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78R4315 MI-D
By: Smith of Harris H.B. No. 1063
A BILL TO BE ENTITLED
AN ACT
relating to compliance histories for and incentives to reward
compliance performance by entities regulated by the Texas
Commission on Environmental Quality.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 5.752(2) and (5), Water Code, are
amended to read as follows:
(2) "Innovative program" means:
(A) a program developed by the commission under
this subchapter, Chapter 26 or 27 of this code, or Chapter 361, 382,
or 401, Health and Safety Code, that provides incentives to a person
in return for:
(i) benefits to the environment that exceed
benefits that would result from compliance with applicable legal
requirements under the commission's jurisdiction; or
(ii) benefits to the environment that are
equal to benefits that would result from compliance with applicable
legal requirements under the commission's jurisdiction and that
also result in economic benefit to regulated entities;
(B) the flexible permit program administered by
the commission under Chapter 382, Health and Safety Code; or
(C) the regulatory flexibility program
administered by the commission under Section 5.758.
(5) "Strategically directed regulatory structure"
means a program that is designed to use innovative programs to
provide maximum environmental benefit, to result in economic
savings to regulated entities, and to reward compliance
performance.
SECTION 2. Sections 5.753(a), (b), and (e), Water Code, are
amended to read as follows:
(a) Consistent with other law and the requirements
necessary to maintain federal program authorization, the
commission by rule may [shall] develop standards [a uniform
standard] for evaluating site-specific compliance history that are
uniform for sites that are similar in size and complexity and at
which similar activities occur.
(b) The components of compliance history may [must]
include:
(1) enforcement orders, court judgments, consent
decrees, and criminal convictions of this state [and the federal
government] relating to compliance with applicable legal
requirements under the jurisdiction of the commission [or the
United States Environmental Protection Agency];
(2) notwithstanding any other provision of this code,
orders issued under Section 7.070;
(3) to the extent readily available to the commission,
enforcement orders, court judgments, and criminal convictions
relating to violations of environmental laws of other states and
the federal government, including the United States Environmental
Protection Agency; and
(4) changes in ownership.
(e) Except as required by other law or any requirement
necessary to maintain federal program authorization, the
commission by rule shall establish a three-year period for
site-specific compliance history.
SECTION 3. Sections 5.754(a), (b), (c), (d), (g), (h), and
(i), Water Code, are amended to read as follows:
(a) The commission by rule may [shall] establish a set of
standards for the classification of a person's compliance history
at a particular site.
(b) Rules adopted under this section must, at a minimum,
provide for three classifications of site-specific compliance
history in a manner adequate to distinguish among:
(1) poor performers, or regulated entities that in the
commission's judgment perform below average at a particular site;
(2) satisfactory [average] performers, or regulated
entities that generally comply with environmental regulations at a
particular site; and
(3) high performers, or regulated entities that have a
[an above-average] compliance record at a particular site that
demonstrates a high level of compliance with environmental
regulations at that site.
(c) In classifying a person's compliance history at a
particular site, the commission shall:
(1) give consideration to the size and complexity of
the site [determine whether a violation of an applicable legal
requirement is of major, moderate, or minor significance];
(2) establish criteria for classifying a repeat
violator, giving consideration to the size [number] and complexity
of the site at which the violations occurred and limiting
consideration to violations of a similar nature [facilities owned
or operated by the person]; and
(3) consider the significance of the violation and
whether the person is a repeat violator at the site.
(d) The commission by rule shall establish methods of
assessing the site-specific compliance history of regulated
entities for which it does not have adequate compliance
information. The methods may include requiring a compliance
inspection at the site to determine an entity's eligibility for
participation in a program that requires a high level of
compliance.
(g) Rules adopted under Subsection (e) for the use of
site-specific compliance history shall provide for additional
oversight of, and review of applications regarding, a site
[facilities] owned or operated by a person whose compliance
performance at that site is in the lowest classification developed
under this section.
