TITLE 30.ENVIRONMENTAL QUALITY

Part 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Subchapter D. STRATEGICALLY DIRECTED REGULATORY STRUCTURE

30 TAC §§90.50, 90.52, 90.54, 90.56, 90.58, 90.60, 90.62, 90.64, 90.66, 90.68, 90.70, 90.72

The Texas Commission on Environmental Quality (commission or TCEQ) proposes new §§90.50, 90.52, 90.54, 90.56, 90.58, 90.60, 90.62, 90.64, 90.66, 90.68, 90.70, and 90.72.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The 77th Legislature re-authorized the commission following an extensive review by the Sunset Advisory Commission. The legislature re-authorized the commission in House Bill (HB) 2912, 77th Legislature, 2001, and in Texas Water Code (TWC), §5.755, directed the commission to develop an initial rule for a strategically directed regulatory structure that will provide incentives for enhanced environmental performance. The legislature further directed the commission to develop the strategically directed regulatory structure based on a person's compliance history classification and voluntary measures undertaken by the person to improve environmental quality. HB 2912 also requires that these initial rules be adopted by September 1, 2003 and the final rules be adopted by September 2005.

This initial rulemaking is intended to establish a system whereby persons interested in participating in the commission's innovative programs may also apply for incentives in recognition of their participation in these programs. While the initial system will involve a case-by-case review and approval methodology, it is the commission's intention to eventually develop a more streamlined system, in which persons meeting certain eligibility requirements will be able to receive a variety of appropriate incentives from an established menu of options that will include federal, as well as state incentives. In developing this system, the commission will make every effort to work with the United States Environmental Protection Agency (EPA) to develop consistent and meaningful incentives for participation in innovative programs. Initial steps have already been made in this direction through the development of a Memorandum of Agreement between the commission and EPA on harmonizing application requirements for certain environmental leadership programs.

TWC, §5.752, defines strategically directed regulatory structure as a program that is designed to use innovative programs to provide maximum environmental benefit and to reward compliance performance. This section defines innovative program as a program developed by the commission under this subchapter, TWC, Chapter 26 or 27, or Texas Health and Safety Code (THSC), Chapter 361, 382, or 401 that provides incentives to a person in return for benefits to the environment that exceed benefits that would result from compliance with applicable legal requirements under the commission's jurisdiction. TWC, §5.755, requires that an innovative program offered as part of the strategically directed regulatory structure must be consistent with other law and any requirement necessary to maintain federal program authorization. Section 5.755 also defines the commission's flexible permit program and regulatory flexibility program as innovative programs.

In the Sunset Advisory Commission Staff Report, 2000, Management Action, 3.5, the Sunset Advisory Commission recommended that the commission "expand opportunities for public participation within innovative regulatory programs." The Sunset Advisory Commission stated that this recommendation, ". . .would encourage TNRCC {now TCEQ} to find more ways for the public to participate in its innovative regulatory programs. Since these programs offer an alternative to traditional regulatory processes, greater public participation is a key to ensuring accountability." (Sunset Advisory Commission Staff Report, Texas Natural Resource Conservation Commission, 2000, page 38.)

To meet these legislative mandates and the Sunset Advisory Commission recommendation, the commission solicited comments from a formal advisory group. The executive director's staff worked with the Pollution Prevention Advisory Committee in developing the process, structural elements, and appropriate incentives for these rules. The legislature designated the committee, created by HB 2912 from the Waste Reduction Advisory Committee, to advise the commission during this rulemaking process under THSC, §361.0215. Accordingly, agency staff made a series of presentations to the committee during the development of this proposal to solicit feedback, and will continue to do so throughout the rulemaking process.

