PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
CHAPTER 101. GENERAL AIR QUALITY RULES
SUBCHAPTER H. EMISSIONS BANKING AND TRADING
DIVISION 7. CLEAN AIR INTERSTATE RULE
30 TAC §§101.502, 101.504, 101.506, 101.508
The Texas Commission on Environmental Quality (commission or TCEQ) proposes amendments to §§101.502, 101.504, 101.506, and 101.508.
The amended sections will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan (SIP).
BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES
The purpose of this Clean Air Interstate Rule (CAIR) revision is to incorporate legislative changes made during the 80th Texas Legislature, 2007, as prescribed by Senate Bill (SB) 1672 and federal rule revisions that the EPA has promulgated since Texas adopted the states initial CAIR rules on July 12, 2006. Additionally, grammatical and formatting changes are being proposed to conform with Texas Register and commission standards.
On May 12, 2005, the EPA promulgated CAIR to assist nonattainment areas in downwind states in achieving compliance with the national ambient air quality standards (NAAQS) for particulate matter less than or equal to 2.5 microns (PM2.5) and eight-hour ozone. Twenty-eight eastern states and the District of Columbia were identified as upwind contributors to the nonattainment of the PM2.5 and eight-hour ozone NAAQS prompting the requirement for the reduction in emissions of sulfur dioxide (SO2) and/or oxides of nitrogen (NOX). Twenty-three states, including Texas, and the District of Columbia were found to contribute to the downwind nonattainment of the PM2.5 NAAQS and are required to make reductions in annual emissions of SO2 and NOX.
The 79th Texas Legislature, 2005, enacted House Bill (HB) 2481, §2 (codified at Texas Health and Safety Code (THSC), Texas Clean Air Act (TCAA), §382.0173), requiring Texas to participate in the EPA-administered interstate cap and trade program through the incorporation by reference of the CAIR model trading rule. HB 2481 also provided specific direction for the methodology to be used in allocating the NOX trading budget provided to Texas, identified an amount of CAIR NOX allowances to be set aside for new sources, and specified that reductions associated with CAIR would only be required from new and existing electric generating units (EGUs) and not from other sources of SO2 and NOX emissions.
In 2007, the 80th Texas Legislature passed SB 1672 that directs the TCEQ to incorporate federal CAIR changes that the EPA has finalized since the initial adoption of the CAIR rules on July 12, 2006, and revise the NOX allocation methodology as prescribed by SB 1672. SB 1672 revises the number of minimum periods specified for NOX allocation adjustments that was directed by HB 2481. HB 2481 revised the baseline heat input of existing units to reflect the average of the three highest amounts of the units total converted control period heat input from control periods one through five of the previous seven control periods. However, the five-year period did not provide adequate time to accommodate the EPA's requirement of providing allocations to them approximately four years in advance. SB 1672 changed the number of control periods from seven to nine and shifted the initial allocation update from 2016 to 2018. Therefore, beginning with the 2018 control period, and for the control period beginning every five-years after 2018, each existing unit's baseline heat input will be adjusted to reflect the average of the three highest amounts of the unit's total converted control period heat input from control periods one through five of the previous nine control periods.
Because of the change in control periods for adjusting baseline heat input, for the 2016 and 2017 control periods new units with five or more consecutive years of operation will be eligible to receive their CAIR NOX allocation from the general NOX trading budget on a modified output basis. This is consistent with how new units are handled for the 2015 control period under the federal CAIR program. However, beginning in the 2018 control period, new units with five or more years of operation will be eligible to receive their CAIR NOX allowances allocation from the general NOX trading budget on a modified output basis only during the baseline adjustment control periods.
SB 1672 also omits the reference dates of the federal CAIR adoption that were specified in HB 2481 from the 79th Texas legislative session. This change will enable the commission to make subsequent changes as dictated by federal rule change for CAIR.
The proposed rule revision also incorporates revisions to the federal CAIR model trading rules. The EPA adopted revisions to 40 Code of Federal Regulations (CFR) Part 96 Subpart AA - Subpart II and Subpart AAA - Subpart III on April 28, 2006. In the April 28, 2006, revisions, the EPA changed the compliance dates for companies to submit a request for allowances from the new unit set-aside from July 1 to May 1 of the control period. The EPA also revised the time to request allowances from the compliance pool from July 1, 2009, to May 1, 2009. For additional information regarding these revisions, please review the EPA final rule, published in the Federal Register at 71 Fed Reg. 82 on April 28, 2006, available online at www.epa.gov/fedrgstr/.
On January 24, 2008, the EPA adopted revisions to 40 CFR Parts 72 and 75 that modify existing requirements for sources affected by CAIR. The revisions include changes implemented by the EPA's Clean Air Markets Division in its data system in order to utilize the latest modern technology for submittal of data by affected sources. The EPA also adopted revisions to require that individuals performing emissions testing or Continuous Emissions Monitoring System (CEMS) performance evaluations must comply with American Society for Testing and Materials (ASTM) D7036-04 "Standard Practice for Competence of Air Emission Testing Bodies." The ASTM standard sets minimum requirements for demonstrating that an air emission testing bodies is competent to perform testing. For additional information regarding these revisions, please review the EPA final rule, published in the Federal Register at 73 Fed Reg. 16 on January 24, 2008, available online at www.epa.gov/fedrgstr/.
Currently, the federal CAIR is being reviewed by the District of Columbia (D.C.) Circuit Court of Appeals. Various states, industry groups, and environmental groups challenged several aspects of the federal CAIR, including whether the EPA improperly included West Texas in the CAIR. The litigation treats West Texas as the counties west of the roughly north-south corridor formed by Interstates 35 and 37. Those cases were consolidated as State of North Carolina v. EPA, No. 05-1244, in the D.C. Circuit Court of Appeals. The court heard oral argument in the case on March 25, 2008. If a final court decision determines that West Texas and/or El Paso Region sources should not have been included in CAIR, then both the CAIR and these rules that implement CAIR will need to be modified.
TCAA, §382.0173(d) directs the commission to take all reasonable and appropriate steps to exclude the West Texas Region and El Paso Region from CAIR and to promptly amend these rules to incorporate any resulting exclusions. The commission solicits comment on how best to effectuate any exclusion of any portion of Texas from the implementation of CAIR in Texas, should a final court decision overturn the inclusion of West Texas Region and/or El Paso Region sources in the federal CAIR. The commission specifically requests comment on whether to effectuate any exclusion as part of this rulemaking should such a final court decision be rendered prior to the commission's final action on this proposal.
SECTION BY SECTION DISCUSSION
SUBCHAPTER H, EMISSIONS BANKING AND TRADING
DIVISION 7, CLEAN AIR INTERSTATE RULE
Grammatical and formatting changes have been made throughout the proposal to conform to Texas Register and agency standards.
Section 101.502, Clean Air Interstate Rule Trading Program
The proposed revision to §101.502 updates the reference to the adoption date of October 19, 2007, effective November 19, 2007, for 40 CFR Part 96, Subpart AA - Subpart II and Subpart AAA - Subpart III.
Section 101.504 Timing Requirements for Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations
The proposed revisions to §101.504 revise the deadlines the executive director must submit to the EPA the CAIR NOX allowance allocations for each CAIR NOX unit subject to this division in order to comply with the minimum lead time of three years provided under 40 CFR 51.123(o)(2)(ii). The deadline to submit CAIR NOX allocations for 2016 will be revised to October 31, 2012. Beginning in control period 2017 and each control period thereafter, the CAIR NOX allowances allocations must be submitted to the EPA 38 months prior to the beginning of the applicable control period.
Section 101.506, Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations
The proposed revisions to §101.506 describe the methodology to be used in distributing CAIR NOX allowances, in tons, for each CAIR NOX unit subject to this division. Beginning with the 2018 control period, and for the control period beginning every five years thereafter, the baseline heat input for units commencing operation prior to January 1, 2001, will be adjusted to reflect the average of the three highest amounts of the unit's control period heat input, adjusted for fuel type, from control periods one through five of the previous nine control periods.
For units commencing operation on or after January 1, 2001, for control periods 2015, 2016, and 2017, units operating each calendar year for a period of five or more consecutive years will be eligible to receive their CAIR NOX allowance allocation from the general NOX trading budget on a modified output basis. The baseline heat input will be the average of the three highest amounts of the unit's total converted control period heat input from the first five years of operation.
The proposed revisions also require the CAIR designated representative for units that commence operation on or after January 1, 2001, and that have not established a historical baseline heat input in accordance with §101.506(b)(2) or (3), to submit a request for a CAIR NOX allowance allocation from the new unit set-aside on or before May 1 of the first control period for which the request is being made and after the date that the CAIR NOX unit commences commercial operation.
The proposed revision also requires the gross electrical output of the generator or generators served by the unit and total heat energy of any steam produced by the unit to be submitted in writing to the executive director by the latter of May 1, 2011, or May 1 of the control period immediately following the unit's fifth consecutive year of commercial operation.
Section 101.508, Compliance Supplement Pool
Proposed revisions to §101.508 require the CAIR designated representative to submit to the executive director by May 1, 2009, a request for an allocation of CAIR NOX allowances from the compliance supplement pool in an amount not to exceed the sum of the CAIR NOX unit's emission reductions, in tons, during 2007 and 2008, that were not necessary to comply with any state or federal emission limitation applicable during those years.
Proposed revisions also require the CAIR designated representative to submit to the executive director by May 1, 2009, a request for an allocation of CAIR NOX allowances from the compliance supplement pool in an amount not to exceed the minimum amount of CAIR NOX allowances necessary to remove the risk to the reliability of electricity supply.
FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENTS
Nina Chamness, Analyst, Strategic Planning and Assessment, has determined that, for the first five-year period the proposed rules are in effect, no significant fiscal implications are anticipated for the agency or other units of state or local governments as a result of administration or enforcement of the proposed rules. The agency will implement the proposed rules utilizing current resources. Local governments that own or operate EGUs may pay additional monitoring and testing costs, but these additional costs are not expected to be significant.
