The Texas Natural Resource Conservation Commission (commission) proposes amendments to §§50.2, 50.13, and 50.31, and new §§50.102, 50.113, 50.115, 50.117, 50.119, 50.131, 50.133, 50.135, 50.137, 50.139, 50.141, 50.143, and 50.145, concerning action on applications.

BACKGROUND

The primary purpose of the proposed amendments and new sections is to implement House Bill (HB) 801, and portions of Senate Bill (SB) 7, SB 211, SB 766, and SB 1308, 76th Legislature (1999). This proposal also represents a continuation of the commission's effort to consolidate agency procedural rules and make certain processes consistent among different agency programs. Concurrently with this rulemaking, the commission is proposing the review of Chapter 50, concerning Action on Applications, in accordance with the General Appropriations Act, Article IX, §167, 75th Legislature, 1997.

OVERVIEW OF HB 801 AND IMPLEMENTATION

HB 801, enacted by the 76th Legislature, revises the public participation in environmental permitting procedures of the commission by adding new Texas Water Code, Chapter 5, Subchapter M; revised Texas Health and Safety Code, Solid Waste Disposal Act, §361.088; revisions to the Texas Clean Air Act (TCAA), Texas Health and Safety Code, §382.056; and revisions to Texas Government Code, §2003.047. The changes in law made by HB 801 only apply to permit applications declared administratively complete on or after September 1, 1999 and former law is continued in effect for applications declared administratively complete before September 1, 1999. Generally, the amendments made by this law are procedural in nature and are not intended to expand or restrict the types of commission actions for which public notice, an opportunity for public comment, and an opportunity for hearing are provided.

More specifically, HB 801 encourages early public participation in the environmental permitting process and is intended to streamline the contested case hearing process. For example, it requires an applicant to publish newspaper notice of intent to obtain a permit and notice of the executive director's preliminary decision on the application. It also requires the applicant to place a copy of the application and the executive director's preliminary decision at a public place in the county and authorizes the executive director to hold public meetings. The executive director is also required to prepare responses to relevant and material public comment received in response to the notices or at public meetings, and file the responses with the chief clerk. This legislation also allows the commission by rule to provide any additional notice, opportunity for public comment, or opportunity for hearing as necessary to satisfy federal program authorization requirements. Contested case hearing procedures are also revised. The scope of proceedings and discovery is limited by the new law. These changes are proposed to be implemented in Chapters 39, 50, 55, and 80. Additional changes to implement HB 801 are proposed to Chapters 106, 116, 122, 305, and 321. Most of these chapters also contain changes necessary for the consolidation of the procedural rules of the agency and to improve consistency among the permitting programs as well as changes to clarify and update agency rules and changes necessary to facilitate permit processing. Changes for all of these chapters are published in this edition of the Texas Register.

OVERVIEW OF SB 7 AND IMPLEMENTATION

SB 7, also enacted by the 76th Legislature, restructures electric utility service in Texas. Owners of grandfathered facilities that generate electric energy for compensation are required to apply for an electric generating facility permit from the commission by September 1, 2000. These permits are subject to notice under §382.056 of the Texas Health and Safety Code. SB 7 provides that initial issuance of these permits requires notice and comment proceedings. However, amendment and renewal of these permits requires notice, comment and opportunity for contested case hearing.

The notice provisions for electric generating facility permits are implemented through changes to Chapters 39 and to a limited extent to Chapters 50 and 55. Amendments and renewals are subject to Chapters 50, 55, and 80 as amended. Additional implementation of the requirements of SB 7 is expected in future rulemaking proposals by the commission.

OVERVIEW OF SB 766 AND IMPLEMENTATION

SB 766, enacted by the 76th Legislature, also amends TCAA Chapter 382 by, among other things: (1) requiring the commission to establish procedures to authorize standard permits and permits by rule; (2) dividing the current category of exemptions from permitting into two categories: permits by rule for construction of facilities with insignificant air emissions, and exemptions from permitting for changes to existing facilities with insignificant air emissions; and (3) creating a voluntary emission reduction permit (VERP) for grandfathered facilities that must be applied for by September 1, 2001. Notice requirements for these changes are implemented in the changes to Chapter 39 because of the critical nature of the timing of the permit program. Public participation requirements applicable to VERPs under SB 766 are included in these chapters, specifically §39.403(11) and §39.606. Additional implementation of the requirements of SB 766 is expected to occur in future rulemaking proposals by the commission.

OVERVIEW OF SB 1308 AND IMPLEMENTATION

SB 1308 allows the executive director to approve water quality management plans (WQMP) and revisions, so long as an opportunity for public participation has been provided. This bill, which amends Texas Water Code §26.037, also requires rules to provide for commission review of the executive director's decision on a plan approval or revision. This proposal incorporates these requirements through §§39.401, 39.403, and 39.553.

OVERVIEW OF HB 1479 AND IMPLEMENTATION

HB 1479 amended §26.028 of the Texas Water Code and allows the commission to approve an application to renew or amend a permit without the necessity of a public hearing if the applicant is not applying to increase significantly the quantity of waste authorized to be discharged or changing materially the pattern or place of discharge; the activities to be authorized will maintain or improve the quality of waste; and the applicant's compliance history raises no issues regarding the applicant's ability to comply with a material term of its permit; and for TPDES permits, notice and opportunity to comment is provided in accordance with federal program requirements. This proposal implements these provisions.

OVERVIEW OF SB 211 AND IMPLEMENTATION

SB 211 amends §2001.142(c) of the Texas Government Code relating to notice of decision in an administrative hearing and provides that a party is presumed to have been notified on the third day after notice has been mailed. The requirement in SB 211 regarding presumed notice within three days of mailing has also been implemented and has guided rule drafting in Chapters 39, 50, 55, and 80.

EXPLANATION OF PROPOSED RULES

ORGANIZATION OF CHAPTER

HB 801 applies only to certain applications that are administratively complete on or after September 1, 1999. Thus, in the proposed rules in Chapter 50, Subchapters A-C are amended to apply only to applications that were administratively complete before September 1, 1999. Subchapter D is not used here; it is reserved for future rulemaking. At the same time, new Subchapters E-G apply only to applications that are administratively complete on or after September 1, 1999. Generally, new Subchapters E-G are duplicated versions of the existing rules in Subchapters A-C, modified to incorporate substantive changes either related to HB 801 implementation, implementation of other bills, or other changes proposed under this chapter.

In this proposal, only the applicability sections of Subchapters A-C are reproduced. For Subchapters E-G, the entire new subchapters are printed. Many of the sections of Subchapters E-G are the same or very similar to sections in Subchapters A-C. Where possible, section numbers are parallel; for example, §50.13 (Action on Applications) is similar to §50.113 (Action on Applications). Nonetheless, since Subchapters E-G are entirely new, it may be difficult to quickly see the differences between those new and existing subchapters. In the section-by-section analysis in this preamble, the agency has tried to point out any important differences. Additionally, to facilitate review, the agency will make copies of the rule available, which will show the differences between old and new subchapters. Copies may be obtained by calling Casey Vise, in the Office of Environmental Policy, Analysis and Assessment, at (512) 239-1932 and on the commission's website at: http://www.tnrcc.state.tx.us/oprd/forum.html#hb801

SECTION BY SECTION ANALYSIS

Proposed §50.2 (Applicability) states that Subchapter A applies to any application for a permit that is declared administratively complete before September 1, 1999, and that the similar Subchapter E applies to any application that is declared administratively complete on or after September 1, 1999. Section 50.2(c) clarifies that this chapter does not apply to Federal Operating Permits, which continue to be regulated under the provisions of Chapter 122 (Federal Operating Permits).

