HBA-JLV H.B. 3297 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3297 By: Dukes Environmental Regulation 3/19/2001 Introduced BACKGROUND AND PURPOSE The Texas Natural Resource Conservation Commission (TNRCC) serves to protect the state's human and natural resources consistent with sustainable economic development. TNRCC does not have a set of consistent standards for evaluating the compliance history of applicants in permitting and enforcement matters. TNRCC is less able to hold these entities accountable within existing permit and enforcement guidelines, and within new regulatory structures that provide incentives to exceed minimum regulatory expectations. TNRCC is also less able to assess TNRCC's job of protecting the environment without a comprehensive assessment of the regulated community's compliance performance. Providing a common definition of compliance history might enable the agency to track performance of regulated entities across all programs and agency functions for permitting, inspection, and enforcement. Using compliance history information in deciding permitting and enforcement matters could provide consistency across media and predictability of results for the public and the regulated community. House Bill 3297 requires TNRCC to develop standards for evaluating the compliance history of an applicant or permit holder and to consistently apply those components and standards in all permitting and enforcement matters under the jurisdiction of TNRCC . RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking is expressly delegated to the Texas Natural Resource Conservation Commission in SECTION 1 (Sections 5.652 and 5.654, Water Code) and SECTION 10 of this bill. ANALYSIS House Bill 3297 amends the Water Code to require the Texas Natural Resource Conservation Commission (TNRCC) by rule to develop a single set of components of and standards for evaluating the compliance history of an applicant or permit holder and is required to consistently apply those components and standards in all permitting and enforcement matters under TNRCC's jurisdiction. The bill sets forth certain factors TNRCC is required to include and consider in developing the components and standards. TNRCC is required to consider changes in ownership when tracking the compliance history of a regulated entity (Sec. 5.652). The bill requires TNRCC to conduct annual compliance inspections of each person engaging in an activity under a permit issued by TNRCC under the Water or Health and Safety codes. The bill requires TNRCC to collect certain data relating to repeat offenders, enforcement orders, and the significance of violations. The bill requires TNRCC to annually prepare a comparative analysis of data evaluating the performance, over time, of TNRCC and of entities regulated by TNRCC. The bill requires TNRCC to include in the annual enforcement report, the compliance data and the comparative performance analysis (Sec. 5.653). The bill requires TNRCC by rule to develop a method of performance assessment that differentiates persons regulated by TNRCC according to their compliance histories and guidelines for the use of compliance history in TNRCC decisions (Sec. 5.654). The bill prohibits TNRCC from announcing an inspection of a facility owned or operated by a person regulated by TNRCC unless the person has established a compliance history that qualifies the person for announced inspections. The bill requires TNRCC to track whether inspections are announced or unannounced and to include the information in a report (Sec. 5.655). The bill authorizes TNRCC to approve an application to renew or amend a permit if TNRCC determines that an applicant's compliance history during the period established by TNRCC, rather than the preceding five years, raises no issues regarding the applicant's ability to comply with a material term of its permit (Sec. 26.028). The bill amends the Health and Safety Code to conform with provisions set forth requiring TNRCC to develop by rule a single set of components of and standards for evaluating the compliance history of an applicant or permit holder (Secs. 361.084, 361.088, 361.089, 382.0518, and 382.055, Health and Safety Code). The bill requires TNRCC by rule to establish, not later than March 1, 2002, the components of and standards for evaluating compliance history (SECTION 10). EFFECTIVE DATE September 1, 2001.