(h) The commission by rule shall, at a minimum, prohibit a
person whose compliance history at a particular site is classified
in the lowest classification developed under this section from:
(1) receiving an announced inspection at the site; and
(2) obtaining or renewing a flexible permit for the
site under the program administered by the commission under Chapter
382, Health and Safety Code, or participating at the site in the
regulatory flexibility program administered by the commission
under Section 5.758.
(i) The commission may [shall] consider the compliance
history of a regulated entity at any of its sites when determining
whether to grant the regulated entity's application for a permit or
permit amendment for any new activity under the commission's
jurisdiction to which this subchapter applies. Notwithstanding any
provision of this code or the Health and Safety Code relating to the
granting of permits or permit amendments by the commission, the
commission, after an opportunity for a hearing, shall deny a
regulated entity's application for a permit or permit amendment if
the regulated entity's compliance history is unacceptable based on
violations constituting a recurring pattern of conduct that
demonstrates a consistent disregard for the regulatory process,
including a failure to make a timely and substantial attempt to
correct the violations.
SECTION 4. Section 5.755, Water Code, is amended by
amending Subsections (a) and (b) and adding Subsection (d) to read
as follows:
(a) The commission by rule shall develop a strategically
directed regulatory structure to provide:
(1) incentives for enhanced environmental
performance; and
(2) economic benefits for regulated entities if the
resulting benefits to the environment are equal to the benefits
that would result from compliance with applicable legal
requirements under the commission's jurisdiction.
(b) The strategically directed regulatory structure shall
offer incentives based on:
(1) a person's site-specific compliance history
classification; and
(2) any voluntary measures undertaken by the person to
improve environmental quality at the site.
(d) If the commission uses a formula to determine
classifications for purposes of this subchapter, the denominator
shall include inspections and reports submitted to the commission
that allege potential violations at the site.
SECTION 5. Section 5.756, Water Code, is amended by
amending Subsection (b) and adding Subsection (e) to read as
follows:
(b) The commission shall collect data on and make available
to the public [on the Internet]:
(1) the number and percentage of all violations
committed at a particular site by persons who previously have
committed the same or similar violations at that site;
(2) the number and percentage of enforcement orders
issued by the commission that are issued for a particular site to
entities that have been the subject of a previous enforcement order
for that site;
(3) [whether a violation is of major, moderate, or
minor significance, as defined by commission rule;
[(4)] whether a violation relates to an applicable
legal requirement pertaining to air, water, or waste; and
(4) [(5)] the region in which the site [facility] is
located.
(e) Any material about a site that is placed on the Internet
under this subchapter is subject to a quality assurance and quality
control procedure, including an opportunity for the entity that
holds the permit for the site to review the information before it is
placed on the Internet.
SECTION 6. Sections 5.758(a), (b), (d), and (h), Water
Code, are amended to read as follows:
(a) The commission by order may exempt an applicant from a
requirement of a statute or commission rule regarding the control
or abatement of pollution if the applicant proposes to control or
abate pollution by an alternative method or by applying an
alternative standard that is:
(1) as [more] protective of the environment and the
public health as [than] the method or standard prescribed by the
statute or commission rule that would otherwise apply; and
(2) not inconsistent with federal law.
(b) The commission may not exempt an applicant under this
section unless the applicant can present to the commission
documented evidence of benefits to environmental quality or of
economic benefit with equivalent protection of environmental
quality that will result from the project the applicant proposes.
(d) The commission's order must provide a [specific]
description of the alternative method or standard and condition the
exemption on compliance with the method or standard as the order
prescribes.
(h) In implementing the program of regulatory flexibility
authorized by this section, the commission shall:
(1) [market the program to businesses in the state
through all available appropriate media;
[(2)] endorse alternative methods that will clearly
benefit the environment and impose the least onerous restrictions
on business, including economic benefit;
[(3) fix and enforce environmental standards,
allowing businesses flexibility in meeting the standards in a
manner that clearly enhances environmental outcomes;] and
(2) [(4)] work to achieve consistent and predictable
results for the regulated community and shorter waits for permit
issuance.
SECTION 7. Sections 5.753(d) and 5.757, Water Code, are
repealed.
SECTION 8. This Act takes effect September 1, 2003.