TITLE 30.ENVIRONMENTAL QUALITY

Part 1. TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

Chapter 101. GENERAL AIR QUALITY RULES

Subchapter A. GENERAL RULES

30 TAC §101.24, §101.27

The Texas Natural Resource Conservation Commission (commission) proposes amendments to §101.24, Inspection Fees, and §101.27, Emissions Fees.

The proposed amendments are to be submitted to the United States Environmental Protection Agency (EPA) as proposed revisions to the state implementation plan.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The commission collects annual inspection fees to cover a portion of the cost of air programs as required by Texas Health and Safety Code (THSC), Texas Clean Air Act, (TCAA), §382.062, Application, Permit, and Inspection Fees. The commission also collects annual fees from sources that are subject to the permitting requirements of Title IV or V of the Federal Clean Air Act Amendments of 1990 (Federal Clean Air Act (FCAA), Titles IV and V, hereinafter referred to as "Title V") as required by TCAA, §382.0621, Operating Permit Fee. The existing rule language in §101.24 and §101.27 structures the inspection fees and the emissions fees to be self-paid by the affected accounts. To maintain consistency with other commission fee programs and in response to the Sunset Commission recommendations, the commission is proposing to convert the inspection fees and emissions fees to a billed system.

The commission is proposing to adjust inspection fees for inflation and the emissions fees to meet the EPA presumptive minimum for the commission's Title V program. Additionally, the commission is proposing to assess a new fee on new permit by rule (PBR) registrations received on or after November 1, 2002 in a concurrent 30 TAC Chapter 106 rulemaking as well as proposing to increase air permit, air permit renewal, and air permit amendment fees in a concurrent 30 TAC Chapter 116 rulemaking.

The Clean Air Fund 151 is the source of funding for essentially all air program related activities of the commission. This fund supports a wide range of activities including permitting, inspections, enforcement, air quality planning, mobile source program, emissions inventory, and monitoring in addition to agency functions which support these activities. Revenues deposited to the fund are from several different fees collected from point sources and mobile sources as well as the general public. Over the last several years, the fund has carried a balance in the account which has allowed the agency to collect revenues below the annual budgeted expenditures. However, the fund balance is close to being depleted. Additionally, due to decreases in emissions, the revenue from fees which are assessed based upon emission levels has declined by an average of approximately 3% per year in recent years. The revenue estimates for Clean Air Fund 151 reveal that there are insufficient funds to support the fiscal year (FY) 2003 appropriated level.

As part of its air program activities, the commission implements an approved Title V program. As part of that approval, the commission was required to demonstrate that the fees collected from Title V sources are sufficient to support the Title V program. Currently under state law, this fee must be dedicated for use only on Title V activities. This fee is commonly referred to as the air emissions fee and is currently set at $26 per ton. However, the fee demonstration submitted to EPA in August 2001 showed that the fee would need to be increased beginning in FY 2003 to provide sufficient support for the Title V program.

Activities which are not considered to be Title V activities must be supported through the remaining fees that are not reserved for other uses. Essentially, these fees generally include permit, renewal, and amendment fees; inspection fees; and a portion of the motor vehicle safety inspection fee (as set by statute, THSC, §382.0622).

Given the declining availability of funds in Clean Air Fund 151, the commission reviewed the air fees which it has the authority to change. Most of the air permit, renewal, and amendment fees have not been increased since the early 1990s. The air emissions fee has not been increased since 1995 and the air inspection fee since 1992. The vehicle inspection maintenance fee has been set recently to cover the cost of that program. Several other funding sources are dedicated for specific uses. In an effort to match fee revenue collections more closely with related expenditures, the commission also reviewed potential sources for new fees. After a review of the commission's existing air program related activity fees, the commission is proposing revisions to the emissions fee, inspection fee, permit, renewal, and amendment fees, as well as proposing a new fee for review of registrations for PBR.

SECTION BY SECTION DISCUSSION

There are several proposed revisions which change the agency name from Texas Natural Resource Conservation Commission (TNRCC) to reflect the new name of Texas Commission on Environmental Quality (TCEQ).

Section 101.24

Section 101.24(a), concerning applicability, would improve the readability of this subsection and correct an improper cross-reference. References to account numbers are being changed to identification numbers to reflect the commission's new Central Registry system.

Proposed new §101.24(b), concerning self-report/billed information, would state that emissions/inspection fee information packets will be mailed to each affected account owner or operator. The emissions/inspection fee basis form will be required to be remitted within 60 days of the date on the emissions/inspection fee packet. All subsequent subsections would be relettered accordingly. This proposed amendment would also specifically state that the completed emissions/inspection fee basis form shall include, at least, the company name, mailing address, site name, all TCEQ identification numbers, the applicable Standard Industrial Classification (SIC) category, and the name and telephone number of a contact person. In the event that more than one SIC category is applicable at the account, the form should specify the applicable SIC category with the highest fee rate. The new language also includes a requirement to include additional information necessary to assess the fee. For example, this would include information such as relative plant size when necessary to determine which fee rate would apply within the SIC category. The intent of this proposed amendment is to allow the review of the self-reported information prior to issuing a statement of the fee assessment to the account.

Proposed new §101.24(c), concerning requesting a fee information packet, would provide a procedure for those account owners or operators who do not receive the fee information packet described in proposed subsection (b). It would set a date by which every account owner or operator should have received the packet and it requires notification to the commission by those account owners or operators which have not received the packet. The language also includes a provision for new account owners or operators who begin operation sometime during the FY. Those accounts would be required to request a packet within 30 days of beginning operation.

Section 101.24(d), concerning payment, would be relettered from subsection (b) and currently states that the fee payment shall accompany a completed fee return form. The proposed amendment would add the payment options of certified check and electronic funds transfer. Additionally, this proposed amendment would change the collection of the inspection fee from a self report/self pay system to a self report/billed system. Finally, language would be removed which is duplicative of the new language in proposed subsection (b).

Section 101.24(e), concerning due date, would be relettered from §101.24(c) and currently states that the fee payment must be received or postmarked no later than November 1 of the FY in which the fee is assessed. This proposed amendment would state that the payment of the inspection fee is due within 30 days of the date the agency sends a statement of the assessment to the facility owner or operator. The intent of this proposed amendment is to change the due date to be consistent with a billed system.

Section 101.24(f), concerning inspection fee schedule, would be relettered from subsection (d). Currently, the inspection fee rate has been unchanged since FY 1992. The proposed amendment would reformat the inspection fee schedule and include a step increase in the inspection fees to adjust for inflation. The initial increase raises the fee approximately 33.8%. For FYs following 2003, the proposed amendment would provide a mechanism to annually adjust the fee for inflation in accordance with the consumer price index (CPI) (as published by the United States Bureau of Labor Statistics, CPI - All Urban Consumers, Not Seasonally Adjusted, base period 1982 - 84 = 100). The intent of this proposed amendment is to generate revenue to help fund, at appropriated levels, the commission's air program related activities.

Section 101.24(g), concerning nonpayment of fees, would be relettered from subsection (e) and currently states that the failure to remit the full inspection fee by the due date would result in an enforcement action. The proposed amendment would state that each inspection fee payment must be paid at the time and in the manner and amount provided in the section. The intent of this amendment is to establish language consistent with other program fees collected within the agency. This subsection has also been amended to reflect the correct citation for enforcement for failure to pay fees. The enforcement provisions previously cited have been consolidated with other enforcement requirements into Texas Water Code (TWC), Chapter 7.

Section 101.24(h), concerning late payments, would be relettered from subsection (f) and currently states that the owner or operator of an account failing to make payment of inspection fees when due are assessed late payment penalties and interest. The proposed amendment would state that the agency shall impose interest and penalties on owners or operators of an account who fail to make payment of inspection fees when due. The intent of this amendment is to establish language consistent with other program fees collected within the agency.

Section 101.27

Section 101.27(a), concerning applicability, would correct the relettering of subsections which are being referenced. This proposed amendment would also state that the account will trigger the emissions fee if it emits or if it has the potential to emit over the specified levels of air contaminants. The intent of this proposed amendment is to improve the readability of this subsection. References to account numbers are being changed to identification numbers to reflect the commission's new Central Registry system.

Proposed new §101.27(b), concerning self-reported/billed information, would state that emissions/inspection fee information packets will be mailed to each affected account owner or operator. The emissions/inspection fee basis form will be required to be remitted within 60 days of the date on the emissions/inspection fee packet. All subsequent subsections would be relettered accordingly. This proposed amendment would also specifically state that the completed emissions/inspection fee basis form shall include, at least, the company name, mailing address, site name, all TCEQ identification numbers, the applicable SIC category, and the name and telephone number of a contact person. In the event that more than one SIC category is applicable at the account, the form should specify the applicable SIC category with the highest fee rate. The new language also includes a requirement to include additional information necessary to assess the fee. For example, this would include information such as capacity when necessary to determine which fee rate would apply within the SIC category. The intent of this proposed amendment is to allow the review of the self-reported information prior to issuing a statement of the fee assessment to the account.

Proposed new §101.27(c), concerning requesting a fee information packet, would provide a procedure for those accounts which do not receive the fee information packet described in proposed subsection (b). It would set a date by which every account owner or operator should have received the packet and it requires notification to the commission by those account owners or operators which have not received the packet. The language also includes a provision for new account owners or operators which begin operation sometime during the FY. Those account owners or operators would be required to request a packet within 30 days of beginning operation.

Section 101.27(d), concerning payment, would be relettered from subsection (b) and currently states that the fee payment shall accompany a completed fee return form. The proposed amendment would add the payment option of certified check. The completed fee basis form is discussed in proposed subsection (b); therefore, the reference to the completed fee return form in this subsection was deleted. The intent of this proposed amendment is to change the collection of the emissions fee from a self-report/self-pay system to a self-report/billed system.

Proposed new §101.27(e), concerning due date, currently states that the fee payment must be received or postmarked no later than November 1 of the FY in which the fee is assessed. This proposed amendment would state the payment of the emissions fee is due within 30 days of the date the agency sends a statement of the assessment to the facility owner or operator. The intent of this revision is to change the due date to be consistent with a billed system. Due to the relettering of the subsections, existing subsection (d) was deleted.

Section 101.27(f), concerning basis for fees, would increase the current per ton emissions fee from $26 to a level equivalent with the EPA presumptive minimum for the commission's Title V program. The emissions fee rate would be adjusted each year by the CPI (as published by the United States Bureau of Labor Statistics, CPI - All Urban Consumers, Not Seasonally Adjusted, base period 1982 - 84 = 100). This increase is necessary to collect sufficient funding for the commission's Title V programs. Setting the per-ton emission fee at the EPA presumptive minimum provides the presumption that the fee rate meets the EPA's funding adequacy requirements. In addition, subsection (f) would be relettered from subsection (c). Subsection (e)(1) would be relettered from subsection (c)(1). Subsection (c)(2) is obsolete and would be deleted. Subsection (c)(3) would be relettered to subsection (f)(2). Subsection (c)(4) would be relettered to subsection (f)(3).

Section 101.27(g), concerning nonpayment of fees, would be relettered from subsection (c) and currently states that the failure to remit the full emissions fee by the due date would result in an enforcement action. The proposed amendment would state that each emissions fee payment must be paid at the time and in the manner and amount provided in the section. The intent of this amendment is to establish language consistent with other program fees collected within the agency. This subsection has also been amended to reflect the correct citation for enforcement for failure to pay fees. The enforcement provisions previously cited have been consolidated with other enforcement requirements into TWC, Chapter 7.

Section 101.27(h), concerning late payments, would be relettered from subsection (f) and currently states that the owner or operator of an account failing to make payment of emissions fees when due shall be assessed late payment penalties and interest. This proposed amendment would state that the agency shall impose interest and penalties on owners or operators of an account who fail to make payment of emissions fees when due. The intent of this proposed amendment is to establish language consistent with other program fees within the agency.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, determined that the proposed rulemaking will generate approximately $5.7 million in additional revenue for the commission in FY 2003 due to the adjustment of air emissions and air inspection fee rates. The fee rate increases proposed in this rulemaking are intended to help generate sufficient revenue to fund the commission's air programs at appropriated levels. The commission does not anticipate significant fiscal implications for other units of state and local government affected by the proposed amendments.

To generate sufficient revenue to fund the commission's Title V program as required by the FCAA, the proposed rulemaking would increase the per-ton air emissions fee from the current rate of $26 to the EPA presumptive minimum rates, which are currently estimated to be $29.11 in FY 2003, $29.98 in FY 2004, $30.88 in FY 2005, $31.81 in FY 2006, and $32.76 in FY 2007, assuming a 3% increase per annum. Air emissions fees are assessed on the annual emissions tonnage of regulated air pollutants as defined in rule; by state statute the fee is not assessed on emissions in excess of 4,000 tons per pollutant. The proposed rulemaking also would increase the air inspection fee by approximately 33.8% in FY 2003, and for inflation in each subsequent FY. The air inspection fee increases are generally intended to help fund the commission's regulation of sources not subject to Title V. Air inspection fees are based on the SIC category generating the highest fee at the site.

The proposed amendments will affect all new or existing Title V sites in Texas. The commission estimates that there are 1,866 Title V accounts in Texas. Sites under these accounts have the potential to emit: more than 100 tons per year (tpy) of any single air pollutant, or; 25 tpy of nitrogen oxides or volatile organic compounds in a severe ozone nonattainment area, or; 50 tpy of nitrogen oxides or volatile organic compounds in a serious ozone nonattainment area, or; 10 tpy of any single hazardous air pollutant, or; 25 tpy of any combination of hazardous air pollutants, or; certain sites subject to new source performance standards or national emissions standards for hazardous air pollutants.

The proposed rulemaking would affect approximately 60 units of state and local government, including river authorities and state universities, that operate facilities subject to emissions or inspection fees, such as municipally-owned power plants and landfills. While the aggregate effect of the rulemaking on state and local government is estimated at approximately $128,000 in FY 2003 up to approximately $234,000 in FY 2005 and thereafter, the rulemaking is not expected to cost any single entity more than an additional $72,000. The average annual emissions fee increase for the majority of affected units of government is estimated to increase from approximately $2,300 in FY 2003 to approximately $5,400 in FY 2005. The preceding estimates assume a decrease in emissions of 5% per annum. The average annual inspection fee for the majority of affected units of government is estimated to increase by approximately $2,200. The commission anticipates that net revenues to the agency derived from the revised annual emissions fee from units of government and industry will increase by approximately $4.0 million in FY 2003 up to approximately $5.8 million in FY 2005. The additional emissions fee revenue will be used to fund the agency's existing Title V program. The commission anticipates that net revenues to the agency derived from the revised annual inspection fee from units of government and industry will increase by approximately $1.7 million in FY 2003 up to approximately $2.0 million in FY 2005. The additional inspection fee revenue will generally be used to fund the commission's regulation of sources not subject to Title V.

PUBLIC BENEFITS AND COSTS

Mr. Davis also determined that for each of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of implementing the amendments will be the generation of revenue to help support the commission's air programs.

The fee rate increases proposed in this rulemaking are intended to generate revenue to help fund, at appropriated levels, the commission's air programs. To generate sufficient revenue to fund the commission's Title V program as required by the FCAA, the proposed rulemaking would increase the per-ton air emissions fee from the current rate of $26 to the EPA presumptive minimum rates, which are currently estimated to be $29.11 in FY 2003, $29.98 in FY 2004, $30.88 in FY 2005, $31.81 in FY 2006, and $32.76 in FY 2007, assuming a 3% increase per annum. Air emissions fees are assessed on the annual emissions tonnage of regulated air pollutants as defined in rule; by state statute the fee is not assessed on emissions in excess of 4,000 tons per pollutant. The proposed rulemaking also would increase the air inspection fee by approximately 33.8% in FY 2003, and for inflation in each subsequent FY. The air inspection fee increases are generally intended to help fund the commission's regulation of sources not subject to Title V. Air inspection fees are based on the SIC category generating the highest fee at the site.

Commission data indicates that there are 1,833 existing accounts operated by private companies that would be affected by the proposed change to the emissions fee rate, while 1,556 existing accounts operated by private companies would be affected by the proposed change to inspection fees. An undetermined number of these accounts are operated by the same parent company. The total emissions fee for each account is expected to increase by approximately 12% to 19%, depending upon the rate of inflation and the extent of anticipated emissions reductions actually realized. Fewer than 1% of payees are expected to experience emissions fee increases greater than $100,000. When the fees for all of a company's accounts are combined, power generators and a petrochemical company account for the five largest fee increases, estimated at $325,000, $283,000, $217,000, $175,000 and $139,000 in FY 2003 up to approximately $456,000, $398,000, $305,000, $246,000, and $196,000 in FY 2005, respectively. The average annual emissions fee for the majority of affected businesses is estimated to increase by approximately $2,200 in FY 2003 up to approximately $3,100 in FY 2005. The average annual inspection fee for the majority of affected businesses is estimated to increase by approximately $1,300.

The total annual cost to private businesses due to the proposed increased emissions and inspection fees is estimated to be approximately $5.7 million beginning in FY 2003 up to approximately $7.8 million in FY 2005 and thereafter.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There will be adverse fiscal implications, which are not anticipated to be significant, for small or micro-businesses as a result of adoption of the proposed amendments, which are intended to revise the commission's air emissions and inspection fees to help generate sufficient revenue to fund the commission's air programs.

Commission data indicate that there are 1,833 existing accounts operated by private companies that would be affected by the proposed change to the emissions fee rate, while 1,556 existing accounts operated by private companies would be affected by the proposed change to inspection fees. An undetermined number of these accounts are operated by the same parent company. Small and micro- businesses are estimated to comprise approximately 3% (60) of the accounts subject to the emissions fee and approximately 6% (95) of the accounts subject to the inspection fee. The commission anticipates that all of the small and micro-businesses affected by the proposed amendments will pay approximately $500 or less to comply with the proposed amendments.

The following is an analysis of the costs per employee for small and micro-businesses that may be affected by the proposed rule changes. Small and micro-businesses are defined as having fewer than 100 or 20 employees, respectively. The proposed increase to emissions and inspection fees would cost up to an additional $5.00 per employee for a small business, and up to an additional $25 per employee for a micro-business.

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 DETERMINATION

The commission reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in that statute. "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 amendments to Chapter 101 are not, themselves, intended to protect the environment or reduce risks to human health from environmental exposure to air pollutants. Therefore, the commission finds that they are not major "environmental" rules. Additionally, the fees collected under the proposed revisions to Chapter 101 generally should not 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. These proposed revisions will be spread through most sectors of the economies of the state as they generally apply to most stationary sources of air pollution. When viewed in conjunction with the amounts of revenues flowing through the sectors, the incremental fee increase is not material.

As defined in the Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: exceed a standard set by federal law, unless the rule is specifically required by state law; exceed an express requirement of state law, unless the rule is specifically required by federal law; 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; adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements of a "major environmental rule." Specifically, the emissions fee, and to some extent inspection fee are required under federal law to be sufficient to support the permit program under Titles IV and V of the FCAA (42 United States Code (USC), §§7651 et seq . and §§7661 et seq .). The emissions fees are also required by state law, THSC, TCAA, §382.0621 and §382.0622, to be sufficient to support the Titles IV and V programs. The inspection fee is required by state law to be sufficient to support a portion of commission activities related to the overall air quality program (TCAA, §382.062). This rulemaking does not exceed an express requirement of federal or state law. The rulemaking does not exceed a requirement of a delegation agreement, but revision to the emissions fee is specifically required by EPA's approval of the Title IV and V programs to the commission. The rulemaking was not developed solely under the general powers of the agency, but was specifically developed and authorized under TCAA, §§382.011, 382.017, 382.062, 382.0621, 382.0622, and generally under TCAA, §§382.001 et seq .

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 prepared a takings impact evaluation for these rules in accordance with Texas Government Code, §2007.043. The specific purpose of the rulemaking is to raise the emissions and inspection fees to maintain funding, at appropriated levels, sufficient to support the Titles IV and V programs and a portion of the overall air quality program.

Promulgation and enforcement of the rules will not burden private, real property because they are fee rules which support air quality programs of the commission. Although the rule revisions do not directly prevent a nuisance or prevent an immediate threat to life or property, the increase in emissions fee does fulfill a federal mandate under 42 USC, §§7651 et seq . and §§7661 et seq . The emissions fee is also required by state law, THSC, TCAA, §382.0621 and §382.0622, to be sufficient to support the Titles IV and V programs. The inspection fee is required by state law to be sufficient to support a portion of commission activities related to the overall air quality program (TCAA, §382.062). Consequently, the exemption which applies to these rules is that of an action reasonably taken to fulfill an obligation mandated by federal and state law. Therefore, this rulemaking action will not constitute a takings under Texas Government Code, Chapter 2007.

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)(2), relating to Actions and Rules Subject to the Coastal Management Program or will affect an action/authorization identified in §505.11(a)(6), and will, therefore, require that goals and policies of the Coastal Management Program (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 amendments are consistent with CMP goals and policies because the rulemaking is a fee rule which is a procedural mechanism for paying for commission programs; will not have direct or significant adverse effect on any coastal natural resource areas; will not have a substantive effect on commission actions subject to the CMP; and promulgation and enforcement of the amendments will not violate (exceed) any standards identified in the applicable 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 August 12, 2002, at 10:00 a.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 before the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Patricia Durón, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-041-116-AI. Comments must be received by 5:00 p.m., August 12, 2002. Comments received prior to this publication have been considered and will be formally addressed in the RESPONSE TO COMMENTS section of the adoption preamble publication and are not required to be resubmitted. For further information or questions concerning this proposal, please contact Debi Dyer, Policy and Regulations Division, at (512) 239-3972.

STATUTORY AUTHORITY

The amendments are proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §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 TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0621, concerning Operating Permit Fee, which requires the commission to collect fees for sources subject to Titles IV or V of the FCAA; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendments implement TCAA, §§382.011, 382.017, 382.062, 382.0621, 382.0622, and TCAA, §§382.001 et seq .

§101.24.Inspection Fees.

(a) Applicability. The owner or operator of each account to which this rule applies shall remit to the commission an inspection fee each fiscal year. A fiscal year is defined as the period from September 1 through August 31. A fiscal year, having the same number as the next calendar year, begins on the September 1 prior to that calendar year. An account subject to both an inspection fee and [ an ] emissions fee, under §101.27 of this title (relating to Emissions Fees), is required to pay only the greater of the two fees. Each account will be assessed a separate inspection fee. The inspection fee shall apply to each account which contains one or more of the types of plants, facilities, and/or processes described in subsection (f) [ (d) ] of this section, including permitted and non- permitted facilities. References for the industrial categories used are provided in the Standard Industrial Classification (SIC) Manual (Executive Office of the President, Office of Management and Budget, 1987). If more than one SIC category can apply to an account, the fee assessed shall be the highest fee listed for the applicable classifications in the fee schedule. Provisions of this section apply to all accounts, including accounts which have not been assigned specific commission identification [ account ] numbers. The owner or operator of an account subject to an inspection fee [ requirement ] is responsible for contacting the [ appropriate ] commission [ regional office ] to obtain an identification [ account ] number. The commission will not initiate the combination or separation of accounts solely for fee assessment purposes. If an account is operated at any time during the fiscal year for which the fee is assessed, a full inspection fee is due. If the commission is notified in writing that the account [ plant ] is not and will not be in operation during that fiscal year, a fee will not be due.

(b) Self report/billed information. Emissions/Inspection fee information packets will be mailed to each affected account prior to the fiscal year for which the fee is due. The completed emissions/inspection fee basis form shall be returned to the address specified on the emissions/inspection fees basis form within 60 days of the date the agency sends the emissions/inspection fee information packet. The completed emissions/inspection fee basis form shall include, at least, the company name, mailing address, site name, all Texas Commission on Environmental Quality (TCEQ) identification numbers, the applicable SIC category, any additional information necessary to assess the fee, and the name and telephone number of the person to contact in case questions arise regarding the emissions/inspection fee basis form. Subsequent to a review of the information submitted, a billing statement of the fee assessment will be sent to the account during the fiscal year in which the fee is due.

(c) Requesting fee information packet. If an account which is subject to the inspection fee in this section has not received the information packet described in subsection (b) of this section by September 1 of the fiscal year in which the fee is due, the owner or operator of the account shall notify the commission by October 1 of the fiscal year in which the fee is due. For accounts which begin operation after September 1, the owner or operator of the account shall request an information packet within 30 days of commencing operation.

(d) [ (b) ] Payment. Fees must [ shall ] be remitted by check , certified check, electronic funds transfer, or money order made payable to the TCEQ [ TNRCC ] and sent to the TCEQ [ TNRCC ] address printed on the billing statement [ fee return form. A completed fee return form shall accompany fees remitted. The fee return form shall include, at least, the company name, mailing address, site name, OAQ account number, the SIC category on which the fee was determined, and the name and telephone number of the person to contact in case questions arise regarding the fee payment ].

(e) [ (c) ] Due date. Payment of the inspection fee is due within 30 days of the date the agency sends a statement of the assessment to the facility owner or operator [ Fee payments shall be made annually and must be received by the TNRCC or postmarked no later than November 1 of the fiscal year in which the fee is assessed ]. If an account commences or resumes operation during [ after November 1 of ] the fiscal year in which the fee is assessed, the full inspection fee will be due prior to commencement or resumption of operations.

(f) [ (d) ] Inspection fee schedule. The inspection fee schedule is as follows. For fiscal years after 2003, the fiscal year 2003 fee schedule shall apply as adjusted for inflation using the Consumer Price Index (CPI). The CPI adjustment factor shall be the average of the CPI for the 12 months preceding the fiscal year for which the fee is assessed (as published by the United States Bureau of Labor Statistics, CPI - All Urban Consumers, Not Seasonally Adjusted, base period 1982 - 84 = 100).

Figure: 30 TAC §101.24(f)

[ Figure: 30 TAC §101.24(d) ]

(g) [ (e) ] Nonpayment of fees. Each inspection fee payment must be paid at the time and in the manner and amount provided by this subchapter [ received by the due date specified in subsection (c) of this section ]. Failure to remit the full inspection fee by the due date shall result in enforcement action under Texas Water Code, §7.178 [ the Texas Clean Air Act, Texas Health and Safety Code, §382.082 or §382.088. In addition, the Texas Clean Air Act, Texas Health and Safety Code, §382.091(a)(2), makes it a criminal offense to intentionally or knowingly fail to pay a required fee ]. The provisions of this section, as first adopted and as amended thereafter, are and shall remain in effect for purposes of any unpaid fee assessments, and the fees assessed pursuant to such provisions as adopted or as amended remain a continuing obligation.

(h) [ (f) ] Late payments [ payment penalties ]. The agency shall impose interest and penalties on owners or operators of accounts who fail [ owner or operator of an account failing ] to make payment of the inspection fees when due [ shall be assessed late payment penalties and interest ] in accordance with Chapter 12 of this title (relating to Payment of Fees).

§101.27.Emissions Fees.

