nothing in this section shall be construed to limit TNRCC's general power to control the state's air quality under Section 382.011(a)(General Powers and Duties), Health and Safety Code. (b) Requires TNRCC, by rule, to specifically define the terms and conditions for a permit by rule under this section. SECTION 6. Amends Section 382.057(a), Health and Safety Code, as follows: (a) Deletes changes within certain types of facilities from those TNRCC, by rule, is authorized to exempt from the requirements of Section 382.0518, Health and Safety Code. Makes conforming changes. SECTION 7. Amends Section 382.058, Health and Safety Code, as follows: Sec. 382.058. New title: PERMITS BY RULE OR STANDARD PERMITS FOR CONSTRUCTION OF CERTAIN CONCRETE PLANTS. Makes conforming changes. SECTION 8. Amends Section 382.062(b), Health and Safety Code, to make conforming changes. SECTION 9. Requires TNRCC to adopt any rules necessary to implement the change in law made by this Act as soon as practicable after its effective date. SECTION 10. Requires TNRCC, no later than January 15, 2001, to prepare and distribute to the governor, lieutenant governor, speaker of the house of representatives, chairman of the senate committee on natural resources, and chairman of the house committee on environmental regulation, a report on the number of companies that have obtained or applied for a permit under Section 382.0519, Health and Safety Code, as added by this Act, and the reductions in emissions anticipated to result from issuance of such permits. SECTION 11. Prohibits TNRCC from initiating an enforcement action against a person for the failure to obtain a preconstruction permit under Section 382.0518, Health and Safety Code, or a rule adopted or order issued by TNRCC under that section, that is related to the modification of a facility that may emit air contaminants if, on or before August 31, 2001, the person files an application for a permit for the facility under Section 382.0519, Health and Safety Code, as added by this Act Makes this section inapplicable to an act related to the modification of a facility that occurs after March 1, 1999. SECTION 12.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 766 differs from the original as follows: SECTION 2. The substitute changes proposed Section 382.051(a) and (b), Health and Safety Code, to make a nonsubstantive change. SECTION 3. The substitute changes proposed Section 382.05101, Health and Safety Code, to make conforming changes in accordance with SECTION 5 of the substitute. SECTION 4. The substitute changes proposed Sections 381.0511(a) and (c), Health and Safety Code, to make conforming changes in accordance with SECTION 5 of the substitute. SECTION 5. The substitute changes proposed Subchapter C, Chapter 382, Health and Safety Code, by adding Sections 382.0519 and 382.05191-382.05196, rather than Sections 382.05191-382.05195, as follows: The substitute modifies Section 382.0519 of the original by making nonsubstantive changes. The substitute modifies Section 382.05191 of the original by making a nonsubstantive change. The substitute makes no change in Section 382.05192 of the original. Sec. 382.05193. The substitute redesignates Section 382.05193 of the original to Section 382.05194 of the substitute, and adds a completely new subsection, "Emissions Permits Through Environmental Mitigation Project." This new section authorizes TNRCC to issue a permit under Section 382.0519 for a facility that either makes a good faith effort to conform to the requirements of that section, cannot reduce its emissions to a degree necessary for the permit, or for a facility with an owner or operator who acquires a sufficient number of emissions credits under the emissions reduction program set forth in this section. This section gives rulemaking authority to TNRCC to create such a program, further defines the program, and provides projects by which a facility may accrue sufficient credit amounts. Sec. 382.05194. Redesignated from Section 382.05193 of the original bill. The substitute makes nonsubstantive changes and conforms the language of the bill to Legislative Council format. Sec. 382.05195. Redesignated from Section 382.05194 of the original. The substitute makes nonsubstantive changes and conforms the language of the bill to Legislative Council format. Sec. 382.05196. Redesignated from Section 382.05195 of the original. Makes nonsubstantive changes from the original. SECTION 6. The substitute makes no change. SECTION 7. The substitute modifies Section 382.058, Health and Safety Code, of the original by changing the proposed title of this section from "Provisions Relating to Commission Permits by Rule or Standard Permits" to "Permits by Rule or Standard Permits for Construction of Certain Concrete Plants." The substitute also makes conforming changes. The substitute makes no changes in SECTIONS 8-12.