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.