(a) Applicability. The owner or operator of each account to which this rule applies shall remit to the commission an emissions fee each fiscal year. A fiscal year is defined as the period from September 1 through August 31. A fiscal year, having the same number as the next calendar year, begins on the September 1 prior to that calendar year. An account subject to both an emissions fee and an inspection fee, under §101.24 of this title (relating to Inspection Fees), is required to pay only the greater of the two fees. Each account will be assessed a separate emissions fee. Provisions of this section apply to all accounts, including accounts which have not been assigned specific commission identification [ account ] numbers. The owner or operator of an account subject to an emissions fee requirement is responsible for contacting the [ appropriate ] commission [ regional office ] to obtain an identification [ account ] number. The commission will not initiate the combination or separation of accounts solely for fee assessment purposes. If an account is operated at any time during the fiscal year for which the fee is assessed, a full emissions fee is due. If the commission is notified in writing that the account [ plant ] is not and will not be in operation during that fiscal year, a fee will not be due. All regulated air pollutants, as defined in subsection (f)(3) [ (c)(4) ] of this section, including, but not limited to, those emissions from point and fugitive sources during normal operations with the exception of (for applicability purposes only) hydrogen, oxygen, carbon dioxide, water, nitrogen, methane, and ethane, are used to determine applicability of this section. In accordance with rules promulgated by EPA in [ at ] 40 Code of Federal Regulations (CFR) Part 70, concerning the use of fugitive emissions in major source determinations, fugitive emissions shall be considered toward applicability of this section only for those source categories listed in [ at ] 40 CFR §51.166(b)(1)(iii). For purposes of this section, an affected account shall have met one or more of the following conditions:

(1) the account emits or has the potential to emit, at maximum operational or design capacity, 100 tons per year (tpy) or more of any single air pollutant;

(2) the account emits or has the potential to emit, at maximum operational or design capacity, 50 tpy or more of volatile organic compounds (VOC) or nitrogen oxides (NO x ) and is located in any serious ozone nonattainment area listed in §101.1 of this title (relating to Definitions);

(3) the account emits or has the potential to emit, at maximum operational or design capacity, 25 tpy or more of VOC or NOx and is located in any severe ozone nonattainment area listed in §101.1 of this title;

(4) the account emits ten tpy or more of a single hazardous air pollutant, as defined in [ the ] FCAA, §112;

(5) the account emits an aggregate of 25 tpy or more of hazardous air pollutants, as defined in [ the ] FCAA, §112;

(6) the account is subject to the National Emission Standards of Hazardous Air Pollutants (40 CFR Part 61) that apply to nontransitory sources;

(7) the account is subject to the control requirements or emissions limitations for New Source Performance Standards (40 CFR Part 60);

(8) the account is subject to the Prevention of Significant Deterioration (40 CFR Part 52) requirements; or

(9) the account is subject to the Acid Deposition provisions in the FCAA Amendments of 1990, Title IV.

(b) Self reported/billed information. Emissions/inspection fees information packets will be mailed to each affected account owner or operator prior to the fiscal year for which the fee is due. The completed emissions/inspection fees basis form shall be returned to the address specified on the emissions/inspection fees basis form within 60 days of the date the agency sends the emissions fees information packet. The completed emissions/inspection fees basis form shall include, at least, the company name, mailing address, site name, all Texas Commission on Environmental Quality (TCEQ) identification numbers, applicable Standard Industrial Classification (SIC) category, the emissions of all regulated air pollutants at the account for the reporting period, and the name and telephone number of the person to contact in case questions arise regarding the fee payment. Subsequent to a review of the information submitted, a billing statement of the fee assessment will be sent to the account owner or operator.

(c) Requesting fee information packet. If an account owner or operator who is subject to the inspection fee in this section has not received the information packet described in subsection (b) of this section by September 1 of the fiscal year in which the fee is due, the owner or operator of the account shall notify the commission by October 1 of the fiscal year in which the fee is due. For accounts which begin operation after September 1, the owner or operator of the account shall request an information packet within 30 days of commencing operation.

(d) [ (b) ] Payment. Fees must [ shall ] be remitted by check, certified check, electronic funds transfer, or money order made payable to the TCEQ [ Texas Natural Resource Conservation Commission (TNRCC) ] and sent to the TCEQ [ TNRCC ] address printed on the billing statement [ fee return form. A completed fee return form shall accompany fees remitted. The fee return form shall include, at least, the company name, mailing address, site name, air emissions inventory account number, Standard Industrial Classification (SIC) category, the allowable levels and/or actual emissions of all regulated air pollutants at the account for the reporting period, and the name and telephone number of the person to contact in case questions arise regarding the fee payment ].

(e) Due date. Payment of the emissions fee is due within 30 days of the date the agency sends a statement of the assessment to the facility owner or operator. If an account commences or resumes operation during the fiscal year in which the fee is assessed, the full emissions fee will be due prior to commencement or resumption of operations.

(f) [ (c) ] Basis for fees.

(1) The [ emissions ] fee shall be based on allowable levels and/or actual emissions at the account during the last full calendar year preceding the beginning of the fiscal year for which the fee is assessed. For purposes of this section, the term "allowable levels" are those limits as specified in an enforceable document such as a permit or Commission Order which are in effect on the date the fee is due. Under no circumstances shall the fee basis be less than the actual emissions at the account. The fee applies to the [ tonnage of ] regulated pollutant emissions at the account, including those emissions from point and fugitive sources. The fee basis shall include emissions during all operational conditions. For upset, maintenance, start-up, and shutdown conditions, the basis shall include all events and all quantities. Although certain fugitive emissions are excluded for applicability determination purposes under subsection (a) of this section, all fugitive emissions must be considered for fee calculations after applicability of the fee has been established. A maximum of 4,000 tons of each regulated pollutant will be used for fee calculations [ except as provided in paragraph (2) of this subsection ]. The fee for each fiscal year is set at the following rates.

Figure: 30 TAC §101.27(f)(1)

[ Figure: 30 TAC §101.27(f)(1) ]

[(2) On and after September 1, 2001, a grandfathered facility, as defined in §116.10(6) of this title (relating to General Definitions) that does not have a permit application pending under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) shall use all emissions, including emissions in excess of 4,000 tons per pollutant, for fee calculations. For the first 4,000 tons per pollutant, the rate in paragraph (1) of this subsection shall apply. For emissions in excess of 4,000 tons per pollutant, the rate will be $78 per ton for fiscal year 2002 and will triple, each fiscal year thereafter.]

(2) [ (3) ] The emissions tonnage for the account for fee calculation purposes will be the sum of those allowable levels and/or actual emissions for individual emission points or process units at the account rounded up to the nearest whole number, as follows:

(A) Where there is an enforceable document, such as a permit or Commission Order, establishing allowable levels, actual emissions may be used only if a completed Emissions Inventory Questionnaire for the account is submitted with the fee payment. For stacks or vents, the inventory must include verifiable data based on continuous emission monitor measurements, other continuously monitored values, such as fuel usage and fuel analysis, or stack testing performed during normal operations using EPA-approved methods and quality-assured by the executive director. All measurements, monitored values, or testing must have been performed during the basis year as defined in paragraph (1) of this subsection or if not performed during the basis year, must be representative of the basis year as defined in paragraph (1) of this subsection. Actual emission rates may be based upon calculations for fugitive sources, flares, and storage tanks. Actual production, throughput, and measurement records must be submitted, along with complete documentation of calculation methods. Thorough justification is required for all assumptions made and factors used in such calculations. If the actual emission [ emissions ] rate submitted for fee purposes is less than 60% of the allowable emission rate, an explanation of the discrepancy must be submitted. Where inadequate or incomplete documentation is submitted, the executive director may direct that the fee be based on allowable levels. Where a complete and verifiable inventory is not submitted, allowable levels shall be used.

(B) Where there is not an enforceable document, such as a permit or a Commission Order, establishing allowable levels actual emissions shall be used. Actual production, throughput, or measurement records must be submitted along with complete documentation of calculation methods. Thorough justification is required for all assumptions made and factors used in such calculations.

(3) [ (4) ] For purposes of this section, the term "regulated pollutant" shall include any VOC, any pollutant subject to [ the ] FCAA, §111, any pollutant listed as a hazardous air pollutant under [ the ] FCAA, §112, each pollutant for which a national primary ambient air quality standard has been promulgated (including carbon monoxide), and any other air pollutant subject to requirements under commission rules, regulations, permits, orders of the commission, or court orders.

[(d) Due date. Fee payments shall be made annually and must be received by the TNRCC or postmarked no later than November 1 of the fiscal year in which the fee is assessed. If an account commences or resumes operation after November 1 of the fiscal year in which the fee is assessed, the full emissions fee will be due prior to commencement or resumption of operations.]

(g) [ (e) ] Nonpayment of fees. Each emissions fee payment must be paid at the time and in the manner and amount provided by this subchapter [ received by the due date specified in subsection (d) of this section ]. Failure to remit the full emissions fee by the due date shall result in enforcement action under Texas Water Code, §7.178 [ the Texas Health and Safety Code, Texas Clean Air Act (TCAA), §382.082 or §382.088. In addition, the TCAA, §382.091(a)(2), makes it a criminal offense to intentionally or knowingly fail to pay a required fee ]. The provisions of this section, as first adopted and amended thereafter, are and shall remain in effect for purposes of any unpaid fee assessments, and the fees assessed pursuant to such provisions as adopted or as amended remain a continuing obligation.

(h) [ (f) ] Late payments [ payment penalties ]. The agency shall impose interest and penalties on owners or operators of accounts [ owner or operator ] of an account who fail [ failing ] to make payment of emissions fees when due [ shall be assessed late payment penalties and interest ] in accordance with Chapter 12 of this title (relating to Payment of Fees).

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 28, 2002.

TRD-200204127

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Chapter 106. PERMITS BY RULE

Subchapter B. REGISTRATION FEES FOR NEW PERMITS BY RULE

30 TAC §106.50

The Texas Natural Resource Conservation Commission (commission) proposes new §106.50, Registration Fees for Permits by Rule.

New §106.50 is to be submitted to the United States Environmental Protection Agency (EPA) as a proposed revision to the state implementation plan.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULE

The commission reviews and processes approximately 6,000 air permit applications and registrations of various types annually. Of the total amount, approximately 3,700 - 4,000 are permit by rule (PBR) registrations, with the remainder comprised of new, renewal, or amendment applications. Prior to this rulemaking, the commission has not assessed a fee for review of a PBR registration.

The commission is proposing to assess a fee on PBR registrations received on or after November 1, 2002 to recover some of its registration review costs and fund the commission's air programs. Additionally, the commission is proposing to increase emissions fees and inspection fees in a concurrent 30 TAC Chapter 101 rulemaking as well as proposing to increase air permit, air permit renewal, and air permit amendment fees in a concurrent 30 TAC Chapter 116 rulemaking.

The Clean Air Fund 151 is the source of funding for essentially all air program related activities of the commission. This fund supports a wide range of activities including permitting, inspections, enforcement, air quality planning, mobile source program, emissions inventory, and monitoring in addition to agency functions which support these activities. Revenues deposited to the fund are from several different fees collected from point sources and mobile sources as well as the general public. Over the last several years, the fund has carried a balance in the account which has allowed the agency to collect revenues below the annual budgeted expenditures. However, the fund balance is close to being depleted. Additionally, due to decreases in emissions, the revenue from fees which are assessed based upon emission levels has declined by an average of approximately 3% per year in recent years. The revenue estimates for Clean Air Fund 151 reveal that there are insufficient funds to support the fiscal year (FY) 2003 appropriated level.

As part of its air program activities, the commission implements an approved federal operating permit program (Federal Clean Air Act, Titles IV and V, hereinafter referred to as "Title V"). As part of that approval, the commission was required to demonstrate that the fees collected from Title V sources are sufficient to support the Title V program. Currently under state law, this fee must be dedicated for use only on Title V activities. This fee is commonly referred to as the air emissions fee and is currently set at $26 per ton. However, the fee demonstration submitted to EPA in August 2001 showed that the fee would need to be increased beginning in FY 2003 to provide sufficient support for the Title V program.

Activities which are not considered to be Title V activities must be supported through the remaining fees that are not reserved for other uses. Essentially, these fees generally include permit, renewal, and amendment fees; inspection fees; and a portion of the motor vehicle safety inspection fee (as set by statute, Texas Health and Safety Code (THSC), §382.0622).

Given the declining availability of funds in Fund 151, the commission reviewed the air fees which it has the authority to change. Most of the air permit, renewal, and amendment fees have not been increased since the early 1990s. The air emissions fee has not been increased since 1995 and the air inspection fee since 1992. The vehicle inspection maintenance fee has been set recently to cover the cost of that program. Several other funding sources are dedicated for specific uses. In an effort to match fee revenue collections more closely with related expenditures, the commission also reviewed potential sources for new fees. After a review of the commission's existing air program related activity fees, the commission is proposing revisions to the emissions fee, inspection fee, permit, renewal, and amendment fees, as well as proposing a new fee for review of registrations for PBR.

SECTION DISCUSSION

Subchapter B, Registration Fees for New Permits by Rule

Proposed new §106.50, concerning registration fees for new PBR registrations, would establish a fee for persons claiming PBRs who file PBR registrations with the commission. The fee applies to those PBR registrations that require the submission of a registration form, and to those registrations that are voluntarily submitted for commission review. This PBR fee is for registrations received on or after November 1, 2002. No fee will be assessed on previously submitted PBR registrations. One fee would be assessed for each registration form submitted, regardless of the number of facilities at an account which are identified on the registration form. The proposed PBR fee is a two-tiered fee; small businesses would be assessed $100 and all other entities would be assessed $450. A small business is a legal entity, including a corporation, partnership, or sole proprietorship, that is formed for the purpose of making a profit, is independently owned and operated, and has fewer than 100 employees or less than $1 million in annual gross receipts. The intent of this amendment is to recover some of the registration review costs.

The commission recognizes that many types of businesses which relocate frequently may be subject to a fee with each relocation. The commission requests comments on ways to mitigate the costs to businesses which relocate frequently.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, determined that the proposed rulemaking will generate approximately $1,229,000 in additional revenue for the commission for each year of the first five-year period the new rule is in effect due to the introduction of a new fee for PBR registrations submitted for review by the commission. The commission does not anticipate significant fiscal implications for other units of state and local government affected by the proposed rulemaking.

PBR registrations are divided into approximately 75 different activity types. The most common registration submissions are for oil and gas production; temporary concrete batch plants; trench burners; stationary engines and turbines; surface coating facilities; water and soil remediation; and auto body refinishing. Some of these activities, such as trench burners and temporary concrete batch plants, require frequent PBR registrations with the commission. In contrast, approximately 2.5% of the PBR registrations received annually are not required by the commission; the most common unrequired registration submitted to the commission is for flares.

The new fee on PBR registrations is intended to help recover some of the commission's registration review costs and fund the commission's air related programs at appropriated levels. Of the estimated 6,000 permit applications reviewed annually by the commission, between 3,700 - 4,000 are estimated to be PBR registrations. Prior to this rulemaking, the commission has not assessed a fee for review of PBR registrations, though it does currently assess fees for review of other application types. The proposed rulemaking would implement a new fee for PBR registrations submitted for review by the commission of $100 for small businesses and $450 for all other entities. No fee would be assessed on PBR registrations received prior to November 1, 2002.

Although the commission does not maintain data to determine the average percentage of PBR registration submissions that originate from units of state and local government, the total number is estimated to not exceed approximately 5% (185) of the total number of PBR registrations received by the commission annually. Based on these numbers, the proposed fee is expected to cost affected units of state and local government approximately $83,000 annually in aggregate. No single unit of state or local government is expected to be significantly affected by the new fee.

PUBLIC BENEFITS AND COSTS

Mr Davis also determined that for each of the first five years, the public benefit anticipated as a result of implementing the new fee will be the generation of revenue to help recover the commission's review costs and fund the commission's air programs, as well as a more direct relationship between commission workload and revenue sources.

The new fee on PBR registrations is intended to help recover some of the commission's registration review costs and fund the commission's air related programs at appropriated levels. Of the estimated 6,000 permit applications reviewed annually by the commission, between 3,700 - 4,000 are estimated to be PBR registrations. Prior to this rulemaking, the commission has not assessed a fee for review of PBR registrations, though it does currently assess fees for review of other application types. The proposed rule change would implement a new fee for PBR registrations submitted for review by the commission of $100 for small businesses and $450 for all other entities. No fee would be assessed on PBR registrations received prior to November 1, 2002.

Private businesses (not including small and micro-businesses) submit approximately 60% (2,258) of the total PBR registration reviewed annually by the commission. Based on these numbers, the proposed fee is expected to cost private business approximately $1,016,000 annually in aggregate. No individual business is expected to be significantly affected by the new fee.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There will be adverse fiscal implications, which are not anticipated to be significant, for small and micro-businesses as a result of implementation of the proposed new PBR registration fee. The commission intends to reduce the effect on small and micro-businesses by reducing the rate for those entities.

Small businesses submit approximately 35% (1,300) of the total PBR registration reviewed annually by the commission. At the proposed small business rate of $100 per PBR registrations, the new fee is expected to cost small businesses approximately $130,000 annually. Small business PBR registrations are highly prevalent in many of the most common categories, including temporary concrete batch plants, trench burners, surface coating facilities, and auto body refinishing.

The following is an analysis of the costs per employee for small and micro-businesses that may be affected by the proposed rulemaking. Small and micro-businesses are defined as having fewer than 100 or 20 employees, respectively. The proposed fee for PBR registrations submitted for the commission's review would cost up to an additional $1.00 per employee per registration for small businesses and up to an additional $5.00 per employee per registration for micro-businesses.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission 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 rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in that statute. "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 amendment to Chapter 106 is not, itself, intended to protect the environment or reduce risks to human health from environmental exposure to air pollutants. Therefore, the commission finds that it is not a major "environmental" rule. The PBR fee collected under the proposed revision to Chapter 106 will impose a one-time fee of $450 for most persons claiming a PBR, and a lesser amount for those persons claiming a PBR which are small businesses. The new rule will not impact existing businesses which are currently operating under a PBR or standard exemption. Therefore, the proposed rule should not 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.

As defined in Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: exceed a standard set by federal law, unless the rule is specifically required by state law; exceed an express requirement of state law, unless the rule is specifically required by federal law; 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 adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements of a "major environmental rule." This rulemaking does not exceed an express requirement of federal or state law. The rulemaking does not exceed a requirement of a delegation agreement. The rulemaking was not developed solely under the general powers of the agency, but was specifically developed and authorized under THSC, Texas Clean Air Act (TCAA), §§382.011, 382.017, 382.062, 382.0622, and generally under TCAA, §§382.001 et seq .

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 prepared a takings impact evaluation for this rule in accordance with Texas Government Code, §2007.043. The specific purpose of the rulemaking is to create a PBR fee to maintain funding, at appropriated levels, sufficient to support a portion of the overall air quality program. Promulgation and enforcement of the rule will not burden private, real property because it is a fee rule which supports air quality programs of the commission.

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)(2), relating to Actions and Rules Subject to the Coastal Management Program or will affect an action/authorization identified in §505.11(a)(6), and will, therefore, require that goals and policies of the Coastal Management Program (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 amendments are consistent with CMP goals and policies because the rulemaking is a fee rule which is a procedural mechanism for paying for commission programs; will not have direct or significant adverse effect on any coastal natural resource areas; will not have a substantive effect on commission actions subject to the CMP; and promulgation and enforcement of the amendments will not violate (exceed) any standards identified in the applicable 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 August 12, 2002, at 10:00 a.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 before the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Patricia Durón Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-041-116-AI. Comments must be received by 5:00 p.m., August 12, 2002. Comments received prior to this publication have been considered and will be formally addressed in the "RESPONSE TO COMMENTS" section of the adoption preamble publication and are not required to be resubmitted. For further information or questions concerning this proposal, please contact Debi Dyer, Policy and Regulations Division, at (512) 239-3972.

STATUTORY AUTHORITY

The new section is proposed under Texas Water Code (TWC), §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The new section is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed new section implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq. .

§106.50.Registration Fees for Permits by Rule.

(a) A registrant who submits a permit by rule (PBR) registration for review by the commission shall remit one of the following fees with the PI-7 registration form:

(1) $100 for small businesses, as defined in Texas Government Code, §2006.001; or

(2) $450 for all other entities.

(b) This fee does not apply to a PI-7 registration submitted solely for the purpose of establishing a federally enforceable emissions limit under §106.6 of this title (relating to Registration of Emissions).

(c) This fee is for PBR registrations that are received on or after November 1, 2002.

(d) All PBR fees will be remitted in the form of a check, certified check, electronic funds transfer, or money order made payable to the Texas Commission on Environmental Quality (TCEQ) and submitted concurrently with the registration to the TCEQ, P.O. Box 13087, MC 214, Austin, Texas 78711-3087. No fees will be refunded.

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 28, 2002.

TRD-200204128

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Chapter 115. CONTROL OF AIR POLLUTION FROM VOLATILE ORGANIC COMPOUNDS

Subchapter C. VOLATILE ORGANIC COMPOUND TRANSFER OPERATIONS

The Texas Natural Resource Conservation Commission (commission) proposes amendments to §§115.227 and 115.240 - 115.249 concerning the control of gasoline vapors from storage vessels and dispensing facilities. The commission also proposes revisions to the state implementation plan (SIP) narrative, Stage II Vapor Recovery Program SIP Revision. The commission proposes to submit these amended rule sections and revised SIP narrative to the United States Environmental Protection Agency (EPA) as proposed revisions to the SIP.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The commission adopted the Stage II rules and SIP narrative on October 16, 1992 (revised on November 10, 1993) to satisfy a requirement of the Federal Clean Air Act amendments of 1990, §182(b)(3) (42 United States Code (USC), §7511a(b)(3)). The original rules followed the California Air Resources Board (CARB) certification procedures for the vapor recovery equipment. The CARB is currently implementing an enhanced vapor recovery (EVR) program with a completion date of April 2003, after which it will no longer certify non-EVR systems. In lieu of incorporating the CARB EVR program, the commission is proposing a requirement for more frequent testing of vapor recovery systems at gasoline dispensing facilities. Specifically, the commission proposes to change the five-year requirement for full system tests to a one-year requirement. By doing so, the commission believes that the increased testing frequency will continue to satisfy the federal requirement to maintain a vapor recovery rate of 95%. The commission proposes these amendments to Chapter 115, Control of Air Pollution from Volatile Organic Compounds (VOC).

SECTION BY SECTION DISCUSSION

Throughout this rulemaking the outdated term "undesignated head" is proposed to be replaced with the correct term "division" in response to revised Texas Register rules published in the February 13, 1998 issue of the Texas Register (23 TexReg 1289). The name of the commission is proposed to be changed to the Texas Commission on Environmental Quality because the rules are anticipated to become effective after the date the name change is to occur, September 1, 2002. The term "commission" is proposed to be changed to "executive director" in each location where the action being taken is directly associated with the executive director or his staff. In addition, various stylistic and editorial changes are proposed to comply with the current Texas Register rules and style manual. Justification for these changes will not be discussed any further in this preamble other than to point out where each change has been made.

Subchapter C, Division 2, Stage I Vapor Recovery

The proposed amendments to §115.227, Exemptions, would remove language that could potentially provide a Stage I exemption for a facility that is required to have Stage II vapor recovery. All Stage II vapor recovery systems must include Stage I vapor recovery in order to operate properly. The proposed amendments also add section titles the first time each section is referenced in §115.227.

Subchapter C, Division 4, Stage II Vapor Recovery

The proposed amendments to §115.240, Stage II Vapor Recovery Definitions, include stylistic changes previously discussed in this preamble. The proposed amendments would also delete the definition independent small business marketer of gasoline because the term is no longer used in this division. The proposed amendments would also provide additional definitions for industry-specific terminology presented in the rules, which include the definitions for onboard refueling vapor recovery and onboard refueling vapor recovery (ORVR) compatible . The proposed amendments add a table listing the Stage II vapor recovery systems certified by a CARB executive order and change the section title to Stage II Vapor Recovery Definitions and List of California Air Resources Board Certified Stage II Equipment.

The proposed amendments to §115.241, Emissions Specifications, remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, Counties and Compliance Schedules, where it more appropriately belongs.

The proposed administrative and stylistic amendments to §115.242, Control Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249 where it more appropriately belongs, and would change "undesignated head" to "division." The proposed amendments to §115.242(2) would correct two section numbers and titles in reference citations to 30 TAC Chapter 334; delete two reference citations to §115.249 which no longer apply; spell out the acronym "UL" as "Underwriters Laboratories"; and delete one superfluous reference to the acronym TNRCC.

The proposed technical amendments to §115.242 would clarify which CARB-certified Stage II vapor recovery systems would be authorized for use by the executive director. Also, the proposed amendments would allow the executive director to continue to recognize any Executive Orders which CARB decertifies in the future. Due to the federal mandate requiring motor vehicle manufacturers to make vehicles equipped with ORVR, the incompatibility between ORVR and Stage II vapor recovery should be addressed as this incompatibility may prove to be a new source of emissions. In order to maintain SIP integrity and to prevent new emissions, the proposed amendments include a compliance schedule for gasoline dispensing facilities to upgrade their Stage II vapor recovery systems to be ORVR compatible. The proposed amendments would also eliminate the requirement to post the "TNRCC Stage II Vapor Recovery Hotline" on each gasoline dispensing pump equipped with a Stage II vapor recovery system. The majority of the calls received on this hotline should be directed to either the Texas Department of Agriculture Weights and Measures for issues involving price discrepancies at the pump or to the facility owner or operator for customer service inquiries. Finally, other control requirements have been updated to ensure that the vapor recovery systems operate at the prescribed 95% level of efficiency.

The proposed amendments to §115.243, Alternate Control Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs.

The proposed amendments to §115.244, Inspection Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs. The word "utilize" is proposed to be replaced with the word "use" in §115.244(2).

The proposed administrative and stylistic amendments to §115.245, Testing Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs. The proposed amendments would also delete several superfluous references to the acronym TNRCC, and change "TNRCC" to "executive director" in several locations because the executive director (or his staff) is responsible for program management. Finally, the name of the commission is proposed to be changed in one location.

The proposed technical amendments to §115.245 also would provide a directive to use the most recent Stage II vapor recovery test procedures handbook, add language to allow air-to-liquid ratio (A/L ratio) testing for assist systems, and require annual compliance testing of Stage II equipment to ensure that the equipment is operating properly. Full system testing must be accomplished at least once in any 12-month period. The term "12-month period" is used in the calendar sense and is not meant to imply a specific number of days. For example, if a system test was completed in a given month, such as October, 2003, then another inspection must be done at some time in the subsequent 12-month period from November 1, 2003 through the end of October, 2004. If a system test was done on October 5, 2003, then the facility has until October 31, 2004 to complete the next system test. If the facility waited until October 31, 2003 to do the next system test, the following test would still be due no later than October 31, 2004. However, if the facility made an "early" system test on August 15, 2004, regardless of the reason the test was conducted earlier than required, then the following system test would be due no later than August 31, 2005. Finally, the commission proposes to implement a registry of testers who have certified their knowledge of the State of Texas Vapor Recovery Test Procedures Handbook .