The proposed rules implement the provisions of SB 1672, which allow the agency to comply with changes made to the federal CAIR by the EPA. Specifically, SB 1672 expands the number of control periods that are used to calculate the baseline, which in turn is used to calculate the heat input of a unit from seven to nine years. The baseline would govern the amount of NOX that would be permissible under CAIR. SB 1672 also requires the agency to implement other CAIR provisions that the EPA finalized after SB 1672 was passed. These provisions include: an extension of the deadline that companies must comply with for submitting their request for NOX emission allowances; and additional testing and monitoring options that EGUs can use to measure and report these emissions. The EPA has also mandated that those performing CEMS evaluations and stack testing comply with ASTM D7036-04 requirements so that they can demonstrate competence in performing these monitoring tasks. The proposed rules will apply to any stationary, fossil-fuel-fired boiler or combustion turbine serving at any time a generator with a nameplate capacity of more than 25 megawatts of electricity (MWe) that produces electricity for sale. It is estimated that there may be as many as 400 of these types of machines that fit the criteria governed by the proposed rule and the federal statute. Staff estimates that approximately 48 of these type boilers or combustion turbines are owned by local governments operating EGUs, and approximately 352 are thought to be owned by large businesses operating EGUs.
The proposed rules, which implement EPA requirements, will require that companies performing CEMS evaluations and stack testing comply with ASTM D7036-04 requirements. The EPA has estimated that compliance with ASTM D7036-04 requirements may require a company planning to test for CAIR compliance pay as much as $100 per year to test its ability to comply with ASTM D7036-04 standards and a one-time cost of about $4,000 to establish a quality CAIR monitoring program. A testing company is expected to spread these costs to all the EGUs that choose the company to perform the needed CEMS evaluations and stack testing, and no one EGU, including those owned by local governments, is expected to experience significant cost increases as a result of the proposed rules.
PUBLIC BENEFITS AND COSTS
Ms. Chamness also determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be compliance with state and federal laws and increased environmental protection due to the reduction of NOX and SO2 emissions from stationary sources at affected EGUs.
Approximately 352 of the estimated 400 stationary sources governed by the proposed rule are thought to be owned by large businesses operating EGUs. An EGU will be able to contract a company meeting required technical standards from any of over 240 national and international testing companies, and as many as 19 of these companies may be located in Texas. Most testing companies are thought to be small businesses, and the EPA has estimated that the companies will incur some additional costs, although not anticipated to be significant, to comply with ASTM D7036-04 standards. These additional costs, which are found in the COSTS TO STATE AND LOCAL GOVERNMENT section of this preamble, are not expected to have a significant fiscal implication for EGUs owned by large businesses because testing companies are expected to spread increased costs among several customers.
SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT
No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rules. Although staff does not have the data needed to estimate how many of companies that might perform CEMS evaluations and stack testing for CAIR requirements, staff believes that many of them might be small or micro-businesses. EPA has estimated that compliance with ASTM D7036-04 requirements may require a company planning to test for CAIR compliance pay as much as $100 per year to test its ability to comply with ASTM D7036-04 standards and a one time cost of about $4,000 to establish a quality CAIR monitoring program. A testing company can choose whether or not it will incur these certification costs, and if it chooses to perform this service, the company is expected to recover these costs from their customers.
SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS
The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not required because the proposed rules do not adversely affect a small or micro-business in a material way for the first five years that the proposed rules are in effect. In addition, the proposed rule is required by state and federal law in order to protect the environment and public health and safety.
LOCAL EMPLOYMENT IMPACT STATEMENT
The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.
DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION
The commission reviewed the proposed rulemaking in light of the regulatory impact analysis requirements of Texas Government Code, §2001.0225, and determined that the proposed rulemaking meets the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" means a rule, the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The proposed rulemaking does not, however, meet any of the four applicability criteria for requiring a regulatory impact analysis for a major environmental rule, which are listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225, applies only to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.
The proposed rules are an incorporation by reference of revisions to the federal CAIR. The commission previously adopted rules to incorporate the CAIR, as discussed elsewhere in this preamble The CAIR includes EPA-administered emissions trading programs that will be governed by model rules provided in the CAIR, which states may incorporate by reference. The EPA found that Texas is among several states that contribute significantly to nonattainment of the NAAQS for PM2.5 in downwind states. The EPA is requiring these upwind states to revise their SIPs to include control measures to reduce emissions of SO2 and/or NOX , which are precursors to PM2.5 formation. Reducing upwind precursor emissions will assist downwind PM2.5 nonattainment areas to achieve the NAAQS in a more equitable, cost-effective manner than if those areas implemented local emissions reductions alone. The EPA has specified the amount of each state's required reductions, but each state has flexibility to choose the measures by which it achieves them. If states choose to control EGUs, then they must establish a budget or cap for those sources. The CAIR defines the EGU budgets for the affected states if the states choose to control only EGUs or if they choose to control other sources to achieve some or all of their reductions. States may adopt the CAIR NOX model allowance allocation methodology or choose an alternative method to allocate the state budget of NOX emissions allowances to sources in the state.
Specifically, the proposed rulemaking would incorporate by reference revisions to the CAIR model emissions trading rules located in 40 CFR Part 96, Subpart AA - Subpart II, and Subpart AAA - Subpart III. In addition, the rulemaking proposes revisions to an alternative NOX allowance allocation methodology for Texas CAIR NOX sources in lieu of the model rule methodology in 40 CFR Part 96, Subpart EE. The proposed rulemaking fulfills the requirements of SB 1672, enacted by the 80th Legislature, to incorporate CAIR by reference, including the five subsequent rule revisions that the EPA has promulgated to CAIR since Texas adopted the initial CAIR SIP revision on July 12, 2006, as well as revisions to the NOX allocation methodology as prescribed by SB 1672. SB 1672 relates to correcting the number of minimum periods specified for NOX allocation allowance adjustments that were directed by HB 2481. HB 2481 revised the baseline of existing units by reviewing heat-input data every five years by looking back at the three highest years of the previous seven years. However, the five-year period did not provide adequate time to accommodate the EPA's requirement of providing allocations to them approximately four years in advance of the applicable period. Therefore, the number of control periods was changed from seven to nine in SB 1672, and the allocation update was shifted from 2016 to 2018.
The incorporation of revisions to CAIR and the changes resulting from SB 1672 will allow the CAIR to continue to be implemented in Texas, in accord with the state statutory requirements. The proposed incorporation of the federal rule is intended to protect the environment and to reduce risks to human health and safety from environmental exposure by reducing NOX and SO2 emissions from upwind states so that downwind states may reach attainment of the NAAQS for PM2.5. As discussed elsewhere in this preamble, the proposed revisions are not expected to impose significant costs on regulated entities. While continued implementation of the CAIR is intended to protect human health and the environment, it may adversely affect in a material way sources in the state that fall under the applicability requirements in the federal rule. Cost and benefits of the revisions to CAIR were analyzed by the EPA during the federal notice and comment rulemaking for the CAIR. CAIR is a required federal program, and the ability of states to modify its requirements is limited.
The proposed rulemaking would implement requirements of the federal Clean Air Act (FCAA). Under 42 United States Code (USC), §7410(a)(2)(D), each SIP must contain adequate provisions prohibiting any source within the state from emitting any air pollutant in amounts that will contribute significantly to nonattainment of the NAAQS in any other state. While 42 USC, §7410 generally does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include "enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter," (42 USC, Chapter 85, Air Pollution Prevention and Control). The provisions of the FCAA recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though the FCAA allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of 42 USC, §7410. States are not free to ignore the requirements of 42 USC, §7410, and must develop programs to assure that their contributions to nonattainment areas are reduced so that these areas can be brought into attainment on schedule. Additionally, states have further obligations under 42 USC, §7410(a)(2)(D), to address interstate transport of pollutants that contribute significantly to nonattainment in, or interfere with maintenance by, another state. In the CAIR, the EPA found that 28 states and the District of Columbia contribute significantly to nonattainment of the PM2.5 or eight-hour ozone NAAQS in downwind areas. The EPA is requiring these upwind states to revise their SIPs to include control measures to reduce emissions of SO2 and/or NOX, with limited flexibility. Adoption of the federal CAIR, including revisions and participation in its emissions cap and trade approach for annual SO2 and NOX emissions to reduce downwind PM 2.5 is the method the state has chosen to achieve those reductions in a flexible and cost-effective manner.
The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code was amended by SB 633 during the 75th Legislature, 1997. The intent of SB 633 was to require agencies to conduct a regulatory impact analysis of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill will have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law.
As discussed earlier in this preamble, the FCAA does not always require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each area contributing to nonattainment to help ensure that those areas will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, and to meet the requirements of 42 USC, §7410, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board (LBB) in its fiscal notes. Since the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the LBB, the commission believes that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules will have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of the FCAA. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), because they are required by federal law.
The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature has revised the Texas Government Code but left this provision substantially unamended. It is presumed that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue , 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978).
The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the Texas Administrative Procedure Act (APA) by the legislature in 1999. In an attempt to limit the number of rule challenges based upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the standard of "substantial compliance." The legislature specifically identified Texas Government Code, §2001.0225, as falling under this standard. The commission has substantially complied with the requirements of Texas Government Code, §2001.0225.
The specific intent of the proposed rulemaking is to protect the environment and to reduce risks to human health by adoption of the revisions to the federal CAIR by reference in addition to changes resulting from SB 1672. The proposed rulemaking does not exceed a standard set by federal law or exceed an express requirement of state law. No contract or delegation agreement covers the topic that is the subject of this proposed rulemaking. Finally, this proposed rulemaking was not developed solely under the general powers of the agency, but is required by THSC, TCAA, §382.0173. Therefore, this proposed rulemaking is not subject to the regulatory analysis provisions of Texas Government Code, §2001.0225(b), because although the proposed rulemaking meets the definition of a "major environmental rule," it does not meet any of the four applicability criteria for a major environmental rule.
The commission invites public comment regarding the draft regulatory impact analysis determination during the public comment period.
