BILL ANALYSIS C.S.H.B. 2878 By: Holzheauser 4-4-95 Committee Report (Substituted) BACKGROUND Under current law, facilities which are required to obtain an air permit must go through an extensive process to obtain an initial permit. This process includes extensive health effects modelling, review to determine whether the facility will utilize best available control technology ("BACT"), as well as notice requirements and opportunity for a contested case hearing offered to affected persons. In addition, a facility which has already been authorized to release certain air emissions also is required to apply for a permit amendment whenever the facility intends to change its processes or equipment. This procedure requires the applicant to submit to the same requirements of technical review, including health effects modelling, and contested case hearing as are necessary to obtain the initial preconstruction permit. This is the case even where the change will result in the same or lower emissions. As plants have become increasingly complex, and the permitting process has become longer and more time consuming, this process has resulted in substantial expenditures of TNRCC and applicant staff time and money, with no demonstrable benefit to the environment. PURPOSE HB 2878 will allow certain facilities to be modified without obtaining a permit amendment if the modification would not result in an increase in emissions previously authorized, or in any new emissions. In addition, the bill would clarify that, consistent with current practice, an amendment, rather than a new permit, is required for modification of an existing facility rather than a new permit. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 382.003(9), Health and Safety Code by changing the definition of "Modification of existing facility" to include a change in a facility (rather than a physical change, or change in operation of a stationary source) that results in a net increase in permitted allowable emissions of an air contaminant which is a defined term (rather than an increase in any air pollutant emitted by the source into the atmosphere). It also adds language that the term does not include a change if there is no net increase in allowable emissions or an emission of an air contaminant not previously emitted if the facility has received a preconstruction permit or exempted from such a permit 120 months before the change or uses an air pollution device that is at least effective as the best available control technology regardless of whether the facility has received a permit. Also adds language that the term does not include a change within the scope of a flexible permit. SECTION 2. Amends Section 382.0512, Health and Safety Code, by requiring the TNRCC to consider the following in deciding whether a change results in a net increase in allowable emissions: any air pollution control method applied to the facility, any decreases in allowable emissions from other facilities. Nothing shall be construed to the application of other state or federal requirements. SECTION 3. Amends Section 382.0518, Health and Safety Code, by adding Subsection (h) that states that a reference to a permit in this section includes an amendment to a permit. SECTION 4. Effective date, September 1, 1995. SECTION 5. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute for HB 2878 leaves the definition of "modification of existing facility" as it reads in current law, with the exception of the substitution of the words "facility" instead of "stationary source" and "containment" for "pollution". The substitute creates a new Subsection (E) in the definition of "modification of existing facility" which excludes from the definition facilities having a preconstruction permit received in the last 120 months, or facilities with best achievable control technology equivalent to such facilities. The substitute also renumbers the subsection (E) added in the original bill, and clarifies that the exclusion applies to physical or operational changes. The substitute deletes the language requiring the consideration of decreases in emissions due to pollution control or from other sources within the facility at all facilities. The substitute provides instead that for facilities described in new subsection 382.003(9)(E) the consideration of decreases in emissions due to pollution control, decreases in allowable emissions from other facilities with a preconstruction permit issued no later than 120 months previously, or decreases in actual emissions from non-permitted facilities described in Section 382.003(9)(E)(ii). Finally, the substitute clarifies that the section does not limit the TNRCC's authority to implement any other applicable federal or state requirements, nor does the section limit the agency's enforcement powers. SUMMARY OF COMMITTEE ACTION HB 2878 was heard by the House Committee on Environmental Regulation in a public hearing on April 4, 1995. The Chair recognized Rep. Holzheauser to explain the bill. The committee considered a substitute for the bill. The following persons testified in favor of the bill: Jim Kennedy, representing Texas Chemical Council. Michael White, representing Texas Mid-Continent Oil & Gas Association. Billie G. Meador, Manager, State and Community Affairs for Texas Instruments, representing herself and Texas Instruments. Ken Kramer, representing the Sierra Club, testified against the bill. Jeffrey Anthony Saitas with the Texas Natural Resource Conservation Commission testified neutrally on the bill. The substitute for HB 2878 was adopted without objection. HB 2878 was reported favorably as substituted with the recommendation that it do pass and be printed by a record vote of eight (8) ayes, no (0) nays, no (0) pnv, and one (1) absent.