76R11946 JJT-F                          
         By Brown                                               S.B. No. 766
         Substitute the following for S.B. No. 766:
         By Howard                                          C.S.S.B. No. 766
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the issuance of certain permits for the emission of air
 1-3     contaminants.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 382.003(9), Health and Safety Code, is
 1-6     amended to read as follows:
 1-7                 (9)  "Modification of existing facility" means any
 1-8     physical change in, or change in the method of operation of, a
 1-9     facility in a manner that increases the amount of any air
1-10     contaminant emitted by the facility into the atmosphere or that
1-11     results in the emission of any air contaminant not previously
1-12     emitted.  The term does not include:
1-13                       (A)  insignificant increases in the amount of any
1-14     air contaminant emitted that is authorized by one or more
1-15     commission exemptions;
1-16                       (B)  insignificant increases at a permitted
1-17     facility;
1-18                       (C)  maintenance or replacement of equipment
1-19     components that do not increase or tend to increase the amount or
1-20     change the characteristics of the air contaminants emitted into the
1-21     atmosphere;
1-22                       (D)  an increase in the annual hours of operation
1-23     unless the existing facility has received a preconstruction permit
1-24     or has been exempted, pursuant to Section 382.057, from
 2-1     preconstruction permit requirements;
 2-2                       (E)  a physical change in, or change in the
 2-3     method of operation of, a facility that does not result in a net
 2-4     increase in allowable emissions of any air contaminant and that
 2-5     does not result in the emission of any air contaminant not
 2-6     previously emitted, provided that the facility:
 2-7                             (i)  has received a preconstruction permit
 2-8     or permit amendment or has been exempted pursuant to Section
 2-9     382.057 from preconstruction permit requirements no earlier than
2-10     120 months before the change will occur; or
2-11                             (ii)  uses, regardless of whether the
2-12     facility has received a permit, an air pollution control method
2-13     that is at least as effective as the best available control
2-14     technology, considering technical practicability and economic
2-15     reasonableness, that the board required or would have required for
2-16     a facility of the same class or type as a condition of issuing a
2-17     permit or permit amendment 120 months before the change will occur;
2-18                       (F)  a physical change in, or change in the
2-19     method of operation of, a facility where the change is within the
2-20     scope of a flexible permit or a multiple plant permit; or
2-21                       (G)  a change in the method of operation of a
2-22     natural gas processing, treating, or compression facility connected
2-23     to or part of a natural gas gathering or transmission pipeline
2-24     which does not result in an annual emission rate of a pollutant in
2-25     excess of the volume emitted at the maximum designed capacity,
2-26     provided that the facility is one for which:
2-27                             (i)  construction or operation started on
 3-1     or before September 1, 1971, and at which either no modification
 3-2     has occurred after September 1, 1971, or at which modifications
 3-3     have occurred only pursuant to standard exemptions; or
 3-4                             (ii)  construction started after September
 3-5     1, 1971, and before March 1, 1972, and which registered in
 3-6     accordance with Section 382.060 as that section existed prior to
 3-7     September 1, 1991.
 3-8           SECTION 2.  Sections 382.051(a) and (b), Health and Safety
 3-9     Code, are amended to read as follows:
3-10           (a)  The commission may issue a permit:
3-11                 (1)  to construct a new facility or modify an existing
3-12     facility that may emit air contaminants; [or]
3-13                 (2)  to operate an existing facility under a voluntary
3-14     emissions reduction permit; or
3-15                 (3)  to operate a federal source.
3-16           (b)  To assist in fulfilling its authorization provided by
3-17     Subsection (a), the commission may issue:
3-18                 (1)  special permits for certain facilities;
3-19                 (2)  a general permit [developed by rule] for numerous
3-20     similar sources subject to Section 382.054;
3-21                 (3)  a standard permit [developed by rule] for
3-22     [numerous] similar facilities [subject to Section 382.0518];
3-23                 (4)  a permit by rule for types of facilities that will
3-24     not significantly contribute air contaminants to the atmosphere;
3-25                 (5)  a single federal operating permit or
3-26     preconstruction permit for multiple federal sources or facilities
3-27     located at the same site;
 4-1                 (6)  a multiple plant permit for existing facilities at
 4-2     multiple locations subject to Section 382.0518 or 382.0519; or
 4-3                 (7) [(5)]  other permits as necessary.