Proposed §50.13 (Action on Application) states that Subchapter B applies to any application for a permit that is declared administratively complete before September 1, 1999, and that Subchapter F applies to any application that is declared administratively complete on or after September 1, 1999.

Proposed §50.31(b) (Purpose and Applicability) states that Subchapter C applies to any application for a permit that is declared administratively complete before September 1, 1999, and that Subchapter G applies to any application that is declared administratively complete on or after September 1, 1999.

Proposed §50.102 (Applicability) which parallels current §50.2, states that applications declared administratively complete on or after September 1, 1999 are subject to the requirements of Subchapters E-G; while those declared administratively complete before September 1, 1999 are subject to Subchapters A-C. Paralleling proposed §50.2(c), proposed new §50.102(f) states that Subchapters E-G do not apply to air quality applications for Federal Operating Permits, which continue to be regulated under Chapter 122 of this title (Federal Operating Permits). Voluntary emission reduction permits under §382.0519 of the Texas Health and Safety Code, and emission reduction permits for electric generating facilities under §39.264 of the Texas Utilities Code, are only subject to §§50.117, 50.131, 50.133, 50.135, and 50.145 of this chapter.

Proposed §50.113, while mirroring current §50.13 (Action on Application), introduces the request for reconsideration provided by HB 801. Requests for reconsideration are considered on the same schedule as hearing requests, so in most sections where a hearing request is mentioned in current rules, provision for requests for reconsideration is added. Under proposed §50.113 (Action on Application), the commission may act on an application without holding a contested case hearing (1) when no timely hearing requests have been received, (2) when all timely filed requests for reconsideration or contested case hearing have been withdrawn or denied, or (3) when an application has been remanded because of a settlement. Additionally, proposed §50.113(a)(4) departs from current §50.13 by adding the HB 801 provisions that allow the commission to act on certain applications without a contested case hearing only if the commission finds that there are no issues involving disputed questions of fact, that were raised during the comment period, and that are relevant and material to the decision on the application.

Proposed §50.113(b) provides that the commission may act on an application for a renewal, modification, or amendment of an air permit if doing so will not result in an increase of emissions or the emission of an air contaminant not previously emitted. However, this does not include air applications involving a facility with unresolved, recurring, or egregious compliance violations. See §382.056(o), Texas Health and Safety Code. Similarly, proposed §50.113(b)(2) implements Section 4 of HB 801, allowing the commission to act without a contested case hearing on hazardous waste permit renewals under §305.631(a)(8). Similarly, implementing HB 1479, this section allows the commission to act without a hearing on wastewater discharge permit renewals or amendments under §26.028(d) of the Texas Water Code. While 26.028 has long allowed the commission to act on certain permit amendments without offering the opportunity for a hearing, HB 1479 granted that option to renewal applications.

New §50.115 (Scope of Proceedings) proposes to substantially change current §50.15 to implement HB 801. Proposed §50.115 (Scope of Proceedings) requires the commission to specify the number and scope of issues that may be referred to hearing. Section 50.115(b) states that an issue may not be referred for contested case hearing unless the commission determines that the issue involves a disputed question of fact which is relevant and material to a decision on the application. Section 50.115(c) requires the commission to estimate the maximum expected duration of each hearing. The commission proposes to interpret the maximum expected duration to end when the judge submits the proposal for decision to the commission. Additionally, the commission proposes to specify that the maximum duration, for the most complex hearings, should not exceed one year. Less complex hearings should take less time. Subsection (d) of proposed §50.115 mirrors the language in current §50.15, and (d)(2) incorporates existing statutory requirements from Texas Health and Safety Code §382.055. Finally, subsection (e) applies to those applications that are not under Chapters 26 and 27 of the Texas Water Code or Chapters 361 or 382 of the Texas Health and Safety Code. Subsection (e) implements Section 6 of HB 801, which amends Texas Government Code §2003.047 and requires the commission to submit a list of disputed issues. The rule proposes, for those programs other than those under Chapters 26 and 27 of the Texas Water Code or Chapters 361 or 382 covered by Section 2 and 5 of HB 801, that the list of disputed issues shall be those issues defined by the law governing those applications. This is proposed because it does not appear to be the intent of HB 801 to involve those applications in all of the procedures required by HB 801.

Proposed §50.117(a)-(e) mirrors current §50.17 (Commission Action). To comply with HB 801 and the requirements of federally authorized programs, proposed §50.117(f) (Commission Actions) provides that the commission shall consider all public comments received on an application, and shall either adopt the executive director's response to comments or prepare its own response.

Proposed §50.119 (Notice of Commission Action, Motion for Rehearing) substantially parallels current §50.19, but §50.119(a) adds persons who submit requests for reconsideration to the list of people who get notice of a commission action. Section 50.119(b) refers to proposed §80.272, rather than the current §80.271, to which §50.19 refers. Subsection (b) also provides that a person is presumed to have been notified of the commission's decision three days after the decision is mailed by first class mail, in conformity with §2001.42(c), Texas Government Code, which was enacted by SB 211.

Proposed Subchapter G of Chapter 50 parallels current Subchapter C (Action by the Executive Director). Proposed §50.131 (Purpose and Applicability) parallels current §50.31, except in three respects. First, proposed §50.131(b) delegates to the executive director the authority to certify WQMP updates, implementing SB 1308. Second, proposed §50.131(c) does not contain the statement that this subchapter does not apply to air federal operating permits under Chapter 122. This was deleted because §50.2 and §50.102 are proposed to contain a more general statement that none of Chapter 50, except §50.17 and §50.117, apply to federal operating permits. Third, the current reference to §50.39 in §50.31(d) is changed in proposed §50.139 to the parallel §50.131(d).

Proposed §50.133 (Executive Director Action on Application and WQMP Update) parallels current §50.33 and sets out the circumstances under which the executive director may act on an application. New §50.133 differs slightly from §50.33 because it implements certain provisions of HB 801 and SB 1308. Section 50.133(a)(1) adds the requirement that the executive director must consider public comment and prepare a response before acting on an application. New language is proposed under §50.133(a)(5)(D) and (E) to provide that an application is also considered uncontested if it (1) has been remanded because of a settlement, or a contested case hearing request has been filed but no opportunity for hearing is provided by law, or (2) when the application for renewal, modification or amendment of an air permit would not result in an increase in emissions or the emission of a new contaminant. Proposed §50.133(b) and (c) mirror current §50.33(b) and (c), describing how persons who submit comments will be notified of the executive director's action and the opportunity to file a motion for reconsideration.

Proposed §50.133(d) incorporates a new requirement allowing the executive director to certify a WQMP update after notice and, if appropriate, after revisions have been made to the WQMP in response to those comments. Additionally, the title of the section is proposed to be amended to include a reference to WQMP updates. These proposed changes implement requirements in SB 1308.

Proposed §50.135 (Effective Date of Executive Director Action) parallels current §50.35, providing that a permit is effective when signed by the executive director, but adding "unless otherwise specified in the permit," to allow flexibility.

