HBA-MPM H.B. 2504 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2504 By: Allen Environmental Regulation 3/19/1999 Introduced BACKGROUND AND PURPOSE With the passage of the Texas Clean Air Act in 1972, state leaders created a grandfathered exemption from obtaining an air permit for any source of air emissions existing on August 30, 1971 or nearing completion shortly thereafter. Current law otherwise requires a permit from the Texas Natural Resource Conservation Commission (TNRCC) before any building or modification of any possible source of air emissions take place. Additionally, regulations do not require permits for modifications to an existing emissions source if a proposed modification includes permitted facilities, as well as grandfathered facilities. On September 2, 1997, TNRCC created the Clean Air Responsibility Advisory Committee (CARE), principally charged with providing recommendations regarding a voluntary emissions reduction plan. These and other recommendations are incorporated in this bill. H.B. 2504 creates a system to bring grandfathered facilities into a voluntary emissions reduction program for holders of multiple and standard permits. 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 (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, 382.05195, and 382.05196, Health and Safety Code), and SECTION 9, and that rulemaking authority previously delegated to the commission is modified in SECTION 2 (Section 382.051, Health and Safety Code) and SECTION 7 (Section 382.062(b)), Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 382.003(9), Health and Safety Code, to include a physical change in, or change in the method of operation of, a facility where the change is within the scope of a multiple plant permit or a standard permit, in addition to a flexible permit, among those terms which are not included in the definition of the term "modification of existing facility." SECTION 2. Amends Sections 382.051(a) and (b), Health and Safety Code, to authorize the Texas Natural Resource Conservation Commission (commission) to issue a permit to operate an existing facility following a voluntary emissions reduction permit, in addition to construct a new facility or modify an existing facility that may emit air contaminants. Deletes the requirement that a general and standard permit be developed by rule for numerous similar sources subject to Section 382.054 (Federal Operating Permit), Health and Safety Code, when the commission authorizes issuance of a permit. Authorizes the commission to issue a standard permit for similar facilities subject to Sections 382.0518 (Preconstruction Permits), 382.0519, or 382.05195, Health and Safety Code. Authorizes the commission to issue a permit, by rule, for types of facilities that will not significantly contribute air contaminants to the atmosphere and for 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 (5) to Subdivision (7). Makes conforming and nonsubstantive changes. 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 the commission to develop, by rule, the 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, will be required. SECTION 4. Amends Sections 382.0511(a) and (c), Health and Safety Code, to authorize the commission to consolidate into a single permit standard permits and permits by rule, in addition to other permits, or exemptions for a facility or federal source. Deletes the requirement that these permits or exemptions be issued by the commission before December 1, 1991. Deletes the commission's authorization to consolidate any permit it issues on or after December 1, 1991, with any permits, special permits, or exemptions issued or qualified by that date, into a single permit. Authorizes the commission to authorizes changes, rather than to authorize changes by rule, 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 or an exemption allowed under Section 382.057, Health and Safety Code. SECTION 5. Amends Subchapter C, Chapter 382, Health and Safety Code, by adding Sections 382.0519, 382.05191, 382.05192, 382.05193, 382.05194, 382.05195, and 382.05196, as follows: Sec. 382.0519. VOLUNTARY EMISSION REDUCTION PERMIT. (a) Authorizes the owner or operator of an unpermitted facility that, under Section 382.0518(g) (Preconstruction Permit), Health and Safety Code, is not subject to the requirement to obtain a permit to apply for a permit to operate the facility under this section before September 1, 2001. Section 382.015(g), Health and Safety Code, states that certain provisions do not apply to a person who has executed a contract or has begun construction for an addition, alteration, or modification to a new or existing facility on or before August 30, 1971, and who has complied with requirements of Section 382.060 (Repealed), Health and Safety Code, as it existed on November 30, 1991. Further states that in order to qualify for these exemptions, a contract may not have a beginning construction date later than February 29, 1972. (b) Requires the commission, within a reasonable amount of time after it receives an application under this section, to grant the permit if, from the information it receives, including information presented at any public hearing or through written comment, it 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) (Definitions), Health and Safety Code, considering the age and remaining useful life of the facility. Section 