HBA- SEP, EDN H.B. 2912 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2912
By: Bosse
Environmental Regulation
8/9/2001
Enrolled





BACKGROUND AND PURPOSE 

The Texas Natural Resource Conservation Commission (TNRCC) protects the
state's natural resources and human health by ensuring clean air, clean
water, and the safe management of waste.  The legislature created TNRCC in
1993, by consolidating the Texas Water Commission, Texas Air Control Board,
and environmental programs from the Texas Department of Health.  The agency
implements state and federal environmental regulatory laws by issuing
permits and authorizations for the control of air pollution, the safe
operation of water and wastewater facilities, and the treatment, storage,
and disposal of  hazardous, industrial,  municipal, and low-level
radioactive waste.  TNRCC ensures compliance with environmental laws by
conducting inspections of regulated facilities, monitoring air and water
quality, providing technical assistance, encouraging voluntary compliance,
and taking formal enforcement action against suspected violators.  The
agency also develops programs for the cleanup and eventual reclamation of
contaminated industrial and abandoned hazardous waste sites. 

TNRCC is subject to the Texas Sunset Act and would have been abolished
September 1, 2001 if it had not been continued by the legislature.  In its
review of TNRCC, the Sunset Advisory Commission found that the traditional,
prescriptive regulatory approach focused on outputs and do not adequately
support innovation, provide incentives to reward performance, or solve
persistent environmental problems.  The sunset commission also found that
TNRCC lacked the tools needed to better support its environmental
protection mission and that additional changes were needed to ensure
greater public access to the agency's decision making process.  House Bill
2912 continues TNRCC until September 1, 2013 and contains the commission's
recommendations to better position the agency to address the state's
environmental regulatory needs.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Department of Health in
SECTION 2.02 (Sections 382.056, Health and Safety Code); to the Texas
Natural Resource Conservation Commission in SECTION 1.12 (Sections 5.127,
5.129, and 5.131 ,Water Code); SECTION 1.20 (Section 5.228, Water Code);
SECTION 1.24 (Section 7.0025, Water Code); SECTION 2.01 (Section 361.0666,
Health and Safety Code); SECTION 3.04 (Section 26.0291, Water Code);
SECTION 4.01 (Sections  5.753-5.755, Water Code); SECTION 5.01 (Sections
382.0215 and 382.0216, Health and Safety Code); SECTION 5.03 (Sections
382.05182-382.05186, Health and Safety Code); SECTION 5.07 (Section
382.065, Health and Safety Code); SECTION 6.01 (Sections 5.8025.805);
SECTION 7.01 (Section 341.102, Health and Safety Code); SECTION 8.03
(Section 366.076, Health and Safety Code); SECTION 9.02 (Section 361.114,
Health and Safety Code); SECTION 9.03 (Section 361.119, Health and Safety
Code); SECTION 9.05 (Section 361.121, Health and Safety Code); SECTION
12.02 (Section 26.504, Water Code); SECTIONS 18.05, 18.08, 18.10, and 18.11
of this bill.  In addition, under the general rulemaking authority already
granted to the policymaking bodies, rules may be developed to implement
other new provisions found in this bill. 


 ANALYSIS

House Bill 2912 amends the Water and Health and Safety codes to provide for
the continuation of  the Texas Natural Resource Conservation Commission
(TNRCC) until September 1, 2013, and to set forth standard Sunset Advisory
Commission recommendations for TNRCC regarding public representation,
member training, member removal, designation of a presiding officer,
conflicts of interest, written complaints, development of an equal
employment policy, and a state employee incentive program.     

Strategically Directed Regulatory Structure

The bill requires TNRCC by rule to develop a strategically directed
regulatory structure to provide incentives for enhanced environmental
performance in which incentives are based on a person's compliance history
classification and any voluntary measures taken by the person to improve
environmental quality (Sec. 5.755, Water Code).  The bill expands the scope
of the Waste Reduction Advisory Committee and renames it the Pollution
Prevention Advisory Committee to advise TNRCC on the implementation of a
strategically directed regulatory structure based on incentive and
performance (Sec. 361.0215, Health and Safety Code). 