Proposed new §50.137 (Remand for Action by Executive Director), mirrors current §50.37, stating that an application subject to this subchapter may be remanded to the executive director if all timely filed requests for reconsideration and requests for hearing are withdrawn or denied. The departure from §50.37 is the addition of request for reconsideration to implement HB 801.

Proposed new §50.139 (Motion for Reconsideration of Executive Director's Action), like current §50.39, allows a motion for reconsideration of the executive director's decision on an application or WQMP update certification. This section also identifies the manner in which an interested person may seek commission review of an executive director's action on a WQMP update. The title of the section is proposed to be changed to add "of Executive Director's Action" to emphasize that a Motion for Reconsideration is filed in response to the executive director's final action on an application, whereas a Request for Reconsideration, provided for in Chapter 55, is properly filed while an application is still subject to commission consideration. A Request for Reconsideration is not a prerequisite to a Motion for Reconsideration, but a Request for Reconsideration would come first in time before a Motion for Reconsideration.

A Motion for Reconsideration must be filed no later than 20 days after notice of the executive director's action is mailed. Persons who file timely comments on WQMP update certifications, and who wish to file a motion for reconsideration, must do so within 20 days after the executive director's response to comments is mailed. The executive director's action on an application is not affected by a motion for reconsideration, unless the commission otherwise orders. Procedures relating to motions for rehearing do not apply to motions for reconsideration.

Proposed §50.141 deletes language pertaining to the pendency of delegation of the National Pollutant Discharge Elimination System authority because the commission received authorization to operate the program on September 14, 1998.

Proposed §50.143 is unchanged from current §50.43 except for the removal of the sentence allowing the agency to return classified or confidential portions of an application to an applicant. This change conforms to changes to §1.5 (Records of the Agency) and to the Texas Public Information Act. A cross reference to Commission Action on Hearing Request has been updated to refer to proposed §80.272 rather than current §80.271.

Proposed §50.145 (Corrections to Permits), mirrors §50.15 of this title and includes no substantive changes. This section, like many others, is added solely so that, after all applications that were administratively complete before September 1, 1999 have been processed, Subchapters A-C may be repealed. At that time, Subchapters E-G will contain all of the then-current rules for Action on Application.

FISCAL NOTE

Bob Orozco, Technical Specialist with Strategic Planning and Appropriations, has determined that for the first five-year period the proposed amendments are in effect there will be no significant fiscal implications for units of state and local government as a result of administration or enforcement of the proposed amendments. The proposed amendments to Chapter 50, Actions on Applications, would implement certain provisions contained in HB 801, 76th Legislature, Regular Session, 1999, an act relating to public participation in certain environmental permit proceedings of the commission. It also incorporates changes required by SB 1308, an act relating to approval of WQMPs, and changes required by SB 211, an act relating to the notice of a decision in an administrative hearing, and changes required by HB 1479, an act relating to wastewater permits.

The proposed amendments establish the circumstances when the commission may act on an application without holding a contested case hearing; require the commission to limit the number and scope of issues in permit applications referred to hearing; establish procedures regarding public comment on permit applications; clarify procedures regarding Motions for Rehearing or Reconsideration; delegate authority to the executive director to take action on certain applications and certifications; establish circumstances when the executive director may act on an application; establish the effective date of a permit; clarify when the State Office of Administrative Hearings may remand an application to the executive director. The proposed amendments also provide that the executive director may certify WQMP updates, and that a party is presumed to have been notified on the third day after a final order is mailed.

The proposed amendments affect permitting processes for air, water, and waste programs. It is anticipated that all applicants for permits under Chapters 26, Water Quality Control; Chapter 27, Injection Wells, of the Texas Water Code; applicants for permits under Chapter 361, Solid Waste Disposal Act; and certain permits under Chapter 382, Clean Air Act, of the Texas Health and Safety Code; and all other similar authorizations will be affected by the proposed amendments to the rules. Additionally, applicants for any other permit or approval subject to commission or executive director action may be affected by these amendments. Persons involved in the permitting process, including members of the general public, will also be affected.

PUBLIC BENEFIT

Mr. Orozco has also determined that for each year of the first five years the proposed amendments to Chapter 50 are in effect the public benefit anticipated from enforcement of and compliance with the proposed amendments will be increased opportunity for public participation in the permitting processes conducted by the commission, increased standardization in the application process, and more efficient contested case hearings.

The purpose of the proposed amendments is to establish procedures that will enhance public participation in certain commission permitting processes, as well as to implement recent legislation allowing the executive director to approve WQMP updates; allowing commission action without a hearing on certain air, hazardous waste, and wastewater permit renewals and amendments; and adding three days to the time a person is presumed to have received mailed notice of a final order or decision. No significant additional costs are anticipated to any person associated with the proposed amendments because the amendments do not create new regulatory burdens but only modify or clarify procedures currently in existence.

SMALL BUSINESS ANALYSIS

No adverse economic effects are anticipated to any small business as a result of implementing the provisions of the proposed amendments to Chapter 50 of the rules because the amendments modify or clarify requirements currently in existence.

REGULATORY IMPACT EVALUATION

The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the act. Furthermore, it does not meet any of the four applicability requirements listed in §2001.0225(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, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Because the specific intent of the proposed rulemaking is procedural in nature and establishes procedures associated with actions on permit applications, the rulemaking does not meet the definition of a "major environmental rule."

In addition, even if the proposed rule is a major environmental rule, a draft regulatory impact assessment is not required because the rule does not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, or propose to adopt a rule solely under the general powers of the agency. This proposal does not exceed a standard set by federal law. This proposal does not exceed an express requirement of state law because it is authorized by the following state statutes: Texas Government Code, §2001.004, which requires state agencies to adopt rules of practice; and Texas Water Code, Chapter 5, Subchapter M, as well as the other statutory authorities cited in the STATUTORY AUTHORITY section of this preamble. This proposal does not 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 because the rule is consistent with, and does not exceed, federal requirements, and is in accordance with Texas Water Code, §5.551, which expressly requires the commission to adopt any rules necessary to satisfy any authorization for a federal permitting program. This proposal does not adopt a rule solely under the general powers of the agency, but rather under a specific state law (i.e., Texas Water Code, Chapter 5, Subchapter M, and Texas Government Code, §2001.004). Finally, this rulemaking is not being proposed or adopted on an emergency basis to protect the environment or to reduce risks to human health from environmental exposure.

TAKINGS IMPACT ASSESSMENT

The commission has prepared a Takings Impact Assessment for these proposed rules pursuant to Texas Government Code, §2007.043. The following is a summary of that assessment. The specific primary purpose of the proposed amendments and new sections is to revise the commission's rules to establish procedures for public participation in certain permitting proceedings as required by HB 801, and other legislation. The proposal relates to procedures for providing public notice, providing opportunity for public comment, and providing opportunity for requesting public hearing. The rule would also consolidate already existing notice procedures for some of the air quality permitting programs; correct, clarify, and/or update the air quality permit amendment process, requirements relating to sign posting for concrete batch plants, and clarification of requirements relating to bilingual education notices; and consolidate commission procedural rules. The proposed rules will substantially advance these stated purposes by providing specific provisions on the aforementioned matters. Promulgation and enforcement of these rules will not affect private real property which is the subject of the rules because the proposed language consists of amendments and new sections relating to the commission's procedural rules.

COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW

The commission has reviewed the rulemaking and has determined that the proposed sections are not subject to the Texas Coastal Management Program. The proposed actions concern only the procedural rules of the commission and general agency operations, are not substantive in nature, do not govern or authorize any actions subject to the CMP, and are not themselves capable of adversely affecting a coastal natural resource area (Title 31 Natural Resources and Conservation Code, Chapter 505; 30 TAC §281.40, et seq).

PUBLIC HEARING

A public hearing on this proposal will be held August 10, 1999, at 2:00 p.m. in Room 201S of Texas Natural Resource Conservation Commission Building E, located at 12100 Park 35 Circle, Austin. The hearing will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes before the hearing and will answer questions before and after the hearing.

SUBMITTAL OF COMMENTS

Written comments may be submitted by mail to Casey Vise, MC 205, Office of Environmental Policy, Analysis, and Assessment, P.O. Box 13087, Austin, Texas 78711-3087; or by fax at (512) 239- 4808. All comments must be received by August 16, 1999, and should reference Rule Log No. 99030- 039-AD. Comments received by 5:00 p.m. on that date will be considered by the commission before any final action on the proposal. For further information, please contact Ray Henry Austin at (512) 239-6814.

Subchapter A. Purpose, Applicability, and Definitions

The Texas Natural Resource Conservation Commission (TNRCC or commission) proposes amendments to §55.1 and §55.21 and new §§55.101, 55.103, 55.150, 55.152, 55.154, 55.156, 55.200, 55.201, 55.203, 55.205, 55.206, 55.209, 55.211, 55.250, 55.251, 55.252, 55.253, 55.254, 55.255, and 55.256, concerning Requests for Contested Case Hearing; Public Comment.

BACKGROUND The primary purpose of the proposed amendments and new sections is to implement House Bill (HB) 801, and portions of Senate Bill (SB) 7, SB 211, SB 766, and HB 1479, 76th Legislature (1999). The proposed amendments and new sections are intended to establish avenues for public participation in the permitting process for water, waste, and air applications. This proposal also represents a continuation of the commission's effort to consolidate agency procedural rules and make certain processes consistent among different agency programs. Concurrently with this rulemaking, the commission is proposing the review of Chapter 55, concerning Requests for Contested Case Hearing; Public Comment, in accordance with the General Appropriations Act, Article IX, §167, 75th Legislature, 1997.

OVERVIEW OF HB 801 AND IMPLEMENTATION HB 801, enacted by the 76th Legislature, revises the public participation in environmental permitting procedures of the commission by adding new Texas Water Code (TWC), Chapter 5, Subchapter M; revised Texas Health and Safety Code, (THSC), Solid Waste Disposal Act, §361.088; revisions to TCAA, THSC §382.056; and revisions to Texas Government Code, §2003.047. The changes in law made by HB 801 only apply to permit applications declared administratively complete on or after September 1, 1999 and former law is continued in effect for applications declared administratively complete before September 1, 1999. Generally, the amendments made by this law are procedural in nature and are not intended to expand or restrict the types of commission actions for which public notice, an opportunity for public comment and an opportunity for hearing are provided.

More specifically, HB 801 encourages early public participation in the environmental permitting process and is intended to streamline the contested case hearing process. For example, it requires an applicant to publish newspaper notice of intent to obtain a permit and notice of the executive director's preliminary decision on the application. It also requires the applicant to place a copy of the application and the executive director's preliminary decision at a public place in the county and authorizes the executive director to hold public meetings. The executive director is also required to prepare responses to relevant and material public comment received in response to the notices or at public meetings, and file the responses with the chief clerk. This legislation also allows the commission by rule to provide any additional notice, opportunity for public comment or opportunity for hearing as necessary to satisfy federal program authorization requirements. Contested case hearing procedures are also revised. The scope of proceedings and discovery is limited by the new law. These changes are proposed to be implemented in Chapters 39, 50, 55 and 80. Additional changes to implement HB 801 are proposed to Chapters 106, 116, 122, 305 and 321. Most of these chapters also contain changes necessary for the consolidation of the procedural rules of the agency and to improve consistency among the permitting programs as well as changes to clarify and update agency rules and changes necessary to facilitate permit processing. Changes for all of these chapters are published in this edition of the Texas Register.

OVERVIEW OF SB 7 AND IMPLEMENTATION Senate Bill (SB 7), also enacted by the 76th Legislature, restructures electric utility service in Texas. Owners of grandfathered facilities that generate electric energy for compensation are required to apply for an electric generating facility permit from the commission by September 1, 2000. These permits are subject to notice under §382.056 of the Health and Safety Code. SB 7 provides that initial issuance of these permits requires notice and comment proceedings. However, amendment and renewal of these permits requires notice, comment and opportunity for contested case hearing.

The notice provisions for electric generating facility permits are implemented through changes to Chapters 39 and to a limited extent to Chapters 50 and 55. Amendments and renewals are subject to Chapters 50, 55, and 80 as amended. Additional implementation of the requirements of SB 7 is expected in future rulemaking proposals by the commission.

OVERVIEW OF SB 766 AND IMPLEMENTATION SB 766, enacted by the 76th Legislature, also amends TCAA, Chapter 382 by, among other things: (1) requiring the commission to establish procedures to authorize standard permits and permits by rule; (2) dividing the current category of exemptions from permitting into two categories: permits by rule for construction of facilities with insignificant air emissions, and exemptions from permitting for changes to existing facilities with insignificant air emissions; and (3) creating a voluntary emission reduction permit (VERP) for grandfathered facilities that must be applied for by September 1, 2001. Notice requirements for these changes are implemented in the changes to Chapter 39 because of the critical nature of the timing of the permit program. Public participation requirements applicable to VERPs under SB 766 are included in these chapters, specifically §39.403(11) and §39.606. Additional implementation of the requirements of SB 766 is expected to occur in future rulemaking proposals by the commission.

OVERVIEW OF HB 1479 AND IMPLEMENTATION House Bill (HB) 1479 amended §26.028 of the Texas Water Code and allows the commission to approve an application to renew or amend a permit without the necessity of a public hearing if the applicant is not applying to increase significantly the quantity of waste authorized to be discharged or changing materially the pattern or place of discharge; the activities to be authorized will maintain or improve the quality of waste; and the applicant's compliance history raises no issues regarding the applicant's ability to comply with a material term of its permit; and for TPDES permits, notice and opportunity to comment is provided in accordance with federal program requirements. This proposal implements these provisions.

OVERVIEW OF SB 211 AND IMPLEMENTATION Senate Bill (SB) 211 amends §2001.142(c) of the Texas Government Code relating to notice of decision in an administrative hearing and provides that a party is presumed to have been notified on the third day after notice has been mailed. The requirement in SB 211 regarding presumed notice within three days of mailing has also been implemented and has guided rule drafting in Chapters 39, 50, 55 and 80.

ORGANIZATION OF CHAPTER HB 801 applies only to certain applications that are administratively complete on or after September 1, 1999. Thus, in the proposed rules in Chapter 50, Subchapters A-B are amended to apply only to applications that were administratively complete before September 1, 1999. At the same time, new Subchapters D-G apply only to applications that are administratively complete on or after September 1, 1999. More specifically, Subchapter G applies to applications other than those under Chapter 26 or 27, Texas Water Code and Chapter 361 or 382, Texas Health and Safety Code that are declared administratively complete on or after September 1, 1999. Subchapter C is not used here; it is reserved for future rulemaking.