 4-4           SECTION 3.  Subchapter C, Chapter 382, Health and Safety
 4-5     Code, is amended by adding Section 382.05101 to read as follows:
 4-6           Sec. 382.05101.  DE MINIMIS AIR CONTAMINANTS.  The commission
 4-7     may develop by rule the criteria to establish a de minimis level of
 4-8     air contaminants for facilities or groups of facilities below which
 4-9     a permit under Section 382.0518 or 382.0519, a standard permit
4-10     under Section 382.05195, or a permit by rule under Section
4-11     382.05196 is not required.
4-12           SECTION 4.  Sections 382.0511(a) and (c), Health and Safety
4-13     Code, are amended to read as follows:
4-14           (a)  The commission may consolidate into a single permit[:]
4-15                 [(1)]  any permits, special permits, standard permits,
4-16     permits by rule, or exemptions for a facility or federal source
4-17     [issued by the commission before December 1, 1991; or]
4-18                 [(2)  any permit issued by the commission on or after
4-19     December 1, 1991, with any permits, special permits, or exemptions
4-20     issued or qualified for by that date].
4-21           (c)  The commission [by rule] may authorize changes in a
4-22     federal source to proceed before the owner or operator obtains a
4-23     federal operating permit or revisions to a federal operating permit
4-24     if the changes are de minimis under Section 382.05101 or the owner
4-25     or operator has obtained a preconstruction permit or permit
4-26     amendment required by Section 382.0518 or is operating under a
4-27     standard permit under Section 382.05195, a permit by rule under
 5-1     Section 382.05196, or an exemption allowed under Section 382.057.
 5-2           SECTION 5.  Subchapter C, Chapter 382, Health and Safety
 5-3     Code, is amended by adding Sections 382.0519 and
 5-4     382.05191-382.05196 to read as follows:
 5-5           Sec. 382.0519.  VOLUNTARY EMISSIONS REDUCTION PERMIT.  (a)
 5-6     Before September 1, 2001, the owner or operator of an existing,
 5-7     unpermitted facility not subject to the requirement to obtain a
 5-8     permit under Section 382.0518(g) may apply for a permit to operate
 5-9     that facility under this section.
5-10           (b)  The commission shall grant within a reasonable time a
5-11     permit under this section if, from the information available to the
5-12     commission, including information presented at any public hearing
5-13     or through written comment, the commission finds that the facility
5-14     will use an air pollution control method at least as beneficial as
5-15     that described in Section 382.003(9)(E)(ii), considering the age
5-16     and remaining useful life of the facility.
5-17           (c)  If the commission finds that the emissions from the
5-18     facility will contravene the standards under Subsection (b) or the
5-19     intent of this chapter, including protection of the public's health
5-20     and physical property, the commission may not grant the permit
5-21     under this section.
5-22           (d)  A person planning the modification of a facility
5-23     previously permitted under this section must comply with Section
5-24     382.0518 before work is begun on the construction of the
5-25     modification.
5-26           (e)  A permit issued by the commission under this section may
5-27     defer the implementation of the requirement of reductions in the
 6-1     emissions of certain air contaminants only if the applicant will
 6-2     make substantial emissions reductions in other specific air
 6-3     contaminants.  The deferral shall be based on a prioritization of
 6-4     air contaminants by the commission as necessary to meet local,
 6-5     regional, and statewide air quality needs.
 6-6           Sec. 382.05191.  VOLUNTARY EMISSIONS REDUCTION PERMIT:
 6-7     NOTICE AND HEARING.  (a)  An applicant for a permit under Section
 6-8     382.0519 shall publish notice of intent to obtain the permit in
 6-9     accordance with Section 382.056.