The proposed amendments to §115.246, Recordkeeping Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs. Other proposed amendments include changing the term "undesignated head" to "division" in accordance with Texas Register rules, changing the legalistic term "pursuant to" to "under" in two places to comply with the current style guidance, and changing references from the "TNRCC" to the "executive director" in two locations because the executive director (or his staff) is the more appropriate recipient of facility records.

The proposed amendments to §115.247, Exemptions, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs, and would delete one superfluous reference to the Texas Natural Resource Conservation Commission.

The proposed amendments to §115.248, Training Requirements, would remove the reference to specific nonattainment areas as being subject to the controls of the division and place the reference in §115.249, where it more appropriately belongs; delete one superfluous reference to the TNRCC; and change "TNRCC" to "executive director" in several locations because the executive director (or his staff) is responsible for program management.

The proposed amendments to §115.249, Counties and Compliance Schedules, would specify the counties in which these rules apply; delete the compliance dates which have passed and change the language to "shall continue to comply with"; and add the compliance schedule for ORVR compatibility. The proposed amendments would also change the term undesignated head to division .

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

Jeffrey Horvath, Analyst with Strategic Planning and Appropriations, has determined that for the first five-year period the proposed amendments are in effect, no significant fiscal implications are expected for the agency resulting from the implementation of the proposed amendments. However, costs are anticipated for units of state or local government, businesses, or individuals who own or operate gasoline stations or gasoline dispensing facilities in the 16 ozone nonattainment counties in the state. Although costs per facility are not anticipated to be significant, total overall costs for all facilities in the ozone nonattainment counties are anticipated to be significant.

The proposed amendments would require more frequent testing of vapor recovery systems at gasoline dispensing facilities in ozone nonattainment counties. Vapor recovery systems capture gasoline vapors before the vapors escape into the atmosphere and cause the formation of ozone and smog. The proposed amendments also include a compliance schedule for gasoline dispensing facilities to upgrade their Stage II vapor recovery systems to be compatible with ORVR systems on many vehicles. The proposed amendments are expected to allow the state to continue to satisfy the federal requirement to maintain a vapor recovery rate of 95% in the 16 ozone nonattainment counties of Brazoria, Chambers, Collin, Dallas, Denton, El Paso, Fort Bend, Galveston, Hardin, Harris, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller. The proposed amendments will also be submitted to the EPA as proposed revisions to the SIP.

The commission proposes these amendments in lieu of incorporating the new CARB enhanced vapor recovery program. Current rules follow the CARB certification procedures for vapor recovery equipment. The CARB is currently implementing an enhanced vapor recovery program which consists of six modules and would require gasoline dispensing facilities to install new vapor recovery systems including in-station diagnostic computer equipment to monitor emissions. This enhanced vapor recovery program has been estimated to cost between $30,000 and $60,000 per facility.

Instead of implementing the CARB enhanced vapor recovery systems, the commission is proposing amendments which will require more frequent testing of vapor recovery systems at gasoline dispensing facilities in the 16 ozone nonattainment counties in the state. The commission believes that the increase in testing and the upgrade of vapor recovery systems to make them ORVR compatible will continue to satisfy federal SIP requirements for vapor recovery.

Currently, gasoline stations in ozone nonattainment areas must perform full system tests every five years to ensure that vapor recovery systems are operating correctly. The proposed amendments would require full system tests every 12 months. There are seven components to the full suite of performance tests. The full suite of tests costs station owners and operators approximately $550 every five years. An annual pressure decay test is also required for those years when the full suite of tests is not conducted. This stand-alone test normally costs about $300. The proposed amendments would require testing every 12 months and cost station owners and operators $550 each year, with the pressure decay test included in the $550. Therefore, over a five-year period, gas station owners and operators would pay approximately $200 more each year for the additional testing. There are approximately 7,400 facilities with Stage II vapor recovery equipment installed that will be subject to the proposed testing requirements. The total cost for the additional testing requirements for all of these facilities is estimated to be $1,480,000.

The proposed amendments include a compliance schedule for gasoline dispensing facilities in the ozone nonattainment counties to upgrade their vapor recovery systems to be compatible with the ORVR systems on many newer vehicles. The upgrade is necessary in order to continue to satisfy the SIP requirements to maintain vapor recovery rates at 95% efficiency. The EPA required a phase-in for new vehicles to have ORVR systems beginning in 1998. Data provided by EPA indicates that ORVR may be more efficient than Stage II vapor recovery, however, when an ORVR vehicle refuels at a facility that uses a vacuum assist Stage II system (the type of vapor recovery system used extensively in Texas), there is a potential to produce significant fugitive emissions. A growing percentage of the total number of vehicles in the ozone nonattainment areas now have ORVR systems.

Approximately 30% of the Stage II vapor recovery systems at gasoline dispensing facilities in the nonattainment counties are already ORVR compatible. Some stations will have to only make minor upgrades to become ORVR compatible and depending on the availability of retrofit kits provided by the manufacturers, some systems may have to be completely removed and replaced. The full replacement of Stage II vapor recovery dispenser, hose, and nozzle systems is estimated to be $1,100 per dispenser. Assuming that 70% of the 7,400 facilities in the ozone nonattainment areas are not ORVR compatible, and each facility has an average of six dispensers, at $1,100 per dispenser, total costs for those facilities requiring total upgrades are estimated to be $34,188,000.

There will be additional testing costs for units of state or local government that own or operate gasoline dispensing facilities in the 16-county ozone nonattainment areas. Refueling facilities may be owned by the Texas Department of Transportation, or by cities or counties. It is not known how many of the estimated 7,400 facilities with vapor recovery equipment in the four ozone nonattainment areas are owned or operated by units of state or local government. Many of these facilities may be exempt from the vapor recovery requirements as they may have been constructed prior to November 15, 1992 and have a documented throughput of less than 10,000 gallons per month. Those that are not exempt will pay an additional $200 per year in testing costs. In addition, those facilities that must replace the Stage II vapor recovery dispenser, hose, and nozzle systems will pay an estimated $1,100 per dispenser.

For the average gas station owner or operator with six dispensers, costs to become ORVR compatible would be an estimated $6,600 plus the additional testing costs of $200 per year. The upgrade costs would be one-time costs, but the testing costs would be recurring.

PUBLIC BENEFITS AND COSTS

Mr. Horvath has also determined that for each year of the first five years the proposed amendments are in effect, the public benefit anticipated from the enforcement of and compliance with the proposed amendments would include the maintenance of SIP requirements to keep vapor recovery rates at the 95% prescribed levels of efficiency while implementing a less expensive methodology than the enhanced vapor recovery system under the CARB initiative.

There will be costs to comply with the proposed amendments which could be significant, for businesses and individuals who own or operate gasoline dispensing facilities in the 16-county ozone nonattainment areas.

The proposed amendments will require more frequent testing of vapor recovery systems at gasoline dispensing facilities in the 16 ozone nonattainment counties in the state. Currently, gasoline stations in ozone nonattainment areas must perform full system tests every five years to ensure that vapor recovery systems are operating correctly. The proposed amendments would require full system tests every 12 months. There are seven components to the full suite of performance tests. The full suite of tests costs station owners and operators approximately $550 every five years. An annual pressure decay test is also required for those years when the full suite of tests is not conducted. This stand-alone test normally costs about $300. The proposed amendments would require testing every 12 months and cost station owners and operators $550 each year, with the pressure decay test included in the $550. Therefore, over a five-year period, gas station owners and operators would pay approximately $200 more each year for the additional testing. There are approximately 7,400 facilities with Stage II vapor recovery equipment installed that will be subject to the proposed testing requirements. The total cost for the additional testing requirements for all of these facilities is estimated to be $1,480,000.

The proposed amendments include a compliance schedule for gasoline dispensing facilities to upgrade their Stage II vapor recovery systems to be ORVR compatible. Most gasoline dispensing facilities in the ozone nonattainment counties will also need to upgrade their vapor recovery systems to be compatible with the ORVR systems on many newer vehicles in order to satisfy the SIP requirements to maintain vapor recovery rates at 95% efficiency. The EPA required a phase-in for new vehicles to have ORVR systems to begin in 1998. Four years later, a larger percentage of the total number of vehicles in the ozone nonattainment area have ORVR systems. However, the vapor recovery systems used by most gas stations in the nonattainment areas are not compatible with the ORVR systems on newer vehicles, resulting in the failure of both the ORVR and the dispenser vapor recovery systems to maintain required vapor recovery rates. Data provided by EPA indicates that ORVR may be more efficient than Stage II vapor recovery; however, when an ORVR vehicle refuels at a facility that uses a vacuum assist Stage II system, there is a potential to produce significant fugitive emissions.

Approximately 30% of the Stage II vapor recovery systems at gasoline dispensing facilities in the nonattainment counties are already ORVR compatible. Some stations will have to only make minor upgrades to become ORVR compatible and depending on the availability of retrofit kits provided by the manufacturers, some systems may have to be completely removed and replaced. The full replacement of Stage II vapor recovery dispenser, hose, and nozzle systems is estimated to be $1,100 per dispenser. Assuming that 70% of the 7,400 facilities in the ozone nonattainment areas are not ORVR compatible, and each facility has an average of six dispensers, at $1,100 per dispenser, total costs for those facilities requiring total upgrades are estimated to be $34,188,000.

For the average gas station owner or operator with six dispensers, costs to become ORVR compatible would be an estimated $6,600 plus the additional testing costs of $200 per year. Businesses that own multiple facilities will have higher costs depending upon the number of facilities owned. The commission assumes that these costs will passed on to consumers in the form of higher gasoline costs.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There are adverse fiscal implications anticipated as a result of the implementation and enforcement of the proposed amendments for small and micro-businesses that own or operate gas stations and gasoline dispensing facilities in the 16-county ozone nonattainment areas in the state.

The agency estimates that of the 7,400 facilities in the 16-county ozone nonattainment areas, there are 4,221 owners of gas stations that own ten facilities or less. It is not known how many of these would be small or micro-businesses, but those that are will pay $200 more per year in testing costs, and for those that need to upgrade their systems to become ORVR compatible will incur an expense of an additional $1,100 per dispenser. Assuming all 4,221 owners are small or micro- businesses, they would pay an estimated total of $844,200 per year for additional testing costs and assuming there were an average of six dispensers that needed to be upgraded, an additional $27,858,600 to become ORVR compatible.

The following is an analysis of the cost per employee for small or micro-businesses affected by the proposed amendments. Small and micro-businesses are defined as having fewer than 100 or 20 employees respectively. Owners of gas stations that own ten facilities or less with an average of six dispensers at each facility, with 100 or fewer employees would incur additional costs of $200 per year per facility for the testing and $6,600 per facility for the ORVR upgrade. Total costs for these facilities is estimated at $68,000 or $680 per employee. A micro-business with five gas stations with an average of six dispensers per facility with 20 or less employees would incur estimated additional costs of $34,000 or $1,700 per employee. The projected costs for affected facilities is the same for small businesses as for larger businesses and the portion of costs attributed to the ORVR upgrade are assumed to be one-time costs.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission has review this proposed rulemaking and determined that a local employment impact statement is not required because the proposed amendments do not adversely affect a local economy in a material way for the first five years that the proposed amendments are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the proposed amendments meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule which is specifically intented 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 intent of this proposed rulemaking action is to protect the environment and reduce risks to human health from environmental exposure to ozone by keeping gasoline vapor recovery rates at the 95% prescribed level of efficiency. The proposed amendments may have an adverse material impact on a sector of the economy or a sector of the state. Gas station owners and operators in the four ozone nonattainment areas (16 counties) in the state will be required to pay $200 more per year in testing costs, and those that need to upgrade their gas dispensing systems to become ORVR compatible will incur an expense of an additional $1,100 per dispenser.

Although the proposed amendments meet the definition of a "major environmental rule" as defined in the Texas Government Code, §2001.0225 only applies 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. This proposed rulemaking is not subject to the regulatory analysis provisions of §2001.0225(b), because the proposed amendments do not meet any of the four applicability requirements. Specifically, the proposed amendments implement requirements of 42 USC, §7511a(b)(3), (c), and (d) and Texas Health and Safety Code (THSC), §§382.002, 382.011, 382.012, 382.019, and 382.208. The commission invites public comment on the draft regulatory impact analysis determination.

TAKINGS IMPACT ASSESSMENT

The commission evaluated this rulemaking action and performed an analysis of whether Texas Government Code, Chapter 2007 is applicable. The analysis indicates this action is reasonably being taken to fulfill an obligation mandated by federal law, and therefore is exempt under Texas Government Code, §2007.003(b)(4). Specifically, this proposed rulemaking action amends the Stage II gasoline vapor recovery rules and SIP narrative required under 42 USC, §7511a(b)(3), (c), and (d). The specific purpose of this rulemaking action is to continue to satisfy the provisions of 42 USC and to maintain a vapor recovery rate of 95%. The proposed amendments would substantially advance this stated purpose by updating control requirements of vapor recovery systems at gasoline dispensing facilities, requiring more frequent testing of these systems, and requiring these facilities to upgrade their Stage II vapor recovery systems to be compatible with newer, ORVR-equipped vehicles. Facilities that do not upgrade their incompatible Stage II vapor recovery systems may prove to be a new source of emissions, thus weakening the SIP integrity.

Nevertheless, the commission further evaluated this proposed rulemaking action and performed an analysis of whether this action would constitute a takings under Chapter 2007. The specific purpose of these proposed amendments is to continue to satisfy federal requirements for vapor recovery from gasoline dispensing facilities in nonattainment areas of the state. The proposed amendments would substantially advance this stated purpose by requiring more frequent testing and upgrading of vapor recovery systems at these gasoline stations. Promulgation and enforcement of these proposed amendments 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% or more beyond that which would otherwise exist in the absence of the proposed regulations. In other words, these amendments are proposed to continue to meet the requirements of 42 USC, §7511a(b)(3) and THSC, §382.019 and §382.208, but in a less financially burdensome manner on owners and operators of gasoline dispensing facilities. Some gas station owners and operators may be required to install or modify Stage II vapor control equipment that will make the gas dispensing systems ORVR compatible. However, as described in the FISCAL NOTE section of this preamble, the existing Stage II rules follow the CARB certification process for vapor recovery equipment. CARB is implementing an enhanced program that will require installation of more costly equipment than the alternative proposed in these amendments to Chapter 115. In addition, the alternative proposed in these amendments will continue to provide benefits to society by maintaining vapor recovery rates at 95% efficiency. Therefore, these proposed amendments will not constitute a takings under Texas Government Code, Chapter 2007.

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 TAC Chapter 281, Subchapter B, concerning Consistency with the CMP. As required by §281.45(a)(3) and 31 TAC §505.11(b)(2), relating to 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 will be authorized and the proposed revisions will maintain the same 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 Code of Federal Regulations (CFR), to protect and enhance air quality in the coastal areas (31 TAC §501.14(q)). This rulemaking action complies with 40 CFR 51, Requirements for Preparation, Adoption, and Submittal of Implementation Plans. Therefore, in compliance with 31 TAC §505.22(e), the commission affirms that this rulemaking action is consistent with CPM goals and policies. The commission solicits comments on the consistency of the proposed rules with the CMP during the public comment period.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM

Chapter 115 contains applicable requirements under 30 TAC Chapter 122, Federal Operating Permits; therefore, owners or operators subject to the Federal Operating Permit Program must, consistent with the revision process in Chapter 122, revise their operating permits to include the revised Chapter 115 requirements for each emission unit at their sites affected by the revisions to Chapter 115.

ANNOUNCEMENT OF HEARING

A public hearing on this proposal will be held in Austin, Texas, on August 8, 2002, at 2:00 p.m., at the Texas Natural Resource Conservation Commission, 12100 Park 35 Circle, Building F, Room 2210. 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, a commission staff member will be available to discuss the proposal 30 minutes prior to the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Ms. Lola Brown, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-012-115-AI. Comments must be received by 5:00 p.m., August 12, 2002. For further information, please contact Ashley Forbes of the Registration, Review, and Reporting Division at (512) 239-0493 or Alan Henderson of the Policy and Regulations Division at (512) 239-1510.

2. FILLING OF GASOLINE STORAGE VESSELS (STAGE I) FOR MOTOR VEHICLE FUEL DISPENSING FACILITIES

30 TAC §115.227

STATUTORY AUTHORITY

The amendment is proposed under Texas Water Code (TWC), §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 TWC; and under THSC, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act (TCAA). The amendment is 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; and §382.039, concerning Attainment Program, which authorizes the commission to develop and implement transportation programs and other measures necessary to demonstrate attainment and protect the public from exposure to hazardous air contaminants from motor vehicles.

The proposed amendment implements THSC, §§382.002, 382.011, 382.012, and 382.039.

§115.227.Exemptions.

The following exemptions apply:

[ (1) In the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas, stationary gasoline storage containers with a nominal capacity less than or equal to 1,000 gallons, at motor vehicle fuel dispensing facilities for which construction began prior to November 15, 1992, are exempt from the requirements of this division (relating to Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities), except for:]

[ (A) §115.222(7) of this title (relating to Control Requirements);]

[ (B) §115.222(3) of this title as it applies to liquid gasoline leaks; and]

[ (C) §115.224(1) of this title (relating to Inspection Requirements) as it applies to liquid gasoline leaks.]

(1) [ (2) ] In the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas, transfers to stationary storage tanks located at a motor vehicle fuel dispensing facility which has dispensed no more than 10,000 gallons of gasoline in any calendar month after January 1, 1991, and for which construction began prior to November 15, 1992, are exempt from the requirements of this division (relating to Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities), except for:

(A) §115.222(7) of this title (relating to Control Requirements) ;

(B) §115.222(3) of this title as it applies to liquid gasoline leaks;

(C) §115.224(1) of this title (relating to Inspection Requirements) as it applies to liquid gasoline leaks; and

(D) §115.226(2)(B) of this title (relating to Recordkeeping Requirements).

(2) [ (3) ] In the covered attainment counties, as defined in §115.10 of this title (relating to Definitions), stationary gasoline storage containers with a nominal capacity less than or equal to 1,000 gallons at motor vehicle fuel dispensing facilities are exempt from the requirements of this division [ (relating to Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities) ], except for:

(A) §115.222(7) of this title [ (relating to Control Requirements) ];

(B) §115.222(3) of this title as it applies to liquid gasoline leaks; and

(C) §115.224(1) of this title [ (relating to Inspection Requirements) ] as it applies to liquid gasoline leaks.

(3) [ (4) ] In the covered attainment counties, transfers to stationary storage tanks located at a motor vehicle fuel dispensing facility which has dispensed less than 125,000 gallons of gasoline in any calendar month after January 1, 1999 are exempt from the requirements of this division [ (relating to Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities) ], except for:

(A) §115.222(7) of this title;

(B) §115.222(3) of this title as it applies to liquid gasoline leaks;

(C) §115.224(1) of this title as it applies to liquid gasoline leaks; and

(D) §115.226(2)(C) of this title [ (relating to Recordkeeping Requirements) ].

(4) [ (5) ] Transfers to the following stationary receiving containers are exempt from the requirements of this division [ (relating to Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities) ]:

(A) containers used exclusively for the fueling of implements of agriculture; and

(B) storage tanks equipped with external floating roofs, internal floating roofs, or their equivalent.

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 28, 2002.

TRD-200204082

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-0348

4. CONTROL OF VEHICLE REFUELING EMISSIONS (STAGE II) AT MOTOR VEHICLE FUEL DISPENSING FACILITIES

30 TAC §§115.240 - 115.249

STATUTORY AUTHORITY

The amendments are proposed under TWC, §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 TWC; 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; and §382.039, concerning Attainment Program, which authorizes the commission to develop and implement transportation programs and other measures necessary to demonstrate attainment and protect the public from exposure to hazardous air contaminants from motor vehicles.

The proposed amendments implement TCAA, §§382.002, 382.011, 382.012, and 382.039.

§115.240.Stage II Vapor Recovery Definitions and List of California Air Resources Board Certified Stage II Equipment .

(a) The following words and terms, when used in this division, shall have the following meanings, unless the context clearly indicates otherwise. Additional definitions for terms used in this division are found in §§115.10, 101.1, and 3.2 [ §115.10 of this title (relating to Definitions), §101.1 of this title (relating to Definitions), and §3.2 ] of this title (relating to Definitions).

[ (1) Independent small business marketer of gasoline--A person engaged in the marketing of gasoline who owns the dispensing equipment at a motor vehicle fuel dispensing facility and receives at least 50% of his annual income from the marketing of gasoline. A person is not an independent small business marketer of gasoline if such person:]

[ (A) is a refiner; or]

[ (B) controls (i.e., owns more than 50% of a business or corporation's stock), is controlled by, or is under common control with, a refiner; or]

[ (C) is otherwise directly or indirectly affiliated with a refiner or with a person who controls, is controlled by, or is under common control with a refiner (unless the sole affiliation is by means of a supply contract or an agreement or contract to use a trademark, trade name, service mark, or other identifying symbol or name owned by such refiner or any such person).]

(1) Onboard refueling vapor recovery--A system on motor vehicles designed to recover hydrocarbon vapors that escape during refueling.

(2) Onboard refueling vapor recovery (ORVR) compatible--A vacuum assist Stage II vapor recovery system designed to prevent the ingestion of ambient air during the fueling of motor vehicles equipped with ORVR.

(3) [ (2) ] Owner or operator of a motor vehicle fuel dispensing facility--Any person who owns, leases, operates, or controls the motor vehicle fuel dispensing facility.

(b) The table in the following figure is a list of the Stage II vapor recovery systems certified by a California Air Resources Board (CARB) Executive Order in effect as of January 1, 2002.

Figure: 30 TAC §115.240(b)

§115.241.Emission Specifications.

No person in the counties listed in §115.249 of this title (relating to Counties and Compliance Schedules) [ Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas as defined in §115.10 of this title (relating to Definitions) ] shall transfer or allow the transfer of gasoline from any stationary storage container into a motor vehicle fuel tank, unless an approved Stage II vapor recovery system has been installed which is certified to reduce the emissions of volatile organic compound to the atmosphere by at least 95%.

§115.242.Control Requirements.

For all persons in the counties listed in §115.249 of this title (relating to Counties and Compliance Dates) and [ Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas ] affected by this division [ undesignated head ] (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities), a vapor recovery system will be assumed to comply with the specified emission limitation of §115.241 of this title (relating to Emission Specifications) if the following conditions are met.

(1) The facility is equipped with a Stage II vapor recovery system [ that has been ] certified by a California Air Resources Board (CARB) Executive Order [ concerning Stage II vapor recovery systems ] in effect as of January 1, 2002 (as specified in §115.240(b) of this title (relating to Stage II Vapor Recovery Definitions and List of California Air Resources Board Certified Stage II Equipment)); or certified by a CARB Executive Order in effect after January 1, 2002 [ August 1993 ], except that the executive director reserves the right to continue to recognize any CARB Executive Orders decertified after January 1, 2002; or certified by an alternative procedure which meets the requirements specified in §115.243 of this title (relating to Alternate Control Requirements). In addition :

(A) Stage II vapor recovery balance systems which include vapor check valves in a location other than the nozzle shall not be installed; [ and ]

(B) Stage II vapor recovery systems which include dual-hang (non-coaxial) hoses shall not be installed ; and [ . ]

(C) all vacuum assist Stage II vapor recovery systems must be onboard refueling vapor recovery (ORVR) compatible, as defined in §115.240 of this title in accordance with the schedules in §115.249 of this title.

(2) All underground piping must be installed by a person holding a valid License A as defined in §§334.401, 334.407, 334.424 of this title (relating to License and Registration Required; Other Requirements for an Underground Storage Tank Container; and Other Requirements for an On- Site Supervisor) [ §§334.401 - 334.428 of this title (relating to Underground Storage Tank Contractor Registration and Installer Licensing) ]. Piping specifications shall be in compliance with the applicable CARB Executive Order(s) for the Stage II vapor recovery system. For any facility newly constructed after November 15, 1993, or at any facility undergoing a major modification to the Stage II vapor recovery system after November 15, 1993, the following requirements shall apply where piping specifications are not provided in the applicable CARB Executive Order(s).

(A) All underground piping shall be constructed of rigid material and conform to the applicable portions of the technical standards for new piping defined by §334.45(c) and (e) [ §334.45(c)(1)(A) - (C) and (3) ] of this title (relating to Technical Standards for New Underground Storage Tank [ UST ] Systems) [ and §334.45(e)(1) of this title ].

(B) Noncorrodible [ Noncorrosive ] piping or cathodically protected metallic piping shall be used. In the event metallic piping is used, the applicable portions of the general requirements for corrosion protection defined by §334.49(a)(1) - (5) and (c)(1) - (4) of this title (relating to Corrosion Protection) shall apply.

(C) Minimum slope on vapor piping shall be one eighth of an inch per foot from the dispenser to the storage tank. Piping installed after January 1, 2002 shall not include liquid collection points (condensate traps) unless the associated underground storage tanks:

(i) were installed prior to November 15, 1992; and

(ii) are not at sufficient depth to allow for minimum slope requirements.

(D) - (E) (No change.)

(F) If a fire protection agency with jurisdiction requires a vapor shear valve on the vapor return line at the base of a dispenser, the shear valve shall be CARB-certified and/or Underwriters Laboratories [ UL ] listed for use in vapor recovery systems .

(3) The owner or operator shall maintain the Stage II vapor recovery system in proper operating condition, as specified by the manufacturer and/or any applicable CARB Executive Order(s), and free of defects that would impair the effectiveness of the system, including, but not limited to:

(A) - (I) (No change.)

(J) pressure/vacuum relief valves, vapor check valves, or Stage I dry breaks that are inoperative or defective; [ and ]

(K) a system monitor or printer that is malfunctioning or out of paper;

(L) a nozzle, hose, break-away, or any other component that is not approved for use with the certified vapor recovery system in use; and

(M) [ (K) ] any equipment defect that is identified in the [ a CARB ] certification of an approved system as substantially impairing the effectiveness of the system in reducing refueling vapor emissions.

(4) - (5) (No change.)

(6) Upon identification of any of the defects described in paragraphs (3) and (4) of this section, any inspector with jurisdiction shall tag the impaired equipment out-of-order. The "Out-of-Order" tag shall state "use of this device is prohibited under state law, and unauthorized removal of this tag or use of this equipment will constitute a violation of the law punishable by a maximum civil penalty of up to $25,000 per day or a maximum criminal penalty of $50,000 and/or up to 180 days in jail." The impaired equipment shall remain out of service until such time as the equipment has been properly repaired, replaced, or adjusted, as necessary. Once repairs are completed, the "Out-of-Order" tag may be removed, and the equipment shall be returned to service by the owner or operator or facility representative upon notification to the agency that originally tagged the equipment out-of-service in the following manner: verbal notification prior to placing the equipment back in service followed by written notification received by the agency within ten [ 10 ] days of placing the equipment back in service. For the purposes of this paragraph, "facility representative" has the meaning ascribed to it in §115.248(1) of this title (relating to Training Requirements).