Many of the sections of Subchapters D-G are the same or very similar to sections in Subchapters A-B. Nonetheless, since Subchapters D-G are entirely new, it may be difficult to quickly see the differences between those new and existing Subchapters. In the section-by-section analysis in this preamble, the agency has tried to point out any important differences. Additionally, to facilitate review, the agency will make copies of the rule available, which will show the differences between old and new subchapters. Copies may be obtained by calling Casey Vise, in the Office of Environmental Policy, Analysis and Assessment, at (512) 239-1932 and on the TNRCC website at: http://www.tnrcc.state.tx.us/oprd/forum.html#hb801

EXPLANATION OF PROPOSED RULES The primary purpose of the proposed new sections is to implement House Bill (HB) 801, and portions of Senate Bill (SB) 7, SB 211, SB 766, and HB 1479, 76th Legislature (1999). HB 801 establishes new procedures for public participation in environmental permitting proceedings. It establishes procedures for providing public notice, an opportunity for public comment, and an opportunity for public hearing for certain actions. This legislation also allows the commission by rule to provide any additional notice, opportunity for public comment or opportunity for hearing as necessary to satisfy air quality federal program authorization requirements. More specifically, HB 801 revises the public participation in environmental permitting procedures of the commission by adding new statutory provisions to Texas Water Code (TWC), Chapter 5, Subchapter M; revisions to Solid Waste Disposal Act, Texas Health and Safety Code (THSC), §361.088; revisions to Texas Clean Air Act, THSC, §382.056; and revisions to Texas Government Code, §2003.047. Except for the changes required under Texas Government Code, §2003.047, the new and amended statutory provisions apply to applications under TWC, Chapters 26 and 27, and THSC, Chapters 361 and 382. These changes are proposed to be implemented in Chapters 39, 50, 55, and 80. Additional changes to implement HB 801 are proposed to Chapters 116, 122, 305 and 321; changes for all of these chapters are published in this edition of the Texas Register. Concurrently with this rulemaking the commission is proposing the review of 30 TAC Chapter 50 in accordance with the General Appropriations Act, Article IX, §167, 75th Legislature, 1997.

The amendments to chapter 55 propose to change the name of this chapter to Requests for Reconsideration and Contested Case Hearings; Public Comment to reflect that the new public participation procedures allow for requests for reconsideration, as well as requests for contested case hearings. HB 801 has provided for the opportunity to file requests for reconsideration, as well as requests for hearing.

The amendments to chapter 55 include a proposed revision to §55.1, Applicability, to reflect that subchapters A and B of this chapter apply to applications declared administratively complete before September 1, 1999. This amendment satisfies the requirement of HB 801, §7(b) that applications declared administratively complete before the effective date of the new legislation are subject to the law in effect before the effective date of that legislation. This section has also been revised to more accurately state that it applies to public comments, as well as hearing requests, received on applications. This section proposes that Chapter 55 does not apply to hearing requests for applications under Chapter 122 (Federal Operating Permits) because there is no right to a contested case hearing on such applications.

Proposed new §55.21(a) likewise provides that subchapter B of chapter 55 applies to applications declared administratively complete before September 1, 1999, in accordance with the requirements of HB 801, §7(b).

Proposed new §55.101 incorporates the requirement of HB 801, §7(b) that applications declared administratively complete on or after September 1, 1999 are subject to the requirements of new subchapters D-G; whereas, applications declared administratively complete before September 1, 1999 are subject to subchapters A and B. Generally, subchapters D-G set forth procedures for commenting and requesting reconsideration or a contested case hearing with respect to an application. Under §55.101(c)(3)-(5), the proposed rule provides that subchapters D-G do not apply to hearing requests related to applications under chapter 122, and applications for initial issuance of voluntary emission reduction permits and permits for electric generating facilities, because there is no right to a contested case hearing on such applications. Proposed §55.101(c)(6) provides that hearing requests on weather modification permits and licenses are not subject to subchapters D-G, because there is no right to a contested case hearing under Chapter 18, Texas Water Code, in keeping with the interpretation of law given in commission orders which have addressed hearing requests on these applications. Because certain air quality permit exemptions and permits by rule are not subject to contested case hearings, proposed §55.101(c)(7)-(8) provide that hearing requests on these applications are not subject to subchapters D-G. Hearing requests on certain utility matters specified in §55.101(d) are not subject to the procedures of subchapters D-F because, under the procedures set forth in subchapter G, the executive director, rather than the commission, determines the sufficiency of hearing requests on these applications.

Proposed new §55.103, concerning Definitions, provides that the terms specified in this section shall have certain meanings and has deleted the qualifying phrase "unless the context clearly indicates otherwise" to eliminate ambiguity. This section has also been revised to reflect that it now applies to subchapters D-G of this chapter, rather than the entire chapter. The section includes the same definition of affected person contained in existing §55.3, relating to definitions.

Proposed new §55.150, concerning Applicability, incorporates the requirement of HB 801, §7(b) by providing that new subchapter E, regarding procedures for processing public comment and requests for reconsideration or hearing, applies only to applications filed under Texas Water Code, Chapter 26 or 27 or Texas Health and Safety Code, Chapter 361 or 382 that are declared administratively complete on or after September 1, 1999.

Proposed new §55.152, concerning Public Comment, provides that public comment must be filed within the time period set forth in the Notice of Receipt of Application and Preliminary Decision, which shall be 30 days from the date of last publication unless stated otherwise. Proposed new §55.152(a)(1)-(6) provides the length of the comment period for specific applications, and is revised to reflect that what was formerly a standard exemption for a concrete batch plant is now a concrete batch plant exemption from permitting or permit by rule under chapter 106 of this title. The section reflects that public comment is now made in response to the Notice of Application and Preliminary Decision required by HB 801, rather than in response to a notice of draft permit.

The proposed amendments to Chapter 55 create new §55.154, relating to Public Meetings. This new section will address public meetings with respect to applications subject to Texas Water Code, Chapter 26 or 27 or Texas Health and Safety Code, Chapter 361 or 382; whereas proposed §55.253 will address public meetings concerning other applications declared administratively complete on or after September 1, 1999. In accordance with the requirements of HB 801, proposed §55.154(b) provides that during technical review of an application, the applicant, in cooperation with the executive director, may hold a public meeting in the county affected by the application. The language in §55.154(c)(1) has also been revised to incorporate the provisions of the HB 801, new §5.554, Texas Water Code, that the executive director may hold a public meeting when there is substantial public interest in activity proposed under the application. The proposed section retains the provisions from §55.25 that public meetings are not contested case hearings under the Administrative Procedure Act (APA) and the comment period for any application is automatically extended to the end of the any public meeting.

Proposed new §55.156, concerning Public Comment Processing, provides that the executive director, the applicant, the office of public interest counsel and the office of alternative dispute resolution shall receive copies of all documents submitted on an application. Proposed §55.156(b)(1) requires the executive director to prepare a response to all relevant and material or significant comments received in response to a Notice of Receipt of Application and Intent to Obtain Permit on an air application or received during the comment period in response to a notice of the executive director's preliminary decision. This requirement has been included to satisfy the requirement in HB 801 that the executive director file a response to comments. Requiring a response to relevant and material or significant comments is intended to satisfy not only the requirements for the executive director to respond to comments under HB 801, but also existing requirements for federally delegated programs. Comments received in response to an air Notice of Receipt of Application and Intent to Obtain Permit have been distinguished from comments received during the comment period given in response to a Notice of Application and Preliminary Decision. In accordance with the HB 801 amendments to §382.056(g), Texas Health and Safety Code, for air applications, there will not be a Notice of Application and Preliminary Decision unless a hearing request was filed in response to the Notice of Receipt of Application and Intent to Obtain a Permit. Accordingly, there may only be an opportunity to submit comments in response to the first notice.