6-10           (b)  The commission may authorize an applicant for a permit
6-11     for a facility that constitutes or is part of a small business
6-12     stationary source as defined in Section 382.0365(g)(2) to provide
6-13     notice using an alternative means if the commission finds that the
6-14     proposed method will result in equal or better communication with
6-15     the public, considering the effectiveness of the notice in reaching
6-16     potentially affected persons, cost, and consistency with federal
6-17     requirements.
6-18           (c)  The commission shall provide an opportunity for a public
6-19     hearing and the submission of public comment and send notice of a
6-20     decision on an application for a permit under Section 382.0519 in
6-21     the same manner as provided by Sections 382.0561 and 382.0562.
6-22           (d)  A person affected by a decision of the commission to
6-23     issue or deny a voluntary emissions reduction permit may move for
6-24     rehearing and is entitled to judicial review under Section 382.032.
6-25           Sec. 382.05192.  VOLUNTARY EMISSIONS REDUCTION PERMITS:
6-26     REVIEW AND RENEWAL.  Review and renewal of permits issued under
6-27     Section 382.0519 shall be conducted in accordance with Section
 7-1     382.055.
 7-2           Sec. 382.05193.  EMISSIONS PERMITS THROUGH ENVIRONMENTAL
 7-3     MITIGATION PROJECT.  (a)  The commission may issue a permit under
 7-4     Section 382.0519 for a facility:
 7-5                 (1)  that makes a good faith effort to make equipment
 7-6     improvements and emissions reductions necessary to meet the
 7-7     requirements of that section;
 7-8                 (2)  that, in spite of the effort, cannot reduce the
 7-9     facility's emissions to the degree necessary for the issuance of
7-10     the permit; and
7-11                 (3)  the owner or operator of which acquires a
7-12     sufficient number of emissions reduction credits to offset the
7-13     facility's excessive emissions under the program established under
7-14     Subsection (b).
7-15           (b)  The commission by rule shall establish a program to
7-16     grant emissions reduction credits to a facility if the owner or
7-17     operator conducts a special environmental project to offset the
7-18     facility's excessive emissions.  The rules must establish two
7-19     categories of projects eligible for credits under the program,
7-20     including:
7-21                 (1)  emissions reduction projects; and
7-22                 (2)  environmental protection projects.
7-23           (c)  A project included in the emissions reduction projects
7-24     category must reduce net emissions from one or more sources in this
7-25     state in an amount and type sufficient to prevent air pollution to
7-26     a degree comparable to the amount of the reduction in the
7-27     facility's emissions that would be necessary to meet the permit
 8-1     requirement.  The emissions reduction projects category must
 8-2     include:
 8-3                 (1)  generation of electric energy by a low-emission
 8-4     method, including:
 8-5                       (A)  wind power;
 8-6                       (B)  biomass gasification power; and
 8-7                       (C)  solar power;
 8-8                 (2)  the purchase and destruction of high-emission
 8-9     automobiles or other mobile sources;
8-10                 (3)  the reduction of emissions from a permitted
8-11     facility that emits air contaminants to a level significantly below
8-12     the levels necessary to comply with the facility's permit;
8-13                 (4)  a carpooling or alternative transportation program
8-14     for the owner's or operator's employees;
8-15                 (5)  a telecommuting program for the owner's or
8-16     operator's employees; and
8-17                 (6)  conversion of a motor vehicle fleet operated by
8-18     the owner or operator to a low-sulphur fuel or an alternative fuel
8-19     approved by the commission.
8-20           (d)  A project included in the environmental protection
8-21     projects category must benefit, preserve, or protect environmental
8-22     quality in this state to a degree that the value of the project to
8-23     the status of the state's environment is comparable to the value to
8-24     the environment of reducing the facility's emissions to the extent
8-25     necessary to meet the permit requirements.  The environmental
8-26     protection projects category must include:
8-27                 (1)  the creation of a wildlife or plant preserve;
 9-1                 (2)  the creation of an environmental easement;
 9-2                 (3)  surface water, groundwater, or soil pollution
 9-3     prevention or remediation; and
 9-4                 (4)  wetlands enhancement, remediation, or
 9-5     preservation.