(7) - (8) (No change.)

(9) The owner or operator of a motor vehicle fuel dispensing facility shall post operating instructions conspicuously on the front of each gasoline dispensing pump equipped with a Stage II vapor recovery system. These instructions shall, at a minimum, include:

(A) a clear description of how to correctly dispense gasoline using the system; and

(B) a warning against attempting to continue to refuel after initial automatic shutoff of the system (an indication that the vehicle fuel tank is full) . [ ; and ]

[ (C) the telephone number of the Texas Natural Resource Conservation Commission (TNRCC) Stage II Vapor Recovery Hotline (1-800-533-3AIR) to be used for questions, comments, or the reporting of any problems experienced with the system.]

(10) Any motor vehicle fuel dispensing facility that becomes subject to the provisions of this division [ undesignated head ] by exceeding the throughput limits of §115.247 [ §§115.247, 115.249(2), or 115.249(3) ] of this title (relating to Exemptions [ , and Counties and Compliance Schedules ]) shall have 120 days to come into compliance and will remain subject to the provisions of this division [ undesignated head ] even if its gasoline throughput later falls below throughput limits, except that:

(A) (No change.)

(B) at a facility exempted under §115.247(2) of this title [ or having an extended compliance schedule under §115.249(3) of this title, ] for which an exceedance occurred for any consecutive 30-day period due to an emergency condition or natural disaster after November 15, 1992, the owner or operator may petition the executive director to permit the continuance of the facility's exempt status or extended compliance schedule status. If exempt [ or extended compliance schedule ] status is continued by the executive director, the requirement of annual verification of the status as stated in §115.247(2) of this title must be fulfilled.

(11) Any facility having installed Stage II vapor recovery system(s) or component(s) [ components(s) ] previously certified by CARB via an Executive Order, for which certification was [ has been ] revoked by CARB, prior to January 1, 2002 [ as of August 1993 ], must install and have operational an [ a different ] approved system(s) or component(s) as referenced in paragraph (1) of this section [ §115.242(1) of this title (relating to Emission Specifications) ] as soon as practicable, but no later than September 1, 2006 [ three years from the date that CARB revoked the certification ].

(12) After November 15, 1993, the owner or operator shall provide written notification of any Stage II vapor recovery system installation to the appropriate [ TNRCC ] regional office and any local air pollution program at least 30 days prior to start of construction. The information in the notification shall include, but is not limited to:

(A) facility name, location (physical and mailing address); name, address, and phone number of owner(s) and operator(s); name and phone number of owner's representative; name, address, and phone number of contractor(s); and the [ TNRCC ] Petroleum Storage Tank [ Division ] Facility ID number and Owner ID number (if known);

(B) - (C) (No change.)

§115.243.Alternate Control Requirements.

Alternate [ For all persons in the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas affected by this undesignated head (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities), alternate ] methods of complying with §115.242(1) of this title (relating to Control Requirements) may be approved by the executive director if:

(1) emission reductions are demonstrated to be [ substantially ] equivalent or greater than those afforded by the requirements in §115.242(1) of this title ; and

(2) the Stage II vapor recovery system is capable of meeting the applicable performance requirements prescribed in this division, as verified by third-party evaluation conducted by a qualified independent testing organization using a code or standard of practice, acceptable to the executive director, which has been developed by a nationally recognized agency, association, or independent testing laboratory [ certified by the California Air Resources Board (CARB) ].

§115.244.Inspection Requirements.

The [ For the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas, the ] owner or operator of any motor vehicle fuel dispensing facility subject to the control requirements of this division [ undesignated head ] (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities) shall conduct daily inspections of the Stage II vapor recovery system for the defects specified in §115.242(3) and (4) of this title (relating to Control Requirements) as follows.

(1) For all systems, the daily inspections shall include the applicable portions of §115.242(3)(A)-(F), (H), (I) [ (H)-(I) ], and (K) and (4) of this title.

(2) For assist systems that use [ utilize ] a processor, indicating mechanisms designed by the Stage II vapor recovery equipment manufacturer to verify proper operation shall be inspected daily. Examples of these indicating mechanisms include flame detection sensors, remote (from the processor) visual or audible displays indicating system operation, or other means as described in the applicable Executive Order for the system.

(3) - (4) (No change.)

§115.245.Testing Requirements.

For all affected persons [ in the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas ], compliance with §115.241 and §115.242 of this title (relating to Emission Specifications and Control Requirements) shall be determined at each facility within 30 days of installation of the Stage II equipment by testing as follows.

(1) Stage II vapor recovery systems shall successfully meet the performance criteria proper to the system by successfully completing the following testing requirements using [ utilizing ] the test procedures as found in the State of Texas Vapor Recovery Test Procedures Handbook ( (handbook)(March 2002) [ Texas Natural Resource Conservation Commission Stage II Vapor Recovery Test Procedure Handbook (August 1993) ].

(A) (No change.)

(B) For bootless nozzle assist systems, the volume-to-liquid ratio (V/L ratio) or air-to-liquid ratio (A/L ratio) shall be within acceptable limits.

(C) Each system shall meet minimum performance criteria specific to the individual system as defined in the California Air Resources Board Executive Order. The criteria and test methods contained in the handbook [ Texas Natural Resource Conservation Commission (TNRCC) Stage II Vapor Recovery Test Procedure Handbook (August 1993) ] specified in paragraph (1) [ subparagraph (A) ] of this section [ paragraph ] shall take precedence for applicable tests where performance criteria exist in both the Executive Order and the handbook [ Stage II Vapor Recovery Test Procedure Handbook ]; otherwise, the Executive Order specific criteria shall take precedence.

(D) The owner or operator , or his or her representative , shall provide written notification to the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction of the testing date and who will conduct the test. The notification must be received by the appropriate regional office and any local air pollution program with jurisdiction [ agency ] at least ten [ 10 ] working days in advance of the test, and the notification must contain the information and be in the format as found in the handbook [ TNRCC Stage II Vapor Recovery Test Procedure Handbook (August 1993) ]. Notification may take the form of a facsimile or telecopier transmission, as long as the facsimile is received by the appropriate regional office [ TNRCC ] and any local air pollution program with jurisdiction at least ten [ 10 ] working days prior to the test and it is followed up within two weeks of the transmission with a written notification. The owner or operator , or his or her representative , shall give at least 24-hour notification to the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction if a scheduled test is cancelled. In the event that the test cancellation is not anticipated prior to 24 hours before the scheduled test, the owner or operator , or his or her representative , shall notify the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction as soon in advance of the scheduled test as is practicable.

[ (2) Pressure decay testing shall be conducted annually and in accordance with the test procedures referenced in paragraph (1) of this section.]

(2) [ (3) ] Verification of proper operation of the Stage II equipment shall be performed in accordance with the test procedures referenced in paragraph (1) of this section at least every twelve months [ five years ] or upon major system replacement or modification, whichever occurs first. The verification shall include all functional tests that were required for the initial system test. The owner or operator , or his or her representative , shall provide written notification to the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction of the testing date and who will conduct the test. The notification must be received by the appropriate regional office and any local air pollution program with jurisdiction [ agency ] at least ten [ 10 ] working days in advance of the test, and the notification must contain the information and be in the format as found in the handbook [ TNRCC Stage II Vapor Recovery Test Procedure Handbook (August 1993) ]. Notification may take the form of a facsimile or telecopier transmission, as long as the facsimile is received by the appropriate regional office [ TNRCC ] and any local air pollution program with jurisdiction at least ten [ 10 ] working days prior to the test and it is followed up within two weeks of the transmission with a written notification. The owner or operator , or his or her representative , shall give at least 24-hour notification to the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction if a scheduled test is cancelled. In the event that the test cancellation is not anticipated prior to 24 hours before the scheduled test, the owner or operator , or his or her representative , shall notify the appropriate [ TNRCC ] regional office and any local air pollution program with jurisdiction as soon in advance of the scheduled test as is practicable. For the purposes of this paragraph, a major system replacement or modification is defined as:

(A) the repair or replacement of any stationary storage tank equipped with a Stage II vapor recovery system;

(B) the replacement of an existing CARB-certified Stage II vapor recovery system with a system certified by CARB under a different CARB Executive Order; [ or ]

(C) the repair or replacement of any part of a piping system attached to a stationary storage tank equipped with a Stage II vapor recovery system, excluding the repair or replacement of piping which is accessible for such repair or replacement without excavation or modification of the vapor recovery equipment ; or [ . ]

(D) the replacement of at least one fuel dispenser.

(3) [ (4) ] Minor modifications of these test methods may be approved by the executive director.

(4) [ (5) ] All required tests shall be conducted either in the presence of a Texas Commission on Environmental Quality [ TNRCC ] or local program inspector with jurisdiction, or by a person who is registered with the executive director to conduct Stage II vapor recovery tests [ TNRCC by successfully completing a TNRCC proficiency test relating to Stage II Vapor Recovery Test Procedures and Methods ]. The requirement to be registered shall begin on November 15, 1993, or 60 days after the executive director [ TNRCC ] has established the registry, whichever occurs later. The executive director [ TNRCC ] may remove an individual from the registry of testers for any of the following causes:

(A) the executive director [ TNRCC ] can demonstrate that the individual has failed to conduct the test(s) properly in at least three separate instances; or

(B) the individual falsifies test results for tests conducted to fulfill the requirements of this section.

(5) [ (6) ] The owner or operator , or his or her representative , shall submit the results of all tests required by this section to the appropriate [ TNRCC ] regional office and any local air pollution control program with jurisdiction within ten [ 10 ] working days of the completion of the test(s) using the format specified in the handbook [ TNRCC Stage II Vapor Recovery Test Procedure Handbook (August 1993) ]. For purposes of on-site recordkeeping, the Test Procedures [ Cover ] Results Cover Sheet, properly completed with the summary of the testing, is acceptable. The detailed results from each test conducted along with a properly completed summary sheet, as provided for in the handbook [ Stage II Vapor Recovery Test Procedure Handbook ], shall be submitted to the appropriate [ TNRCC ] regional office and any local air pollution control program with jurisdiction.

§115.246.Recordkeeping Requirements.

The [ For the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas, the ] owner or operator of any motor vehicle fuel dispensing facility subject to the control requirements of this division [ undesignated head ] (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities) shall maintain the following records:

(1) a copy of the California Air Resources Board (CARB) Executive Order(s) or third party certification(s) for the Stage II vapor recovery system and any related components installed at the facility;

(2) a copy of any owner or operator request for executive director approval under [ pursuant to ] §115.243 of this title (relating to Alternate Control Requirements) and any executive director approval issued under [ pursuant to ] §115.243 of this title;

(3) - (6) (No change.)

(7) all records shall be maintained for at least two years, except that the CARB Executive Order(s) or third party certification(s) specified in paragraph (1) of this section, any applicable alternate method of control requirement approval specified in paragraph (2) of this section, and testing results specified in paragraph (5) of this section shall be kept on-site indefinitely. These records shall be:

(A) kept on-site at facilities ordinarily manned during business hours, and made immediately available for review upon request by authorized representatives of the executive director, EPA [ Texas Natural Resource Conservation Commission (TNRCC), the United States Environmental Protection Agency (EPA) ], or any local air pollution control program with jurisdiction; or

(B) [ made available for review at the site by authorized representatives of TNRCC, EPA, or any local air pollution control program with jurisdiction within 48 hours after being requested by the representative ] for facilities [ ordinarily ] unmanned at the time of inspection, made available at the site within 48 hours after being requested by authorized representatives of the executive director, EPA, or any local air pollution control program with jurisdiction [ during business hours ].

§115.247.Exemptions.

The [ For the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas, the ] following are exempt from the requirements of this division [ undesignated head ] (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities):

(1) (No change.)

(2) any motor vehicle fuel dispensing facility for which construction began prior to November 15, 1992, and which has a monthly throughput of less than 10,000 gallons of gasoline. For the purposes of this paragraph, the monthly throughput shall be based on the maximum monthly gasoline throughput for any calendar month after January 1, 1991. To maintain a facility's exempt status under this paragraph, the owner or operator must submit the facility's monthly gasoline throughput on an annual basis no later than January 31 of each year to the executive director or his designated representative [ appropriate Texas Natural Resource Conservation Commission regional office and any local air pollution control program with jurisdiction ].

§115.248.Training Requirements.

For all persons [ in the Beaumont/Port Arthur, Dallas/Fort Worth, El Paso, and Houston/Galveston areas ] affected by this division [ undesignated head ] (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities), the following training requirements apply.

(1) The owner or operator of a motor vehicle fuel dispensing facility shall ensure that at least one facility representative receive training and instruction in the operation and maintenance of the Stage II vapor recovery system by successfully completing a training course approved by the executive director [ Texas Natural Resource Conservation Commission (TNRCC) ]. Successful [ Such successful ] completion shall constitute certification of the facility representative. Each such facility representative is then responsible for making every current and future employee aware of the purposes and correct operating procedures of the system. The required training shall be completed as soon as practicable prior to the initiation of operation of the facility's Stage II equipment. The following additional requirements apply to the designation of the facility representative.

(A) - (B) (No change.)

(2) (No change.)

(3) An [ A TNRCC ] approved training course will include, but is not limited to, the following:

(A) - (E) (No change.)

(4) The executive director [ TNRCC ] may revoke approval of a training course if the training provider:

(A) fails to administer the training course as proposed in the application made to the executive director [ TNRCC ] to provide such training; or

(B) fails to notify the executive director [ TNRCC ] of upcoming courses in writing at least 21 days prior to the date of the training as to the date, time, and place the training is to be held, or in the event of a scheduled course cancellation, fails to notify the executive director [ TNRCC ] at least 24 hours in advance of the cancellation, except:

(i) for all training providers, if conditions exist such that 24-hour notice of course cancellation is impossible or impracticable, notice must be given to the executive director [ TNRCC ] as soon as practicable, preferably prior to the time the course was originally scheduled; and

(ii) for training courses provided at no charge to the persons who attend, such as company-provided inhouse training, the 21-day advance notice shall not apply, and advance notice of upcoming courses is only required when such notice is requested, in writing, by the executive director [ TNRCC ].

§115.249.Counties and Compliance Schedules.

(a) The rules in this division (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities) apply to affected persons in Brazoria, Chambers, Collin, Dallas, Denton, El Paso, Fort Bend, Galveston, Harris, Hardin, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller Counties.

(b) All affected persons [ in Brazoria, Chambers, Collin, Dallas, Denton, El Paso, Fort Bend, Galveston, Harris, Hardin, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller Counties ] shall continue to comply [ be in compliance ] with this division as required by §115.930 of this title (relating to Compliance Dates). [ undesignated head (relating to Control of Vehicle Refueling Emissions (Stage II) at Motor Vehicle Fuel Dispensing Facilities) according to the following schedules: ]

(c) All vacuum assist Stage II vapor recovery systems must be onboard refueling vapor recovery (ORVR) compatible according to the following schedules:

(1) all installations of vacuum assist Stage II vapor recovery systems installed on or after April 1, 2004, must be ORVR compatible; and

(2) all vacuum assist Stage II vapor recovery systems installed before April 1, 2004, must be upgraded to an ORVR compatible system no later than April 1, 2007.

[ (1) as soon as practicable, but no later than May 15, 1993, or upon initial start-up, whichever is later, for facilities for which construction began after November 15, 1990;]

[ (2) as soon as practicable, but no later than November 15, 1993, for facilities with a monthly throughput of at least 100,000 gallons of gasoline. For the purposes of this paragraph, the monthly throughput shall be based on the maximum monthly gasoline throughput for any calendar month after January 1, 1991;]

[ (3) as soon as practicable, but no later than November 15, 1994, for all other facilities, except that individual independent small business marketers of gasoline (ISBMG), as defined in §115.10 of this title (relating to Definitions), may petition the executive director for an extension of the compliance deadline to December 22, 1998, or until one or more of the facility's gasoline storage tanks are replaced and/or equipped with corrosion protection as required by the Petroleum Storage Tank (PST) Division of the Texas Natural Resource Conservation Commission (TNRCC), whichever occurs first, provided that the petition is submitted no later than January 15, 1994, and approved by the executive director. The availability of an extended compliance schedule for independent small business marketers of gasoline only applies to individual facilities for which the monthly gasoline throughput is less than 50,000 gallons per month, based on the maximum monthly gasoline throughput for any calendar month after January 1, 1991. In order for the station to maintain ISBMG compliance date extension status under this paragraph, the facility shall not exceed the 50,000 gallons per month gasoline throughput limit, and the owner or operator shall submit the facility's monthly gasoline throughput on an annual basis no later than January 31 of each year to the appropriate TNRCC regional office and any local air pollution control program with jurisdiction until such time as the Stage II vapor recovery system is installed; and]

[ (4) if more than one of the compliance schedules in paragraphs (1) - (3) of this section applies to a facility, the earliest compliance schedule shall take precedence.]

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 28, 2002.

TRD-200204083

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-0348

Subchapter H. HIGHLY-REACTIVE VOLATILE ORGANIC COMPOUNDS

2. FLARES

30 TAC §115.741

The Texas Natural Resource Conservation Commission (commission) proposes new §115.741, Emissions Specifications, and corresponding revision to the state implementation plan (SIP). This proposed new section in Chapter 115, new Subchapter H, Division 2, and corresponding revision to the SIP will be submitted to the United States Environmental Protection Agency (EPA).

The commission also is withdrawing, concurrently in this issue, the proposed new §115.741 which was published in the June 21, 2002, issue of the Texas Register (27 TexReg 5394).

The commission proposes this change to Chapter 115 and revision to the SIP as essential components of, and consistent with, the SIP that Texas is required to develop under the Federal Clean Air Act (FCAA) Amendments of 1990 as codified in 42 United States Code (USC), §7410, to demonstrate attainment of the national ambient air quality standard (NAAQS) for ozone. In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and 42 USC, §7511a(d), requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as Houston/Galveston (HGA).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULE

The commission is withdrawing the proposed new §115.741, Emission Specifications, concurrently in this issue, which was published in the June 21, 2002, issue of the Texas Register (27 TexReg 5394). A computational error was discovered which inaccurately reflected an emission rate of 0.6 pounds per hour for all highly-reactive volatile organic compounds (VOC) from each flare at an account. In order to correct this inaccuracy, the commission is proposing to establish an emission rate of 7.4 pounds per hour for all highly-reactive VOC from each flare at an account. Therefore, any references in other rules to §115.741 are intended to reference the 7.4 pounds-per- hour limit. For additional background information on this proposal, please refer to the Proposed Rules section of the June 21, 2002, issue of the Texas Register .

As discussed in Chapter 7 of the HGA SIP, this revision is another phase in the process of continued analysis and review of the science. The data collected as a result of these revisions will further assist the commission as it develops its full reassessment of the attainment demonstration at the mid-course review.

By the adoption date, the commission intends to have better data and greater confidence in the exact emissions reductions requirements required to control highly-reactive VOC while maintaining the integrity of the SIP.

SECTION BY SECTION DISCUSSION

The proposed new §115.741 specifies that the total highly-reactive VOC emission rate for each flare at an account shall not exceed 7.4 pounds per hour. If this emission rate is exceeded and exemption is claimed under 30 TAC §101.222, concerning Demonstrations, the owner or operator must use the records that are required to be retained under 30 TAC §115.746, concerning Recordkeeeping Requirements, in the calculation and justification of those excess emissions in order to demonstrate compliance with that section. Section 101.222 was proposed in the April 26, 2002, issue of the Texas Register (27 TexReg 3475) and, if adopted, will replace the current 30 TAC §101.11, concerning Demonstrations.

The highly-reactive VOC emission rate of 7.4 pounds per hour represents the amount that each flare can emit into the HGA airshed and still demonstrate compliance with the one-hour ozone attainment standard. In such instances that this rate is exceeded, the owner or operator must use actual monitoring data to show that the exceedance was not preventable based on the most current operating history. Use of actual site specific monitoring data in determining compliance with §101.222, will produce results that more accurately represent hourly activity of the flare. The commission expects that industry will use best management practices in order to ensure compliance with the emission specification within this division. In addition, the commission solicits comment on the concept of establishing an emission rate cap for all highly-reactive VOC emitted from all flares at an account or on the concept of establishing an emission rate cap for all highly-reactive VOC emitted from all flares, vents, and cooling tower heat exchange systems at an account.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Analyst with Strategic Planning and Appropriations, has determined that there will be no fiscal implications for any other unit of state or local government due to administration or enforcement of the proposed rule, because none of the sources which would be required to comply with the proposed Chapter 115 requirement are owned or operated by units of state and local government.

This proposed amendment to the commission's VOC rules is intended to improve implementation of the existing Chapter 115 by adding requirements to achieve reductions in emissions of highly- reactive VOCs in HGA.

PUBLIC BENEFITS AND COSTS

Mr. Davis determined that for each year of the first five years the proposed rule is in effect, the public benefit anticipated from enforcement of and compliance with the proposed rule will be potentially increased environmental protection due to reductions of public exposure to VOCs emitted from affected stationary sources, and reduction of ground-level ozone in ozone nonattainment areas.

The commission has attempted to identify all additional costs to industry due to implementation of the proposed rule. The proposed rule affects industrial VOC sources and is intended to reduce emissions of highly-reactive VOC from flares. Current inventory indicates that approximately 30% of the highly-reactive VOC come from flares. These types of VOC emissions occur at a wide variety of industrial sites, including petroleum refineries; synthetic organic chemical, polymer, resin, or methyl tert-butyl ether manufacturing processes; and miscellaneous chemical processing and handling operations in HGA. It is also possible that natural gas/gasoline processing operations include emissions of highly-reactive VOC, but the commission expects that any such emissions would be well below the exemption levels.

The commission estimates that approximately 337 privately-owned and operated flares in Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties would be required to comply with the proposed rule. This proposal would require a temperature gauge, pressure gauge, continuous flow monitor, and an on-line gas analyzer (used for sampling purposes). The temperature and pressure gauges shall be used for detecting the exit velocity from the flare and the on-line analyzer shall be used to sample the gas stream at least once every 15 minutes for the purposes of detecting all highly-reactive VOC concentrations in the gas stream. Based on cost estimates from various vendors that sell temperature gauges, pressure gauges, continuous flow monitors, and on-line gas analyzers, the initial capital cost and any associated annual operating expenses for the first year shall be approximately $90,000 for each flare in highly-reactive VOC service within the HGA area. For subsequent years and thereafter, the annual operating cost shall be approximately $20,000 for each flare in highly-reactive VOC service within the HGA area. The total annual costs to affected industrial sites with flares in VOC service where highly-reactive VOC are present in the gas stream is estimated to be $30,330,000 for the first year and $6,740,000 for each year thereafter.

In addition, the owner or operator of the flare shall comply with the proposed recordkeeping and reporting requirements to claim an exemption. The recordkeeping and reporting requirements were proposed in the June 21, 2002, issue of the Texas Register (27 TexReg 5394). The cost to comply with the proposed recordkeeping and reporting requirements is estimated not to exceed $500 a year. Included in the compliance cost is the purchase of filing space and administrative supplies, printing of records, and the initial training of persons responsible for maintaining the records. Although the commission has identified significant costs to industry to implement the proposed rule, concurrent rulemaking that proposes the revisions of nitrogen oxides (NO x ) emission specifications for attainment demonstration in the June 21, 2002, issue of the Texas Register (27 TexReg 5454) is estimated to save industry considerable capital and annual operating expenses.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

The commission has been unable to identify any small or micro-businesses which would be affected by the proposed rule. The majority of sites affected by the proposed rule are large petrochemical and industrial businesses. If there are affected small or micro-businesses, the estimated capital and annualized cost in this fiscal note would appear to be a reasonable cost estimate for small or micro-businesses.

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 has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the 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, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed rule and revision to the SIP would improve implementation of the existing Chapter 115 by adding requirements to achieve reductions in emissions from flares of highly-reactive VOC in the HGA ozone nonattainment area. The proposed rule is intended to protect the environment and reduce risks to human health and safety from environmental exposure and may have adverse effects on owners and operators of flares. Many of these sources are owned or operated by petrochemical plants, refineries, and other industrial, commercial, or institutional groups, and each group could be considered a sector of the economy. This is based on the analysis provided elsewhere in this preamble, including the discussion in the PUBLIC BENEFITS AND COSTS section of this proposal, and in the proposal to amend Chapter 115 published in the June 21, 2002, issue of the Texas Register (27 TexReg 5394).

The proposed rule does not meet any of the four applicability criteria of a "major environmental rule" as defined in the Texas Government Code. Section 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 rule implements requirements of the FCAA. Under 42 USC, §7410, states are required to adopt a SIP which provides for "implementation, maintenance, and enforcement" of the primary NAAQS in each air quality control region of the state. While 42 USC, §7410, 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," (meaning Chapter 85, Air Pollution Prevention and Control). It is true that the FCAA does require some specific measures for SIP purposes, such as the inspection and maintenance program, but those programs are the exception, not the rule, in the SIP structure of the FCAA. 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. Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of 42 USC, §7410, and must develop programs to assure that the nonattainment areas of the state will be brought into attainment on schedule.

The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Legislative Session. The intent of SB 633 was to require agencies to conduct an regulatory impact analysis (RIA) 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 require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each nonattainment area to ensure that area will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, 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 RIA 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 RIA 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 specifically required by federal law.

In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and 42 USC, §7511a(d), requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as HGA. The proposed rule, which will reduce ambient highly- reactive VOC and ozone in HGA, will be submitted to the EPA as one of several measures in the federally approved SIP. As discussed earlier in this preamble, controls on upsets and routine industrial VOC emissions are necessary to address some of the elevated ozone levels observed in HGA; these controls will result in reductions in ozone formation in the HGA ozone nonattainment area and help bring HGA into compliance with the air quality standards established under federal law as NAAQS for ozone. As discussed in Chapter 7 of the HGA SIP, this revision is another phase in the process of continued analysis and review of the science, and the data collected as a result of these revisions will further assist the commission as it develops its full reassessment of the attainment demonstration at the mid-course review. Therefore, the proposed rule is a necessary component of and consistent with the ozone attainment demonstration SIP for HGA, required by 42 USC, §7410.

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); Sharp v. House of Lloyd , Inc., 815 S.W.2d 245 (Tex. 1991); 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).