Proposed §55.156(b)(2) provides that the executive director may call a public meeting in response to comments. New language proposed under §55.156(b)(3) requires the executive director's response to comments to be filed with the chief clerk as soon as practical, no later than 60 days after the comment period ends. The executive director needs flexibility for those times the commission has received a voluminous number of applications and comments which need to be processed within a relatively short time, in order to ensure that the responses are thorough. The requirement of §55.25(b)(1)(A)-(B) that the response to comments be "made available to the public" is not included because this requirement is otherwise satisfied by making the comments available in the chief clerk's office under new §55.156(b)(3). Section 55.156(c) also requires the chief clerk to mail the response to comments. The requirement for the commission to adopt the executive director's response to comments or prepare its own response is now contained in §50.117(f) of this title (relating to Commission Action).

Proposed §55.156(c) requires that after the executive director's response to comments has been filed, the chief clerk shall transmit the executive director's decision, the response to comments and instructions for requesting reconsideration or hearing to the applicant, persons who submitted comments, persons who submitted hearing requests in response to the Notice of Receipt of Application and Intent to Obtain Permit for an air application, other persons on the mailing list, the Office of Public Interest Counsel, and the Office of Alternative Dispute Resolution. This requirement is consistent with current rules and also the requirements of HB 801 concerning the transmittal of the executive director's response to comments.

To conform to the changes proposed to implement HB 801, new §55.200 provides that subchapter F (Requests for Reconsideration or Contested Case Hearing) applies only to applications under Chapter 26 or 27, Texas Water Code or Chapter 361 or 382, Texas Health and Safety Code, which are declared administratively complete on or after September 1, 1999.

Proposed new §55.201, which parallels current §55.21, provides the procedures for filing requests for reconsideration and hearing. Subsection (a) requires that requests for reconsideration or hearing must be filed no later than 20 days after the chief clerk mails the executive director's decision and response to comments. A 20 day period has been proposed and is considered adequate, considering that at this point in the process the public will have been given the opportunity to provide input in the decision making process through the comment period provided for under §55.152. Subsection (b) sets forth who may request a contested case hearing. The proposed rule does not include an equivalent to §55.21(a)(5), which gives legislators from the general area of a proposed facility the ability to request hearings on certain air applications, because such hearing requests are no longer authorized by §382.056(g), Texas Health and Safety Code.

Proposed new §55.201(d)(1) requires that requestors now provide their fax numbers, where possible, in addition to the other information previously required to be provided with a hearing request. Consistent with new statutory requirements for limiting the issues which may be referred to hearing, the new §55.201(d)(4) requires a hearing request to list the relevant and material issues which form the basis of the request and states that requestors should specify the factual basis for any disagreement with specific statements made or positions taken in the executive director's response to comments.

Proposed subsection (e) provides that any person may file a request for reconsideration within the period allowed under subsection (a). Subsection (e) further sets forth the requirements for a request for reconsideration, including the requirement that the requestor must expressly state that the person is requesting reconsideration of the executive director's decision and the reasons for the request. Subsection (e) is necessary because HB 801 provides for requests for reconsideration, in addition to requests for contested case hearing.

Under proposed §55.201(f), late filed requests for reconsideration or contested case hearing will be treated as public comment. Proposed §55.201(g) further provides that late filed requests for reconsideration, as well as late filed public comments and requests for hearing, shall be placed in the file, but not processed. Under proposed subsection (h), persons who did not avail themselves of opportunities to comment or request reconsideration or a contested case hearing may file a motion for reconsideration of any executive director action on a permit only to the extent that the final permit differs from the draft permit.

Proposed subsection (i)(1) and (2) states applicable law by providing that there is no right to a contested case hearing on an application for a minor amendment or minor modification of a permit under Chapter 305, Subchapter D of this title, or a Class 1 or Class 2 modification of a permit under Chapter 305, Subchapter D of this title. Also, subsection (i)(3) and (4) implements new statutory provisions under HB 801 that there is no right a contested case hearing for an amendment, modification or renewal of an air permit that will not increase emissions or result in the emission of a new contaminant unless specific compliance history issues exist, or hazardous waste permit renewals under §305.631(a)(8). Furthermore, subsection (i)(5) implements HB 1479 regarding limitations on the availability of contested case hearings on certain permit amendments or renewals under Chapter 26, Texas Water Code.

Proposed new §55.203, concerning Determination of Affected Person, retains the requirements of §55.29 regarding the determination of whether a hearing requestor is determined to be an affected person with a personal justiciable interest concerning an application. Under HB 801, a person requesting a hearing is still required to demonstrate that the person is an affected person with a personal justiciable interest in order for the request to be granted.

Proposed new §55.205, concerning Request by Group or Association, contains the same requirements for evaluating hearing requests by groups or association set forth in existing §55.23.

Proposed new §55.206, concerning Determination of Relevant and Material Issues, provides standards for determining whether a request for reconsideration or contested case hearing raises issues which are relevant and material to the commission's decision on an application. This section has been proposed in response to the requirement of HB 801 that only relevant and material issues shall be referred to hearing. The commission invites comments on improving these standards for determining the relevance and materiality of the issues.

Proposed new §55.209, concerning Processing Requests for Reconsideration and Contested Case Hearing, includes subsection (a), also in §55.26(a), which provides that §55.209 and §55.211 procedures apply only to timely filed hearing requests. New §55.209 does not require the executive director to file a statement that technical review is complete and to file such a statement before or after notice of the application is issued because, under HB 801, the executive director completes technical review before the issuance of the Notice of Application and Preliminary Decision. New subsection (b), also in §55.26(c), provides that timely filed requests for reconsideration or contested case hearing shall be referred to alternative dispute resolution and also scheduled for a commission meeting approximately 40 days after the final deadline to request reconsideration or hearing. It should be noted that with respect to applications for air permits, there is an initial opportunity to request a hearing in response to the Notice of Receipt of Application and Intent to Obtain Permit; however, if a request for contested case hearing is filed then, triggering the requirement under the HB 801 amendments to §382.056(g), Texas Health and Safety Code that a notice of the executive director's preliminary decision be given following technical review, the final opportunity to request reconsideration or hearing comes after the chief clerk mails notice of the executive director's decision. The subsection reflects that the final request deadline will now always be the last step in the process before processing any timely filed requests. Accordingly, the equivalent of §55.26(c)(2)(B), providing that the request deadline may follow technical review, is not proposed to be included because the final hearing request deadline will always occur after technical review has been completed and the Notice of Application and Preliminary Decision has been issued.

Subsection (b) further provides that if only requests for reconsideration are filed, the requests will be scheduled for consideration only if the general counsel instructs the chief clerk to do so. This is consistent with current procedures under §50.39 that allow for motions for reconsideration concerning executive director action to be overruled by operation of law. New subsection (c) contains the requirements of §55.26(d) amended to require the chief clerk to mail notice of the commission's agenda at which the request for reconsideration or hearing will be considered to "requestors," including persons who submitted either requests for reconsideration or requests for hearing.