Components of and Standards for Evaluating Compliance History

The bill requires TNRCC by rule to develop a uniform standard for
evaluating compliance history based on specific factors and to establish a
period for compliance history.  TNRCC by rule is required to establish a
set of standards for the classification and use of a person's compliance
history. TNRCC is required by rule to use compliance history when
determining eligibility for participation in its innovative regulatory
programs (Sec. 5.753 and 5.754, Water Code).  TNRCC is also required to
track and report compliance history information of regulated entities and
to designate a single point of contact within the agency to coordinate all
innovative programs (Secs. 5.756 and 5.757, Water Code).  The bill requires
TNRCC by rule to establish the components of compliance history by February
1, 2002, and the standards for the clarification and use of compliance
history by September 1, 2002  (SECTION 18.05). 

Agency Policy on Upsets and Inspections

TNRCC is required by rule to prohibit a person whose compliance history is
classified in the lowest classification from receiving announced
inspections or participating in the regulatory flexibility program (Sec.
5.754, Water Code).  TNRCC shall require the owner or operator of a
facility that experiences an emissions event to report to TNRCC all
information necessary to evaluate the emissions event.  The bill requires
TNRCC to centrally track emissions events and incorporate them into a
permanent centralized database.  TNRCC is required  to establish criteria
for determining when emissions events are excessive. The bill requires
TNRCC to require a facility to take action to reduce emissions from
excessive emissions events.  The bill authorizes TNRCC, by rule, to
establish an affirmative defense to a commission enforcement action if the
emissions event meets criteria defined by TNRCC rule (Secs. 382.0215 and
382.0216, Health and Safety Code). 

Laboratory Accreditation Program

The bill requires TNRCC to adopt rules to implement a voluntary
environmental testing laboratory accreditation program consistent with
national standards.  The bill also transfers the Safe Drinking Water Lab
Certification Program from the Texas Department of Health to consolidate it
with the new accreditation program at TNRCC.  The bill requires TNRCC by
rule to assess laboratory accreditation fees sufficient to recover program
administration costs, with those fees credited to an account that may be
used only for the accreditation program  (Secs. 5.801-5.807, Water Code and
SECTION 18.02).  The bill authorizes TNRCC to accept data and analyses for
all decisions affecting permitting, compliance, enforcement, and corrective
action from a lab accredited by TNRCC, an on-site or in-house lab that is
periodically inspected by TNRCC, or a lab accredited under federal law.
The bill authorizes TNRCC to accept data and analyses from a lab not
accredited by TNRCC or under federal law if the data and analysis are
necessary  for emergency response activities.  TNRCC is authorized to
require, by rule, that data and analysis used in other TNRCC decisions be
obtained from a lab accredited by TNRCC.  TNRCC is required to periodically
inspect on-site or in-house environmental testing laboratories described
above (Sec. 5.127, Water Code). 

Environmental Research

The bill requires TNRCC to coordinate and facilitate agency research needs
and efforts with the state's scientific and academic communities and to
administer grants or contracts if the money is appropriated. TNRCC is
authorized to establish an advisory board to encourage participation in the
research effort. TNRCC must follow a research model for coordinating with
or making use of any research activities conducted under existing state
initiatives, including research by state universities, the Texas Higher
Education Coordinating Board, the United States Department of Agriculture,
the Texas Department of Agriculture, and other state and federal agencies
to develop a plan to address TNRCC's practical regulatory needs and to
identify specific research goals.  The bill also requires TNRCC to report
to the legislature on its ongoing research efforts and outcomes (Secs.
5.1191-5.1193, Water Code). 

Public Interest Representation and Information 

The bill authorizes the Office of Public Interest Counsel to use outside
technical support and to recommend needed legislative and regulatory
changes (Secs. 5.273 and 5.274, Water Code).  The bill also authorizes
TNRCC or the executive director to create and consult with advisory
committees, work groups, or task forces.  The bill requires these groups to
be composed of balanced representation of affected stakeholders and
requires TNRCC to track the composition and activities of these groups and
make the information easily available to the public (Sec. 5.107, Water
Code).  

Contested Permit Hearings

The bill requires the executive director to be named a party in hearings
before TNRCC in a matter in which the executive director bears the burden
of proof and requires TNRCC, by rule, to specify the factors the executive
director must consider when determining whether to be a party in a
contested case permit hearing.  The bill stipulates that the executive
director not being named as a party in a hearing is not grounds for
appealing a TNRCC decision.  The bill specifies the executive director's
role as a party with respect to completing the record.  The bill requires
TNRCC to adopt rules to determine when the executive director can assist
permit applicants in meeting their burdens of proof.  The bill prohibits
the executive director from rehabilitating non-agency witnesses (Sec.
5.228, Water Code).  