TAKINGS IMPACT ASSESSMENT
The commission evaluated the proposed rulemaking and performed an assessment of whether Texas Government Code, Chapter 2007, is applicable. The specific purpose of the proposed rulemaking is to incorporate by reference revisions to the federal CAIR emissions trading rules located in 40 CFR Part 96, Subpart AA - Subpart II and Subpart AAA - Subpart III, and to incorporate legislative changes during the 80th Texas Legislature as prescribed by Senate Bill (SB) 1672. In 2007, the 80th Texas Legislature passed SB 1672 that allows the TCEQ to incorporate federal CAIR changes that the EPA has finalized since the initial adoption of the CAIR rules on July 12, 2006, and revise the NOX allocation methodology as prescribed by SB 1672. SB 1672 revises the number of minimum periods specified for NOX allowance allocation adjustments that was directed by HB 2481, as discussed elsewhere in this preamble. Additionally, EPA promulgated several changes to the federal CAIR, as discussed elsewhere in this preamble. Texas Government Code, §2007.003(b)(4), provides that Texas Government Code, Chapter 2007 does not apply to this proposed rulemaking because it is an action reasonably taken to fulfill an obligation mandated by federal law and by state law.
In addition, the commission's assessment indicates that Texas Government Code, Chapter 2007 does not apply to these proposed rules because this is an action that is taken in response to a real and substantial threat to public health and safety; that is designed to significantly advance the health and safety purpose; and that does not impose a greater burden than is necessary to achieve the health and safety purpose. Thus, this action is exempt under Texas Government Code, §2007.003(b)(13). The EPA promulgated the CAIR rule, and revisions to the CAIR, to reduce SO2 and NOX emissions from upwind states so that downwind states may reach attainment of the NAAQS for PM2.5. The proposed rules will enable Texas to implement the federal emissions budget and trading program and impose its requirements on new and existing fossil fuel-fired electric utility units, ultimately ensuring reductions of SO2 and NOX emissions. The action will specifically advance the health and safety purpose by reducing PM2.5 levels through an emissions cap and gradual reductions in emissions of SO2 and NOX . The rules specifically target a category of sources with significant SO2 and NOX emissions, and through the cap and trade program support cost-effective control strategies. Consequently, the proposed rulemaking meets the exemption criteria in Texas Government Code, §2007.003(b)(4) and (13). For these reasons, Texas Government Code, Chapter 2007 does not apply to this proposed rulemaking.
CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM
The commission determined that this rulemaking action relates to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, §§33.201 et seq.), and the commission rules in 30 Texas Administrative Code (TAC) Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal Management Program. As required by §281.45(a)(3) and 31 TAC §505.11(b)(2), concerning Actions and Rules Subject to the Coastal Management Program, commission rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission reviewed this action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council and determined that the action is consistent with the applicable CMP goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(l)). No new sources of air contaminants are authorized and the proposed new rules will maintain at least the same level of or increase the level of emissions control as the existing rules. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with federal regulations in 40 CFR, to protect and enhance air quality in the coastal areas (31 TAC §501.32). This rulemaking action complies with 40 CFR Part 51, concerning Requirements for Preparation, Adoption, and Submittal of Implementation Plans. Therefore, in accordance with 31 TAC §505.22(e), the commission affirms that this rulemaking action is consistent with CMP goals and policies.
EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM
The requirements of 42 USC, §7410 are applicable requirements of 30 TAC Chapter 122. Facilities that are subject to the Federal Operating Permit Program will be required to obtain, revise, reopen, and renew their federal operating permits as appropriate in order to include CAIR.
ANNOUNCEMENT OF HEARINGS
Public hearings for the proposed rulemaking and SIP revision have been scheduled in Fort Worth on July 15, 2008, at 2:00 p.m. at the Texas Commission on Environmental Quality Regional Office, located at 2309 Gravel Drive; in Austin on July 16, 2008, at 2:00 p.m. in Building C, Room 131E at the Texas Commission on Environmental Quality complex, located at 12100 Park 35 Circle; and in Houston on July 17, 2008, at 2:00 p.m. in Conference Room B at Houston-Galveston Area Council, located at 3555 Timmons Lane, Number 120.
The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to each hearing. Individuals may present oral statements when called upon in order of registration. A four-minute time limit may be established at each hearing to assure that enough time is allowed for every interested person to speak. There will be no open discussion during each hearing; however, commission staff members will be available to discuss the proposal 30 minutes before each hearing.
Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Kristin Smith, Office of Legal Services at (512) 239-0177. Requests should be made as far in advance as possible.
SUBMITTAL OF COMMENTS
Comments may be submitted to Kristin Smith, Texas Register Team, Office of Legal Services, Texas Commission on Environmental Quality, MC 205, P.O. Box 13087, Austin, Texas 78711 or faxed to (512) 239-4808. All comments should reference Rule Project Number 2007-053-101-EN. Electronic comments may be submitted at: http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. Comments must be received by July 18, 2008. Copies of the proposed rules can be obtained from the commission's Web site at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html. For further information, please contact Brandon Greulich, Air Quality Planning Section, (512) 239-4904.
STATUTORY AUTHORITY
The amendments are proposed under Texas Water Code, §5.103, concerning Rules, and §5.105, concerning General Policy, which authorize the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; and under THSC, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendments are also proposed under THSC, §382.002, concerning Policy and Purpose, which establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.012, concerning State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; §382.014, concerning emission inventory; §382.016, concerning Monitoring Requirements; §382.0173, concerning adoption of rules regarding certain state implementation plan requirements and standards of performance for certain sources; and §382.054, concerning federal operating permits; and FCAA, 42 USC, §§7401 et seq., which requires states to include in their adequate provisions prohibiting any source within the state from emitting any air pollutant in amounts that will contribute significantly to nonattainment, or interfere with maintenance of, the national ambient air quality standard in any other state.
The proposed amendments implement THSC, §§382.002, 382.011, 382.012, 382.014, 382.016, 382.0173, and 382.054; and FCAA, 42 USC, §§7401 et seq.
§101.502.Clean Air Interstate Rule Trading Program.
(a) The commission incorporates by reference, except
as specified in this division, the provisions of 40 Code of Federal
Regulations (CFR) Part 96, Subpart AA - Subpart II and Subpart AAA
- Subpart III (as amended through October 19, 2007 (72 FR 59190))
[May 12, 2005 (70 FR 25162))] for purposes of implementing the
Clean Air Interstate Rule (CAIR) trading programs for annual
emissions of oxides of nitrogen (NOX) and
sulfur dioxide to meet the requirements of Federal Clean Air Act, §110(a)(2)(D).
(b) (No change.)
(c) The methodologies and procedures for determining
and recording each subject source's
CAIR NOX [
Clean Air Interstate Rule oxides of nitrogen] allowance allocation
in 40 CFR Part 96, Subpart EE are replaced by the requirements of
this division.
§101.504.Timing Requirements for Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations.
(a) The executive director shall submit to the United States Environmental Protection Agency (EPA) the Clean Air Interstate Rule (CAIR) oxides of nitrogen (NOX) allowance allocations determined in accordance with §101.506(c) of this title (relating to Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations) by the following dates:
(1) - (2) (No change.)
(3) October 31, 2012, [2014,]
for the 2016 control period; and
(4) 38 [14] months prior to the
beginning of each applicable control period for the control period
beginning in 2017 and for each control period thereafter.
(b) - (d) (No change.)
§101.506.Clean Air Interstate Rule Oxides of Nitrogen Allowance Allocations.
(a) For units commencing operation before January 1, 2001:
(1) (No change.)
(2) for the control period beginning January 1,
2018 [2016
], and for the control period beginning every five years
thereafter, the baseline heat input must be adjusted to reflect the
average of the three highest amounts of the unit's adjusted control
period heat input from control periods one through five of the preceding
nine [seven
] control periods with the adjusted control
period heat input for each year calculated as follows:
(A) - (C) (No change.)
(b) For units commencing operation on or after January 1, 2001:
(1) (No change.)
(2) for the control periods [period]
beginning January 1, 2015, January 1, 2016, and January 1, 2017, for
units operating each calendar year during a period of five or more
consecutive years, the baseline heat input is the average of the three
highest amounts of the unit's total converted control period heat
input over the first such five years. The converted control period
heat input for each year is calculated as follows:
(A) - (C) (No change.)
(3) for the control period beginning January 1,
2018, [2016,
] and for the control period beginning every
five years thereafter, for units operating each calendar year during
a period of five or more consecutive years, the baseline heat input
must [shall] be adjusted to reflect the average of
the three highest amounts of the unit's converted control period heat
input from control periods one through five of the preceding
nine [seven
] control periods. The converted control period heat input
for each year is calculated as follows:
(A) - (C) (No change.)
(c) (No change.)
(d) For units commencing operation on or after January 1, 2001, and that have not established a baseline heat input in accordance with subsection (b)(2) or (3) of this section, CAIR NOX allowances must be allocated according to the following.
(1) (No change.)
(2) To receive a CAIR NOX allowance
allocation from the new unit set-aside, the CAIR designated representative
shall submit to the executive director a written request on or before
May 1 [July 1
] of the first control period for which
the CAIR NOX allowance allocation is
requested and after the date that the CAIR NOX unit
commences commercial operation.
(3) (No change.)
(4) The executive director shall review each CAIR NOX allowance allocation request submitted in accordance with this subsection and shall allocate CAIR NOX allowances for each control period as follows.
(A) (No change.)
(B) On or after May 1 [July 1]
of the control period, the executive director shall determine the
sum of all accepted CAIR NOX allowance
allocation requests for the control period.
(C) - (E) (No change.)
(e) - (f) (No change.)
(g) On or before the latter of May 1, 2011, [July 1, 2011,
] or May 1 [July 1] of the
control period immediately following a unit's fifth complete, consecutive
year of commercial operation, the CAIR designated representative of
a unit establishing a baseline heat input in accordance with subsection
(b)(2) or (3) of this section shall submit, on a form specified by
the executive director, written certification of the gross electrical
output of the generator or generators served by the unit and the total
heat energy of any steam produced by the unit during the first five
years of commercial operation.
§101.508.Compliance Supplement Pool.
(a) (No change.)
(b) For any CAIR NOX unit that achieves NOX emission reductions in 2007 and 2008 that are not necessary to comply with any state or federal emissions limitation applicable during such years, the CAIR designated representative of the unit may request early reduction credits and allocation of CAIR NOX allowances from the compliance supplement pool under subsection (a) of this section for such early reduction credits, in accordance with the following.
(1) (No change.)
(2) The CAIR designated representative of such CAIR
NOX unit shall submit to the executive
director by May 1, 2009, [July 1, 2009,] a written
request for allocation of an amount of CAIR NOX allowances
from the compliance supplement pool not exceeding the sum of the amounts,
in tons, of the unit's NOX emission reductions
in 2007 and 2008 that are not necessary to comply with any state or
federal emissions limitation applicable during such years, determined
in accordance with 40 CFR Part 96, Subpart HH.