 9-6           (e)  A permit issued under Section 382.0519 for a facility
 9-7     participating in the program established under this section must be
 9-8     conditioned on the successful and timely completion of the project
 9-9     or projects for which the facility owner or operator acquires the
9-10     credits.
9-11           (f)  To renew the permit of a facility permitted under
9-12     Section 382.0519 with credits acquired under the program
9-13     established under this section, the commission shall require the
9-14     owner or operator of the facility to have:
9-15                 (1)  made equipment improvements and emissions
9-16     reductions necessary to meet the permit requirements under that
9-17     section for a new permit; or
9-18                 (2)  acquired additional credits under the program as
9-19     necessary to meet the permit requirements under that section for a
9-20     new permit.
9-21           (g)  Emissions reduction credits acquired under the program
9-22     established under this section are not transferrable.
9-23           Sec. 382.05194.  MULTIPLE PLANT PERMIT.  (a)  The commission
9-24     may issue a multiple plant permit for multiple plant sites that are
9-25     owned or operated by the same person or persons under common
9-26     control if the commission finds that:
9-27                 (1)  the aggregate rate of emission of air contaminants
 10-1    to be authorized under the permit does not exceed the total of:
 10-2                      (A)  for previously permitted facilities, the
 10-3    rates authorized in the existing permits; and
 10-4                      (B)  for existing unpermitted facilities not
 10-5    subject to the requirement to obtain a preconstruction
 10-6    authorization under Section 382.0518(g) or for facilities
 10-7    authorized under Section 382.0519, the rates that would be
 10-8    authorized under Section 382.0519; and
 10-9                (2)  there is no indication that the emissions from the
10-10    facilities will contravene the intent of this chapter, including
10-11    protection of the public's health and physical property.
10-12          (b)  A permit issued under this section may not authorize
10-13    emissions from any of the facilities authorized under the permit
10-14    that exceed the facility's highest historic annual rate or the
10-15    levels authorized in the facility's most recent permit.  In the
10-16    absence of records extending back to the original construction of
10-17    the facility, best engineering judgment shall be used to
10-18    demonstrate the facility's highest historic annual rate to the
10-19    commission.
10-20          (c)  Emissions control equipment previously installed at a
10-21    facility permitted under this section may not be removed or
10-22    disabled unless the action is undertaken to maintain or upgrade the
10-23    control equipment or to otherwise reduce the impact of emissions
10-24    authorized by the commission.
10-25          (d)  The commission shall publish notice of a proposed
10-26    multiple plant permit for existing facilities in the Texas Register
10-27    and in one or more statewide or regional newspapers designated by
 11-1    the commission by rule that will, in the commission's judgment,
 11-2    provide reasonable notice throughout the state.  If the multiple
 11-3    plant permit for existing facilities will be effective for only
 11-4    part of the state, the notice shall be published in a newspaper of
 11-5    general circulation in the area to be affected.  The commission by
 11-6    rule may require additional notice to be given.  The notice must
 11-7    include an invitation for written comments by the public to the
 11-8    commission regarding the proposed multiple plant permit and must be
 11-9    published not later than the 30th day before the date the
11-10    commission issues the multiple plant permit.
11-11          (e)  For existing facilities, the commission shall hold a
11-12    public meeting to provide an additional opportunity for public
11-13    comment.  The commission shall give notice of a public meeting
11-14    under this subsection as part of the notice described in Subsection
11-15    (d) not later than the 30th day before the date of the meeting.
11-16          (f)  If the commission receives public comment related to the
11-17    issuance of a multiple plant permit for existing facilities, the
11-18    commission shall issue a written response to the comments at the
11-19    same time the commission issues or denies the permit.  The response
11-20    must be made available to the public, and the commission shall mail
11-21    the response to each person who made a comment.
11-22          (g)  The commission by rule shall establish the procedures
11-23    for application and approval for the use of a multiple plant
11-24    permit.