Additionally, the agency staff reviewed rules from other state environmental agencies regarding innovative programs and identified several common elements. These elements include using a person's compliance history classification as a basis for tracking and/or admission to innovative regulatory programs; using a tiered regulatory approach, in which the conventional compliance system is used as the base-level tier and "beyond compliance" schemes are used for higher tiers; providing technical assistance that is explicitly linked to compliance and enforcement strategies; using environmental management systems as compliance tools and requirements for participation in upper tier programs; and encouraging participation in upper tier programs through incentives. Some of the incentives used to move entities into higher tiers include recognition for superior performance, regulatory flexibility, "single point of contact" management through the regulatory process, and additional technical assistance for meeting goals. Finally, several programs that the executive director's staff reviewed contain strong public participation components, like active stakeholder involvement in decision-making about project goals or in managing projects either through a contract or a charter.

The purpose of these proposed rules is to establish a systematic approach for using innovative programs to achieve maximum environmental benefit and to reward compliance performance. As allowed by TWC, §5.755, one of the factors the executive director must use to determine whether a person is eligible for an incentive under an innovative program is that person's compliance history classification. In December 2001, the commission adopted the definition of compliance history and in August 2002 amended 30 TAC Chapter 60, Compliance History, to include the process the commission uses in determining a person's compliance history classification. These proposed rules reference the commission's existing compliance history requirements and do not create a new evaluation process to assess a person's compliance history classification. These proposed rules reward good compliance and actions which exceed regulatory requirements by providing meaningful incentives. Examples of categories of innovative programs and incentives include alternative methods of compliance, burden reduction, and recognition.

Additional incentives proposed in these rules include on-site technical assistance, accelerated access to program information, and modification of state or federal regulatory requirements that do not change emission or discharge limits. These classes of incentives were identified in a related piece of legislation, HB 2997, dealing with the establishment of an environmental management system, and in a set of incentives proposed for the EPA's National Environmental Performance Track Program and the EPA's Innovation Policy. These classes of incentives were included in these proposed rules because they were broad enough to cover most incentives available to the commission, because they are similar to the list of incentives related to compliance history, and finally because they have a firm legislative mandate under the terms of HB 2997.

Also to evaluate a person's eligibility, the proposed rules provide that the executive director will consider whether the proposal will address local environmental concerns identified annually in the "Regional Issue Ranking" when determining incentive eligibility. To determine the environmental needs for different geographic areas of the state, the executive director will look to the most current version of the Environmental Issues Ranking in the commission's strategic plan. Potential environmental needs include, but are not limited to, reducing ozone and ozone precursors in air quality nonattainment and near-nonattainment areas; reducing water pollution in impaired waters and waters of concern; taking corrective action or remediating contaminated sites; addressing potential cumulative impacts from air emissions or wastewater discharges; and, providing needed ambient monitoring to enhance current efforts.

SECTION BY SECTION DISCUSSION

The commission proposes to change the name of Chapter 90 from Regulatory Flexibility and Environmental Management Systems to Innovative Programs to better reflect the contents of the chapter.

Subchapter D: Strategically Directed Regulatory Structure

The commission proposes to create a new Subchapter D, Strategically Directed Regulatory Structure, to accommodate the new rule sections that outline how a person would become eligible to request regulatory incentives through the commission's strategically directed regulatory structure.

Proposed new §90.50, Purpose, explains that the purpose of Subchapter D is to implement TWC, §5.755, Strategically Directed Regulatory Structure, to establish a framework for innovative programs to provide for enhanced environmental performance and to reward compliance performance.

Proposed new §90.52, Applicability, specifies the activities to which Subchapter D applies.

Proposed new §90.52(a) specifies that the provisions of Subchapter D apply to all persons subject to the requirements of TWC, Chapters 26 and 27, and THSC, Chapters 361, 382, and 401. Activities that are regulated under these chapters include: the management and disposal of industrial solid waste, hazardous waste, or municipal solid waste (including composting, sewage sludge, and water treatment sludge) regulated under the Texas Solid Waste Disposal Act, THSC, Chapter 361; discharges to surface water and groundwater regulated under TWC, Chapter 26; petroleum storage tanks regulated under TWC, Chapter 26; disposal of waste by underground injection regulated under TWC, Chapter 27; emission sources of air contaminants regulated under THSC, Chapter 382; and management and disposal of radioactive material waste regulated under THSC, Chapter 401. This subsection implements TWC, §5.751, Applicability, which specifies that programs under the jurisdiction of the commission under TWC, Chapters 26 and 27 and THSC, Chapters 361, 382, and 401 are eligible to participate in performance-based regulation.