(c) For any CAIR NOX unit of which [whose
] compliance with the CAIR NOX
emissions limitation for the control period
in 2009 would create an undue risk to the reliability of electricity
supply during such control period, the CAIR designated representative
of the unit may request the allocation of CAIR NOX allowances
from the compliance supplement pool under subsection (a) of this section,
in accordance with the following.
(1) The CAIR designated representative of such CAIR
NOX unit shall submit to the executive director by
May 1, 2009, [July 1, 2009,] a written
request for allocation of an amount of CAIR NOX allowances
from the compliance supplement pool not exceeding the minimum amount
of CAIR NOX allowances necessary to remove
such undue risk to the reliability of electricity supply.
(2) In the request under paragraph (1) [subsection
(c)(1)] of this subsection [section],
the CAIR designated representative of such CAIR NOX
unit shall demonstrate that, in the absence of allocation
to the unit of the amount of CAIR NOX allowances
requested, the unit's compliance with CAIR NOX emissions
limitation for the control period in 2009 would create an undue risk
to the reliability of electricity supply during such control period.
This demonstration must include a showing that it would not be feasible
for the owners and operators of the unit to:
(A) - (B) (No change.)
(d) The executive director shall review each request
under subsections (b) or (c) of this section submitted by
May 1, 2009, [July 1, 2009,] and shall allocate CAIR
NOX allowances for the control period
in 2009 to CAIR NOX units covered by such request as follows.
(1) - (3) (No change.)
(4) By November 30, 2009, the executive director shall determine, and submit to the EPA, the allocations under paragraph (2) or (3) of this subsection.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on June 6, 2008.
TRD-200802911
Robert Martinez
Director, Environmental Law Division
Texas Commission on Environmental Quality
Earliest possible date of adoption: July 20, 2008
For further information, please call: (512) 239-0177
SUBCHAPTER P. RECLAIMED WATER PRODUCTION FACILITIES
30 TAC §§321.301, 321.303, 321.305, 321.307, 321.309, 321.311, 321.313, 321.315, 321.317, 321.319, 321.321, 321.323, 321.325
The Texas Commission on Environmental Quality (commission) proposes new §§321.301, 321.303, 321.305, 321.307, 321.309, 321.311, 321.313, 321.315, 321.317, 321.319, 321.321, 321.323, and 321.325.
BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES
The commission received a petition with a request to initiate rulemaking and proposed rule language to authorize the construction and operation of reclaimed water production facilities. On July 25, 2007, the commission granted the petition and directed the executive director to prepare a proposed rule. This proposed rule would provide a streamlined process to authorize the construction and operation of reclaimed water production facilities at a location other than a permitted domestic wastewater treatment facility. These reclaimed water production facilities must currently be authorized through the same permitting process as wastewater treatment facilities that are authorized to discharge or land apply treated effluent.
This rule would apply to permitted wastewater treatment facility owners who wish to produce reclaimed water at a site other than the permitted domestic wastewater treatment facility. The rule would give them a streamlined process to obtain authorization to construct and operate reclaimed water production facilities. These facilities would be located near reclaimed water users and would save the cost of transporting or piping reclaimed water from the permitted wastewater treatment facility to these users.
SECTION BY SECTION DISCUSSION
Proposed new §321.301, Purpose and Applicability, explains that the purpose of the proposed rule is to provide a mechanism for owners of domestic wastewater treatment facilities to treat wastewater closer to reclaimed water users. The applicability portion provides that the owner of the reclaimed water production facility is required to be the same person as the owner of the permitted domestic wastewater treatment facility. This requirement ensures that there is no opportunity for the operation of the reclaimed water production facility to interfere with the operation of the permitted wastewater treatment facility. The applicability also provides that the authorization is automatically cancelled if the wastewater discharge permit is not in effect. The domestic wastewater treatment facility must be authorized for the treatment and disposal of domestic wastewater since reclaimed water will be sent through the collection system to the domestic wastewater treatment facility during times when there is no demand from the reclaimed water user.
Proposed new §321.303, Definitions, incorporates, by reference, the definitions in 30 TAC Chapter 210, Use of Reclaimed Water, 30 TAC Chapter 305, Consolidated Permits, and includes definitions for specific terms that apply to this subchapter. The definitions section ensures that the regulated community and the public are aware of the specific terminology used in this subchapter.
Proposed new §321.305, General Requirements, provides that the applicant must have a domestic wastewater permit and the reclaimed water production facility authorization does not alter the permitted flow or effluent limits of the permitted domestic wastewater treatment facility. The flow or effluent limits of a permitted wastewater facility may be changed only by amending the permit. In addition, the applicant is required to have an authorization to reuse reclaimed water or apply for authorization concurrently under Chapter 210. The applicant must have authorization for the use of the reclaimed water for the reclaimed water production facility authorization to be useful.
Proposed new §321.307, Restrictions, prohibits the owner of a reclaimed water production facility from accepting any trucked or hauled wastes and from discharging wastewater or pollutants into water in the state. These provisions will prevent operational problems at the facility and will protect the quality of the reclaimed water, human health, and the environment. The proposed rule also prohibits the reclaimed water production facility from exceeding the hydraulic capacity or being authorized at a flow rate that could cause interference with the domestic wastewater treatment facility. This requirement ensures that the permitted wastewater treatment facility is able to continue to operate in a manner that protects human health and the environment.
Proposed new §321.309, Application Requirements, includes requirements for the application for reclaimed water production facilities so that the executive director has all the information necessary to evaluate the application and requires the application complies with other commission rules.
Proposed new §321.311, Application Review, describes the process the executive director will use to: review the application; notify the applicant to publish notice (if required); and return the application if insufficient information is submitted by the applicant.
Proposed new §321.313, Authorization, includes specific requirements, including, design criteria, a prohibition of issuing an authorization to applicants with a poor compliance history rating, and provisions for filing a motion to overturn the executive director's final action on an authorization. The design criteria ensure that the facility is designed and constructed to protect human health and the environment over the life span of the facility. Applicants with poor compliance histories may not be authorized under this streamlined process; however, they may apply for an individual domestic wastewater permit to authorize the reclaimed water production facility. The motion to overturn provides a mechanism for the applicant, public interest counsel or other person to request the commission to review a reclaimed water production facility authorization.
Proposed new §321.315, Design Requirements, requires reclaimed water production facilities to meet the design criteria according to the requirements of 30 TAC Chapter 317, Design Criteria for Sewage Systems, with minor exceptions, and to convey all wastewater to the domestic wastewater treatment facility when not in operation. The rule requires reclaimed water production facilities to be designed and operated to minimize odor.
Proposed new §321.317, Buffer Zone Requirements, includes general site selection requirements to protect groundwater and surface water and specific requirements relating to unsuitable site characteristics. The proposed rule includes two options for meeting buffer zone requirements: enhanced buffer zone and standard buffer zone requirements. If the owner requests authorization using the enhanced buffer zone, the reclaimed water production facility must meet one of three buffer zone options: placing the treatment units within a building with a 150-foot buffer zone; placing the treatment units within a building with air exhaust systems and odor control technology with a 50-foot buffer zone; or an extended 300-foot buffer zone. The enhanced buffer zone ensures that under normal operating conditions, odor from the facility should not reach adjoining property. If the owner requests authorization without an enhanced buffer zone designation, the reclaimed water production facility must have a buffer zone of 150 feet from the nearest property line. The applicant may meet these requirements by ownership or by legal restriction of the buffer zone area.
Proposed new §321.319, Public Notice Requirements, includes notice requirements for reclaimed water production facilities that do not meet the enhanced buffer zone designation. These facilities must meet the standard 150-foot buffer zone requirement. The owner of a reclaimed water production facility that meets the enhanced buffer zone designation is not required to publish notice.
Proposed new §321.321, Additional Reclaimed Water Production Facility Requirements, includes operator requirements for the reclaimed water production facility and notification requirements for the applicant. This requirement ensures that the operator of the reclaimed water production facility has the training and knowledge necessary to properly operate the facility. This section also requires the applicant to notify the executive director at least 45 days prior to completion and at least 45 days prior to operation of a reclaimed water production facility. This requirement ensures that the executive director has opportunities to inspect the reclaimed water production facility during construction and prior to operation.
Proposed new §321.323, Enforcement, includes enforcement criteria for reclaimed water production facilities. The rule is consistent with other commission enforcement procedures.
Proposed new §321.325, Fees, includes application fees for reclaimed water production facilities. The proposed rule includes an application fee of $300 and an annual water quality fee of $800 for a constructed facility or $400 for a facility that has not been constructed.
FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT
Nina Chamness, Analyst, Strategic Planning and Assessment, determined that, for the first five-year period the proposed rules are in effect, no significant fiscal implications are anticipated for the agency as a result of administration or enforcement of the proposed rules. The agency will utilize currently available resources to implement a streamlined authorization process for the construction and operation of reclaimed water production facilities at a site other than a permitted domestic wastewater treatment facility. Other state agencies or local governments that reclaim water for reuse and elect to apply for the proposed authorization are expected to save time in obtaining such authorizations and experience cost savings if they determine a remote reclaimed water production facility is economically advantageous.
The agency has been petitioned to develop a streamlined authorization method to allow regulated entities to construct facilities to reclaim water at sites other than their permitted domestic wastewater treatment facilities. Under current rules, treatment of reclaimed water is only authorized at permitted domestic wastewater treatment facilities. Applying for an authorization of separate reclaimed water treatment facilities under the proposed rules would afford owners of wastewater treatment facilities another wastewater treatment option that could be less expensive and more efficient in reclaiming and using wastewater. However, the proposed authorization would restrict the types of treatment units that can be constructed. In addition, the proposed authorization would impose more stringent buffer zone requirements or enclosing the facility in a structure for odor reduction. For facilities that do not meet these enhanced buffer zone requirements, the proposed rule includes notice requirements to publish notice and provide an opportunity for public comments and a public meeting.
