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.