11-25          (h)  For a multiple plant permit that applies only to
11-26    existing facilities for which an application is filed before
11-27    September 1, 2001, the issuance, amendment, or revocation by the
 12-1    commission of the permit is not subject to Chapter 2001, Government
 12-2    Code.
 12-3          (i)  The commission may adopt rules as necessary to implement
 12-4    and administer this section and may delegate to the executive
 12-5    director under Section 382.061 the authority to issue, amend, or
 12-6    revoke a multiple plant permit.
 12-7          Sec. 382.05195.  STANDARD PERMIT.  (a)  The commission may
 12-8    issue a standard permit for new or existing similar facilities if
 12-9    the commission finds that:
12-10                (1)  the standard permit can be enforceable;
12-11                (2)  the commission can adequately monitor compliance
12-12    with the terms of the standard permit; and
12-13                (3)  for permit applications for facilities subject to
12-14    Sections 382.0518(a)-(d) filed before September 1, 2001, the
12-15    facilities will use control technology at least as effective as
12-16    that described in Section 382.0518(b).  For permit applications
12-17    filed after August 31, 2001, all facilities permitted under this
12-18    section will use control technology at least as effective as that
12-19    described in Section 382.0518(b).
12-20          (b)  The commission shall publish notice of a proposed
12-21    standard permit in the Texas Register and in one or more statewide
12-22    or regional newspapers designated by the commission by rule that
12-23    will, in the commission's judgment, provide reasonable notice
12-24    throughout the state.  If the standard permit will be effective for
12-25    only part of the state, the notice shall be published in a
12-26    newspaper of general circulation in the area to be affected.  The
12-27    commission by rule may require additional notice to be given.  The
 13-1    notice must include an invitation for written comments by the
 13-2    public to the commission regarding the proposed standard permit and
 13-3    must be published not later than the 30th day before the date the
 13-4    commission issues the standard permit.
 13-5          (c)  The commission shall hold a public meeting to provide an
 13-6    additional opportunity for public comment.  The commission shall
 13-7    give notice of a public meeting under this subsection as part of
 13-8    the notice described in Subsection (b) not later than the 30th day
 13-9    before the date of the meeting.
13-10          (d)  If the commission receives public comment related to the
13-11    issuance of a standard permit, the commission shall issue a written
13-12    response to the comments at the same time the commission issues or
13-13    denies the permit.  The response must be made available to the
13-14    public, and the commission shall mail the response to each person
13-15    who made a comment.
13-16          (e)  The commission by rule shall establish the procedures
13-17    for application and approval for the use of a standard permit.
13-18          (f)  The issuance, amendment, or revocation of a standard
13-19    permit by the commission is not subject to Chapter 2001, Government
13-20    Code.
13-21          (g)  The commission may adopt rules as necessary to implement
13-22    and administer this section and may delegate to the executive
13-23    director under Section 382.061 the authority to issue, amend, or
13-24    revoke a standard permit.
13-25          Sec. 382.05196.  PERMITS BY RULE.  (a)  Consistent with
13-26    Section 382.051, the commission may adopt permits by rule for
13-27    certain types of facilities if it is found on investigation that
 14-1    the types of facilities will not make a significant contribution of
 14-2    air contaminants to the atmosphere.  The commission may not adopt a
 14-3    permit by rule authorizing any facility defined as a "major source"
 14-4    under the federal Clean Air Act (42 U.S.C. Section 7401 et seq.) or
 14-5    regulations adopted under that Act.  Nothing in this subsection
 14-6    shall be construed to limit the commission's general power to
 14-7    control the state's air quality under Section 382.011(a).
 14-8          (b)  The commission by rule shall specifically define the
 14-9    terms and conditions for a permit by rule under this section.