Authorization and construction of these smaller, separate treatment facilities would allow owners of wastewater treatment facilities to produce reclaimed water closer to sites where the water is needed if stringent criteria are met concerning odor control, and groundwater and surface water protection. The time required to obtain a current wastewater treatment facility permit is approximately 330 days. If an owner can meet the stringent operating criteria of the proposed authorization for a remote treatment facility, an authorization is expected to take 60 to 90 days. Since a remote wastewater treatment facility would allow for closer proximity to users of reclaimed water, owners of these facilities would save the costs of constructing more pipelines and transporting the water to a site where reclaimed water would be used.
State agencies and local governments that reclaim water at permitted wastewater treatment facilities are expected to choose this proposed optional authorization process only if it will reduce their infrastructure, operating, and treatment costs. At least 12 local governments have expressed interest in applying for this type of authorization. The agency would charge a flat application fee of $300 per application and an annual water quality fee. The annual water quality fee would be $400 before construction occurs and $800 after the facility is constructed. Revenue would be deposited to Account 153 - Water Resource Management Account and could be as much as $8,400 in the first year before facilities are constructed if all 12 authorizations are granted. Revenue could range from $4,800 to $9,600 in subsequent years depending on whether all 12 facilities are constructed.
One potential applicant has estimated that construction of a six-mile pipeline through a densely populated area to carry treated domestic wastewater to a site of reuse could cost as much as $10,500,000. In addition, pumping costs have been estimated to be as much as $190,000 per year. If the applicant is authorized to construct a reclaimed water production facility near the site of reuse, it could save money by constructing a facility estimated to cost $2,000,000. Construction savings are estimated to be $8,500,000, and annual operating costs are expected to be less than pumping costs of $190,000. Cost savings will vary greatly among applicants depending on the amount of demand for reclaimed water, characteristics of each project, and each applicant's operating practices.
PUBLIC BENEFITS AND COSTS
Nina Chamness also determined that for each year of the first five years the proposed new rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be the facilitation of reclaimed water usage which may lead to greater use of reclaimed water and less strain on the available groundwater and surface water resources of the state.
The proposed rules offer a streamlined authorization process for reclaimed water production facilities if they meet strict criteria. Applicants are expected to utilize this authorization method only if it becomes economically advantageous to construct and operate these smaller, separate facilities. Businesses that own or operate wastewater treatment facilities at large investor owned utilities and that choose to apply for this authorization of separate, smaller facilities are expected to experience the same savings in construction and operating costs as those experienced by local governments. The amount of savings would vary greatly depending on the amount of demand for reclaimed water and the operating costs of each project.
SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT
No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rules. Small or micro-businesses typically do not own or operate wastewater treatment facilities where there will be a sufficient supply of reclaimed water to make the addition of a separate, smaller treatment facility economically advantageous. If a small or micro-business decides a separate facility would be beneficial, they are expected to experience the same type of cost savings as a large investor owned utility.
SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS
The commission reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not required because the proposed rules are not expected to adversely affect a small or micro-business in a material way for the first five years that the proposed rules are in effect.
LOCAL EMPLOYMENT IMPACT STATEMENT
The commission reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.
DRAFT REGULATORY IMPACT ANALYSIS
The commission reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined the rules do not meet the definition of a "major environmental rule." Under Texas Government Code, §2001.0225, "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Furthermore, it does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 applies only to a major environmental rule which 1) exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement of state law, unless the rule is specifically required by federal law; 3) exceeds a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopts a rule solely under the general powers of the agency instead of under a specific state law. The proposed rulemaking would provide owners of domestic wastewater treatment facilities with the ability to construct reclaimed water production facilities to produce reclaimed water at a site other than a permitted domestic wastewater treatment facility as described in the BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES and SECTION BY SECTION DISCUSSION sections of this preamble. Because the proposed rules are not specifically intended to protect the environment or reduce risks to human health from environmental exposure but to provide an alternative to the current wastewater permitting process, this rulemaking is not a major environmental rule and does not meet any of the four applicability requirements. Because these rules provide an alternative, more cost efficient process for treating wastewater for reuse, they do not result in any new requirements and should not adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs. The commission invites public comment regarding this draft regulatory impact analysis determination.
TAKINGS IMPACT ASSESSMENT
The commission evaluated these proposed rules and performed an assessment of whether Texas Government Code, Chapter 2007 is applicable. The commission's assessment indicates Texas Government Code, Chapter 2007 does not apply to this proposed rule because this action provides owners of domestic wastewater treatment facilities with the ability to construct a wastewater treatment facility at a remote location, provided the owner either owns or has a lease on the land to be used, as described in the BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES and SECTION BY SECTION DISCUSSION sections of this preamble. Promulgation and enforcement of these proposed rules would be neither a statutory or constitutional taking of private real property. Specifically, the proposed amendments do not affect a landowner's rights in private real property, because this rulemaking action does not burden, restrict, nor limit the owner's rights to property or reduce its value by 25 percent or more beyond which would otherwise exist in the absence of the proposed regulations.
CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM
The commission reviewed the proposed rulemaking and found the proposal is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(4), concerning rules subject to the Texas Coastal Management Program (CMP), and will, therefore, require that goals and policies of the CMP be considered during the rulemaking process. The commission reviewed this rulemaking for consistency with the CMP goals and policies in accordance with the regulations of the Coastal Coordination Council and determined that the rulemaking is editorial and procedural in nature and will have no substantive effect on commission actions subject to the CMP and is, therefore, consistent with CMP goals and policies. Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the SUBMITTAL OF COMMENTS section of this preamble.
ANNOUNCEMENT OF HEARING
The commission will hold a public hearing on this proposal in Austin on July 15, 2008 at 10:00 a.m. in Room 201S, Building E, at the commission's central office located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. Open discussion will not be permitted during the hearing; however, commission staff members will be available to discuss the proposal 30 minutes prior to the hearing.
Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Kristin Smith, Office of Legal Services at (512) 239-0177. Requests should be made as far in advance as possible.
SUBMITTAL OF COMMENTS
Written comments may be submitted to Kristin Smith, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. The commission specifically requests comments relating to incorporating the appropriate provisions requiring the posting of notice signs for reclaimed water production facilities that are required to provide public notice. Electronic comments may be submitted at: http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2008-002-321-PR. The comment period closes July 21, 2008. Copies of the proposed rulemaking can be obtained from the commission's Web site at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html . For further information, please contact Mary Ann Dimakos Airey, P.E., Wastewater Permitting Section at (512) 239-4521.
STATUTORY AUTHORITY
The new sections are proposed under Texas Water Code (TWC), §5.013, which establishes the general jurisdiction of the commission over other areas of responsibility as assigned to the commission under the TWC and other laws of the state; §5.102, which establishes the commission's general authority to carry out its jurisdiction; §5.103(a) and §5.105, which provide the commission with the authority to adopt rules and policies necessary to carry out its powers and duties under the TWC and other laws of the state; §5.120, which states the commission shall administer the law so as to promote the judicious use and maximum conservation and protection of the quality of the environment and the natural resources of the state; §5.701 which authorizes the commission to charge fees; §7.002, which authorizes the commission to enforce the TWC; §26.011, which provides the commission with the authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state; and §26.027, which authorizes the commission to issue permits and amendments to permits for the discharge of waste or pollutants into or adjacent to water in the state.
The proposed new sections would implement TWC, §§5.013, 5.102, 5.103, 5.105, 5.120, 5.701, 7.002, 26.011, and 26.027.
§321.301.Purpose and Applicability.
(a) The purpose of this subchapter is to establish authorization procedures, general design criteria, and operational requirements for reclaimed water production facilities and thereby promote the beneficial use of reclaimed water that may be substituted for potable water or raw water.
(b) This subchapter authorizes a reclaimed water production facility to produce reclaimed domestic wastewater at a site other than a permitted domestic wastewater treatment facility.
(c) A reclaimed water production facility authorized according to this subchapter is not required to hold a wastewater discharge permit from the commission, except as provided in §210.5 of this title (relating to Authorization for the Use of Reclaimed Water).
(d) A reclaimed water production facility may be authorized only if the owner of the reclaimed water production facility is also an owner of the associated domestic wastewater treatment facility that is permitted by the commission.
(e) If the wastewater discharge permit for the domestic wastewater treatment facility associated with a reclaimed water production facility expires, lapses, is surrendered, suspended, or revoked, the authorization to operate the reclaimed water production facility is automatically cancelled.
§321.303.Definitions.
All definitions in Texas Water Code, §26.001 and 30 TAC Chapters 210 and 305 of this title (relating to Use of Reclaimed Water, and Consolidated Permits) shall apply to this subchapter and are incorporated by reference. Specific definitions of words or phrases used in this subchapter are as follows:
(1) Authorization--a written document issued by the commission allowing an owner to construct and operate a reclaimed water production facility in accordance with the provisions of this subchapter.
(2) Reclaimed Water Production Facility--a domestic wastewater treatment facility authorized in accordance with this subchapter that treats municipal wastewater for reuse on an as-needed basis and is located at a different location from the permitted domestic wastewater treatment facility.
(3) Treatment unit--Any apparatus necessary for treating wastewater (e.g., aeration basins, splitter boxes, bar screens, clarifiers, on-site lift stations) located at the reclaimed water production facility.
§321.305.General Requirements.
(a) An applicant for authorization to produce reclaimed water at a reclaimed water production facility must have:
(1) a domestic wastewater permit for a domestic wastewater treatment facility that is located at the terminus of the collection system to which the reclaimed water production facility is or will be connected; and
(2) an authorization to use reclaimed water under Chapter 210 of this title (relating to the Use of Reclaimed Water).
(b) Applications for reclaimed water production facilities and for authorization to beneficially reuse reclaimed water under Chapter 210 of this title may be submitted concurrently.
(c) The authorization of a reclaimed water production facility does not alter the permitted flow or effluent limits of the associated domestic wastewater treatment facility.
§321.307.Restrictions.
(a) A reclaimed water production facility may not discharge wastewater or pollutants into water in the state.
(b) The hydraulic capacity of the reclaimed water production facilities may not individually nor collectively exceed the permitted hydraulic capacity of the associated domestic wastewater treatment facility.
(c) A reclaimed water production facility may not be authorized at a flow rate that could cause interference with the operation of the domestic wastewater treatment facility or a violation of the domestic wastewater treatment facility's permit.