As discussed earlier in this preamble, this rulemaking implements requirements of the FCAA. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking. Therefore, the proposed rule does not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, nor is adopted solely under the general powers of the agency. In addition, the rule is proposed under the Texas Health and Safety Code (THSC), Texas Clean Air Act (TCAA), §§382.011, 382.012, 382.014, 382.016, 382.017, 382.021, 382.034 and 382.051(d). The commission invites public comment on the draft RIA.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact analysis for the proposed rule under Texas Government Code, §2007.043. The specific purposes of this proposed rule are to achieve reductions in highly-reactive VOC emissions and ozone formation in the HGA ozone nonattainment area and help bring HGA into compliance with the air quality standards established under federal law as NAAQS for ozone. If adopted, certain sources located in HGA will be required to install equipment to monitor emissions and achieve reductions in emissions of highly-reactive VOC in the HGA ozone nonattainment area, and implement new reporting and recordkeeping requirements. Installation of the necessary equipment could conceivably place a burden on private, real property.

Texas Government Code, §2007.003(b)(4), provides that Chapter 2007 does not apply to the proposed rule, because it is reasonably taken to fulfill an obligation mandated by federal law. The emission limitations and control requirements within this rulemaking were developed in order to meet the NAAQS for ozone set by the EPA under 42 USC, §7409. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under 42 USC, §7410, and related provisions, states must submit, for approval by the EPA, SIPs that provide for the attainment and maintenance of NAAQS through control programs directed to sources of the pollutants involved. Therefore, one purpose of this rulemaking action is to meet the air quality standards established under federal law as NAAQS. Attainment of the ozone standard will eventually require reductions of highly-reactive VOC emissions, as well as substantial reductions in NO x emissions. Any VOC reductions resulting from the current rulemaking are no greater than what scientific research indicates is necessary to achieve the desired ozone levels. However, this rulemaking is only one step among many necessary for attaining the ozone standard.

In addition, Texas Government Code, §2007.003(b)(13), states that Chapter 2007 does not apply to an action that: 1) is taken in response to a real and substantial threat to public health and safety; 2) is designed to significantly advance the health and safety purpose; and 3) does not impose a greater burden than is necessary to achieve the health and safety purpose. Although the proposed rule does not directly prevent a nuisance or prevent an immediate threat to life or property, it does prevent a real and substantial threat to public health and safety and significantly advance the health and safety purpose. This action is taken in response to the HGA area exceeding the federal ambient air quality standard for ground-level ozone, which adversely affects public health, primarily through irritation of the lungs. The action significantly advances the health and safety purpose by reducing ozone levels in the HGA nonattainment area. Consequently, the proposed rule meets the exemption in §2007.003(b)(13). This rulemaking action therefore meets the requirements of Texas Government Code, §2007.003(b)(4) and (13). For these reasons, the proposed rule does not constitute a takings under Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rulemaking and found that the proposal is a rulemaking identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, or will affect an action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, and therefore will require that applicable goals and policies of the Texas Coastal Management Program (CMP) be considered during the rulemaking process.

The commission prepared a preliminary consistency determination for the proposed rule under 31 TAC §505.22 and found that the proposed rulemaking 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(1)). No new sources of air contaminants will be authorized and ozone levels will be reduced as a result of the proposed rule. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations in 40 Code of Federal Regulations (CFR), to protect and enhance air quality in the coastal area (31 TAC §501.14(q)). This rulemaking action complies with 40 CFR. Therefore, in compliance with 31 TAC §505.22(e), this rulemaking action is consistent with CMP goals and policies. Interested persons may submit comments on the consistency of the proposed rule with the CMP during the public comment period.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMIT PROGRAM

Chapter 115 is an applicable requirement under 30 TAC Chapter 122; therefore, owners or operators subject to the Federal Operating Permit Program must, consistent with the revision process in Chapter 122, revise their operating permits to include the new requirements in §115.741 for each emission unit affected at their sites.

ANNOUNCEMENT OF HEARINGS

Public hearings for this proposed rulemaking have been scheduled for the following times and locations: July 18, 2002, 2:00 p.m., Texas Natural Resource Conservation Commission, 12100 North I-35, Building E, Room 201S, Austin; July 22, 2002, 10:00 a.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby, Houston; July 22, 2002, 7:00 p.m., Flukinger Community Center, 16003 Lorenzo, Channelview; as well as August 6, 2002, 10:00 a.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby; Houston. The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to the hearings. Individuals may present oral statements when called upon in order of registration. A four-minute time limit may be established at the hearings to assure that enough time is allowed for every interested person to speak. There will be no open discussion during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes before the hearings and will answer questions before and after the hearings.

Persons planning to attend the hearings who have special communication or other accommodation needs, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitted to Kelly Keel, MC 206, Office of Environmental Policy, Analysis, and Assessment, Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087, faxed to (512) 239-4808, or emailed to: siprules@tceq.state.tx.us . All comments should reference Rule Log Number 2002-046- 115-AI. Comments must be received by 5:00 p.m., August 6, 2002. For further information, please contact Brad Oehler of the Strategic Assessment Division at (512) 239-0599 or Eddie Mack, also of the Strategic Assessment Division, at (512) 239-1488.

STATUTORY AUTHORITY

This new section is proposed under Texas Water Code (TWC), §5.103, which provides the commission the authority to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which provides the commission the authority to adopt rules consistent with the policy and purposes of the TCAA. The new section is proposed under TCAA, §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; §382.016, concerning Monitoring Requirements; Examination of Records, which authorizes the commission to prescribe requirements for owners or operators of sources to make and maintain records of emissions measurements; §382.034, concerning Research and Investigations, which authorizes the commission to require any research it considers advisable and necessary to perform its duties; and §382.051(d), concerning Permitting Authority of Commission; Rules, which authorizes the commission to adopt rules as necessary to comply with changes in federal law or regulations applicable to permits under Chapter 382; and FCAA, 42 USC, §§7401 et seq .

The proposed new section implements TCAA, §382.011, relating to General Powers and Duties; §382.012, relating to State Air Control Plan; §382.016, concerning Monitoring Requirements; Examination of Records; §382.017, relating to Rules; and §382.051(d), concerning Permitting Authority of Commission; Rules; and TWC, §5.103, relating to Rules.

§115.741.Emission Specifications.

The total highly-reactive volatile organic compound emission rate for each flare at an account shall not exceed 7.4 pounds per hour. If this emission rate is exceeded and exemption is claimed under §101.222 of this title (relating to Demonstrations), the owner or operator must use the records that are required to be retained under §115.746 of this title (relating to Recordkeeping Requirements) in the calculation and justification of those excess emissions in order to demonstrate compliance with §101.222 of this title.

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 28, 2002.

TRD-200204086

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-0348

Chapter 116. CONTROL OF AIR POLLUTION BY PERMITS FOR NEW CONSTRUCTION OR MODIFICATION

The Texas Natural Resource Conservation Commission (commission) proposes amendments to §116.141, Determination of Fees; §116.143, Payment of Fees; §116.163, Prevention of Significant Deterioration Permit Fees; §116.313, Renewal Application Fees; §116.614, Standard Permit Fees; §116.750, Flexible Permit Fee; and §116.1050, Multiple Plant Permit Application Fee.

The proposed amendments are to be submitted to the United States Environmental Protection Agency (EPA) as proposed revisions to the state implementation plan.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The commission assesses fees when an owner or operator applies for an air permit, air permit renewal, or air permit amendment. Assessment of these fees is required under Texas Health and Safety Code (THSC), Texas Clean Air Act (TCAA), §382.062, Application, Permit, and Inspection Fees, to recover the commission's cost of review.

The commission is proposing to increase the fee rates and the minimum fees to generate sufficient revenue to recover application review costs and fund the commission's air programs. Additionally, the commission is proposing to increase emissions fees and inspection fees in a concurrent 30 TAC Chapter 101 rulemaking as well as proposing to assess a new fee on new permit by rule (PBR) registrations received on or after November 1, 2002 in a concurrent 30 TAC Chapter 106 rulemaking.

The Clean Air Fund 151 is the source of funding for essentially all air program related activities of the commission. This fund supports a wide range of activities including permitting, inspections, enforcement, air quality planning, mobile source program, emissions inventory, and monitoring in addition to agency functions which support these activities. Revenues deposited to the fund are from several different fees collected from point sources and mobile sources as well as the general public. Over the last several years, the fund has carried a balance in the account which has allowed the agency to collect revenues below the annual budgeted expenditures. However, the fund balance is close to being depleted. Additionally, due to decreases in emissions, the revenue from fees which are assessed based upon emission levels has declined by an average of approximately 3% per year in recent years. The revenue estimates for Clean Air Fund 151 reveal that there are insufficient funds to support the fiscal year (FY) 2003 appropriated level.

As part of its air program activities, the commission implements an approved federal operating permit program (Federal Clean Air Act, Titles IV and V, hereinafter referred to as "Title V"). As part of that approval, the commission was required to demonstrate that the fees collected from Title V sources are sufficient to support the Title V program. Currently under state law, this fee must be dedicated for use only on Title V activities. This fee is commonly referred to as the air emissions fee and is currently set at $26 per ton. However, the fee demonstration submitted to EPA in August 2001 showed that the fee would need to be increased beginning in FY 2003 to provide sufficient support for the Title V program.

Activities which are not considered to be Title V activities must be supported through the remaining fees that are not reserved for other uses. Essentially, these fees generally include permit, renewal, and amendment fees; inspection fees; and a portion of the motor vehicle safety inspection fee (as set by statute, THSC, §382.0622).

Given the declining availability of funds in Clean Air Fund 151, the commission reviewed the air fees which it has the authority to change. Most of the air permit, renewal, and amendment fees have not been increased since the early 1990s. The air emissions fee has not been increased since 1995 and the air inspection fee since 1992. The vehicle inspection maintenance fee has been set recently to cover the cost of that program. Several other funding sources are dedicated for specific uses. In an effort to match fee revenue collections more closely with related expenditures, the commission also reviewed potential sources for new fees. After a review of the commission's existing air program related activity fees, the commission is proposing revisions to the emissions fee, inspection fee, permit, renewal, and amendment fees, as well as proposing a new fee for review of registrations for PBR.

SECTION BY SECTION DISCUSSION

Section 116.141(b), concerning the fee schedule, would be revised to reflect the proposed increases to the minimum fee rate and to the capital cost assessment rate applied to projects that exceed the minimum capital cost threshold. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

Section 116.141(e), concerning applications for projects not involving capital expenditure, would be revised to reflect the increase in the minimum permit fee amount. The intent of this amendment is to ensure a consistent minimum fee for all permit or permit amendment applications under this section.

Section 116.143(a), concerning payment of fees, would be revised to reflect the new agency name and to provide the payment options of certified check and electronic funds transfer.

Section 116.163(a), concerning prevention of significant deterioration (PSD) permit fees, would be revised to increase the minimum fee. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

Section 116.163(b), concerning PSD permit fees, would be revised to reflect the increase in the capital cost assessment rate for projects that exceed the minimum. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

Section 116.313(a), concerning renewal application fees, would be revised to increase the various base fee rates and the minimum fee. The maximum fee would be effective at a lower allowable emission tonnage. Finally, the example fee calculation would change as well to be consistent with the change in fee rates and thresholds. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

Section 116.313(b), concerning renewal application fees, would be revised to reflect the new agency name and to provide the payment options of certified check and electronic funds transfer.

Section 116.614, concerning standard permit fees, would be revised to reflect the increase in the flat fee amount. The intent of this amendment is to increase the commission's revenue collection to recover application review costs, fund the commission's air programs, and match the minimum permit fee under §116.141. Additionally, the revisions would reflect the new agency name and provide the payment options of certified check and electronic funds transfer.

Section 116.750(b), concerning the flexible permit fee, would be revised to reflect increases to the fee rate on allowable emissions and to the minimum fee amount. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

Section 116.750(c), concerning the flexible permit fee, would be revised to reflect the new agency name and to provide the payment options of certified check and electronic funds transfer.

Section 116.1050, concerning the multiple plant permit application fee, would be revised to reflect the increase in the fee amount. The intent of this amendment is to increase the commission's revenue collection to recover application review costs and fund the commission's air programs.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, determined that the proposed rulemaking will generate approximately $1.0 to $1.4 million in additional revenue for the commission for each year of the first five-year period the amendments are in effect due to the adjustment of fees assessed for issuance of a New Source Review (NSR) air permit, air permit renewal, air permit amendment, PSD permit, flexible permit, or multiple plant permit. The commission does not anticipate significant fiscal implications for other units of state and local government affected by the proposed amendments.

The fee rate increases proposed in this rulemaking are intended to generate revenue to help recover application review costs and fund the commission's air programs at appropriated levels. The proposed rulemaking would increase the fees assessed for issuance of an NSR air permit, air permit renewal, air permit amendment, PSD permit, flexible permit, or multiple plant permit. The permit and permit amendment fees are based on the capital cost of the project for which a permit is requested. The current rate is 0.15% of the project cost, with a minimum of $450. The maximum fee (set in statute) for NSR permits and amendments is $75,000; the maximum fee (set by rule) for renewals is $10,000. The proposed rulemaking would increase the assessment rate for permits and permit amendments to 0.30% of the project cost and the minimum fee to $900. The PSD assessment rate would be increased from 0.5% to 1.0% and the minimum permit fee would be increased from $1,500 to $3,000. The per-ton fee for flexible permits would be increased from $25 to $32, and the minimum would increase from $450 to $900. Finally, the minimum multiple plant permit fee would be increased from $450 to $900. The maximum fee amounts of $75,000 for NSR permits and amendments (set in statute) and $10,000 for permit renewals (set in rule) would remain in effect.

Units of government most likely to be affected by the proposed rulemaking are municipally- owned electric generating units (power plants) and landfills. The commission currently processes approximately 1,200 new NSR permits, 350 NSR permit amendments, and 100 NSR permit renewals annually, some of which are submitted by units of state and local government.

The proposed rulemaking is not anticipated to have a significant fiscal effect on units of state and local government. For example, a unit of government that plans on $300,000 in modifications to an affected site would currently pay $450 for a permit amendment. Adoption of the proposed amendments would increase that amendment fee to $900. Although the assessment rate and minimum fee would double, the commission does not anticipate that this provision will result in significant additional expenditures for units of state or local government. The total cost to units of government is undetermined, because the commission has no information about future construction or modification activity that would require the account owner or operator to obtain a new permit or permit amendment. Permit renewals are required only once every ten years.

PUBLIC BENEFITS AND COSTS

Mr. Davis also determined that for each of the first five years the proposed amendments are in effect, the public benefit anticipated as a result of implementing the amendments will be the generation of revenue to help recover application review costs and fund the commission's air programs.

The fee rate increases proposed in this rulemaking are intended to generate revenue to help recover application review costs and fund the commission's air programs at appropriated levels. The proposed rulemaking would increase the fees assessed for issuance of an NSR air permit, air permit renewal, air permit amendment, PSD permit, flexible permit, or multiple plant permit. The permit and permit amendment fees are based on the capital cost of the project for which a permit is requested. The current rate is 0.15% of the project cost, with a minimum of $450. The maximum fee (set in statute) for NSR permits and amendments is $75,000; the maximum fee (set by rule) for renewals is $10,000. The proposed rulemaking would increase the assessment rate for permits and permit amendments to 0.30% of the project cost and the minimum fee to $900. The PSD assessment rate would be increased from 0.5% to 1.0% and the minimum permit fee would be increased from $1,500 to $3,000. The per-ton fee for flexible permits would be increased from $25 to $32, and the minimum would increase from $450 to $900. Finally, the minimum multiple plant permit fee would be increased from $450 to $900. The maximum fee amounts of $75,000 for NSR permits and amendments (set in statute) and $10,000 for permit renewals (set in rule) would remain in effect.

The commission currently processes approximately 1,200 new NSR permits, 350 NSR permit amendments, and 100 NSR permit renewals annually, the majority of which are submitted by industry. The commission estimates that there are at least 3,400 existing accounts owned and operated by private businesses that would be affected by the proposed amendments.

The proposed rulemaking is not anticipated to have a significant fiscal effect on industry. For example, a facility that plans on $5,000,000 in modifications to an affected site would currently pay $7,500 for a permit amendment. Adoption of the proposed amendments would increase that amendment fee to $15,000. The largest fee increase due to implementation of the proposed amendments would result from an application for a project costing $25,000,000. Currently, the permit fee for this project would be $37,500; however, implementation of the proposed amendments would raise the permit fee for this project to the maximum allowable fee of $75,000. The total cost to industry is undetermined, because the commission has no information about future construction or modification activity that would require the account owner or operator to obtain a new permit or permit amendment. Permit renewals are required only once every ten years.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There may be adverse fiscal implications, which are not anticipated to be significant, for small or micro-businesses due to implementation of the proposed amendments. This rulemaking is intended to increase the fees assessed for issuance of a NSR air permit, air permit renewal, air permit amendment, PSD permit, flexible permit, or multiple plant permit.

The commission currently processes approximately 1,200 new NSR permits, 350 NSR permit amendments, and 100 NSR permit renewals annually, some of which are submitted by small or micro- businesses. The commission estimates there are at least 1,000 small and micro-businesses with existing NSR permits that could be affected by the proposed amendments. Examples of operations potentially affected by the proposed amendments that are owned and operated by small and micro-businesses include concrete batch plants and rock crushers.

The proposed rulemaking is not anticipated to have a significant fiscal effect on small or micro- businesses. For example, a small business that plans on $300,000 in modifications to an affected site would currently pay $450 for a permit amendment. Adoption of the proposed amendments would increase that amendment fee to $900. The total cost to small and micro-businesses is undetermined, because the commission has no information about future construction or modification activity that would require the account owner or operator to obtain a new permit or permit amendment. Permit renewals are required only once every ten years.

The following is an analysis of the costs per employee for small and micro-businesses that may be affected by the proposed rulemaking. Small and micro-businesses are defined as having fewer than 100 or 20 employees, respectively. The commission does not have specific capital costs examples for small and micro-businesses seeking NSR permits or permit amendments; however, it is anticipated that those costs would not exceed $10,000,000. For NSR permit and permit amendments relating to projects with capital costs of $10,000,000, the proposed rulemaking could cost up to an additional $150 per employee for small businesses, and up to an additional $750 per employee for micro-businesses. For renewal permits, the proposed rulemaking could cost up to an additional $6 per employee for small businesses, and up to an additional $30 per employee for micro-businesses.

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 DETERMINATION

The commission reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in that statute. "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 amendments to Chapter 116 are not, themselves, intended to protect the environment or reduce risks to human health from environmental exposure to air pollutants. Therefore, the commission finds that they are not major "environmental" rules. The permit, amendment, and renewal fees collected under the proposed revisions to Chapter 116 will raise significant amounts of revenue, but are generally a one-time cost that is insignificant based upon the capital costs of the project itself. Therefore, the proposed amendments should not 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.

As defined in Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: exceed a standard set by federal law, unless the rule is specifically required by state law; exceed an express requirement of state law, unless the rule is specifically required by federal law; 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 adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements of a "major environmental rule." Specifically, the permit, amendment, and renewal fees are required by state law to be sufficient to support a portion of commission activities related to the overall air quality program (THSC, TCAA, §382.062). This rulemaking does not exceed an express requirement of federal or state law. The rulemaking does not exceed a requirement of a delegation agreement. The rulemaking was not developed solely under the general powers of the agency, but was specifically developed and authorized under TCAA, §§382.011, 382.017, 382.062, 382.0622, and generally under TCAA, §§382.001 et seq .

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 prepared a takings impact evaluation for these rules in accordance with Texas Government Code, §2007.043. The specific purpose of the rulemaking is to raise the permit, amendment, and renewal fees in order to maintain funding sufficient to support a portion of the overall air quality program.

Promulgation and enforcement of the rules will not burden private, real property because they are fee rules which support the commission's air quality programs. Although the rule revisions do not directly prevent a nuisance or prevent an immediate threat to life or property, the permit, amendment, and renewal fees are required by state law to be sufficient to support a portion of commission activities related to the overall air quality program (THSC, TCAA, §382.062). Consequently, the exemption which applies to these rules is that of an action reasonably taken to fulfill an obligation mandated by state law. Therefore, this rulemaking action will not constitute a takings under Texas Government Code, Chapter 2007.

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)(2), relating to Actions and Rules Subject to the Coastal Management Program or will affect an action/authorization identified in §505.11(a)(6), and will, therefore, require that goals and policies of the Coastal Management Program (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 amendments are consistent with CMP goals and policies because the rulemaking is a fee rule which is a procedural mechanism for paying for commission programs; will not have direct or significant adverse effect on any coastal natural resource areas; will not have a substantive effect on commission actions subject to the CMP; and promulgation and enforcement of the amendments will not violate (exceed) any standards identified in the applicable 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 August 12, 2002, at 10:00 a.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 before the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Patricia Durón, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-041-116-AI. Comments must be received by 5:00 p.m., August 12, 2002. Comments received prior to this publication have been considered and will be formally addressed in the "RESPONSE TO COMMENTS" section of the adoption preamble publication and are not required to be resubmitted. For further information or questions concerning this proposal, please contact Debi Dyer, Policy and Regulations Division, at (512) 239-3972.

Subchapter B. NEW SOURCE REVIEW PERMITS

4. PERMIT FEES

30 TAC §116.141, §116.143

STATUTORY AUTHORITY

The amendments are proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendments implement TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.141.Determination of Fees.

(a) (No change.)

(b) The following fee schedule shall be used by a permit applicant to determine the fee to be remitted with a permit application.

(1) If the estimated capital cost of the project is less than $300,000 or if the project consists of new facilities controlled and operated directly by the federal government and the federal regulations for Prevention of Significant Deterioration (PSD) Review do not apply, the fee is $900 [ $450 ]. The provisions of subsections (c) and (d) of this section do not apply to a project consisting of new facilities controlled and operated directly by the federal government.

(2) If the estimated capital cost of the project is $300,000 or more and the PSD regulations do not apply, the fee is 0.30% [ 0.15% ] of the estimated capital cost of the project. The maximum fee is $75,000. For determination of fees for projects applicable to PSD regulations, see §116.163 of this title (relating to Prevention of Significant Deterioration Permit Fees).

(c) - (d) (No change.)

(e) An applicant for a permit or permit amendment not involving any capital expenditure shall be required to remit the minimum permit fee of $900 [ $450 ].

§116.143.Payment of Fees.

All permit fees will be remitted in the form of a check , certified check, electronic funds transfer , or money order made payable to the Texas Commission on Environmental Quality (TCEQ) [ Texas Natural Resource Conservation Commission ] or TCEQ [ TNRCC ] and delivered with the application for permit or amendment to the TCEQ [ TNRCC ], P.O. Box 13087 [ 13088 ], MC 214, Austin, Texas 78711-3087 [ 78711-3088 ]. Required fees must be received before the agency will begin examination of the application.

(1) - (2) (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 28, 2002.

TRD-200204129

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

6. PREVENTION OF SIGNIFICANT DETERIORATION REVIEW

30 TAC §116.163

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendment implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.163.Prevention of Significant Deterioration Permit Fees.

(a) If the estimated capital cost of the project is less than $300,000 or if the project consists of new facilities controlled and operated directly by the federal government for which an application is submitted after January 1, 1987, and the federal regulations for Prevention of Significant Deterioration (PSD) of Air Quality are applicable, the fee is $3,000 [ $1,500 ].

(b) If the estimated capital cost of the project is $300,000 or more and the PSD regulations are applicable, the fee is 1.0% [ 0.5% ] of the estimated capital cost of the project. The maximum fee is $75,000.

(c) - (e) (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 28, 2002.

TRD-200204130

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Subchapter D. PERMIT RENEWALS

30 TAC §116.313

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendment implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.313.Renewal Application Fees.

(a) The fee for renewal is based on the total annual allowable emissions from the permitted facility to be renewed, according to the following table.

Figure: 30 TAC §116.313(a)

(b) Fees are due and payable at the time the renewal application is filed. No fee will be accepted before the permit holder has been notified by the commission that the permit is scheduled for review. All permit review fees shall be remitted by check , certified check, electronic funds transfer, or money order payable to the Texas Commission on Environmental Quality (TCEQ) [ Texas Natural Resource Conservation Commission (TNRCC) ] and mailed to the TCEQ [ TNRCC ], P.O. Box 13087 [ 13088 ], MC 214, Austin, Texas 78711-3087 [ 78711-3088 ]. Required fees must be received before the agency will consider an application to be complete.

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 28, 2002.

TRD-200204131

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Subchapter F. STANDARD PERMITS

30 TAC §116.614

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendment implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.614.Standard Permit Fees.

Any person who registers to use a standard permit or an amended standard permit, or to renew a registration to use a standard permit shall remit, at the time of registration, a flat fee of $900 [ $450 ] for each standard permit being registered, unless otherwise specified in a particular standard permit. No fee is required if a registration is automatically renewed by the commission. All standard permit fees will be remitted in the form of a check , certified check, electronic funds transfer , or money order made payable to the Texas Commission on Environmental Quality (TCEQ) [ Texas Natural Resource Conservation Commission (TNRCC) ] and delivered with the permit registration to the TCEQ [ TNRCC ], P.O. Box 13087 [ 13088 ], MC 214, Austin, Texas 78711-3087 [ 78711-3088 ]. No fees will be refunded.

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 28, 2002.

TRD-200204132

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Subchapter G. FLEXIBLE PERMITS

30 TAC §116.750

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendment implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.750.Flexible Permit Fee.

(a) (No change.)

(b) Fee amounts. The fee to be remitted with a flexible permit application shall be based on the total annual allowable emissions from the permitted facility, group of facilities, or account for which the flexible permit is being sought. The fee shall be $32 [ $25 ] per ton with the minimum fee being $900 [ $450 ] and the maximum fee $75,000. For flexible permit amendments, the fee shall be calculated based on $32 [ $25 ] per ton for the incremental emission increase with the minimum fee being $900 [ $450 ] and the maximum fee being $75,000.

(c) Payment of fees. All permit fees for a flexible permit shall be remitted in the form of a check , certified check, electronic funds transfer , or money order made payable to the Texas Commission on Environmental Quality [ Texas Natural Resource Conservation Commission ] and delivered with the application for flexible permit or flexible permit amendment to the commission's New Source Review Permits Division. Required fees must be received before the agency will begin examination of the application.

(d) (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 28, 2002.

TRD-200204133

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Subchapter J. MULTIPLE PLANT PERMITS

30 TAC §116.1050

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under THSC, TCAA, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA. The amendment is also proposed under TCAA, §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.062, concerning Application, Permit, and Inspection Fees, which requires the commission to collect fees for inspections; §382.0622, concerning Clean Air Act Fees, which restricts the use of Clean Air Act fees; and the entire TCAA (§§382.001 et seq .), which provides authority for all of the air quality programs which the fees are necessary to support.

The proposed amendment implements TCAA, §§382.011, 382.017, 382.062, 382.0622, and TCAA, §§382.001 et seq .

§116.1050.Multiple Plant Permit Application Fee.

Any person who applies for a multiple plant permit shall remit, at the time of application for such permit, a fee of $900 [ $450 ] plus the estimated public notice cost for the permit consistent with the public notice requirements in §116.1040 of this title (relating to Multiple Plant Permit Public Notice).

(1) - (2) (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 28, 2002.