New subsections (d) and (e), containing requirements similar to §55.26(c), allows the opportunity for the filing of responses to both requests for reconsideration and requests for hearing. Under subsection (e), responses to hearing requests must address whether the requestor is an affected person and identify which issues raised in the hearing request involve disputed issues of fact raised during the comment period which are relevant and material to the decision on the application. This requirement is intended to facilitate the commission's ability to determine whether relevant and material issues of fact have been raised which may be referred to hearing pursuant to HB 801 requirements. New subsection (g) differs from §55.26(f) in that the new subsection provides that requestors who requested either reconsideration or hearing may file a reply to responses filed on their request no later than ten days before the commission agenda when their request will be considered, rather than six days before agenda. This time period has been changed because the commission will require additional time to consider all filings in order to specify the number and scope of issues, if any, to be referred to State Office of Administrative Hearings (SOAH) in accordance with HB 801.

Subsection (f) provides that responses to hearing requests should address the issues raised in the request. Under proposed §55.209(h), an application may be referred directly to SOAH only if the commission has specified or the parties have agreed to the number and scope of the issues subject to hearing and the maximum expected duration of the hearing. This limitation on the commission's ability to refer an application directly to SOAH is because of the HB 801 requirement that the commission limit the number and scope of issues before any referral to SOAH.

Proposed new §55.211, concerning Commission Action on Requests for Reconsideration and Hearing, is named to include requests for reconsideration, as well as requests for hearing. The proposed amended section describes actions the commission may take after evaluating requests for a contested case hearing. Subsection (a) provides that commission consideration of public comment, as well as consideration of requests for reconsideration and contested case hearing, are not proceedings subject to the APA. Because HB 801 now provides for an opportunity to file requests for reconsideration, subsection (b)(1) provides that the commission may grant or deny any request for reconsideration. Section 55.211(b)(2) remains unchanged and provides that if a hearing request does not meet the requirements of this chapter, the commission may act on the application. The equivalent of §55.27(a)(2), which states that the commission may refer an application to public meeting to develop comment before taking action on hearing requests, is not proposed to be included in light of the new statutory procedures now incorporated into Chapter 55, which provide for increased opportunities for public comment before the time when hearing requests would be set for commission consideration.

Under proposed §55.211(b)(3), if a hearing request does meet the requirements of this chapter, the commission will further determine if the request raises disputed issues of fact. Under proposed §55.211(b)(3)(A), if disputed issues of fact are raised, the commission will limit the scope and number of issues to be referred to hearing, specify the maximum expected duration of the hearing and direct the chief clerk to refer the issue to the SOAH for a hearing. This provision implements new HB 801 requirements for referring applications to SOAH. Proposed §55.211(b)(3)(B) further provides that the commission may take action on the application if the request raises only disputed issues of law. Proposed §55.211(b)(4) allows commission discretion to refer a hearing request to SOAH on the sole issue of whether the hearing requestor is an affected person; however, SOAH may not proceed with a contested case hearing unless and until the number and scope of the issues subject to hearing and the maximum expected duration of the hearing have been specified by the commission or by the agreement of the parties because of the HB 801 requirement that the commission limit the number and scope of issues.

The proposed amendment eliminates the former §55.27(b)(2)(A) and (B) requirements that a hearing request from an affected person may be granted only when deemed reasonable and supported by competent evidence because these determinations are no longer required by §5.115(a), Texas Water Code. The proposed amendment further eliminates the requirement of existing §55.27(b)(3) to hold a hearing on air permits when requested by legislators representing the general area because this requirement has been removed from §382.056(g), Texas Health and Safety Code.

As required by HB 801, proposed §55.211(d)(1) retains the commission's ability to refer an application to SOAH where there is no valid hearing request, if the commission determines that a hearing would be in the public interest. New §55.211(d)(2) also allows the commission to refer an application for amendment, modification or renewal of an air permit to hearing based on a determination that the applicant's compliance history constitutes a recurring pattern of egregious conduct which demonstrates a consistent disregard for the regulatory process. New §55.211(d)(3) further allows the commission to refer an application for renewal of a hazardous waste permit subject to proposed §305.631(a)(8) to hearing if the applicant's compliance history for the preceding five years raises an issue regarding the applicant's ability to comply with a material term of its permit. These provisions of §55.211(d) implement the provisions of HB 801 relating to the commission's ability to refer these matters to SOAH based on compliance history concerns, notwithstanding the fact that such renewals or modifications are not otherwise subject to contested case hearings under HB 801.

The existing §55.27(e), concerning a commission determination as to the applicability of the freeze rules of Chapter 80, Subchapter E, is not proposed to be included in this section. The freeze rules allow an administrative law judge to limit the issues and the scope of complex proceedings. In light of the commission's ability to limit the issues referred to hearing under §5.556, Texas Water Code and this proposed Chapter 55, former §55.27(e) is not needed. Under proposed §55.211(d), commission decisions on requests for reconsideration, requests for contested case hearing and the referral of an issue are interlocutory. If SOAH holds a hearing, a person whose hearing request was denied may attend the hearing and seek to be admitted as a party to the hearing. Likewise, the administrative law judge presiding over a contested case hearing referred from the commission may consider an issue which was not included in the commission's referral, subject to the restrictions of §80.4(c)(16). Proposed §55.211(f) provides for reconsideration of the executive director's decision, but specifies that a request for reconsideration is denied if the general counsel does not respond in writing within 20 days after the deadline for filing requests. Proposed §55.211(g), which continues to provide that a party has 20 days to file a motion for rehearing after being notified of the denial of a hearing request, now provides that a party or attorney of record is presumed notified on the third day after the date that the decision or order is mailed by first class mail, in conformity with §2001.42(c), Texas Government Code.

There is no need for a section that is equivalent to existing §55.31, concerning Determination of Reasonableness of Hearing Request, because §5.115(a), Texas Water Code, has been amended to no longer require a determination of reasonableness in taking action on hearing requests with respect to applications declared administratively complete on or after September 1, 1999.

Proposed new Subchapter G applies to applications other than applications under Texas Water Code, Chapter 26 or 27 and Texas Health and Safety Code, Chapter 361 or 382. Proposed §55.250 specifies that this subchapter will apply only to such applications declared administratively complete on or after September 1, 1999. The proposed subchapter retains the same comment and hearing request procedures as exist under current rules, with minor modifications.

Proposed §55.251, concerning Requests for Contested Case Hearing, Public Comment, incorporates the requirements of §55.21 except as noted below. The section does not include the provision that legislators from the general area of the proposed facility may request a contested case hearing for applications for certain air permits and authorizations because this provision has been eliminated from §382.056(g), Texas Health and Safety Code. Proposed §55.251(b) has deleted §55.21(b) references to comment periods for applications that will now be processed under subchapters D-F. Proposed §55.251(g) does not contain the §55.21(g) references to the fact that there is no right to a hearing regarding certain applications for amendment or modification of permits subject to Chapter 305, Subchapter D of this title because such applications will now be processed under proposed subchapters D-F, rather than this Subchapter G. Subsection (g) also provides that there is no right to a contested case hearing on an application for a weather modification permit or license to reflect the interpretation of law given in commission orders which have addressed hearing requests on these applications.

Proposed new §55.252, concerning Request by Group or Association, mirrors the requirements of §55.23.