Proposed new §90.52(b) specifies that this subchapter does not apply to occupational licensing programs or other programs specifically exempted by statute. This subsection implements TWC, §5.751.

Proposed new §90.54, Single Point of Contact, specifies that the executive director or the executive director's designee will serve as the single point of contact within the agency to coordinate all innovative programs. This provision is included to implement TWC, §5.757, which was added to TWC by HB 2912.

Proposed new §90.54 requires that the executive director, or the executive director's designee, acting as the coordinator must inventory, coordinate, and market and evaluate all innovative programs; provide information and technical assistance to persons participating in or interested in participating in those programs; and work with the Pollution Prevention Advisory Committee to assist the commission in integrating the innovative programs into the commission's operations, including program administration; strategic planning; and staff training. The commission proposes this requirement to implement TWC, §5.757.

Proposed new §90.56, Eligibility, specifies the eligibility requirements for Subchapter D.

Proposed new §90.56(a) provides that except as provided in subsection (b) or (c) of this section, a person whose application to participate in an innovative program or whose application for an incentive meets the minimum standards of §90.62 is eligible to receive regulatory incentives under this chapter. The commission proposes this subsection to avoid making a person apply twice for the same incentives when that person's eligibility has already been established.

Proposed new §90.56(b) explains that a person who has incurred a judgment in a suit brought by the Texas or United States attorney general against the site for which the person is requesting regulatory incentives, is ineligible to participate in an innovative program or to receive regulatory incentives at that site for a period of three years after the date the judgment was final. The commission proposes this subsection for consistency with the requirements in Chapter 60.

Proposed new §90.56(c) explains that a person who has been convicted of willfully or knowingly committing an environmental crime regarding the site for which the person is requesting to participate in an innovative program or requesting regulatory incentives is ineligible to receive regulatory incentives for using an environmental management system for a period of three years after the date of the conviction. The commission proposes this subsection for consistency with the requirements in Chapter 90, Subchapter C.

Proposed new §90.56(d) provides that a person will be accepted into a strategically directed regulatory structure by meeting the criteria and standards for regulatory flexibility under Subchapter B; the criteria and standards to receive incentives for using an environmental management system under Subchapter C; the criteria and standards of programs authorized as innovative by the executive director; the criteria and standards for flexible permits under 30 TAC Chapter 116; or the criteria and standards set forth under this subchapter. The commission proposes this subsection to conform with the rules for innovative programs and to avoid a person having to submit multiple applications for the same incentives.

Proposed new §90.56(e) specifies that incentives granted under one innovative program do not guarantee incentives offered under another innovative program, except where those incentives are equivalent. This provision is adapted from Chapter 90, Subchapter B.

Proposed new §90.58, Definitions, defines the terms used in Subchapter D.

Applicable legal requirement is defined as an environmental law, regulation, permit, order, consent decree, or other requirement. This definition is taken from TWC, §5.752, Definitions.

Enhanced environmental performance is defined as an activity by a person, including any measurable voluntary action undertaken by a person to improve environmental quality, which reduces or eliminates discharges or emissions of pollutants to an extent that is greater than required by applicable legal requirements; provides an overall reduction of discharges or emissions of pollutants from a site to an extent that is greater than required by applicable legal requirements; reduces a negative impact on air, water, land, natural resources, or human health to an extent that is greater than required by applicable legal requirements; or other activity determined by the executive director to be greater than required by applicable legal requirements. The commission developed this definition from the regulatory flexibility rules in Chapter 90, Subchapter B; and from TWC, §5.755(c).