14-10          SECTION 6.  Section 382.057(a), Health and Safety Code, is
14-11    amended to read as follows:
14-12          (a)  Consistent with Section 382.0511, the commission by rule
14-13    may exempt from the requirements of Section 382.0518 changes within
14-14    any facility [and certain types of facilities] if it is found on
14-15    investigation that such changes [or types of facilities] will not
14-16    make a significant contribution of air contaminants to the
14-17    atmosphere.  The commission by rule shall exempt from the
14-18    requirements of Section 382.0518 or issue a standard permit for the
14-19    installation of emission control equipment that constitutes a
14-20    modification or a new facility, subject to such conditions
14-21    restricting the applicability of such exemption or standard permit
14-22    that the commission deems necessary to accomplish the intent of
14-23    this chapter.  The commission may not exempt [any facility or] any
14-24    modification of an existing facility defined as "major" under the
14-25    federal Clean Air Act or regulations adopted under that Act.
14-26    Nothing in this subsection shall be construed to limit the
14-27    commission's general power to control the state's air quality under
 15-1    Section 382.011(a).
 15-2          SECTION 7.  Section 382.058, Health and Safety Code, is
 15-3    amended to read as follows:
 15-4          Sec. 382.058.  PERMITS BY RULE OR STANDARD PERMITS
 15-5    [LIMITATION ON COMMISSION EXEMPTION] FOR CONSTRUCTION OF CERTAIN
 15-6    CONCRETE PLANTS.  (a)  A person may not begin construction on any
 15-7    concrete plant that performs wet batching, dry batching, or central
 15-8    mixing under a standard permit under Section 382.05195 or a permit
 15-9    by rule [an exemption] adopted by the commission under Section
15-10    382.05196 [382.057] unless the person has complied with the notice
15-11    and opportunity for hearing provisions under Section 382.056.
15-12          (b)  This section does not apply to a concrete plant located
15-13    temporarily in the right-of-way, or contiguous to the right-of-way,
15-14    of a public works project.
15-15          (c)  For purposes of this section, only those persons
15-16    actually residing in a permanent residence within 440 yards of the
15-17    proposed plant may request a hearing under Section 382.056(d) as a
15-18    person who may be affected.
15-19          SECTION 8.  Section 382.062(b), Health and Safety Code, is
15-20    amended to read as follows:
15-21          (b)  The commission may adopt rules relating to charging and
15-22    collecting a fee for an exemption, for [from] a permit, for a
15-23    permit by rule, for a voluntary emissions reduction permit, for a
15-24    multiple plant permit, or for a standard permit [authorized by
15-25    commission rule] and for a variance.
15-26          SECTION 9.  The Texas Natural Resource Conservation
15-27    Commission shall adopt, as soon as practicable after the effective
 16-1    date of this Act, any rules necessary to implement the changes in
 16-2    law made by this Act.
 16-3          SECTION 10.  Not later than January 15, 2001, the Texas
 16-4    Natural Resource Conservation Commission shall prepare and
 16-5    distribute to the governor, the lieutenant governor, the speaker of
 16-6    the house of representatives, the chair of the Senate Committee on
 16-7    Natural Resources, and the chair of the House Committee on
 16-8    Environmental Regulation a report on the number of companies that
 16-9    have obtained or applied for a permit under Section 382.0519,
16-10    Health and Safety Code, as added by this Act, and the reductions in
16-11    emissions anticipated to result from issuance of such permits.
16-12          SECTION 11.  (a)  The Texas Natural Resource Conservation
16-13    Commission may not initiate an enforcement action against a person
16-14    for the failure to obtain a preconstruction permit under Section
16-15    382.0518, Health and Safety Code, or a rule adopted or order issued
16-16    by the commission under that section, that is related to the
16-17    modification of a facility that may emit air contaminants if, on or
16-18    before August 31, 2001, the person files an application for a
16-19    permit for the facility under Section 382.0519, Health and Safety
16-20    Code, as added by this Act.
16-21          (b)  This section does not apply to an act related to the
16-22    modification of a facility that occurs after March 1, 1999.
16-23          SECTION 12.  The importance of this legislation and the
16-24    crowded condition of the calendars in both houses create an
16-25    emergency and an imperative public necessity that the
16-26    constitutional rule requiring bills to be read on three several
16-27    days in each house be suspended, and this rule is hereby suspended,
 17-1    and that this Act take effect and be in force from and after its
 17-2    passage, and it is so enacted.