TRD-200204134

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-6087

Chapter 210. USE OF RECLAIMED WATER

The Texas Natural Resource Conservation Commission (commission) proposes the repeal of §§210.51 - 210.55. The commission also proposes new §§210.51 - 210.60.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The new sections in Subchapter E, Special Requirements for Use of Industrial Reclaimed Water, will clarify the existing application requirements; clarify the existing criteria regarding authorization denial situations; modify the existing recordkeeping requirements; and add the existing fee into the rule language. Currently, the fee language is included on the authorization form, but not in the rules.

The commission is also proposing the repeal of §§210.51 - 210.55 in Subchapter E due to an increase in questions the agency has been receiving regarding eligibility under this subchapter. Specifically, the agency has seen an increase in applications for wastes that should be authorized by an individual permit rather than under this subchapter. Currently, a person may request coverage under this subchapter even though the wastewater proposed for reuse is a waste that this subchapter is not intended to authorize, such as process wastewater from a chemical manufacturing facility. Generally, the agency receives requests for authorizations under this subchapter because this subchapter offers significant time and cost savings over an individual permit. However, the agency also receives many inquiries about coverage under this subchapter when coverage is not necessary. These types of questions have included a person whose facility has non-contact cooling water and is requesting to reuse this water as makeup water for the facility's boiler. This type of reuse does not require an authorization under this subchapter because the reuse does not discharge into or adjacent to waters in the state. Since the rules are not clear about who should request coverage, who should not request coverage, and which activities do not require coverage, the executive director's staff has had to answer these questions on a case-by-case basis. By rewriting and reorganizing the existing sections and adding new sections, the executive director will clarify the intent and scope of this subchapter, including the existing: application requirements; criteria regarding the denial of authorizations; recordkeeping requirements; and fee language.

More specifically, the proposed changes to this subchapter will clarify and establish the following requirements for industrial reclaimed water: general requirements applicable to producers, providers, and users; requirements and specifications for transfer, storage, irrigation, and other end uses; requirements and specifications necessary to minimize the impact of discharge of waste into or adjacent to waters in the state; specific uses of industrial reclaimed water; standards for the quality of industrial reclaimed water; standards for monitoring and recordkeeping; and criteria for denying or suspending an authorization.

These sections will not establish new or different requirements for the holders of water rights allowing the use of state water. These proposed new sections do not affect any current requirements necessitating the need for a commission permit for a water right or amendment, if applicable to a particular industrial reclaimed water use or activity.

SECTION BY SECTION DISCUSSION

Proposed new §210.51, Applicability, Purpose, and Scope, expands and clarifies the applicability, purpose, and scope information in the existing §210.51, When Authorization Is Required and How To Obtain It; Effect on Permitted Discharges. The proposed new section outlines the intent of the subchapter and indicates the types of requirements producers, users, and providers will be required to meet. These requirements are intended to allow the safe use of reclaimed water for conservation of surface water and groundwater, to ensure the protection of public health, to protect surface and groundwater from contamination, and to help ensure an adequate supply of water resources for present and future needs. If a person currently has a wastewater discharge permit and the person obtains coverage for reuse of its reclaimed water under this subchapter, an amendment to the permit is not required to recognize the activity. However, the person must comply with the applicable requirements and limitations of the wastewater discharge permit and the Chapter 210, Subchapter E authorization. Nothing in this proposed subchapter will alter any existing requirements to obtain a water right authorization.

Proposed new §210.52, Definitions, defines terms used in the subchapter. The majority of the terms in this section are in the existing section, but several terms were added based on the new rule language. The additional definitions include acronyms for the Code of Federal Regulations (CFR), and standard units (su). Definitions for "Containing," "Dioxins and furans," "On-site," "Playa lake," "Process wastewater," and "Tail water" were added to the definition section to clarify the meaning of the terms as used in this subchapter.

"Containing" is defined as when the pollutant(s) of concern are measured at levels which exceed the minimum analytical level (MAL). This definition is included to improve readability of the rules. This term explains standard practice used by wastewater permitting staff to determine what is considered a measurable amount of a particular pollutant in a waste stream. If the level of a pollutant in a waste stream is measured above the MAL, then the effluent is considered by staff to contain that pollutant.

The term "Dioxins and furans" is defined as tetra, penta, hexa, hepta, and octa-chlorinated dibenzo dioxins and furans. This definition is from §335.1(35), Definitions.

"On-site" is defined as the use of industrial reclaimed water within the boundaries of the producer's facility or within the boundaries of the property that is contiguous to the producer's facility and owned by the producer. This definition is in the existing Subchapter E, but is not included in the definition section. It has been added to the definition section so that all definitions in the subchapter can be found in one location.

"Playa lake" is defined as a shallow (generally less than one meter deep), isolated, naturally ephemeral approximately circular lake located in an enclosed basin in the High Plains and West Central Plains areas of the state. This definition is taken from the " Glossary of Geology, 2nd Ed, Robert L. Bates & Julia A. Jackson, 1980 , and has been modified to fit this subchapter.

"Process wastewater" is defined as any water which, during manufacturing or processing, comes into direct contact with or results from the production or use of any raw material, intermediate product, finished product, byproduct, or waste product. This definition is taken from 40 CFR Part 122.2, Definitions.

"Tail water" is defined as the runoff of irrigation water from the lower end of an irrigated field. This definition is taken from the United States Environmental Protection Agency's (EPA) " Terms of Environment " webpage at www.epa.gov/OCEPAterms .

Proposed new §210.53, Wastes Eligible for Coverage, expands and clarifies the existing language in §210.54, Authorization of Industrial Reclaimed Water Use. The existing requirements in §210.53 have been moved to proposed new §210.56. Proposed new §210.53 clarifies that there are two tiers of authorization labeled as "Level I" and "Level II." In the existing Subchapter E, the eligibility requirements for Level I are in §210.54(b) and for Level II in §210.54(c). Eligibility for Level I authorization in the proposal is the same as the existing subchapter, but more specific requirements regarding alternate disposal methods and end uses for industrial reclaimed water would be established. Wastes eligible under Level I authorization are the same as in the existing rule; however, a limit is set for total dissolved solids (TDS) for cooling tower blowdown. Cooling tower blowdown can have high concentrations of TDS (greater than 2,000 milligrams per liter (mg/l)) which can negatively affect plant uptake of water. Water treatment filter backwash, external building washwater, and pavement wash water are included under Level I authorizations because of minimal water quality concerns. A person who is eligible to obtain a Level I authorization would not be required to submit an authorization that is consistent with the existing rule. The majority of the eligibility requirements for Level II authorizations are continued from the existing rule. Under the proposed rule, a producer is now required to submit the application to request authorization. The existing rule requires the user to submit the application; however, the application required the producer to provide a majority of the information. Additionally, the eligibility requirements have been clarified.

Proposed new §210.54, Wastes Not Eligible for Coverage, replaces the existing §210.54, Authorization of Industrial Reclaimed Water Use. The existing requirements in §210.54 have been moved to proposed new §210.53. The proposed §210.54 is a new section not found in the existing Subchapter E. This proposed section delineates the types of wastes that the executive director will not consider for authorization. The intent of the rule is to consider water reuse for wastes with little or no water quality concerns. The wastes listed in this section are wastes that have high pollutant potential or otherwise require more oversight or other authorization than the rule provides. These wastes include wastewater that may contain radioactive material regulated under Texas Health and Safety Code, Chapter 401, pesticides, dioxin and furans, wastes that are characteristically hazardous or classified as hazardous, process wastewater from facilities regulated under 40 CFR Parts 400-471 with a few exceptions, septic tank waste, chemical toilet waste, grit trap waste, grease trap waste, barge cleaning washwater, and air scrubber washwater. Additionally, where process wastewater is prohibited for use from facilities regulated under 40 CFR Part 400-471, the use of remediated/contaminated groundwater from these facilities is also prohibited. The producer may not obtain coverage under this subchapter for any wastewater that is regulated under 30 TAC Chapter 321, Control of Certain Activities by Rule, or where an issued general permit for land application is available. The waste is more properly handled under that authorization because the waste will be evaluated more thoroughly and limitations specific to that waste will be developed. Furthermore, the proposed section clarifies that, if a facility is eligible for coverage under this subchapter but does not implement all the required conditions, the facility will be required to obtain proper permit coverage. The proposed section will also prohibit irrigation or storage within the boundaries of a playa lake. The executive director has determined that playa lakes can directly recharge groundwater; therefore, a discharge permit is required for that activity.

Proposed new §210.55, Application Requirements for Authorization, replaces the existing §210.55, Record Keeping and Reporting. The recordkeeping and reporting requirements in existing §210.55 have been moved to proposed new §210.57, Sampling and Recordkeeping. Proposed §210.55 is a new section that clarifies the information required for application submittal. Level I authorizations do not require an application to be submitted. For Level II authorizations, the proposed section outlines the minimum information required for the application. The information required is the same information as in the existing application with the exception of two items: liner certification and the location of the facility in relation to the Edward's Aquifer. This information is necessary to ensure the producer complies with §210.23, Storage Requirements for Reclaimed Water, and 30 TAC Chapter 213, Edwards Aquifer. Further, this section revises the effluent testing requirements in the application based on the type of wastewater proposed for use as industrial reclaimed water. In the existing rules, the applicant must provide effluent results for all priority pollutants. This extensive amount of testing is no longer necessary since facilities with effluent that, for example, may contain pesticides may not request authorization. Testing requirements for higher strength wastes will be more extensive than lower strength wastes. For example, process wastewater will require more testing than reverse osmosis reject water. Cut-off levels would be increased by a factor of three for antimony, arsenic, barium, beryllium, cadmium, copper, lead, manganese, nickel, selenium, silver, thallium, and zinc as indicated in the figure contained in §210.53(a)(9). The original cutoff levels were at the MAL and often many of these metals are detected even though they are not a concern when detected at the MAL. By increasing the threshold level by a factor of three, more facilities will be able to obtain Level I authorization and still not present any water quality concerns at and below the threshold level. The remaining pollutants were left at the original threshold level or MAL because of water quality concerns at the detection level. This section also clarifies that if the end use is not on-site, the producer is subject to additional requirements in §210.4.

Proposed new §210.56, Authorization Requirements, includes and expands the information in existing §210.53, Requirements in Other Subchapters. Proposed new §210.56 outlines the requirements for Level I and Level II authorizations. This section includes requirements from other subchapters, general requirements, irrigation requirements, storage requirements, liner requirements, and requirements for off-site use. These requirements are in the existing subchapter, but are unclear because of general references and location of the requirements within the subchapter. Subsection (a) incorporates §210.53 in its entirety. Previously, §210.53 was located before the eligibility requirements section which made it unclear how to apply the section. A reference to the requirements of §210.22(a) and (e) has been added in §210.56(a)(6). Section 210.22(a) prohibits the reuse of untreated wastewater. Since industrial wastewater does not necessarily require treatment, this requirement would inadvertently eliminate many waste streams where treatment is not necessary, such as cooling tower blowdown and vegetable wash water. Subsection (e) states that ponds used for storage may discharge into waters in the state as a result of a storm event or in accordance with a permit. Since Subchapter E does not require the producer to hold a permit to be eligible for a Subchapter E authorization, this subsection does not apply. A discharge from a facility that does not have an appropriate permit violates Texas Water Code (TWC), §26.121.

Proposed new subsection (b) outlines the minimum requirements for Level I authorizations. These requirements are continued from the existing subchapter with one change. Subsection (b) contains a list of authorized means of disposal as an alternative to reuse that are appropriate under this subchapter. This provides guidance for the acceptable types of disposal methods. Subsection (b)(3) clarifies that if the producer's facility is within the service area of a publicly-owned treatment works (POTW), the producer must provide notice to the POTW of the producer's intent to use industrial wastewater under this subchapter. Subsection (b)(4) clarifies that the storage, use, or distribution of industrial reclaimed water shall not cause nuisance conditions to arise and will help ensure the facility operates in a manner to discourage odor and insect problems. Subsection (b)(5) clarifies that the producer, provider, and user shall comply with all applicable rules under Chapter 335.

Proposed new subsection (c) requires that if the producer is eligible for Level I authorization but does not implement all of the requirements, the producer must apply for Level II authorization.

Proposed new subsection (d) clarifies what limitations the producer will be required to follow. All Level II authorizations will be required to meet a total organic carbon limit of 55 mg/l and a pH between 6.0 to 9.0 su. These limitations were identified in the existing subchapter, but will now be required for every authorization. These two parameters are indicator parameters used to identify the general quality of the water and are continued from the existing rule. This requirement is in existing §210.51, but will be added to the recordkeeping requirements in proposed new §210.57 to clarify what the authorization requires. The executive director continues to have authorization to establish additional limitations and/or monitoring requirements as he deems appropriate.

Proposed new subsection (e) clarifies that Level II authorizations do not change any general or individual permit limits or requirements for an industrial wastewater discharge activity.

Proposed new subsection (f) ensures that irrigation water is used properly. A hydraulic application rate is proposed to give additional guidance on the appropriate amount of water for land application. The existing subchapter did not provide clear guidance for irrigation amounts or management practices. The existing subsection in §210.53 requires that the facility comply with the applicable parts of Chapter 210, Subchapters A - D. However, this information was not provided in a location where the user could easily locate and understand the requirements. The last four requirements of the subsection are best management practices and buffer zone requirements for facilities that irrigate industrial reclaimed water. These requirements are standard for irrigation permits.

Proposed new subsection (g) establishes requirements for storage of industrial reclaimed water. The two-foot freeboard requirement is a standard requirement for industrial impoundments to ensure the pond does not overflow. This subsection establishes a new requirement prohibiting the use of ponds for disposal. Discharges to waters in the state are not authorized under this subchapter.

Proposed new subsection (h) was included by reference in the existing rule under §210.53, Requirements in Other Subchapters. However, the location of this reference made the requirement unclear and difficult to understand. All Level I and Level II authorizations will continue to be considered Type I effluent where contact between the effluent and humans is likely.

Proposed new subsection (i) includes the requirement from existing §210.53(c) and (e). This requirement was unclear because neither the application nor the rule clearly indicated that additional information is required for off-site use.

Proposed new subsection (j) clarifies that an authorization to reuse industrial reclaimed water is separate from the general and individual permit requirements for wastewater discharges under 30 TAC Chapter 205, General Permits for Waste Discharge, and 30 TAC Chapter 305, Consolidated Permits.

Proposed new §210.57, Sampling and Record Keeping Requirements, is a new section that expands the rule language in existing §210.55 and clarifies the monitoring, sampling, and recordkeeping requirements for the producer and user for each level of authorization. The section also clarifies that Level I authorizations do not have any additional sampling or recordkeeping requirements. Level II authorizations have an expanded list of requirements from the existing subchapter. Clarifications were made regarding how, what, when, and where sampling shall be conducted. The section further explains the responsibilities of the producer when the industrial water does not meet the limitations in the authorization. The existing rule did not address this situation. The proposed new section requires that if the limitations are not met, the producer must use the means of disposal instead of reuse. However, if the producer can treat the water to meet the limitations, the water may be used as industrial reclaimed water. Under the new §210.57(b)(2)(C), the user will be required to maintain records regarding application rates if the user will be irrigating with industrial reclaimed water. This information was not required in the existing subchapter but, to assist in site evaluation, it is important to have performance records on-site.

Proposed new §210.58, Existing Authorizations, is a new section that clarifies how the proposed rule affects existing authorizations. Any producer holding a Level II authorization under the existing rule (the authorization that required application submittal) is exempt from reapplying under the proposed rules. Since these applications were reviewed by staff and existing and proposed authorization requirements are similar, these applications do not require additional review. For existing authorizations where an application was not required for agency approval, the producers must reevaluate its processes against the proposed rules and determine the appropriate level of coverage. If a producer is no longer authorized under a Level I authorization, the producer will need obtain authorization for the reuse of industrial wastewater within 180 days of the effective date of this subchapter.

Proposed new §210.59, Executive Director Denial or Suspension Authorization, is a new section that clarifies the criteria the executive director may use in denying or suspending an authorization. The existing rule does not provide clear guidance under what circumstances an authorization may be denied or suspended. Compliance history will now be reviewed as part of Level II authorization requests as required by 30 TAC Chapter 60, Compliance History.

Proposed new §210.60, Fees, is a new section that clarifies that all Level II authorization requests are subject to a $100 application fee. The fee is continued from the existing application, but it was not addressed in the existing rule. Persons obtaining Level I authorizations are not subject to the $100 application fee because an application is not required.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, has determined that for each year of the first five-year period the proposed rules are in effect, there will be no significant fiscal implications for the agency or any other unit of state or local government due to administration and enforcement of the proposed rules. The proposed rules would only affect units of state and local government that seek authority to reuse reclaimed industrial wastewater. All other units of state and local government would not be affected by the proposed rules.

The proposed rules are intended to clarify the existing application requirements concerning the use of reclaimed industrial wastewater and the existing criteria regarding authorization denial, to modify existing recordkeeping requirements, and to add the existing $100 application fee for Level II authorizations into the rule language. This fee is included on the application form, but not in the rules.

The proposed rules do not introduce regulations that are not already enforced by the agency; therefore, no significant fiscal implications for units of state and local government are anticipated due to implementation of the proposed rules.

PUBLIC BENEFIT AND COSTS

Mr. Davis has also determined that for each of the first five years the proposed rules are in effect, the public benefit anticipated as a result of implementing the proposed rules will be more clearly defined rules concerning the reuse of reclaimed industrial wastewater. The clarification of the rules could result in more entities opting to reuse reclaimed industrial wastewater, which could increase conservation of surface water and groundwater.

The proposed rules are intended to clarify agency application requirements concerning the reuse of reclaimed industrial wastewater. The proposed rules do not introduce regulations that are not already enforced by the agency; therefore, no significant fiscal implications for individuals and businesses are anticipated due to implementation of the proposed rules.

SMALL AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or micro-businesses as a result of implementation of the proposed rules, which are intended to clarify agency application requirements concerning the reuse of reclaimed industrial wastewater. The proposed rules do not introduce regulations that are not already enforced by the agency; therefore, no significant fiscal implications for small or micro-businesses are anticipated due to implementation of the proposed rules.

LOCAL EMPLOYMENT IMPACT

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 DETERMINATION

The commission reviewed this rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and 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 that statute. 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 does not adversely affect, in a material way, the economy, a section of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of this proposal is to clarify existing regulations in order to make them easier to follow.

In general, this rulemaking will repeal the existing Chapter 210, Subchapter E, which sets out the requirements that authorize a person to reuse industrial wastewater as industrial reclaimed water and replace it with a new Subchapter E which will clarify the requirements. Specifically, the proposed rules include: 1) the general requirements applicable to producers, providers, and users of industrial reclaimed water; 2) the requirements and specifications for the transfer, storage, and irrigation of industrial reclaimed water; 3) the requirements and specifications necessary to minimize the discharge of waste into or adjacent to waters in the state; 4) the specific manner in which industrial reclaimed water may be used; 5) the standards for the quality of industrial reclaimed water; and 6) the standards for monitoring and recordkeeping. Most importantly, this rulemaking will continue the two-tiered authorization process for the reuse of industrial wastewater - Level I and Level II authorizations.

A significant change in the proposed rules is the list of specific waste sources that are not eligible for coverage under this subchapter regardless of effluent quality or proposed end use because these types of high strength wastes are more appropriately regulated under an individual, wastewater discharge permit. Furthermore, the proposal outlines the executive director's criteria to suspend or deny an authorization. Finally, the rulemaking adds the existing fee into the rule language.

The proposed rules do not meet the definition of a major environmental rule as defined in the Texas Government Code, because §2001.0225 only applies 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. First, there are no federal law standards relating to or applicable to the reuse of industrial wastewater effluent. Therefore, there are no applicable standards set by federal law that could be exceeded by these rules. Second, the requirements of these proposed rules seek to carry out the commission's statutory authority to protect the quality of water in the state pursuant to TWC, §26.011. Therefore, the rulemaking does not exceed an express requirement of state law. Third, the commission is not a party to a delegation agreement with the federal government concerning a state and federal program that would be applicable to requirements set forth in these rules. Therefore, there are no delegation agreement requirements that could be exceeded by these rules. Fourth, the commission proposes these rules to protect the quality of water in the state in accordance with and in furtherance of its authority under state law in TWC, §26.011 and §26.121. Therefore, the commission does not propose these rules solely under the commission's general powers. The commission concludes that a regulatory analysis is not required in this instance because the proposed rules do not trigger the definition of major environmental rule in Texas Government Code, §2001.0225.

TAKINGS IMPACT ASSESSMENT

The commission performed a preliminary assessment of these rules in accordance with Texas Government Code, §2007.043. The specific purpose of the rulemaking is to continue to encourage and facilitate the reuse of treated industrial wastewater effluent for beneficial purposes, assist in the conservation of surface and groundwater, ensure the protection of public health, protect the quality of surface and groundwater, and help ensure an adequate supply of water for present and future needs. In addition, the proposal provides that certain waste sources must be authorized by an individual permit. The rulemaking also clarifies that the executive director may suspend or deny a request for authorization if the authorization request poses a potential adverse impact. Thus, the commission's preliminary assessment indicates that Texas Government Code, Chapter 2007 does not apply to this rulemaking because the promulgation and enforcement of these rules will not create a burden on private real property.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rulemaking and found that the proposed rules are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, relating to Actions and Rules Subject to the Texas Coastal Management Program (CMP), nor will they affect any action or authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11. Therefore, the proposed rules are not subject to the CMP.

SUBMITTAL OF COMMENTS

Comments may be submitted to Angela Slupe, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-042-210-WT. Comments must be received by 5:00 p.m., August 12, 2002. For further information, please contact Kathy Ramirez, Regulation Development Section, at (512) 239-6757.

Subchapter E. SPECIAL REQUIREMENTS FOR USE OF INDUSTRIAL RECLAIMED WATER

30 TAC §§210.51 - 210.55

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeals are proposed under TWC, §5.102, which provides the commission the general powers to carry out duties under TWC and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC and other laws of this state. In addition, TWC, §26.011 states that the commission shall administer the provisions of this chapter and shall establish the level of quality to be maintained in, and shall control the quality of, the waters in the state. Finally, TWC, §26.121, provides that no person may discharge sewage, municipal waste, recreational waste, agricultural waste, or industrial waste into or adjacent to any waters in the state or commit any other act or engage in any other activity which in itself or in conjunction with any other discharge or activity causes, continues to cause, or will cause pollution of any waters in the state.

The proposed repeals implement TWC, §§5.102, 5.103, 26.011, and 26.121.

§210.51.When Authorization Is Required and How To Obtain It; Effect on Permitted Discharges.

§210.52.Definitions.

§210.53.Requirements in Other Subchapters.

§210.54.Authorization of Industrial Reclaimed Water Use.

§210.55.Record Keeping and Reporting.

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 28, 2002.

TRD-200204075

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712

30 TAC §§210.51 - 210.60

STATUTORY AUTHORITY

The new sections are proposed under TWC, §5.102, which provides the commission the general powers to carry out duties under TWC and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of TWC and other laws of this state. In addition, TWC, §26.011 states that the commission shall administer the provisions of this chapter and shall establish the level of quality to be maintained in, and shall control the quality of, the waters in the state. Finally, TWC, §26.121, provides that no person may discharge sewage, municipal waste, recreational waste, agricultural waste, or industrial waste into or adjacent to any waters in the state or commit any other act or engage in any other activity which in itself or in conjunction with any other discharge or activity causes, continues to cause, or will cause pollution of any waters in the state.

The proposed new sections implement TWC, §§5.102, 5.103, 26.011, and 26.121.

§210.51.Applicability, Purpose, and Scope.

(a) A person proposing to use industrial wastewater as industrial reclaimed water may obtain authorization under this subchapter if all of the requirements of the subchapter are met. The purpose of this subchapter is to establish the applicable requirements for industrial reclaimed water use which may be substituted for water requirements normally met by using potable water or raw water. As defined and specified in this subchapter, the requirements must be met by the producers, providers, and users of industrial reclaimed water. These requirements are intended to allow the safe utilization of reclaimed water for conservation of surface water and groundwater, to ensure the protection of public health, to protect surface water and groundwater from contamination, and to help ensure an adequate supply of water resources for present and future needs.

(b) This subchapter establishes the following requirements for producers, providers, and users of industrial reclaimed water:

(1) general requirements applicable to producers, providers, and users;

(2) requirements and specifications for transfer, storage, irrigation, and other end uses;

(3) requirements and specifications necessary to minimize the impact of discharge of waste into or adjacent to waters in the state;

(4) specific uses of industrial reclaimed water;

(5) standards for the quality of industrial reclaimed water; and

(6) standards for monitoring and recordkeeping.

(c) The requirements of this subchapter to obtain an authorization do not apply to the use of industrial reclaimed water when the use is authorized by permit or by commission rules other than those in this subchapter. When a use of industrial reclaimed water is regulated under Chapter 335 of this title (relating to Industrial Solid Waste and Municipal Hazardous Waste), the use shall comply with the requirements of Chapter 335 of this title and this subchapter.

(d) The use of industrial wastewater as industrial reclaimed water as authorized by this subchapter does not require an amendment of any issued industrial wastewater discharge permit to recognize the activity authorized under this subchapter. Effluent limitations in the industrial wastewater discharge permit remain in effect during industrial reclaimed water use activities.

(e) Industrial reclaimed water projects approved under this subchapter do not require a new or amended permit from the commission except as provided by §210.5 of this title (relating to Authorization for the Use of Reclaimed Water). To develop projects not specifically authorized by this subchapter, a person may seek authorization for a new or amended waste discharge permit under Chapter 305 of this title (relating to Consolidated Permits).

(f) Nothing in this subchapter shall alter any requirement to obtain a water right authorization.

§210.52.Definitions.

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Blowdown - The discharge of recirculating water for the purpose of discharging materials contained in the water, the further buildup of which would cause concentration in amounts that could damage or impair machinery, equipment, or systems.

(2) CFR - Code of Federal Regulations.

(3) Commingled wastewater - Industrial wastewater that contains any amount of domestic wastewater.

(4) Containing - When the pollutant(s) of concern are measured at levels that exceed the minimum analytical level.

(5) Discharge - The release or disposal of waste into or adjacent to any waters in the state that in itself or in conjunction with any other discharge or activity causes, continues to cause, or will cause pollution of any of the waters in of the state.

(6) Dioxins and furans - Tetra, penta, hexa, hepta, and octa-chlorinated dibenzo dioxins and furans.

(7) Industrial reclaimed water - Any industrial wastewater which has been treated, if necessary, to a quality suitable for beneficial use.

(8) Industrial wastewater - A non-domestic or non-municipal wastewater.

(9) MGD - Million gallons per day.

(10) Minimum analytical level (MAL) - The lowest concentration at which a particular substance can be quantitatively measured in the matrix of concern (i.e., wastewater) with a defined precision level, using approved analytical methods.

(11) Non-contact cooling water - Water used for cooling which does not come into direct contact with any raw material, intermediate product, waste product, by-product, or finished product.