(d) A reclaimed water production facility may not treat or dispose of sludge. All sludge must be conveyed through the collection system to the permitted domestic wastewater treatment facility, treated, and disposed of in accordance with the facility's permit and all applicable rules.
(e) The owner may not accept trucked or hauled wastes at a reclaimed water production facility.
(f) Authorization under this chapter does not convey or alter any property right and does not grant any exclusive privilege.
§321.309.Application Requirements.
(a) An applicant shall comply with the provisions of §§305.43, 305.44, and 305.47 of this title (relating to Who Applies; Signatories to Applications; and Retention of Application Data).
(b) An application for an authorization of a reclaimed water production facility under this subchapter must be made on forms prescribed by the executive director.
(c) An applicant shall submit one original application with attachments to the executive director and one additional copy of the application with attachments to the appropriate regional office. Additional copies may be required as noted in the application.
(d) The application must contain, at a minimum, the following information:
(1) the applicant's name, mailing address, and telephone number;
(2) the wastewater permit number of the associated domestic wastewater treatment facility;
(3) a brief description of the nature of the reclaimed water use;
(4) the signature of the applicant, in accordance with §305.44 of this title;
(5) a copy of a recorded deed or tax records showing ownership, or a copy of a contract or lease agreement between the applicant and the owner of any lands to be used for the reclaimed water production facility;
(6) a copy of the applicant's reuse authorization issued under Chapter 210 of this title (relating to Use of Reclaimed Water), or a copy of a concurrent application;
(7) a preliminary design report for the reclaimed water production facility that includes the design flow, design calculations, the size of the proposed treatment units, a flow diagram, and the proposed effluent quality;
(8) a buffer zone map and report indicating how the reclaimed water production facility will meet buffer zone requirements;
(9) a County General Highway Map (with scale clearly shown) to identify the relative location of the domestic wastewater treatment facility, the main lines of the collection system, and the reclaimed water production facility and at least a one-mile area surrounding the reclaimed water production facility;
(10) one original (remainder in color copies, if required) United States Geological Survey 7.5-minute quadrangle topographic map or an equivalent high quality color copy showing the boundaries of land owned, operated or controlled by the applicant and to be used as a part of the reclaimed water production facility. The map shall extend at least a one-mile beyond the facility boundaries and shall be sufficient to show the following:
(A) each well, spring, and surface water body or other water in the state within the one-mile area; and
(B) the general character of the areas adjacent to the facility, including public roads, towns and the nature of development of adjacent lands such as residential, commercial, agricultural, recreational, and undeveloped.
(11) any other information requested by the executive director.
§321.311.Application Review.
(a) The executive director will review all applications for reclaimed water production facility authorizations for administrative and technical completeness.
(b) If an application has either an administrative or technical deficiency, the applicant will be asked to submit additional information no later than 30 days following the date of the request.
(c) If additional information is not timely submitted or is insufficient to complete the application, the executive director may return the application without refunding the application fee.
(d) If the application is both administratively and technically complete, the executive director will:
(1) proceed with processing the application; and
(2) if applicable, notify the applicant to publish notice according to §321.319 of this title (relating to Public Notice Requirements).
§321.313.Authorization.
(a) The executive director shall not authorize a reclaimed water production facility unless the following conditions are met:
(1) the applicant has obtained plans and specifications approval for the reclaimed water production facility according to the design criteria in §321.315 of this title (relating to Design Requirements); and
(2) the applicant has an authorization according to Chapter 210 of this title (relating to Use of Reclaimed Water).
(b) The executive director shall not authorize a reclaimed water production facility owned or operated by an applicant that has a compliance history rating of poor, as defined by Chapter 60 of this title (relating to Compliance History).
(c) The executive director shall not authorize a reclaimed water production facility that discharges to a domestic wastewater treatment facility that has a compliance history site rating of poor, as defined by Chapter 60 of this title.
(d) The applicant, public interest counsel or other persons may file with the Office of the Chief Clerk a motion to overturn the executive director's final action on an authorization for a reclaimed water production facility under §50.139(a), (b), and (d) - (g) of this title (relating to Motion to Overturn Executive Director's Decision).
§321.315.Design Requirements.
(a) Plans and specifications for a reclaimed water production facility must meet the design criteria and the operation, maintenance, and safety requirements in Chapter 317 of this title (relating to Design Criteria for Sewerage Systems) except for redundant treatment units or processes, including power supplies, if the design incorporates sufficient provisions to ensure the effluent quality meets the required limits in the event of a failure of a power supply or a treatment unit or process.
(b) The reclaimed water production facility must be designed to convey all wastewater to the domestic wastewater treatment facility any time the facility is not in operation.
(c) The reclaimed water production facility must be designed to convey all sludge received or produced by the facility to the domestic wastewater treatment facility. Sludge may be held in an aerated storage vessel for discharge to the collection system if the entire sludge contents are completely discharged at least once within every 24-hour period.
(d) The reclaimed water production facility must be designed and operated to minimize odor and other nuisance conditions.
(e) The following treatment processes and units are prohibited:
(1) unaerated primary treatment units (including Imhoff tanks and primary clarifiers);
(2) trickling filters;
(3) pond or lagoon treatment systems;
(4) flow equalization basins; and
(5) unenclosed screenings storage containers.
§321.317.Buffer Zone Requirements.
(a) A reclaimed water production facility must comply with §309.12 of this title (relating to Site Selection to Protect Groundwater or Surface Water).
(b) A reclaimed water production facility must comply with §309.13(a) - (d) of this title (relating to Unsuitable Site Characteristics).
(c) A reclaimed water production facility that does not qualify for an enhanced buffer zone designation must locate each treatment unit at least 150 feet from the nearest property line.
(d) To qualify for an enhanced buffer zone designation, a reclaimed water production facility must comply with one of the following buffer zone requirements:
(1) A treatment unit not located in a building may not be located closer than 300 feet to the nearest property line;
(2) A treatment unit located within an enclosed building that is not equipped with exhaust air systems and odor control technology may not be located closer than 150 feet of the nearest property line; or
(3) A treatment unit located within an enclosed building equipped with exhaust air systems and odor control technology may not be located closer than 50 feet of the nearest property line.
(e) An applicant must own or have sufficient property interest to the land necessary to meet the buffer zone requirements so that residential structures are prohibited within the buffer zone. An applicant must submit sufficient evidence of its property interest to demonstrate the reclaimed water production facility meets the applicable buffer zone.
§321.319.Public Notice Requirements.
(a) Public notice is not required if an applicant for a reclaimed water production facility qualifies for an enhanced buffer zone designation in accordance with §321.317(d) of this title (relating to Buffer Zone Requirements).
(b) An applicant for a reclaimed water production facility that does not qualify for an enhanced buffer zone designation shall publish notice of the executive director's preliminary determination on the application at least once in a newspaper of general circulation in the county where the reclaimed water production facility is located or proposed to be located. The notice shall be published at the applicant's expense.
(1) The applicant must publish notice no later than 30 days after receiving instructions to publish notice from the Texas Commission on Environmental Quality's (TCEQ's) Office of the Chief Clerk. The notice must include:
(A) the legal name of the applicant and the address of the applicant;
(B) a brief summary of the information included in the application;
(C) the location of the reclaimed water production facility;
(D) the location and mailing address where the public may provide comments to the TCEQ;
(E) the public location or the publicly accessible internet Web site where copies of the application, executive director's technical summary, and authorization may be reviewed;
(F) an opportunity for the public to submit comments on the application and executive director's technical summary; and
(G) instructions to the public on how to request a public meeting for a new reclaimed water production facility.
(2) The applicant must file with the Office of the Chief Clerk no later than 30 days after receiving the instruction to publish the notice of the executive director's preliminary determination on the application, and if applicable the notice of public meeting:
(A) a signed affidavit from the publisher acknowledging that the notice was published and the date of publication; and
(B) a copy of the newspaper clipping.
(3) The public comment period begins on the first date the notice is published and ends 30 days later unless a public meeting is held. If a public meeting is held, the public comment period ends either 30 days after the initial notice is published or at the conclusion of the public meeting, whichever is later.
(4) The public may submit written comments to the Office of the Chief Clerk during the comment period detailing how the application for the reclaimed water production facility fails to meet the technical requirements or conditions of this rule. The executive director will consider all comments received during the comment period.
(5) The public may submit a written request for a public meeting to the Office of the Chief Clerk during the comment period.
(A) The executive director will determine if there is significant interest to hold a public meeting.
(B) If the executive director determines that there is significant interest to hold a public meeting:
(i) TCEQ staff will facilitate the meeting; and
(ii) the applicant will:
(I) arrange accommodations for the public meeting to be held in the county where the reclaimed water production facility will be located; and
(II) publish notice of the public meeting in the same newspaper as the initial notice was published at least 30 days prior to the meeting.
(iii) At the public meeting the applicant will:
(I) describe the proposed reclaimed water production facility and provide maps and other facility data; and
(II) provide a sign-in sheet for attendees to register their names and addresses and furnish the sheet to the executive director.
(C) A public meeting held under this rule is not an evidentiary proceeding.
(6) The TCEQ Office of the Chief Clerk will mail the executive director's decision and final technical summary on which the decision was based to the applicant, persons whose names and addresses appear legibly on the sign-in sheet from the public meeting, and persons who submitted written comments.
§321.321.Additional Reclaimed Water Production Facility Requirements.
(a) The owner shall employ or contract with one or more licensed wastewater treatment facility operators or wastewater facility operations companies holding a valid license or registration according to the requirements of Chapter 30, Subchapter J of this title (relating to Wastewater Operators And Operations Companies).
(b) The operator or wastewater facility operations company shall have the same level of license or higher as the operator license of the permitted domestic wastewater treatment facility associated with the reclaimed water production facility.
(c) The owner shall notify the executive director at least 45 days prior to completion and at least 45 days prior to operation of a reclaimed water production facility.
§321.323.Enforcement.
(a) If an owner of a reclaimed water production facility fails to comply with the terms of its authorization, this subchapter, or other regulations and statutes within the jurisdiction of the commission, the executive director may take enforcement action as provided by the Texas Water Code and in accordance with Chapter 70 of this title (relating to Enforcement).
(b) The executive director may revoke any reclaimed water production facility authorization due to noncompliance with the authorization, this subchapter, the requirements of Chapter 210 of this title (relating to Use of Reclaimed Water), or other regulations and statutes within the jurisdiction of the commission, but only after notice and the opportunity for hearing.