Complaint Investigations

The bill requires TNRCC to enhance coordination of complaint investigations
with local officials and, on request, to train local officials in
investigating complaints and enforcing environmental laws, with authority
to recover the cost of training.  The bill also requires TNRCC to implement
policies to timely respond to complaints after normal business hours.
TNRCC is required to conduct a comprehensive analysis of the complaints
received and to assess the impact of changes made in the complaint policy
and to include a summary of such information in its annual report to the
governor and to the legislature (Secs.  5.17715.1773 and 5.178, Water
Code).  The bill authorizes TNRCC to initiate an enforcement action based
on information received from a private individual if that information, in
TNRCC's judgment, is of sufficient value and credibility to warrant the
initiation of an enforcement action.  TNRCC is also authorized by rule to
adopt criteria for the executive director to use in evaluating the value
and credibility of such information (Sec. 7.0025, Water Code). 

Funding and Revenue Management 

The bill authorizes TNRCC to transfer a percentage of appropriations from
one appropriation item to another as authorized in the General
Appropriations Act (Sec. 5.707, Water Code).  The bill authorizes  fees
collected for deposit to the water resource management account under
certain statutory provisions to be appropriated and used to protect water
resources related to the activities of any of the persons required to pay a
fee under those provisions.  The bill sets forth provisions regarding the
submission and adjustment of fees and authorizes TNRCC to collect interest
and penalties on delinquent fees.  The bill authorizes the executive
director to modify penalty and interest amounts or audit findings only upon
good cause and with written explanation.  If a permit issued by TNRCC is
required for a research project by an institution of higher education or a
state agency, payment of a fee is not required (Secs.  5.701-5.708, Water
Code).  

Regulation of Water Treatment Specialists

The bill requires TNRCC, by rule, to establish a program to certify water
treatment specialists and increases the certification fee from $10 per year
to an amount not to exceed $150 per year.  The bill exempts persons who
hold a license under The Plumbing License Law and employees of an
industrial facility installing or servicing water treatment from the
requirements of the certification program (Secs. 341.101-341.105, Health
and Safety Code). 

Electronic Reporting and Posting of Information

The bill requires TNRCC to encourage the use of electronic reporting
through the Internet for reports and to strive to reduce duplication in
reporting requirements (Sec. 5.128, Water Code).  The bill also requires
TNRCC to post public information on its website, including the minutes of
advisory committee meetings, pending permit and enforcement actions,
compliance histories, and emissions inventories by county and facility name
(Sec. 5.1733, Water Code). 

Public Notices

Within 45 days of filing the application, an applicant for a new solid
waste facility that accepts municipal solid wastes is required to hold a
public meeting in the county in which the proposed facility is to be
located (Sec. 361.0666, Health and Safety Code).  The bill requires TNRCC,
by rule, to provide for each public notice issued or published by TNRCC or
by a person under TNRCC's jurisdiction as required by law or commission
rule to include at the beginning of the notice a succinct statement of the
subject of the notice (Sec. 5.129, Water Code). 

Preconstruction Permits

The bill requires the Texas Department of Health (TDH) to establish rules
to ensure that an applicant complies with the notice requirement for an
intent to obtain a preconstruction permit or permit review but provides
that such notice requirements do not apply to the relocation or change of
location of a portable facility to a site where a facility permitted by
TNRCC is located if no portable facility has been located at the proposed
site at any time during the previous two years.  The notice requirements
also do not apply to  or a facility located temporarily in the
right-of-way, or contiguous to The right-of-way, of a public works project
(Sec. 382.056, Health and Safety Code).  Any facility exempt from obtaining
a preconstruction permit that does not have an application pending for such
a permit, other than a federal operating permit, and that has not submitted
notice of shutdown is prohibited from emitting air contaminants on or after
September 1, 2003 or 2004, depending on the facility location (Sec.
382.05181, Health and Safety Code). The bill sets forth provisions
regarding notice of shutdown, existing facility permits, small business
stationary source permits, electric generating facility permits, pipeline
facility permits, emission reduction permits, the review and renewal of
emissions reduction and multiple plant permits, the prohibition of certain
locations for concrete crushing facilities, and emergency orders concerning
the operation of rock crusher or concrete plants without a permit (SECTIONS
5.03-5.08) .   