Environmental outcome is defined as a measurable or discernable improvement in the quality of air, water, land, or natural resources or in the protection of the environment as determined by the executive director. This definition is based on agency practices for measurement of environmental trends as used by the commission in its strategic plan and the commission's Small Business and Environmental Assistance Division's definition of environmental outcomes for innovative programs.

Innovative program is defined as a program developed by the commission under TWC, Subchapter Q, Performance-Based Regulations, TWC, Chapter 26 or 27, or THSC, Chapter 361, 382, or 401, that provides incentives to a person in return for benefits to the environment that exceed benefits that would result from compliance with applicable legal requirements under the commission's jurisdiction; the flexible permit program administered by the commission under THSC, Chapter 382, and defined in Chapter 116; or the regulatory flexibility program defined in Chapter 90, Subchapter B. The environmental management system program and voluntary programs administered by the commission's Small Business and Environmental Assistance Division or that division's successor are also included as innovative programs. This definition is taken from TWC, §5.752, Definitions, and has been modified for clarity.

Maximum environmental benefit is defined as the overall long-term goal of the commission for environmental improvement which is accomplished by enhanced environmental performance over time from individual reductions in discharges or emissions of pollutants by persons who reduce the negative impacts on water, air, land, natural resources, or human health to an extent that is greater than required by applicable legal requirements. TWC, §5.752(5), defines strategically directed regulatory structure as " . . .a program that is designed to use innovative programs to provide maximum environmental benefit and to reward compliance performance." The commission has developed this definition to provide notice to persons seeking incentives through the strategically directed regulatory structure program about how the goal of the strategically directed regulatory structure program will be assessed.

Permit is defined as a license, certificate, registration, approval, permit by rule, standard permit, or other form of authorization issued by the commission under TWC or THSC. This definition is taken from TWC, §5.752, Definitions, as amended by HB 2912. The commission proposes this definition of permit for consistency with the strategically directed regulatory structure framework set forth in HB 2912 and with Chapter 60.

Public participation is defined as activities by a person under this subchapter intended to enhance public input that are not otherwise required by law or by commission rules. This definition is based on a recommendation from the Sunset Advisory Commission Staff Report, Texas Natural Resource Conservation Commission, 2000, Issue 3.

Region is defined as a region of the commission's Field Operations Division or that division's successor. This definition is taken from TWC, §5.752.

Site is defined as, except with regard to portable units, all regulated units, facilities, equipment, structures, or sources at one street address or location that are owned or operated by the same person. Site includes any property identified in the permit or used in connection with the regulated activity at the same street address or location. A site for a portable regulated unit or facility is any location where the unit or facility is or has operated. This definition is taken from §60.2(a).

Strategically directed regulatory structure is defined as a program that is designed to use innovative programs to provide enhanced environmental performance and to reward compliance performance. This definition is taken from TWC, §5.752.

Voluntary measure is defined as any program with specific performance measures undertaken by a person to improve environmental quality that is not required by rule or law. The commission developed this based on its experience developing and implementing voluntary compliance and voluntary pollution reduction programs, including the Clean Texas Program, Clean Industries, Clean Cities, and Clean Texas Star.

Proposed new §90.60, Incentives, specifies the criteria that the executive director will use when determining whether to grant an incentive.

Proposed new §90.60(a) specifies that a person's compliance history classification will be used in determining eligibility for incentives. This subsection also specifies that the executive director must consider a person's voluntary measures undertaken to improve environmental quality. The executive director may weigh more favorably voluntary measures that are related to the specific media for which a person is requesting incentives or participation in an innovative program. This section implements TWC, §5.755(b)(1) and (2), which requires the commission to base incentives offered under a strategically directed regulatory structure on a person's compliance history classification and voluntary measures undertaken by a person to improve environmental quality.