§321.325.Fees.
(a) An applicant shall include an application fee of $300.
(b) An owner of a reclaimed water production facility authorized under this subchapter shall pay an annual water quality fee in the following amount:
(1) $800 for a constructed facility; or
(2) $400 for a facility that has not been constructed.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on June 6, 2008.
TRD-200802909
Robert Martinez
Director, Environmental Law Division
Texas Commission on Environmental Quality
Earliest possible date of adoption: July 20, 2008
For further information, please call: (512) 239-0177
SUBCHAPTER D. OPERATIONAL STANDARDS FOR MUNICIPAL SOLID WASTE LANDFILL FACILITIES
The Texas Commission on Environmental Quality (commission or TCEQ) proposes an amendment to §330.165.
BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULE
The commission is initiating this rulemaking to revise the allowable contaminant levels for materials to be used as alternative daily cover. The commission intends to use a risk based approach when evaluating the use of contaminated material as an acceptable alternative daily cover at Type I municipal solid waste (MSW) landfills.
SECTION DISCUSSION
The contaminants that cause an industrial solid waste to be classified as Class 1 can also be found in contaminated soil from municipal sources and wastes from oil, gas, and geothermal activities. If approved as an alternative daily cover, these contaminated materials continue to be solid wastes and special wastes since the approved use still constitutes disposal of these materials.
The commission proposes to amend §330.165 to revise the criteria for evaluating whether contaminated material may perform as a suitable alternative daily cover material at MSW landfills. Alternative daily cover must have a demonstrated effectiveness in satisfying the control requirements of daily cover and not pose an unacceptable risk to human health and the environment. The commission has established in existing §330.165(d)(4) that contaminated soils may not contain constituents of concern exceeding the leachable concentrations listed in Table 1 of §335.521(a)(1), polychlorinated biphenyl wastes, or total petroleum hydrocarbons in concentrations greater than 1,500 milligrams per kilogram (mg/kg). Additionally, the commission established in existing §330.165(d)(5) that alternative materials may not exceed constituent limitations imposed on wastes authorized to be landfilled. The commission considers the total petroleum hydrocarbon limit as a conservative screening value considered protective of worker direct contact with total petroleum hydrocarbons in soil. The commission has required characterization of contaminated materials as part of a request for use of an alternative daily cover. These existing limits are intended to ensure that the composition of the wastes used as alternative daily cover is appropriate to the wastes being covered within the landfill unit. The commission seeks comment as to the appropriateness of using 1,500 mg/kg total petroleum hydrocarbons as a conservative screening value for regulating the use of contaminated soil and earthen material as alternative daily cover.
The commission proposes to add the term "contaminated earthen material" to §330.165(d)(4) to clearly establish that the requirements of this paragraph also apply to wastes from oil, gas, and geothermal activities and not just surface soils.
The commission proposes to re-evaluate the acceptable contaminant levels for wastes used as alternative daily cover and proposes that the wastes must have constituent concentrations below protective concentration levels established in accordance with §350.76(g). These concentration levels have been established as part of the Texas Risk Reduction Program and are used by other agency programs. For consistency, the commission proposes to use this existing comprehensive risk evaluation process when considering requests to use these types of waste materials as alternative daily cover.
The commission proposes to amend §330.165(d)(5) to allow wastes to be approved as an alternative daily cover, even though they may otherwise exceed the waste disposal limitations authorized at a MSW landfill. Wastes having total petroleum hydrocarbons in concentrations greater than 1,500 mg/kg are further proposed to not be required to be disposed in dedicated Class 1 industrial solid waste landfill cells when approved for use as an alternative daily cover in Type I MSW landfill cells that have approved Resource Conservation and Recovery Act, Subtitle D liners having leachate management systems.
FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT
Nina Chamness, Analyst, Strategic Planning and Assessment, has determined that, for the first five-year period the proposed rule is in effect, fiscal implications are anticipated for the agency or other units of state government. Revenue in Fund 549 - Waste Management Account - dedicated may increase because of increased receipts of disposal fees collected. Local governments that own or operate permitted MSW landfills may experience revenue increases or cost savings as a result of administration or enforcement of the proposed rule if wastes contaminated with total petroleum hydrocarbons are used as an alternative daily cover.
Under current rules, contaminated soil having concentrations greater than 1,500 mg/kg total petroleum hydrocarbons may only be disposed of at an MSW landfill in dedicated landfill cells for Class 1 industrial solid wastes. Under the proposed rule, petroleum hydrocarbon wastes could be used as an alternative daily cover if their contaminant concentrations are below protective concentration levels based upon a health based risk assessment and if the MSW landfill has a permitted liner and leachate management system. Material approved for use as alternative daily cover under this rule will still be considered waste, because of the inherent waste-like characteristics of these materials. State disposal fees will be collected in accordance with Texas Health and Safety Code (THSC), §361.013(a) for use of waste, even when used as alternative daily cover under the amended rule.
Revenue Impact to the Agency
Use of contaminated material as alternative daily cover under the proposed rule would be subject to either an industrial or municipal fee amount depending on the source of the material. The portion of tipping fees to be remitted to the agency from the acceptance of municipal source petroleum hydrocarbon waste with greater than 1,500 mg/kg total petroleum hydrocarbons is $0.40 per cubic yard. The agency's portion of tipping fees collected from the disposal of industrial solid wastes exceeding 1,500 mg/kg total petroleum hydrocarbons is $1.92 per cubic yard. The agency deposits any monies remitted into Account 549 - Waste Management Account.
In estimating the amount of industrial waste expected to be used as alternative daily cover under the proposed rule, the commission has considered that some landfills have used similar material in the past and may resume using the material under the proposed rule. Those landfills were using an estimated 100,000 cubic yards per year of petroleum hydrocarbon material, containing Railroad Commission of Texas waste, as alternative daily cover. Under the proposed rule, those MSW landfill operators would be required to begin paying the agency a disposal fee of $1.92 per cubic yard if they choose to resume using this type of material after the proposed rule becomes effective. Revenue deposited in Account 549 - Waste Management Account, could increase by $192,000 per year under the proposed rule if those landfills resume using the amount of material used in the past.
This proposed rule could also result in additional MSW landfills being authorized to receive Class 1 industrial waste as alternative daily cover throughout Texas. By allowing industrial solid waste generators to use an MSW landfill closer in proximity to the site of waste generation and incur lower transportation costs, industrial solid waste generators may be more likely to generate additional waste by removing rather than leaving contaminated soils in place. For purposes of this fiscal note, staff is estimating that there may be as much as an additional 50,000 cubic yards of Class 1 industrial solid waste contaminated with petroleum hydrocarbons generated statewide that may be taken to MSW landfills and utilized as an alternative daily cover. The MSW landfill operator would be required to remit to the agency a disposal fee of $1.92 per cubic yard for this additional industrial waste, and if 50,000 cubic yards statewide is used as an alternative daily cover, then the annual revenue increase in Account 549 - Waste Management Account, could be as much as $96,000 in addition to the $192,000 discussed above.
In addition to fees associated with using industrial solid waste under the proposed rule, the commission also expects to collect fees associated with using MSW as alternative daily cover. Staff estimates that there may be as many as 88 local governments and 35 businesses that could apply for permit modifications. If MSW landfill operators obtain permit modifications to use MSWs exceeding 1,500 mg/kg total petroleum hydrocarbons as an alternative daily cover, the MSW landfill operators would be required to remit to the agency a disposal fee of $0.40 per cubic yard when this waste is disposed in an MSW landfill. This proposed rule could result in additional MSW landfills being authorized to receive more highly contaminated soils from MSW sources throughout Texas. These wastes were previously prohibited from disposal in an MSW landfill cell except for disposal in a cell approved for disposal of Class 1 industrial solid waste. For purposes of this fiscal note, staff is estimating that there may be as much as an additional 50,000 cubic yards of MSW contaminated with petroleum hydrocarbons generated statewide that may be taken to MSW landfills and utilized as an alternative daily cover. The MSW landfill operator would be required to remit to the agency a disposal fee of $0.40 per cubic yard for this additional MSW, and if 50,000 cubic yards statewide is used as an alternative daily cover, then the annual revenue increase in Account 549 - Waste Management Account, could be as much as $20,000 in addition to the $288,000 for industrial solid waste for a total increase of $308,000.
Impact to Local Governments
Staff estimates that there may be as many as 88 local governments that own or operate MSW landfills with permitted liner and leachate management systems. If these local governments choose to accept petroleum hydrocarbon wastes under the proposed rule, they will be required to obtain a temporary authorization followed by a one-time permit modification. The temporary authorization and permit modification may cost up to $50,000 per applicant. The number of local governments that would choose to apply for a permit modification is not known, but local governments could partially offset the cost of the permit modification by collecting a disposal fee in addition to the state disposal fee. Staff estimates that a local government could charge as much as $20 per cubic yard, not counting any fees required to be passed through to the agency, to accept petroleum hydrocarbon wastes under the proposed rule. The revenue increase for each local government would depend on the size of the landfill and the amount of petroleum hydrocarbon waste accepted. In addition, by using the petroleum hydrocarbon waste as an alternative daily cover, a local government could save as much as $4.00 per cubic yard it would normally spend for clean soil. The total amount of cost savings would depend on the quantity of these wastes used by each MSW landfill as an alternative daily cover.
PUBLIC BENEFITS AND COSTS
Nina Chamness also determined that for each year of the first five years the proposed rule is in effect, the public benefit anticipated from the changes seen in the proposed rule will be to allow the use of waste material as alternative daily cover at MSW landfills.
Staff does not have the information to determine how many businesses generating petroleum hydrocarbon wastes exceeding 1,500 mg/kg total petroleum hydrocarbons will choose to place such waste in MSW landfills under the proposed rule.
Staff estimates that there may be as many as 35 business-owned MSW landfills with permitted liner and leachate management systems that may choose to use petroleum hydrocarbon wastes as alternative daily cover under the proposed rule. These businesses may incur temporary authorization costs and one-time permit modification costs of up to $50,000, save $4.00 per cubic yard by using petroleum hydrocarbon wastes instead of clean soil as daily cover, and could net $20 per cubic yard in revenue from disposal fees. The net increase in revenue or cost savings generated for each business owned MSW landfill would depend on whether wastes are used as alternative daily cover and the quantity of petroleum hydrocarbon waste used as alternative daily cover.