Proposed §55.253, (Public Comment Processing), incorporates the requirements of §55.25, except as noted below. The requirements of §55.25(b) concerning public comment received on applications for hazardous waste permits, underground injection well permits and Texas Pollutant Discharge Elimination System (TPDES) permits are not included because such applications will now be processed under proposed Subchapters D-F, rather than this Subchapter G.

Proposed §55.254, concerning hearing request Processing, mirrors the requirements of 55.26.

Proposed §55.255, concerning Commission Action on Hearing Request, incorporates the requirements of §55.27 except as noted in this paragraph. Under the proposed section, the commission shall determine whether hearing requests have been filed which satisfy the requirements of this subchapter. However, unlike §55.27(a)(2), the proposed section does not provide the commission an option to refer an application to public meeting for development of public comment before taking action on an application because new procedures will allow ample opportunity for public comment before commission consideration of hearing requests. In specifying the circumstances when a hearing request from an affected person shall be granted by the commission, proposed §55.255(b)(2) has deleted the requirements of §55.27(b)(2)(A)-(B) that the request must be reasonable and supported by competent evidence. Under the HB 801 amendments to §5.115, Texas Water Code, determinations of reasonableness and competent evidence will no longer be required in determining the validity of hearing requests on applications declared administratively complete on or after September 1, 1999.

This subsection has also deleted the requirement that the commission grant a hearing request on an air quality permit by a legislator from the general area of the facility because this requirement has been eliminated from §382.056(g), Texas Health and Safety Code. Similar to §55.27(d), proposed §55.255(d) provides that the executive director shall determine the sufficiency of hearing requests on specified utility matters; however, proposed §55.255(d) requires the executive director to provide a list of disputed issues and specify the maximum expected duration of the hearing when making such a referral, in accordance with the requirements of revised §2003.047(e) of the APA .

Proposed new §55.256, concerning Determination of Affected Person, mirrors the language in §55.29.

FISCAL NOTE Bob Orozco, Technical Specialist with Strategic Planning and Appropriations, has determined that for the first five-year period the proposed amendments are in effect there will be no significant fiscal implications for units of state and local government as a result of administration or enforcement of the proposed amendments. The proposed amendments to Chapter 55, Request For Contested Case Hearings; Public Comment, would implement certain provisions contained in House Bill 801, 76th Legislature, Regular Session, 1999, an act relating to public participation in certain environmental permit proceedings of the TNRCC.

The proposed amendments establish comment periods and deadlines for public comment and specify procedures for responding to public comment. The proposed amendments also amend a legislator's ability to request a hearing on certain air applications and require a hearing request to list the relevant and material issues which form the basis of the request. The proposed amendments establish procedures regarding requests for Reconsideration or contested case hearing and establish procedures for cases referred to the State Office of Administrative Hearings. Finally, the proposed amendments reorganize some portions of the rules, and delete certain provisions in the rules that conflict with House Bill 801.

The proposed amendments affect permitting processes for air, water, and waste programs. It is anticipated that all applicants for permits under Chapters 26, Water Quality Control; Chapter 27, Injection Wells, of the Texas Water Code; applicants for permits under Chapter 361, Solid Waste Disposal Act; and certain permits under Chapter 382, Clean Air Act, of the Texas Health and Safety Code; and all other similar authorizations will be affected by the proposed amendments to the rules. Persons involved in the permitting process including members of the general public will also be affected.

PUBLIC BENEFIT Mr. Orozco has also determined that for each year of the first five years the proposed amendments to Chapter 55 are in effect the public benefit anticipated from enforcement of and compliance with the proposed amendments will be increased opportunity for public participation in the permitting processes conducted by TNRCC, increased standardization in the application process, and more efficient contested case hearings.

The purpose of the proposed amendments is to establish procedures regarding public comment on permit applications and requests for contested case hearings which will enhance public participation in the permitting processes of the TNRCC. No significant additional costs are anticipated to any person associated with the proposed amendments because the amendments do not create new regulatory burdens but only modify or clarify procedures currently in existence.

SMALL BUSINESS ANALYSIS No adverse economic effects are anticipated to any small business as a result of implementing the provisions of the proposed amendments to Chapter 55 of the rules because the amendments modify or clarify requirements currently in existence. Specifically, the proposed changes will not impose any additional requirements not already required by state or federal law and the proposed amendments do exceed a standard set by federal law, exceed an express requirement of state law, nor exceed a requirement of a delegation agreement.

REGULATORY IMPACT EVALUATION The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the act. Furthermore, it does not meet any of the four applicability requirements listed in §2001.0225(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, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Because the specific intent of the proposed rulemaking is procedural in nature and establishes procedures associated with public comment on permit applications and requests for contested case hearing, the rulemaking does not meet the definition of a "major environmental rule."

In addition, even if the proposed rule is a major environmental rule, a draft regulatory impact assessment is not required because the rule does not exceed a standard set by federal law, exceed an express requirement of of state law, exceed a requirement of a delegation agreement, or propose to adopt a rule solely under the general powers of the agency. This proposal does not exceed a standard set by federal law. This proposal does not exceed an express requirement of state law because it is authorized by the following state statutes: Texas Government Code, §2001.004, which requires state agencies to adopt rules of practice; and Texas Water Code, Chapter 5, Subchapter M, as well as the other statutory authorities cited in the STATUTORY AUTHORITY section of this preamble. This proposal does not 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 because the rule is consistent with, and does not exceed, federal requirements, and is in accordance with Texas Water Code, §5.551, which expressly requires the commission to adopt any rules necessary to satisfy any authorization for a federal permitting program. This proposal does not adopt a rule solely under the general powers of the agency, but rather under a specific state law (i.e., Texas Water Code, Chapter 5, Subchapter M and Texas Government Code, §2001.004). Finally, this rulemaking is not being proposed or adopted on an emergency basis to protect the environment or to reduce risks to human health from environmental exposure.

TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these proposed rules pursuant to Texas Government Code, §2007.043. The following is a summary of that assessment. The specific primary purpose of the proposed amendments and new sections is to revise the procedures for requesting a contested case hearing. The proposed rules will substantially advance these stated purposes by providing specific provisions on the aforementioned matters. Promulgation and enforcement of these rules will not affect private real property which is the subject of the rules because the proposed language consists of amendments and new sections relating to the commission's procedural rules.

COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW The commission has reviewed the rulemaking and has determined that the proposed sections are not subject to the Coastal Management Program. The proposed actions concern only the procedural rules of the commission and general agency operations, are not substantive in nature, do not govern or authorize any actions subject to the CMP, and are not themselves capable of adversely affecting a coastal natural resource area (Title 31 Natural Resources and Conservation Code, Chapter 505; 30 TAC, §§281.40, et seq.).

PUBLIC HEARING A public hearing on this proposal will be held August 10, 1999, at 2:00 p.m. in Room 201S of Texas Natural Resource Conservation Commission Building E, located at 12100 Park 35 Circle, Austin. The hearing will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes before the hearing and will answer questions before and after the hearing.

SUBMITTAL OF COMMENTS Written comments may be submitted by mail to Casey Vise, Office of Environmental Policy, Analysis, and Assessment, MC-205, P.O. Box 13087, Austin, Texas 78711-3087; or by fax at (512) 239-4808. All comments must be received by August 16, 1999, and should reference Rule Log No. 99030-039- AD. Comments received by 5:00 p.m. on that date will be considered by the commission before any final action on the proposal. For further information, please contact Ray Henry Austin at (512) 239- 6814.