Regulation of Solid Waste Facilities

The bill requires TNRCC, by rule, to ensure that a solid waste processing
facility is regulated as a solid  waste facility and is not allowed to
operate unregulated as a recycling facility (Sec. 361.119, Health and
Safety Code).  The bill sets forth provisions regarding public meeting and
notice requirements for solid waste facilities and authorizes TNRCC by rule
to establish a procedure for an applicant to pay for the cost of the
required notice (Sec. 361.0666, Health and Safety Code).  The bill sets
forth provisions regarding immediate remediation or removal of hazardous
substances at scrap tire sites, regulation of certain facilities as solid
waste facilities, notice of hearing and requirements for reopening closed
or inactive landfills, permits for the land application of certain sludge,
prioritization of new technology, corrective action relating to hazardous
waste, and denial of certain landfill permits (Secs. 361.1125,
361.119-361.122, 361.431, Health and Safety Code,  Sec. 7.031, Water Code).
The bill requires TNRCC to prohibit the storage, processing, or disposal of
hazardous waste in a solution-mined salt dome cavern or a sulphur mine
(Sec. 361.114, Health and Safety Code).   

Consideration of Cumulative Risks

The bill requires TNRCC to develop and implement policies by specific
environmental media to protect the public from cumulative risks in areas of
concentrated operations and to give priority to monitoring and enforcement
in areas in which regulated facilities are concentrated (Sec. 5.130, Water
Code).  

Environmental Management Systems

The bill requires TNRCC, by rule, to adopt a comprehensive program that
provides regulatory incentives to encourage the use of environmental
management systems by regulated entities, state agencies, local
governments, and other entities as determined by TNRCC (Sec. 5.131, Water
Code).  

Change of Name of Agency

The bill provides for changing the name of TNRCC to the Texas Commission on
Environmental Quality, to be phased in by January 1, 2004, and provides for
all powers, duties, rights, and obligations of TNRCC to be transferred to
the Texas Commission on Environmental Quality (SECTION 18.01). 

Water Quality Control

The bill renames the waste treatment inspection fee the water quality fee
and provides that it is imposed on, in addition to each wastewater
discharge permit holder, each user of water in proportion to the user's
water right.  The fee is to supplement other funds available to pay certain
TNRCC expenses, including the enforcement of laws and rules governing water
quality management programs and other water resource management programs.
The bill increases the maximum annual fee amount from $25,000 to $75,000
(Sec. 26.0291, Water Code).  The bill sets forth provisions regarding a
on-site sewage disposal system chargeback fee and sets the maximum fee at
$500 (Sec. 366.059, Health and Safety Code).   

Regulation of Certain Animal Feeding Operations

TNRCC may authorize the construction or operation of a new concentrated
animal feeding operation or an increase in the animals confined under an
existing operation, only by a new or amended individual permit. TNRCC is
prohibited from issuing a general permit to authorize the discharge of
agricultural waste into or adjacent to waters in this state from an animal
feeding operation if such waters are within a major sole source impairment
zone (Sec. 26.503, Water Code).  The operator of a concentrated animal
feeding operation is required to contract with a person selected by the
executive director to collect one or more representative composite soil
samples from each waste application field (Sec. 26.504, Water Code).    

Underground and Aboveground Storage Tanks

An underground storage tank system is required to incorporate a method for
secondary containment if the system is located in certain outcrops or
counties (Sec. 26.3476, Water Code).   The person taking corrective action
in response to a release from an underground or aboveground storage tank
reported by  the specified date is required to meet certain deadlines,
including a complete site assessment and risk assessment and a Corrective
Action Plan (Sec. 26.351, Water Code).  Funds from the petroleum storage
tank remediation account are prohibited from being used to pay, and the
owner or operator of a petroleum storage tank ordered by TNRCC to take
corrective action is responsible for payment of, any corrective action
expenses for which reimbursement is prohibited (Sec. 26.3512, Water Code).
To be eligible for the cleanup program, a person must not have missed any
of the deadlines (Sec. 26.3571, Water Code). The account is prohibited from
being used to reimburse any person for corrective action performed after
September 1, 2005 and for corrective action contained in a reimbursement
claim filed with TNRCC after March 1, 2006 (Sec. 26.3573, Water Code).  The
bill extends the reimbursement program from September 1, 2003 to September
1, 2006 (Sec. 26.361, Water Code).     

Environmental Health

TNRCC is required to enter into an agreement with TDH to jointly establish
the Texas Environmental Health Institute to examine ways to identify,
treat, manage, prevent, and reduce health problems associated with
environmental contamination (Sec. 427.002, Health and Safety Code).  The
institute is required to conduct a pilot project at the RSR West Dallas
site and at the Cadillac Heights site (Sec. 427.006, Health and Safety
Code).   

EFFECTIVE DATE

September 1, 2001.