After temporary authorization costs and permit modification costs of up to $50,000 per applicant are recouped, total statewide revenue gains and cost savings for an annual statewide volume of 200,000 cubic yards could be as much as $4,800,000 per year for these local government and business-owned landfills. The increase in revenue for each owner or operator of an MSW landfill will depend on the characteristics of each landfill and the quantity of these wastes used as alternative daily cover.
SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT
No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rule. Owners or operators of MSW landfills are not typically classified as small or micro-businesses. If a small or micro-business owns or operates an MSW landfill that decides to accept and use petroleum hydrocarbon wastes as an alternative daily cover, it could expect to experience the same revenue and cost increases as those experienced by local governments or large businesses that decide to use petroleum hydrocarbon wastes as alternative daily cover at MSW landfills.
SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS
The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not required because the proposed rule does not adversely affect a small or micro-business in a material way for the first five years that the proposed rule is in effect.
LOCAL EMPLOYMENT IMPACT STATEMENT
The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rule does not adversely affect a local economy in a material way for the first five years that the proposed rule is in effect.
DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION
The commission reviewed the proposed rule in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the proposed rule is not subject to §2001.0225 because they are not a "major environmental rule" and it does not meet any of the four criteria listed in the statute. A "major environmental rule" means a rule, the specific intent of which, is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.
This proposal meets the first criteria to be considered a "major environmental rule" because it is intended to protect the environment and reduce risk to human health from environmental exposure. The proposal is intended to allow contaminated soils and wastes generated from activities regulated by the Railroad Commission of Texas (RRC) to be used as an alternative daily cover in an MSW landfill if contaminant concentrations are below protective concentration levels. The provisions that are proposed would allow the use of contaminated soil or contaminated earthen material having concentrations greater than 1,500 mg/kg total petroleum hydrocarbons for use as an alternative daily cover in an MSW landfill and allow wastes approved as an alternative daily cover to exceed waste constituent limitations that may otherwise be authorized for disposal at an MSW landfill. These provisions would only apply to those Type I MSW landfill facilities that have approved Resource Conservation and Recovery Act, Subtitle D liners having leachate management systems.
The proposed rule does not meet the definition of a "major environmental rule" because it is not expected to adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.
Furthermore, a regulatory impact analysis is not required, because the proposed rulemaking does not meet any of the four applicable requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225(a) only applies to a "major environmental rule" adopted by an agency, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.
In this case, the proposed rule does not meet any of these applicability requirements. First, there are no standards set for use of this type of material at these facilities by federal law and the proposal is not required by state law. Second, the proposed rule does not exceed an express requirement of state law. There are no specific statutory requirements for alternative daily cover used at MSW landfill facilities. Third, the rule does not exceed an express requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program. Fourth, the commission does not propose the rule solely under the general powers of the agency, but rather under the authority of: THSC, §361.011, which establishes the commission's jurisdiction over all aspects of the management of MSW; THSC, §361.024, which provides the commission with rulemaking authority; THSC, §361.061, which authorizes the commission to require and issue permits governing the construction, operation, and maintenance of solid waste facilities used to store, process, or dispose of solid waste. Therefore, the commission does not propose the adoption of the rule solely under the commission's general powers.
Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the SUBMITTAL OF COMMENTS section of this preamble.
TAKINGS IMPACT ASSESSMENT
The commission evaluated the proposed rulemaking and performed an assessment of whether the proposed rulemaking constitutes a taking under Texas Government Code, Chapter 2007. The specific intent of the proposed rulemaking is to ensure that contaminated soils and wastes generated from activities regulated by the RRC that are used as an alternative daily cover in an MSW landfill have contaminant concentrations that are below protective concentration levels. The provisions that are proposed would allow wastes approved as an alternative daily cover to exceed waste constituent limitations authorized for disposal at an MSW landfill. These provisions would apply to those Type I MSW landfill cells that have approved Resource Conservation and Recovery Act, Subtitle D liners having leachate management systems.
The proposed rulemaking provides a benefit to society by protecting the environment, public health, and safety. The provisions relate to allowing use of wastes as alternative daily cover and do not impose a burden on a recognized real property interest and therefore do not constitute a taking.
The promulgation of the proposed rulemaking is neither a statutory nor a constitutional taking of private real property by the commission. Specifically, the proposed rulemaking does not affect a landowner's rights in a recognized private real property interest because this rulemaking neither: burdens (constitutionally) or restricts or limits the owner's right to the property that would otherwise exist in the absence of this rulemaking; nor would it reduce its value by 25% or more beyond that value which would exist in the absence of the proposed rules. Therefore, the proposed rulemaking will not constitute a taking under Texas Government Code, Chapter 2007.
CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM
The commission reviewed the proposed rulemaking and found that the proposal is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, §§33.201 et seq., and therefore must be consistent with all applicable CMP goals and policies. The commission conducted a consistency determination for the proposed rule in accordance with Coastal Coordination Act Implementation Rules, 31 TAC §505.22 and found the proposed rulemaking is consistent with the applicable CMP goals and policies.
CMP goals applicable to the proposed rule include to protect, preserve, restore, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (CNRAs); to ensure sound management of all costal resources by allowing for compatible economic development and multiple human uses of the coastal zone; and to balance benefits from economic development and multiple human uses of the coastal zone, the benefits from protecting, preserving, restoring, and enhancing CNRAs, the benefits from minimizing loss of human life and property, and the benefits from public access to and enjoyment of the coastal zone.
CMP policies applicable to the proposed rule include the construction and operation of solid waste treatment, storage, and disposal facilities and discharge of municipal and industrial waste to coastal waters.
Promulgation and enforcement of the rule will not violate or exceed any standards identified in the applicable CMP goals and policies, because the rule does not create or have a direct or significant adverse effect on any coastal natural resource areas, and because, like the current rules, the proposed rule would ensure proper MSW management in all regions of the state, including coastal areas.
Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the SUBMITTAL OF COMMENTS section of this preamble.
ANNOUNCEMENT OF HEARING
The commission will hold a public hearing on this proposal in Austin on July 15, 2008 at 2:00 p.m. in Building E, Room 201S, at the commission's central office located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. Open discussion will not be permitted during the hearing; however, commission staff members will be available to discuss the proposal 30 minutes prior to the hearing.
Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Michael Parrish, Office of Legal Services at (512) 239-2548. Requests should be made as far in advance as possible.
SUBMITTAL OF COMMENTS
Written comments may be submitted to Michael Parrish, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at: http://www5.tceq.state.tx.us/rules/ecomments/ . File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2008-013-330-PR. The comment period closes July 21, 2008. Copies of the proposed rulemaking can be obtained from the commission's Web site at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html . For further information, please contact Wayne Harry, Municipal Solid Waste Permits Section, at (512) 239-6619.
STATUTORY AUTHORITY
The amendment is proposed under Texas Water Code, §5.103, which authorizes the commission to adopt any rules necessary to carry out its powers and duties; and THSC, §361.002, Policy and Findings; THSC, §361.011, which establishes the commission's jurisdiction over all aspects of the management of MSW; THSC, §361.024, which provides the commission with rulemaking authority; and THSC, §361.061, which authorizes the commission to require and issue permits governing the construction, operation, and maintenance of solid waste facilities used to store, process, or dispose of solid waste. The proposed amendment implements THSC, §361.024, which provides the commission with rulemaking authority; and THSC, §361.061, which authorizes the commission to require and issue permits governing the construction, operation, and maintenance of solid waste facilities used to store, process, or dispose of solid waste.
The proposed amendment implements Texas Water Code, §5.103 and THSC, §§361.002, 361.011, 361.024, and 361.061.
§330.165.Landfill Cover.
(a) - (c) (No change.)
(d) Alternative daily cover. Alternative daily cover may only be allowed by a temporary authorization under §305.70(m) of this title (relating to Municipal Solid Waste Permit and Registration Modifications) followed by a major amendment or a modification in accordance with §305.70(k)(1) of this title. Use of alternative daily cover is limited to a 24-hour period after which either waste or daily cover as defined in subsection (a) of this section must be placed.
(1) - (3) (No change.)
(4) For contaminated soil or contaminated earthen material proposed to be used as alternative daily cover in a municipal solid waste landfill, the constituents of concern shall not exceed the concentrations listed in Table 1, Constituents of Concern and Their Maximum Leachable Concentrations, located in §335.521(a)(1) of this title (relating to Appendices). Additionally, the contaminated soil or contaminated earthen material must not contain:
(A) (No change.)
(B) total petroleum hydrocarbons in concentrations greater than 1,500 milligrams per kilogram. The owner or operator may submit a demonstration for executive director approval that material exceeding 1,500 milligrams per kilogram (mg/kg) total petroleum hydrocarbons can be a suitable alternative daily cover if the material has constituent concentrations below protective concentration levels. The demonstration shall include information regarding the risk to human health and the environment, establishing protective concentration levels in accordance with §350.76(g) of this title (relating to Approaches for Specific Chemicals of Concern to Determine Human Health Protective Concentration Levels), and the information required in paragraph (1) of this subsection. These materials may only be approved for use at Type I landfill units that have liners approved under §330.331(a)(1) or (2) of this title (relating to Design Criteria) and leachate provisions approved under §330.333 or §330.335 of this title (relating to Leachate Collection System and Alternative Liner Design). If approved, the executive director may impose additional permit requirements regarding the use of this material.
(5) Alternative daily cover must not exceed constituent limitations imposed on waste authorized to be disposed at the facility. Except as stated in §330.15 of this title (relating to General Prohibitions), this restriction does not apply to material approved for use as alternative daily cover under paragraph (4)(B) of this subsection. Waste that is approved for use as alternative daily cover under paragraph (4)(B) of this subsection is not subject to the requirements of §330.171(b)(4) of this title (relating to Disposal of Special Wastes) and §330.331(e) of this title.
(6) (No change.)
(e) - (h) (No change.)
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on June 6, 2008.
TRD-200802912
Robert Martinez
Director, Environmental Law Division
Texas Commission on Environmental Quality
Earliest possible date of adoption: July 20, 2008
For further information, please call: (512) 239-2548