382.003(9)(E)(ii), Health and Safety Code, includes one of the definitions of "modification of an existing facility" as a physical change in, or change in the method of operation of, a facility that does not result in a net increase in allowable emissions of any air contaminant and that does not result in the emission of any air contaminant not previously emitted, provided that the facility uses, regardless of whether it has received a permit, an air pollution control method that is at least as effective as the best available control technology, considering technical practicability and the economic reasonableness, that the Texas Board of Health required or would have required for a facility of the same class or type as a condition of issuing a permit or permit amendment 120 months before the change will occur. (c) Prohibits the commission from granting a permit under this section if it finds that the emissions from the 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 must comply with Section 382.0518, Health and Safety Code, before work may begin on modification of a facility previously permitted under this section. 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 the commission 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 the commission 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. Section 382.0365(g)(2), Health and Safety Code states that "small business stationary source" has the meaning assigned by Section 507(c) of the federal Clean Air Act (42 U.S.C. Section 7661f), as added by Section 501 of the federal Clean Air Act Amendments of 1990. (c) Requires the commission to afford an opportunity for a public hearing and the submission of public comment and send notice of a decision on an application for a permit under Section 382.0519 in the same manner as provided by Sections 382.0561 (Federal Operating Permit: Hearing) and 382.0562 (Notice of Decision), Health and Safety Code. (d) Authorizes a person affected by the commission's decision to issue or deny a voluntary emission reduction permit to move for rehearing and entitles the person to a judicial review under Section 382.032 (Appeal of Commission Action), Health and Safety Code. Sec. 382.05192. VOLUNTARY EMISSION REDUCTION PERMITS: REVIEW AND RENEWAL. Requires that review and renewal permits issued under Section 382.0519, Health and Safety Code, be conducted in accordance with Section 382.055 (Review and Renewal of Preconstruction Permit), Health and Safety Code. Sec. 382.05193. EMISSIONS PERMITS THROUGH ENVIRONMENTAL MITIGATION PROJECT. (a) Authorizes the commission to issue a permit under Section 382.0519, Health and Safety Code, for a facility which performs certain measures regarding emission reduction. (b) Requires the commission, 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 credit, emissions reductions projects, and environmental protection projects. (c) Provides that a project included in the emissions reduction projects category must reduce net emissions from one or more sources in this state in an amount and 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. Requires the emissions reduction projects category to include certain considerations. (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 that the projects category must include certain considerations. (e) Provides that a permit issued under Section 382.0519, Health and Safety Code, 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 facility owner or operator acquires the credits. (f) Requires the commission, in order to renew the permit of a facility permitted under Section 382.0519, Health and Safety Code, with credits acquired under the program established under this section, to require the owner or operator of the facility to have performed certain equipment improvements and emissions reductions and to have acquired additional credits under the program necessary for a new permit. (g) Provides that emissions reduction credits acquired under the program established under this section are not transferable. Sec. 382.05194. MULTIPLE PLANT PERMIT. (a) Authorizes the commission to issue a multiple plant permit for multiple existing facilities owned or operated by the same person if the commission makes certain findings regarding the facilities' emissions. (b) Requires a permit issued under this section to provide that the emissions from any of the facilities authorized under the permit are prohibited from exceeding that facility's highest historical annual rate. Requires the best engineering judgment to be used to demonstrate the facility's highest historic annual rate to the commission 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 equipment. Sec. 382.05195. STANDARD PERMIT. (a) Authorizes the commission to issue a standard permit for similar facilities if it makes certain findings regarding the enforceability of the permit, the ability to monitor the facility's compliance with the permit, and the effectiveness of the facility's control technology. (b) Requires the commission to publish notice of a proposed standard permit in the Texas Register and in one or more statewide or regional newspapers, designated by the commission, by rule, that will, in the commission's judgment, provide reasonable statewide notice. Requires the notice to be published in a newspaper of general circulation in the affected area if the permit will be effective for only