(12) On-site - The use of industrial reclaimed water within the boundaries of the industrial facility or within the boundaries of property that is contiguous to the facility and owned by the producer.

(13) Once-through cooling water - Water passed through main cooling condensers in one or two passes for the purpose of removing waste heat.

(14) Playa lake - A shallow (generally less than one meter deep), isolated, naturally ephemeral approximately circular lake located in an enclosed basin in the High Plains and West Central Plains areas of the state.

(15) POTW - Publicly-owned treatment works.

(16) Priority pollutants - The pollutants as listed in 40 CFR Part 122, Appendix D, Tables 2 and 3, plus 2,3,7,8-Tetrachlorodibenzo-p-dioxin and asbestos.

(17) Process wastewater - Any water which, during manufacturing or processing, comes into direct contact with or results from the production or use of any raw material, intermediate product, finished product, byproduct, or waste product.

(18) Producer - A person who produces industrial reclaimed water as identified in this subchapter.

(19) SU - Standard units.

(20) Tail water - The runoff of irrigation water from the lower end of an irrigated field.

§210.53.Wastes Eligible for Coverage.

(a) Level I eligibility. A producer is eligible for Level I authorization if the producer uses any of the following wastes on-site and has a disposal method as an alternative to reuse and an end use listed in §210.56(b) of this title (relating to Authorization Requirements):

(1) air conditioner condensate; compressor condensate; steam condensate; or condensate that forms externally on steam lines and is considered non-process;

(2) washwater from washing whole fruits and vegetables;

(3) non-contact cooling water;

(4) once through cooling water;

(5) water treatment filter backwash;

(6) water from routine external washing of buildings, conducted without the use of detergents or other chemicals;

(7) water from routine washing of pavement conducted without the use of detergents or other chemicals and where spills or leaks of toxic or hazardous waste has not occurred (unless all spilled material has been removed);

(8) cooling tower blowdown with a total dissolved solids concentration less than 2,000 milligrams per liter; or

(9) wastewater with measured effluent concentrations at or below threshold levels listed in the figure contained in this paragraph and is not a waste source listed in §210.54(a) of this title (relating to Waste Not Eligible for Coverage).

Figure: 30 TAC §210.53(a)(9)

(b) Level II eligibility. A producer is eligible to apply for Level II authorization for any of the following situations:

(1) industrial reclaimed water containing pollutant concentration levels which exceed threshold levels in the figure contained in subsection (a)(9) of this section, but not a listed waste source in §210.54(a) of this title;

(2) industrial reclaimed water that contains any amount of domestic wastewater;

(3) the proposed end use of industrial reclaimed water is not on-site;

(4) the proposed end use is not listed in §210.56(b)(2) of this title; or

(5) the proposed disposal method as an alternative to reuse is not listed in §210.56(b)(1) of this title.

§210.54.Wastes Not Eligible for Coverage.

(a) The following wastes are not eligible for authorization under this subchapter regardless of effluent quality or end use:

(1) wastewater containing radioactive material regulated under Texas Health and Safety Code, Chapter 401;

(2) wastewater containing dioxin and furans;

(3) wastewater containing pesticides;

(4) wastewater classified as or which is characteristically hazardous as defined by 40 Code of Federal Regulations (CFR) Part 261;

(5) process wastewater regulated under 40 CFR Parts 400-471 with the following exceptions:

(A) 405 - dairy products processing;

(B) 406 - grain mills;

(C) 407 - canned and preserved fruits and vegetables;

(D) 408 - canned and preserved seafood processing;

(E) 409 - sugar processing;

(F) 411 - cement manufacturing;

(G) 417 - soap and detergent manufacturing;

(H) 423 - steam electric power generating;

(I) 434 - coal mining;

(J) 436 - mineral mining and processing;

(K) 454 - gum and wood chemicals manufacturing; and

(L) 460 - hospital;

(6) septic tank waste, chemical toilet waste, grit trap waste, or grease trap waste;

(7) barge cleaning washwater;

(8) air scrubber wastewater;

(9) any wastewater where a permit by rule authorized under Chapter 321 of this title (relating to Control of Certain Activities by Rule) or commission-issued general permit for land application is available; or

(10) remediated/contaminated groundwater generated from facilities where process wastewater is prohibited for use as listed in paragraph (5) of this subsection.

(b) Producers who could otherwise be eligible to obtain authorization under this chapter, but who do not implement all required applicable conditions of this authorization must apply for and obtain permit coverage.

(c) Discharges into or adjacent to waters in the state shall not be authorized under this chapter where prohibited by applicable rules including, but not limited to, Chapter 213 of this title (relating to Edward's Aquifer); Chapter 311 of this title (relating to Watershed Protection); and Chapter 335 of this title (relating to Industrial Solid Waste and Municipal Hazardous Waste).

(d) Any user proposing to irrigate or store wastewater within the boundaries of a playa lake may not obtain authorization under this subchapter and must obtain a Texas Pollutant Discharge Elimination System discharge permit for authorization to discharge effluent into a playa lake.

§210.55.Application Requirements for Authorization.

(a) Level I authorization. Producers eligible for Level I authorization under this subchapter are authorized to use industrial reclaimed water without any notification or approval by the executive director. Effluent sampling is not required for wastes listed in §210.53(a)(1) - (8) of this title (relating to Wastes Eligible for Coverage) with the exception of cooling tower blowdown which must meet the 2,000 milligrams per liter threshold level for total dissolved solids.

(b) Level II authorization. Producers eligible for Level II authorization to use industrial reclaimed water under this subchapter must submit a complete application to the executive director on a form approved by the executive director to request authorization. The producer requesting authorization under Level II may not begin use of industrial reclaimed water without written authorization from the executive director. The application shall include, at a minimum, the following information:

(1) the legal name and address of the user, provider, and producer;

(2) contact representative for the applicant and telephone number;

(3) specific description of the producer's and user's facility location including physical address;

(4) specific description of the proposed industrial reclaimed water use site (if different than the producer's site);

(5) the proposed end use for the industrial reclaimed water;

(6) description of the waste source proposed for industrial reclaimed water use;

(7) the means of disposal as an alternative to re-use;

(8) the volume of industrial reclaimed water proposed for end use and the frequency of application;

(9) effluent testing results;

(10) the location of the producer's and user's site in relation to the Edwards Aquifer, if applicable, and;

(11) liner certification, if applicable.

(c) If the end use is not on-site, the producer shall also provide all information described in §210.4 of this title (relating to Notification).

§210.56.Authorization Requirements.

(a) Requirements in other subchapters.

(1) If industrial reclaimed water consists of industrial wastewater commingled with domestic wastewater then paragraphs (2) - (6) of this subsection do not apply. The commingled wastewater is subject to all requirements of §§210.1 - 210.9 of this title (relating to Applicability; Purpose and Scope; Definitions; Notification; Authorization for the Use of Reclaimed Water; Responsibilities; Transfer and Conveyance of Reclaimed Water; Restrictions; and Enforcement), §§210.21 - 210.25 of this title (relating to Applicability General Requirements; Storage Requirements for Reclaimed Water; Irrigation Using Reclaimed Water; and Special Design Criteria for Reclaimed Water Systems), and §§210.31 - 210.36 of this title (relating to Applicability; Specific Uses of Reclaimed Water; Quality Standards for Using Reclaimed Water; Sampling and Analysis; Guidelines for Certain Distribution Systems; and Record Keeping and Reporting).

(2) Except as specified in this subchapter, the requirements for a reclaimed water producer, provider, and user described in Subchapters A - D of this chapter (relating to General Provisions; General Requirements for the Production, Conveyance, and Use of Reclaimed Water; Quality Criteria and Specific Uses For Reclaimed Water; and Alternative and Pre-Existing Reclaimed Water Systems) apply to a producer, provider, and user of industrial reclaimed water.

(3) A producer, provider, or user of industrial reclaimed water is not required to treat industrial water or hold a permit for treatment and disposal as described in §210.1 of this title (relating to Applicability) and §210.5(a) of this title (relating to Authorization for the Use of Reclaimed Water).

(4) A producer who uses industrial reclaimed water on-site only is not required to comply with §210.4 of this title (relating to Notification). The producer must comply with all applicable requirements of this subchapter pertaining to the industrial reclaimed water use.

(5) The requirements of §210.25(e), (f), and (h) of this title (relating to Special Design Criteria for Reclaimed Water Systems) do not apply to the producer, provider, or user of industrial reclaimed water used on-site only.

(6) The requirements of §210.22(a) and (e) of this title (relating to General Requirements) and §§210.31 - 210.36 of this title, shall not apply to the producer, provider, or user of industrial reclaimed water.

(b) General requirements. Producers required to obtain Level I authorization to use industrial reclaimed water under this subchapter must comply with the following:

(1) have an authorized means of disposal as an alternative to reuse, which includes one or more of the following:

(A) have authority to discharge under a permit;

(B) have authority to route to a publicly-owned treatment works (POTW);

(C) have entered into a contract with an authorized facility to haul the waste off-site; or

(D) have the ability to recycle the industrial reclaimed water in a manner that does not discharge into or adjacent to waters in the state;

(2) have an end use which includes one or more of the following and is on-site:

(A) irrigation, including landscape irrigation;

(B) fire protection;

(C) dust suppression and soil compaction;

(D) maintenance of impoundments;

(E) irrigation of non-food crops, including, but not limited to, sod farms and silviculture; and

(F) irrigation of pastures for milking animals.

(3) If the producer's facility is within the service area of a POTW, the producer must provide notice to the POTW of the producer's intent to use industrial wastewater under this subchapter.

(4) There shall be no nuisance conditions resulting from the distribution, use, and storage of industrial reclaimed water.

(5) The producer, provider, and user shall comply with all applicable rules under Chapter 335 of this title (relating to Industrial Solid Waste and Municipal Hazardous Waste).

(c) If the producer is eligible for Level I authorization but cannot meet the requirements of subsection (b) of this section, the producer shall submit an application for a Level II authorization to use reclaimed water.

(d) Industrial reclaimed limitations for Level II authorizations.

(1) The producer shall comply with the limitations and monitoring frequencies outlined in subparagraphs (A) - (C) of this paragraph for an authorization request which has been approved by the executive director:

(A) total organic carbon is limited to 55 milligrams per liter and shall be monitored once per month by grab sample;

(B) pH is limited to a minimum of 6.0 standards units (su) and a maximum of 9.0 su and shall be monitored once per week by grab sample;

(C) the executive director may include additional limitations or increased monitoring frequencies based on information provided by the applicant, or any other available information.

(2) Sampling shall be conducted only if industrial reclaimed water use occurs during the monitoring period. If industrial reclaimed water use occurs less than the specified frequency, samples shall be obtained when discharging.

(e) Level II authorization does not change any general or individual permit limits or requirements for an industrial wastewater discharge activity.

(f) Irrigation requirements.

(1) Application rates on the irrigation field shall be limited to the hydraulic application rates established by the nomograph provided in the figure contained in this paragraph. To determine this rate, the user shall determine where the irrigation site is located using the map contained in the figure. The maximum application rate will be the rate indicated by the curve (isopleth line) to the left of the irrigation site. To convert application rates from gallons/square-foot/day to acre-feet/acre/day, multiply the values in the figure by a factor of 0.134.

Figure: 30 TAC §210.56(f)(1)

(2) The provider or user shall comply with all requirements regarding irrigation in §210.24 of this title, as well as the requirements of this subchapter.

(3) Irrigation practices shall be designed and managed to prevent contamination of groundwater or surface water and to prevent the occurrence of nuisance conditions. Tail water control facilities shall be provided, where necessary, to prevent the discharge of any industrial reclaimed water from irrigated lands into or adjacent to waters in the state.

(4) No industrial reclaimed water may be land applied when the ground is frozen or saturated or during rainfall events.

(5) When applying industrial reclaimed water to land, a buffer area must be maintained around water wells to prevent the possibility of waste transport to groundwater via the well or well casing. Industrial reclaimed water shall not be applied within 250 feet of a private water well (used for domestic or irrigation use) or 500 feet of a public water supply well.

(6) The user shall provide adequate maintenance of the irrigation facilities to ensure that the facilities are in good working condition.

(g) Storage requirements.

(1) All industrial reclaimed water retention, holding, and transfer ponds shall be operated in such a manner as to maintain a minimum freeboard of two feet.

(2) Ponds shall not be used for disposal.

(h) Liner requirements. Under Level I and Level II authorizations, industrial reclaimed water is considered equivalent to Type I reclaimed water. The producer, provider, or user shall comply with liner requirements outlined in §210.23 of this title.

(i) Off-site use.

(1) Any proposed use of industrial reclaimed water which is not considered on-site must comply with the requirements in the following sections in addition to the applicable requirements of this subchapter:

(A) §210.4 of this title;

(B) §210.6 of this title;

(C) §210.7 of this title; and

(D) §210.25 of this title.

(2) If the producer provides domestic water or wastewater services to the public, such as at a university, hospital, hotel, or similar institution, then all exposed or buried piping receiving industrial reclaimed water constructed within the boundaries of the industrial facility is exempt from the color coding requirements of §210.25 of this title.

(j) Authorization to use industrial reclaimed water is separate from the general and individual permit requirements for wastewater discharges under Chapter 205 and Chapter 305 of this title (relating to General Permits for Waste Discharges; and Consolidated Permits).

§210.57.Sampling and Record Keeping Requirements.

(a) Level I authorizations. No additional sampling or monitoring is required by the producer, user, or provider other than the requirements already established in this subchapter.

(b) Level II authorizations.

(1) Sampling.

(A) The producer shall sample the reclaimed water after final treatment, if any, but before distribution to a provider or user and analyze such samples to assure that the water quality meets the limitations required by the authorization. The producer shall sample for the parameters listed in §210.56(d) of this title (relating to Authorization Requirements) and any additional parameters required by the executive director in the authorization.

(B) If any of the analytical levels exceed the limitations in the authorization, the producer may not use the wastewater and may not route the industrial wastewater to a user or provider and shall use the means of disposal instead of reuse. The producer has the option to provide additional treatment to meet the limitations and, if the limitations are met, the water may be used as industrial reclaimed water.

(C) Analytical methods for the analyses shall meet the requirements specified in Chapter 319 of this title (related to General Regulations Incorporated into Permits).

(D) Monitoring samples and measurements shall be taken at times and in a manner so as to be representative of the monitored activity.

(2) Recordkeeping requirements.

(A) The producer shall maintain records of notifications made to the executive director concerning industrial reclaimed water use.

(B) The producer shall maintain records of all monitoring activities. These records shall be readily available for inspection by the executive director for a minimum period of five years. Records of monitoring activities shall include:

(i) date, time, and place of sample or measurement;

(ii) identity of individual who collected the sample or made the measurement;

(iii) date of analysis;

(iv) identity of the individual and laboratory who performed the analysis;

(v) the technique or method of analysis; and

(vi) the results of the analysis or measurement.

(C) The user shall maintain an operating log which records irrigation activities and shall be readily available for inspection by the executive director for a minimum period of five years. The operating log shall record irrigation activities which include:

(i) the volume of industrial reclaimed water used for irrigation each day; and

(ii) the actual surface area wetted each day.

§210.58.Existing Authorizations.

(a) A person who has obtained executive director written approval to use industrial reclaimed water under this subchapter is authorized to continue as currently authorized.

(b) If a person is no longer authorized under a Level I authorization, the producer shall obtain authorization for the reuse of industrial wastewater within 180 days of the effective date of this subchapter.

§210.59.Executive Director Denial or Suspension Authorization.

(a) The executive director may deny or suspend an authorization request to use industrial reclaimed water under this subchapter based on potential or actual adverse impact to the environment, based on close proximity to a public park, school, recreational area, spring, water supply well, surface water supply intake, water treatment plant intake, potable water storage facility, sewage treatment plant, or other location of concern. A determination of potential adverse impact may arise from consideration of such factors as, but not limited to, proposed flow rate, production rate, industrial reclaimed water quality, nature of the groundwater, soils, or geology of the disposal area. In making a determination of potential adverse impacts, the executive director may also consider such other factors, as he deems appropriate.

(b) The following requirements apply to suspensions of authorizations.

(1) The authorization issued under this subchapter will include a statement that requires the executive director to provide written notice to a person stating that the executive director intends to suspend a person's authority to use reclaimed water under the authorization, including:

(A) a brief statement of the basis for this decision under this subsection;

(B) a statement by the executive director of whether the person shall immediately cease the use of industrial reclaimed water;

(C) a statement setting the deadline for obtaining authorization under Texas Water Code (TWC), Chapter 26.

(2) The executive director may require the person whose authorization to use reclaimed water is suspended to apply for and obtain an individual permit.

(3) The executive director may suspend authorization to use industrial reclaimed water under an existing authorization issued under this subchapter for the following reasons:

(A) the quantity of industrial reclaimed water used, the type of waste or reclaimed water, or the type of operation does not comply with this chapter;

(B) the use, irrigation, or discharge causes a violation of the Texas Surface Water Quality Standards;

(C) the wastewater used as industrial reclaimed water contains pollutants that cause significant adverse affects to water quality. In making this determination, the executive director shall consider the following factors:

(i) the location of the end use for industrial reclaimed water;

(ii) the volume of wastewater used as industrial reclaimed water;

(iii) the quantity and nature of pollutants contained in the wastewater used as industrial reclaimed water;

(iv) whether the use of industrial reclaimed water would adversely affect groundwater quality, inconsistent with the policy specified in TWC, §26.401; and

(v) other factors relating to the protection of water quality standards.

(c) The compliance history of the producer, provider, and user will be evaluated prior to approval of any Level II authorization under this subchapter. Authorization may be suspended or additional requirements may be established based on the evaluation of compliance history as outlined in Chapter 60 of this title (relating to Compliance History).

§210.60.Fees.

Each application submitted to the executive director for Level II authorization under this subchapter shall include a fee of $100.

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 28, 2002.

TRD-200204076

Stephanie Bergeron

Director, Environmental law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712

Chapter 331. UNDERGROUND INJECTION CONTROL

The Texas Natural Resource Conservation Commission (commission) proposes amendments to §§331.2, 331.5, 331.7, 331.47, 331.121, and 331.163. The commission also proposes new §331.17 and §331.18.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The commission's practice of permitting pre-injection units and other surface units as part of nonhazardous noncommercial underground injection control (UIC) permits has varied over time, due to the different scope of applications submitted by applicants, and due to different interpretations of statutes and the provisions of Chapter 331. Generally, it has been the applicants' option whether to include pre-injection facility information in their UIC permit applications. About half of the UIC permits issued by the commission for on-site disposal of nonhazardous waste include specifications for pre-injection units. This rulemaking is intended to provide the option of including pre-injection units in a registration under the authority of Texas Water Code (TWC), Chapter 27, and to provide a consistent set of standards and guidance to permit applicants, agency staff, and the general public on application requirements for pre-injection units, whether they are to be authorized by permit or registration. This rulemaking also proposes to change the terms "pre-injection facilities" and "surface facilities," which are considered to be terms of art, to "pre-injection units." These changes are proposed for consistency with other agency definitions wherein "facility" usually refers to a property along with structures and other appurtenances, and "unit" usually refers to the individual types of equipment used for the management of waste, such as tanks, pumps, and surface impoundments.

The commission gave preliminary consideration to this issue at a commissioners' work session on October 20, 2000 and directed staff to conduct additional research on the issue and develop recommendations. Staff returned to the commissioners' work session on January 17, 2001 and presented a list of options relating to the regulation of pre-injection units associated with on-site nonhazardous waste disposal by Class I injection wells and any permitted Class V injection wells. The commission directed staff to require applicants for UIC permits to include design information for pre- injection units with the permit application, and to review the design information to ensure it is adequate to protect groundwater. Applicants were to be informed that inclusion of nonhazardous pre-injection units as part of their UIC permit was optional. Applicants who choose not to include nonhazardous pre-injection units in their UIC permits would be subject to a registration process for those units. Applicants also were to be informed that sufficient design information must be included in permit or registration applications so that staff could conduct a thorough technical review and determine whether the pre-injection units are protective of human health and the environment.

TWC, Chapter 27 provides authority to the commission to regulate injection wells and to prevent underground injection which may pollute fresh water. Existing commission UIC rules require permits for "all injection wells and activities." The rules currently define the term "Activity" to include "the construction or operation of an injection well or pre-injection facilities." The term "Pre-injection facilities" is also defined in existing rules to include the "on-site above-ground appurtenances, structures, equipment, and other fixtures that are or will be used for storage, processing, or in conjunction with an injection operation." These definitions have provided the basis for inclusion of pre-injection facilities in UIC permits in the past. The commission proposes to amend the definition of "Activity" in §331.2, Definitions, and to amend §331.7(a), to delete the use of the term "and activities." These proposed amendments would clarify the use of the term "activity" and effectively separate and distinguish the regulation of the injection well itself from the regulation of pre-injection units. Thus, if the applicant chooses not to include nonhazardous noncommercial pre-injection units in their UIC permit, then the permit will only regulate the injection operation "from the wellhead down."

On-site processing, storage, and disposal of industrial nonhazardous noncommercial solid waste is exempt from solid waste permitting under Texas Health and Safety Code (THSC), §361.090. Also, the United States Environmental Protection Agency (EPA) does not currently require the states to regulate pre-injection units for nonhazardous noncommercial injection wells under either the Resource Conservation and Recovery Act or UIC regulations. However, THSC, §361.090(d) provides that the commission may adopt rules to control the collection, handling, storage, processing, and disposal of industrial solid waste to protect the property of others, public property and rights-of-way, groundwater, and other rights requiring protection. This proposal would provide rules to control the collection, handling, storage, and processing of industrial nonhazardous solid waste, prior to its disposal in accordance with an underground injection control permit authorized by TWC, Chapter 27.

In a related rulemaking, proposed changes to 30 TAC Chapter 39, Public Notice, will appear in a forthcoming issue of the Texas Register .

SECTION BY SECTION DISCUSSION

The commission proposes to amend §331.2(2), Definitions, to clarify the definition of "Activity" by changing the definition from "The construction or operation of an injection well or of pre-injection facilities, including the processing, storage, and disposal of waste" to the following: "The construction or operation of an injection well for disposal of waste, or of pre-injection units for processing or storage of waste." The primary effect of this proposed revision is to change the word "facilities" to "units" and to make the distinction that injection wells are used for disposal of waste, while the pre-injection units are used for processing and storage.

Section 331.2(44) is proposed to be amended to delete the phrase "surface storage or" from the definition of "Injection operations," to reflect that surface storage units are not considered to be part of the injection operations. The commission intends that this proposed change will help clarify that surface storage units are considered to be pre-injection units and not part of the injection well itself.

Section 331.2(45) is proposed to be amended to add the following sentence to the definition of "Injection well," in order to more fully define this term: "Components of an injection well annulus monitoring system are considered to be a part of the injection well."

Section 331.2(56)(C) is proposed to be amended to revise the definition of "Pond monitor wells" by changing the phrase "surface facility" to "pre-injection units."

Section 331.2(70), the definition of "Pre-injection facilities," is proposed to be amended to further delineate and specify the types of above ground appurtenances, structures, equipment, and other fixtures associated with pre-injection operations. Specifically, the word "facilities" is proposed to be changed to "units," and "Pre-injection units" is proposed to be defined to include "injection pumps, filters, tanks, surface impoundments, and piping for wastewater transmission between any such facilities and the well." The commission also proposes to add the phrase "of waste to be injected." These revisions are proposed to further reinforce the differences between the pre-injection units and the injection well. This greater degree of specificity is also necessary to distinguish between the injection well and those nonhazardous pre-injection units which may be authorized by registration.

Section 331.5, Prevention of Pollution, is proposed to be amended to add prohibitions relating to pre-injection units which are required to be authorized under §331.7(d). The proposed language would require that these units be designed, constructed, operated, maintained, monitored, and closed so as not to cause: 1) the discharge or imminent threat of discharge of waste into or adjacent to the waters in the state without obtaining specific authorization for such a discharge from the commission; 2) the creation and maintenance of a nuisance; or 3) the endangerment of the public health and welfare.

The commission proposes to amend §331.7, Permit Required, to improve the procedures for technical review of pre-injection units for nonhazardous, noncommercial injection wells. As noted earlier in this preamble, §331.7(a) is proposed to be amended to delete the phrase "and activities." This proposed amendment will make clear that certain activities, as that term is defined in §331.2(2), are in fact associated with pre-injection units and may be eligible for the option of registration.

Proposed §331.7(d) is a new subsection that specifies that pre-injection units must either be authorized by a permit issued by the commission or registered in accordance with proposed new §331.17. The commission notes that it is the applicant's option whether to include nonhazardous noncommercial pre-injection units in their UIC permit or to register those units under the authority of TWC, Chapter 27. An applicant may also elect to include nonhazardous noncommercial pre-injection units in a wastewater permit, if desired by the applicant and if determined by the commission to be appropriate. Additionally, proposed §331.7(d) clarifies that the option of registering does not apply to pre-injection units associated with Class I injection wells that dispose of by-product material, as that term is defined in THSC, §401.003 and in agency rules in 30 TAC §336.2, concerning definitions. By-product material is excluded from the definition of solid waste in 40 Code of Federal Regulations §261.4(a)(4) and 30 TAC §335.1 under the definition of "solid waste." All surface impoundments and other pre-injection units associated with by-product waste disposal wells must continue to be authorized by permit.

Proposed new §331.17, Pre-Injection Units Registration, outlines the procedures for submitting an application for registration of UIC pre-injection units. Registration of pre-injection units and submittal of plans, specifications, and details of those units will enable agency staff to conduct a technical review of the pre-injection units associated with an on-site nonhazardous waste injection well to determine if the design of these units meets the requirements of TWC, Chapter 27; THSC, §361.090; and the technical standards specified in 30 TAC Chapter 317. At a minimum, this review would include checking the application for proper engineering seals as required by the Engineering Practice Act, reviewing the application to determine if the nonhazardous waste management units will be protective of human health and the environment, and determining if there is sufficient information to draft appropriate UIC registration or permit provisions. Proposed new §331.17(a) provides that nonhazardous noncommerical pre-injection units which are not authorized by permit, must be registered in accordance with the applicable requirements of this chapter. Proposed new §331.17(b) provides that no registration shall be allowed where a pre-injection unit causes or allows the release of fluid that would result in the pollution of underground sources of drinking water, fresh water, or surface water. Proposed new §331.17(c) sets forth registration procedures for owners or operators of nonhazardous noncommercial pre-injection units not otherwise authorized under this chapter. The proposal would require the owner or operator to submit an application for registration to the executive director, in accordance with the applicable requirements of this subchapter, and for any new pre-injection unit, obtain approval from the executive director before operating the pre-injection unit. For any existing pre-injection unit, the owner or operator would be required to submit the application on or before the date the injection well permit renewal application is submitted. Proposed new §331.17(d) specifies the minimum design criteria for UIC pre-injection units. Proposed new §331.17(e) also requires that corrective action for pre-injection units, not otherwise authorized by permit, shall be performed under §331.44 concerning corrective action standards.