part of the state. Authorizes the commission, by rule, to require additional notice to be given. Provides that the notice must include an invitation for written comments by the public to the commission regarding the proposed permit and requires this notice to be published no later than the 30th date before the commission issues the permit. (c) Requires the commission to hold a public meeting to provide an opportunity for public comment, and to give notice of the meeting as part of the notice described in Subsection (b) no later than the 30th day before the meeting. (d) Requires the commission, if it receives public comment relating to issuance of a permit, to issue a written response to the comments on the permit simultaneously with its issuance or denial of the permit. Provides that the response is available to the public, and requires it to be mailed to each person who made a comment. (e) Requires the commission to establish, by rule, the procedures for application and approval for the use of a permit. (f) Specifies that the issuance, amendment, or revocation of a permit by the commission is not subject to Chapter 2001 (Administrative Procedure), Government Code. (g) Authorizes the commission to adopt rules as necessary to implement and administer this section and to delegate to the executive director of the commission the authority to issue, amend, or revoke a permit as provided by Section 382.061 (Delegation of Powers and Duties), Health and Safety Code. Sec. 382.05196. PERMITS BY RULE. (a) Authorizes the commission, 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 the facilities will not make a significant contribution of air contaminants to the atmosphere. Prohibits the commission from adopting a permit, by rule, authorizing any facility defined as "major" under 42 U.S.C., Section 7401 et seq. (federal Clean Air Act) or regulations adopted under that Act. Provides that nothing in this subsection shall be construed to limit the commission's general power to control the state's air quality under Section 382.011(a) (regarding the general powers and duties of the commission), Health and Safety Code. (b) Authorizes the commission to adopt rules specifically defining the terms and conditions for a permit by rule under this section in a nonattainment area as defined by 42 U.S.C., Section 7401 et seq. (Title I, federal Clean Air Act). SECTION 6. Amends Section 382.057(a), Health and Safety Code, to authorize the commission, by rule, to exempt from the requirements of Section 382.0518, Health and Safety Code, changes within any facility, rather than any facility and certain types of facilities, if it is found on investigation that such changes will not make a significant contribution of air contaminants to the atmosphere. Makes conforming changes. SECTION 7. Amends Section 382.058, Health and Safety Code, as follows: Sec. 382.058. New title: LIMITATION ON COMMISSION PERMITS BY RULE OR STANDARD PERMITS FOR CONSTRUCTION OF CERTAIN CONCRETE PLANTS. Prohibits a person from beginning construction on any concrete plant that performs wet batching, dry batching, or central mixing under a standard permit under Section 382.05195, Health and Safety Code, or a permit by rule, rather than an exemption, adopted by the commission under Section 382.05196, rather than Section 382.057 (Exemption), Health and Safety Code, unless the person has complied with the notice and opportunity for hearing provisions under Section 382.056 (Notice of Intent to Obtain Permit or Permit Review; Hearing), Health and Safety Code. SECTION 8. Amends Section 382.062(b), Health and Safety Code, to authorize the commission to adopt rules relating to charging and collecting a fee for an exemption, a voluntary emissions reduction program, a permit by rule, a multiple plant permit or a standard permit, rather than an exemption from a permit or for a standard permit authorized by commission rule, and for a variance. SECTION 9. Requires the commission to adopt, as soon as practicable after the effective date of this Act, any rules necessary to implement the changes in law made by the Act. SECTION 10. Requires the commission to prepare and distribute 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 as a result of issuance of the permits to the following persons: _the governor, _the lieutenant governor, _the speaker of the house of representatives, _the chairman of the Senate Committee of Natural Resources, and _the chairman of the House Committee on Environmental Regulation SECTION 11. (a) Provides that in accordance with Section 311.031(c) (Saving Provisions; regarding the repeal of a statute by a code no affecting an amendment, revision, or reenactment of the statute by the same legislature that enacted the code), Government Code, which gives effect to a substantive amendment enacted by the same legislature that codifies the amended statute, the text of Section 382.003(9), Health and Safety Code, as set out in Section 1 of this Act, gives effect to changes made by Chapter 3, Acts of the 72nd Legislature, 1st Called Session, 1991, and Chapter 76, Acts of the 74th Legislature, Regular Session, 1995. (b) Provides that this Act prevails over another Act of the 76th Legislature, Regular Session, 1999, relating to nonsubstantive additions and corrections in enacted code to the extent of any conflict. SECTION 12.Emergency clause. Effective date: upon passage.