Proposed new §331.18, Registration Application Processing, Notice, Comment, Motion to Overturn, outlines the procedures for processing an application for registration of UIC pre-injection units. Registrations for pre-injection units are subject to public notice. The proposed rules provide that the chief clerk of the commission shall mail notice of the registration to landowners named on the application map. There will be a 30-day comment period during which interested persons may file written comments on the proposed registration. The executive director will consider the written comments before deciding whether to issue the registration. The proposed rules further provide an opportunity to file a motion to overturn the executive director's decision to issue or deny a registration; however, persons filing written comments or motions for reconsideration are not entitled to a public meeting or a contested case hearing on a UIC pre-injection unit registration. Affected persons may request a contested case hearing on the related UIC permit application in accordance with the procedural rules given in 30 TAC Chapter 55. Proposed new §331.18(a) sets forth the purpose and scope of this section. Proposed new §331.18(b) specifies the necessary components of a registration application and provides the mailed notice requirements for registration of UIC pre- injection units. The commission notes that the registration application maps required under proposed §331.18(b)(5) do not require identification of any mineral rights owners. Proposed new §331.18(c) provides for administrative processing and completeness of a registration application. Proposed new §331.18(d) provides for notice of the receipt and declaration of technical completeness of the registration application. Proposed new §331.18(e) includes requirements for public notice of the registration. Proposed new §331.18(f) includes application processing procedures and requirements. Proposed new §331.18(g) addresses major amendments of registrations. Major amendments include substantive changes to engineering plans and specifications. Proposed new §331.18(h) addresses minor amendments of registrations. Routine maintenance and replacement of existing units with equivalent units do not require amendment of the registration. Proposed new §331.18(i) provides a 30-day public comment period on registrations. Proposed new §331.18(j) provides the executive director delegation for authority to approve pre-injection unit registrations. Proposed new §331.18(k) provides that registrations are subject to a motion to overturn process on the executive director's final approval of an application.

Additional requirements pertaining to pre-injection units are proposed in §331.47, Pond Lining. This section is proposed to be divided into two subsections. Subsection (a) is proposed to be amended to: add an exception phrase for subsection (b); change the term "surface facilities" to "pre- injection units"; and insert the word "surface" before "impoundment" for consistency with the definition of "surface impoundment" under §335.1. Also, the word "and" is proposed to be changed to "or" to explain the distinction that technical requirements may be approved by the executive director or may be specified in the permit. Proposed new subsection (b) applies to noncommercial injection wells which dispose of nonhazardous Class 1 industrial waste and provides that all surface impoundments associated with these wells must conform to any applicable requirements of Chapter 317.

Section 331.121(a)(2)(K) is proposed to be amended to add engineering drawings for pre- injection units to the information to be included in the technical report for a Class I injection well permit application. Section 331.121(a)(2)(Q) is proposed to be added to require that the technical report include the authorization status of the pre-injection units. Section 331.121(a)(2)(R) is proposed to be added to require that the technical report include information demonstrating compliance with the applicable design criteria of Chapter 317, for pre-injection units associated with Class I nonhazardous, noncommercial injection wells.

Finally, the well construction standards for Class I salt cavern solid waste disposal wells given in §331.163, Well Construction Standards, are proposed to be amended. Specifically, the term "Surface facilities" found in §331.163(g) and (g)(3) is proposed to be changed to "Pre-injection units" for consistency with the proposed definition of "Pre-injection unit" in §331.2(70).

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, determined that for the first five-year period the proposed rules are in effect, there will be no significant fiscal implications for units of state and local government due to administration and enforcement of the proposed rules. The proposed rulemaking would provide units of government the option of either permitting or registering pre-injection units for Class I nonhazardous, noncommercial injection wells and permitted Class V injection wells for the disposal of nonhazardous waste. Units of government that do not operate these types of injection wells would not be affected by the proposed rules.

Pre-injection units are the on-site above ground structures, appurtenances, equipment, and other fixtures, including injection pumps, filters, tanks, surface impoundments, and piping for wastewater transmission between any such facilities and the injection well, that are or will be used for storage or processing of waste to be injected into the disposal well.

Previously, applicants for UIC permits at noncommercial facilities which dispose of nonhazardous waste on-site by means of a Class I or permitted Class V injection well were given the option to include pre-injection units in their permits. Adoption of these rules would provide applicants the option of either registering or permitting their pre-injection units. The proposed rules will only affect applicants seeking new UIC permits or those with pre-injection units which are not in the permit and who are applying for permit renewals (required every ten years).

The permit and registration processes are similar. Both require technical documentation demonstrating that the pre-injection units meet technical and environmental standards. Additionally, both afford the public a comment period to submit written comments to the commission concerning the UIC application. However, there is no public meeting or contested case hearing provision for registration applications, and the commission would be required to conduct a mailing to adjacent landowners during a registration proceeding. The commission anticipates that those sites opting to register their pre-injection units would realize public notice cost savings due to implementation of the proposed rules, in an amount that cannot be determined at this time. The technical demonstration related costs would be similar for owners and operators either registering or permitting their pre- injection units.

Units of state and local government do not normally operate injection wells affected by the proposed rules. Additionally, there are no known active injection wells operated by units of government that would be affected by the proposed rules. Therefore, the commission anticipates no significant fiscal implications for any unit of state or local government due to implementation of the proposed rules.

PUBLIC BENEFIT AND COSTS

Mr. Davis also determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated from enforcement of and compliance with the proposed rules will be increased environmental protection by requiring all affected UIC applications to have pre-injection units permitted or registered. This requirement is intended to ensure these types of operations meet required technical and environmental requirements.

Previously, applicants for UIC permits at noncommercial facilities which dispose of nonhazardous waste on-site by means of a Class I or permitted Class V injection well were given the option to include pre-injection units in their permits. Adoption of these rules would provide applicants the option of either registering or permitting their pre-injection units. The proposed rules will only affect applicants seeking new UIC permits or applicants who do not have pre-injection units in their permit and who are applying for permit renewals (required every ten years).

The commission currently receives approximately 20 applications per year for UIC permits that would be affected by the proposed rules. The majority of these applications are from large industrial businesses. Of the existing injection wells affected by the proposed rules, the majority already incorporate pre-injection units into UIC permits. For these affected sites, the owner/operator would have a choice of registering the units or keeping them in their existing UIC permit during the renewal process. The commission anticipates the proposed rules could potentially result in cost savings for those sites that decide to register pre-injection sites in lieu of keeping them in their existing permit.

The commission estimates that pre-injection units are not included in the UIC permits for approximately 40 injection wells affected by the proposed rules. The proposed rules would provide the owners or operators of these sites the option of obtaining a permit or registering their pre-injection units during the next permit renewal. The commission estimates the permit renewal for most of these sites will occur within the next five years. Although there may be additional costs to these sites that are currently operating pre-injection units without a permit, the commission does not anticipate that the fiscal implications will be significant. The majority of technical data required would normally be produced for the permit renewal, plus there would be potential costs savings for those sites that decide to register their pre-injection units.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There may be adverse fiscal implications, which are not anticipated to be significant, for small or micro-businesses as a result of implementation of the proposed rules. This rulemaking is intended to provide applicants for UIC permits at noncommercial facilities which dispose of nonhazardous waste on-site by means of a Class I or permitted Class V injection wells the option to register or permit pre- injection units.

Previously, applicants for UIC permits at noncommercial facilities which dispose of nonhazardous waste on-site by means of a Class I or permitted Class V injection well were given the option to include pre-injection units in their permits. Adoption of these rules would provide applicants the option of either registering or permitting their pre-injection units. The proposed rules will only affect applicants seeking new UIC permits or applicants who do not have pre-injection units in their permit and who are applying for permit renewals (required every ten years).

The commission currently receives approximately 20 applications per year for UIC permits that would be affected by the proposed rules, some of which are submitted by small or micro-businesses. Of the existing injection wells affected by the proposed rules, the majority already incorporate pre- injection units into UIC permits. For sites that do not include their pre-injection units in the UIC permit, the owner/operator would have a choice of registering the units or incorporating them into a UIC permit during the renewal process. The commission anticipates the proposed rules may result in cost savings for those small and micro-businesses that decide to register their pre-injection units in lieu of obtaining a permit. The commission estimates that of the approximately 40 injection wells where pre-injection units are not included in the UIC permit, none are owned or operated by small or micro- businesses. Therefore, the commission does not anticipate significant additional costs for any small or micro-businesses due to implementation of the proposed rules.

LOCAL EMPLOYMENT IMPACT

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 has reviewed the proposed rules in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the proposed rules are not subject to §2001.0225 because they do not meet the definition of a "major environmental rule" as defined in that statute. "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. The specific intent of the rules is to protect the environment and reduce risks to human health. The proposed rules clarify commission rules for pre-injection units at Class I nonhazardous, noncommercial injection wells so that pre- injection units will be regulated in a more consistent manner. The rules substantially advance their purpose by clarifying the definitions of injection well and pre-injection units; adding registration as an alternative to including pre-injection units in the injection well permit; and explicitly stating the design standards that will apply to all covered pre-injection units. In addition, the requirement to include pre- injection units in a permit or registration is synchronized with renewal of the injection well permit. However, because the proposed rules do not require more from an applicant than is required by current rules, the proposed rules do not adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs. The proposed rules are not anticipated to adversely affect in a material way the environment or the public health and safety of the state or a sector of the state because the proposal specifies technical standards for pre-injection units at Class I nonhazardous, noncommercial injection wells.

In addition, the proposed rules do not exceed the four applicability requirements of Texas Government Code, §2001.0025(a)(1) - (4) in that the proposal does not: 1) exceed a standard set by federal law; 2) exceed an express requirement of state law; 3) exceed a requirement of a delegation agreement; or 4) propose to adopt a rule solely under the general powers of the agency.

The proposal does not exceed a standard set by federal law because there are no such corresponding federal standards for pre-injection units at Class I nonhazardous, noncommercial injection wells. Further, the proposal does not exceed an express requirement of state law because TWC, Chapter 27 does not establish express requirements for pre-injection units at Class I nonhazardous, noncommercial injection wells. The proposal does not exceed the requirements of the delegation agreement because the delegation agreement does not establish express requirements for pre- injection units. This proposal is not adopted solely under the general powers of the agency, but is adopted under the specific provisions of the Texas Injection Well Act, TWC, §§27.002, 27.003, 27.011, 27.019(a), and 27.051(3).

The commission invites public comment on the draft regulatory impact analysis determination.

TAKINGS IMPACT ASSESSMENT

The commission has prepared a takings impact assessment for these proposed rules in accordance with Texas Government Code, §2007.043. The commission's preliminary assessment indicates that the Texas Government Code, Chapter 2007 does not apply to these proposed rules because the proposed rules are an action that is taken in response to a real and substantial threat to public health and safety; they are designed to significantly advance the health and safety purpose and they do not impose a greater burden than is necessary to achieve the health and safety purpose. Texas Government Code, §2007.003(b)(13), provides that 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 is exempt from Chapter 2007.

The real and substantial threat to public health and safety in this rulemaking involves activities that may pollute fresh water. The Texas Injection Well Act, TWC, §27.003 states that it is the policy of the state to "prevent underground injection that may pollute fresh water" and "to require the use of all reasonable methods to implement this policy." Section 27.051(3) requires that the commission make a finding, before it issues a permit, "that, with proper safeguards both ground and surface fresh water can be adequately protected from pollution." Section 27.002(4) defines "pollution" as "the alteration of the physical, chemical, or biological quality of or the contamination of, water that makes it harmful, detrimental, or injurious to humans...."

The proposed rules would minimize this threat by requiring that Class I noncommercial, nonhazardous pre-injection units meet the design criteria for sewerage systems, while offering to applicants the option of using a registration process to authorize such pre-injection units.

The proposed rules significantly advance the health and safety purpose by setting a uniform design standard which is protective of human health and safety for certain pre-injection units. The design standards protect health and safety by requiring the management of waste in such a manner as to prevent their excursion into fresh waters in the state.

The proposed rules do not impose a greater burden than is necessary to achieve the health and safety purpose because the proposed design standards for Class I noncommercial, nonhazardous pre- injection units represent the engineering practice necessary to prevent the pollution of fresh water. Further, the proposed rules allow applicants to use, as an option, a registration process to comply with the proposal. The option of using a registration process is expected to provide, in some instances, a less burdensome method of administering the design standards than the existing rules, which require that Class I noncommercial, nonhazardous pre-injection units be included in the injection well permit.

The proposed rules are not subject to Texas Government Code, Chapter 2007 because they are exempt under the provisions of §2007.003(b)(13).

Nevertheless, the commission further evaluated these proposed rules and performed a preliminary assessment of whether these proposed rules constitute a takings under Texas Government Code, Chapter 2007. The specific purpose of these proposed rules is to clarify commission rules for pre- injection units at Class I nonhazardous, noncommercial injection wells so that pre-injection units will be regulated in a more consistent manner. The proposed rules substantially advance this purpose by clarifying the definitions of injection well and pre-injection units; adding registration as an alternative to including pre-injection units in the injection well permit; and explicitly stating the design standards that will apply to all covered pre-injection units. In addition, the requirement to include pre-injection units in a permit or registration is synchronized with renewal of the injection well permit. The proposed rules do not require more from an applicant than is required by existing rules, which require that pre- injection units be included in the injection well permit. Since the proposed rules do not require more than would be required by existing rules, they do not burden an owner of real property in a manner which would be a statutory or constitutional taking. Specifically, the subject proposed regulations do not affect a landowner's rights in private real property because this rulemaking does not burden (constitutionally); nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the proposed regulations.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rules and found that the rules are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, Actions and Rules Subject to the Texas Coastal Management Program (CMP), nor will they affect any action or authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11. Therefore, the proposed rules are not subject to the CMP.

SUBMITTAL OF COMMENTS

Comments may be submitted to Angela Slupe, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2000-055-331-WS. Comments must be received by 5:00 p.m., August 12, 2002. For further information, please contact Ray Austin, Regulation Development Section, at (512) 239-6814.

Subchapter A. GENERAL PROVISIONS

30 TAC §§331.2, 331.5, 331.7, 331.17, 331.18

STATUTORY AUTHORITY

The amendments and new sections are proposed under TWC, §5.103, which provides the commission with authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; and §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells. The amendments and new sections are also proposed under THSC, §361.017 and §361.024, which provide the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Solid Waste Disposal Act. The amendments and new sections are also proposed under THSC, §401.051, which provides the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Radiation Control Act.

The amendments and new sections implement TWC, Chapter 27.

§331.2.Definitions.

General definitions can be found in Chapter 3 of this title (relating to Definitions). The following words and terms, when used in this chapter , shall have the following meanings, unless the context clearly indicates otherwise.

(1) (No change.)

(2) Activity - The construction or operation of an injection well for disposal of waste, or of pre-injection units for [ facilities, including the ] processing [ , ] or storage [ , and disposal ] of waste.

(3) - (43) (No change.)

(44) Injection operations - The [ surface storage or ] subsurface emplacement of fluids occurring in connection with an injection well or wells, other than that occurring solely for construction or initial testing.

(45) Injection well - A well into which fluids are being injected. Components of an injection well annulus monitoring system are considered to be a part of the injection well.

(46) - (55) (No change.)

(56) Monitor well - Any well used for the sampling or measurement of any chemical or physical property of subsurface strata or their contained fluids.

(A) - (B) (No change.)

(C) Pond monitor wells are wells used in the subsurface surveillance system near ponds or other pre-injection units [ surface facilities ].

(57) - (69) (No change.)

(70) Pre-injection units [ facilities ] - The on-site above-ground appurtenances, structures, equipment, and other fixtures including the injection pumps, filters, tanks, surface impoundments, and piping for wastewater transmission between any such facilities and the well that are or will be used for storage or [ , ] processing of waste to be injected , or in conjunction with an injection operation.

(71) - (101) (No change.)

§331.5.Prevention of Pollution.

(a) - (b) (No change.)

(c) Pre-injection units which are required to be authorized by permit or registration under §331.7(d) of this title (relating to Permit Required), must be designed, constructed, operated, maintained, monitored, and closed so as not to cause:

(1) the discharge or imminent threat of discharge of waste into or adjacent to the waters in the state without obtaining specific authorization for such a discharge from the commission;

(2) the creation and maintenance of a nuisance; or

(3) the endangerment of the public health and welfare.

§331.7.Permit Required.

(a) Except as provided in §331.9 of this title (relating to Injection Authorized by Rule), all injection wells [ and activities ] must be authorized by permit.

(b) - (c) (No change.)

(d) Pre-injection units for Class I nonhazardous, noncommercial injection wells and Class V injection wells permitted for the disposal of nonhazardous waste must be either authorized by a permit issued by the commission or registered in accordance with §331.17 of this title (relating to Pre- Injection Units Registration). The option of registration provided by this subsection shall not apply to pre-injection units for Class I injection wells used for the disposal of by-product material, as that term is defined in Chapter 336 of this title (relating to Radioactive Substance Rules).

§331.17.Pre-Injection Units Registration.

(a) Pre-injection units not otherwise authorized under this chapter must be registered in accordance with the requirements of this section.

(b) No registration shall be approved, and registrations may be denied or revoked, if the executive director determines that:

(1) a pre-injection unit causes or allows the release of fluid that would result in the pollution of underground sources of drinking water, fresh water, or surface water; or

(2) a pre-injection unit poses an immediate threat to public health or safety.

(c) Registration procedures for pre-injection units not otherwise authorized under this chapter must include the following.

(1) The owner or operator shall submit an application for registration to the executive director, in accordance with the applicable requirements of this subchapter;

(A) for any proposed pre-injection unit, obtain approval from the executive director before operating the pre-injection unit; and

(B) for any existing pre-injection unit, submit the application on or before the date the injection well permit renewal application is submitted.

(2) The owner or operator shall cease operation of any pre-injection unit if:

(A) the registration application has not been submitted before the injection well permit is renewed, for an existing pre-injection unit;

(B) renewal of the registration is denied by the executive director;

(C) the term of the registration expires, provided that if registration renewal procedures have been initiated before the permit expiration date, the existing registration will remain in full force and effect and will not expire until commission action on the application for renewal of the registration is final;

(D) the registration is denied or revoked by the executive director; or

(E) the unit poses an immediate threat to public health or safety.

(d) Design criteria are as follows:

(1) pre-injection units shall be designed in such a manner as to protect underground sources of drinking water, fresh water, and surface water from pollution;

(2) pre-injection units shall be designed in such a manner as to enable the authorized injection well to meet all permit conditions and applicable rules and law;

(3) pre-injection units shall meet the design standards contained in Chapter 317 of this title (relating to Design Criteria for Sewerage Systems) which apply to the type of unit being proposed; and

(4) all ponds shall be lined according to the requirements of §331.47 of this title (relating to Pond Lining).

(e) Corrective action for pre-injection units not otherwise authorized by permit shall be performed under §331.44 of this title (relating to Corrective Action Standards).

§331.18.Registration Application, Processing, Notice, Comment, Motion to Overturn.

(a) Applicability. This section sets forth the requirements for applications and the manner in which action will be taken on applications filed for a registration for pre-injection units.

(b) Contents of application. Registration applications for pre-injection units must include:

(1) complete application form(s), signed and notarized, and required number of copies provided;

(2) the verified legal status of the applicant(s) as applicable;

(3) the signature of the applicant(s), in accordance with the requirements of §305.44 of this title (relating to Signatories to Applications);

(4) a notarized affidavit from the applicant(s) verifying land ownership or landowner agreement to the proposed activity. Pre-injection unit registration information on file with the commission shall be confirmed or updated, in writing, whenever:

(A) the mailing address and/or telephone number of the owner or operator is changed; or

(B) requested by the commission or executive director;

(5) maps showing:

(A) the name and address of persons who own the property on which the existing or proposed pre- injection unit is or will be located, if different from the applicant; and

(B) the name and address of landowners adjacent to the property on which the pre-injection unit is located or is proposed to be located.

(6) plans and specifications of the pre-injection units which have the seal of a professional engineer licensed in the State of Texas. The engineer shall certify that the submission meets the applicable technical requirements of Chapter 317 of this title (relating to Design Criteria for Sewerage Systems);

(7) the attachment of technical reports and supporting data required by the application; and

(8) any other information the executive director or the commission may reasonably require.

(c) Administrative completeness. Upon receipt of an application for a registration, the executive director or his designee shall assign the application a number for identification purposes. Applications for registrations shall be reviewed by the staff for administrative completeness within 14 calendar days of receipt of the application by the executive director.

(d) Technical completeness. When the application is declared to be technically complete, the executive director or his designee shall prepare a statement of the receipt of the application and declaration of technical completeness which is suitable for mailing and shall forward that statement to the chief clerk. The chief clerk shall notify every person entitled to notification as stated in subsection (e) of this section. The notice of receipt of an application for registration and declaration of technical completeness shall contain the following information:

(1) the location of the pre-injection unit;

(2) the identifying number given the application by the commission;

(3) the type of registration sought under the application;

(4) the name, affiliation, address, and telephone number of the applicant and the name and address of the agency and the telephone number of an agency contact who may be reached to obtain more information about the application to register the unit;

(5) the date on which the application was submitted;

(6) a brief summary of the information included in the application;

(7) a statement that the registration application has been provided to the county judge and that it is available for review by interested parties;

(8) a brief description of public comment procedures; and

(9) the deadline to file public comment. The deadline shall be not less than 30 days after the date notice is mailed.

(e) Notice requirements.

(1) The public notice requirements of this subsection apply to new applications for a registration, and to applications for major amendment or renewal of a registration for pre-injection units;

(2) The chief clerk of the commission shall mail Notice of Receipt of Application and Technical Completeness, along with a copy of the registration application, to the county judge in the county where the pre-injection unit is located or proposed to be located; and

(3) The chief clerk of the commission shall mail Notice of Receipt of Application and Technical Completeness to the adjacent landowners named on the application map or supplemental map, or the sheet attached to the application map or supplemental map.

(f) Application processing procedures. Any person who is required to obtain approval of a registration, or who requests an amendment, modification, or renewal of a registration for pre-injection units is subject to the application processing procedures and requirements found in Chapter 281 of this title (relating to Application Processing).

(g) Major amendment. A major amendment is an amendment that changes a substantive term, provision, requirement, or a limiting parameter of a registration. Notice requirements of subsection (e) of this section are applicable to major amendments.

(h) Minor amendment. A minor amendment is an amendment to improve or maintain the quality or method of management of waste, and includes any other change to a registration issued under this chapter that will not cause or relax a standard or criterion which may result in a potential deterioration of quality of waters in the state. Notice requirements of subsection (e) of this section are not applicable to minor amendments.

(i) Public comment on registrations. A person may provide the commission with written comments on any new or major amendment applications to register pre-injection units. The executive director shall review any written comments received within the public comment period. The written information received shall be utilized by the executive director in determining what action to take on the application for registration, in accordance with §331.17 of this title (relating to Registration of Pre-injection Units). After the deadline for submitting public comment, the executive director may take final action on the application.

(j) Delegation, effective date of registration, term. The commission delegates to the executive director the authority to approve pre-injection unit registrations. The effective date for the registration of a site at which pre-injection units are located is the date that the executive director by letter, approves the application. The term for registration shall not exceed ten years and shall be synchronized with the term of the injection well permit.

(k) Motion to overturn. The applicant or a person affected may file with the chief clerk a motion to overturn the executive director's final approval of an application, under §50.139(b) - (f) of this title (relating to Motion to Overturn).

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 28, 2002.

TRD-200204077

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712

Subchapter C. GENERAL STANDARDS AND METHODS

30 TAC §331.47

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which provides the commission with authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; and §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells. The amendment is also proposed under THSC, §361.017 and §361.024, which provide the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Solid Waste Disposal Act. The amendment is also proposed under THSC, §401.051, which provides the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Radiation Control Act.

The amendment implements TWC, Chapter 27.

§331.47.Pond Lining.

(a) Except as provided in subsection (b) of this section, all [ All ] holding ponds, emergency overflow ponds, emergency storage ponds, or other surface impoundments associated with, or part of the pre-injection units [ surface facilities ] associated with underground injection wells shall be lined with clay or an artificial liner as approved by the executive director or [ and ] as required by permit, and shall in addition, conform to any applicable requirements of Chapter 335 of this title (relating to Industrial Solid Waste and Municipal Hazardous Waste).

(b) All surface impoundments for nonhazardous, noncommercial Class 1 industrial waste associated with Class I nonhazardous, noncommercial injection wells, or Class V injection wells permitted for the disposal of nonhazardous waste, shall meet the design standards contained in Chapter 317 of this title (relating to Design Criteria for Sewerage Systems) which apply to surface impoundments.

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 28, 2002.

TRD-200204078

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712

Subchapter G. CONSIDERATION PRIOR TO PERMIT ISSUANCE

30 TAC §331.121

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which provides the commission with authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; and §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells. The amendment is also proposed under THSC, §361.017 and §361.024, which provide the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Solid Waste Disposal Act. The amendment is also proposed under THSC, §401.051, which provides the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Radiation Control Act.

The amendment implements TWC, Chapter 27.

§331.121.Class I Wells.

(a) The commission shall consider the following before issuing a Class I Injection Well Permit:

(1) (No change.)

(2) all information in the Technical Report submitted with the application for permit in accordance with §305.45(a)(8) of this title (relating to Contents of Application for Permit) including, but not limited to:

(A) - (J) (No change.)

(K) engineering drawings of the surface and subsurface construction details of the injection well and pre-injection units, except that pre-injection units registered under the provisions of §331.17 of this title (relating to Pre-Injection Units Registration) shall be considered under that section [ system ];

(L) - (P) (No change.)

(Q) the authorization status under this chapter of the pre-injection units for the injection well; and

(R) information demonstrating compliance with the applicable design criteria of Chapter 317 of this title (relating to Design Criteria for Sewerage Systems), for pre-injection units associated with Class I nonhazardous, noncommercial injection wells.

(3) - (5) (No change.)

(b) - (g) (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 28, 2002.

TRD-200204079

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712

Subchapter J. STANDARDS FOR CLASS I SALT CAVERN SOLID WASTE DISPOSAL WELLS

30 TAC §331.163

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.103, which provides the commission with authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; and §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells. The amendment is also proposed under THSC, §361.017 and §361.024, which provide the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Solid Waste Disposal Act. The amendment is also proposed under THSC, §401.051, which provides the commission with authority to adopt rules necessary to carry out its powers and duties under the Texas Radiation Control Act.

The amendment implements TWC, Chapter 27.

§331.163.Well Construction Standards.

(a) - (f) (No change.)

(g) Pre-injection units [ Surface facilities ].

(1) - (2) (No change.)

(3) Pre-injection units [ Surface facilities ], while allowing for pressure release, shall be designed to prevent the release of unauthorized cavern contents to the atmosphere.

(4) (No change.)

(h) - (i) (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 28, 2002.

TRD-200204080

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: August 11, 2002

For further information, please call: (512) 239-4712