Proposed new §90.60(b) allows the executive director to consider any other factor that provides enhanced environmental performance that the executive director finds relevant.

The executive director may also consider whether a person voluntarily engages in restoring, enhancing, or preserving natural resources, or whether a person mentors and/or helps other individuals and entities to comply with environmental requirements, limits discharges or emissions of pollutants, or in some other way minimizes the negative effects on air, water, land, natural resources, or human health. Moreover, the executive director may consider efforts by a person to address environmental issues beyond their own operations; efforts made by the person to include stakeholder involvement and environmental reporting of the person's environmental program with consideration to the size and resources of the specific site; or whether a person undertakes community-based initiatives that improve environmental quality or reduce environmental impacts.

Moreover, the executive director may also take into consideration the voluntary measures a person has undertaken that contribute towards goals set in the commission's strategic plan; environmental issues of local or community concern; or environmental initiatives developed by the regulated community. This section provides criteria that assist in implementing TWC, §5.755(a) and (b), which directs the commission to develop a strategically directed regulatory structure that offers incentives based on compliance history classification and voluntary measures undertaken to improve environmental quality.

Proposed new §90.60(c) specifies that the incentives the executive director may offer for participation in innovative programs include, but are not limited to, one point of contact for coordinating innovative programs; technical assistance provided by the commission; accelerated access to commission program information; modification of state or federal regulatory requirements that do not increase existing emission or discharge limits; flexibility in commission regulatory processes that do not require modification of regulatory requirements; or public recognition. For consistency, the commission has taken these incentives primarily from Chapter 90, Subchapter C.

Proposed new §90.60(d) requires that an innovative program offered as part of the strategically directed regulatory structure must be consistent with other laws and any requirement necessary to maintain federal program authorization, including the provisions of any agreements between the commission and the federal government. This section implements TWC, §5.755(c), which requires that any innovative programs offered as part of the strategically directed regulatory structure be consistent with other laws and requirements necessary to maintain federal program authorization.

Proposed new §90.62, Application, explains the requirements a person must follow to apply for a regulatory incentive.

Proposed new §90.62(a) explains that a person who applies to the executive director for a regulatory flexibility project or to use an environmental management system under Chapter 90, or for a flexible permit under Chapter 116 or another program that is designated as innovative under TWC, §5.752(2)(a), does not need to submit another application under this subchapter. A person would, however, need to submit another application under this subchapter if the person requests incentives different from those incentives provided in another innovative program under Subchapter D in which the person is already participating or applying. Further, this subsection specifies that compliance with this provision does not relieve the person from complying with all other applicable legal requirements. For consistency, the provisions in this section are drawn from the regulatory flexibility requirements in Chapter 90, Subchapter B, and the requirements for using an environmental management system in Chapter 90, Subchapter C. This section implements the requirements for providing incentives for participation in innovative programs under TWC, §5.755.

Proposed new §90.62(b) specifies that within 30 days after receipt of an application to use an innovative program or to request an incentive, the executive director must mail written notification informing the person that the application is administratively complete or that it is deficient. This subsection also allows the person who submitted the application 30 days to correct any deficiencies. Furthermore, the executive director may request additional technical information within 60 days after issuing an administrative completeness letter. If the person does not provide the requested technical information within 30 days, the application will be sent back to the person without further action by the executive director. This section also allows a person to refile the application if the executive director sends the application back based on reasons specified in this subsection. Upon request, the executive director may provide additional time for a person to submit information regarding the person's application to use an innovative program or to request an incentive. The commission developed this subsection by adapting similar provisions in Chapter 90, Subchapter B, and the requirements for using an environmental management system in Chapter 90, Subchapter C.

Proposed new §90.62(c) requires the executive director to review the person's application as well as the person's and site's compliance history classification. This subsection implements TWC, §5.755(b)(1), which requires the commission to base incentives offered under strategically directed regulatory structure on compliance history classification.

Proposed new §90.62(d) lists the items an application must, at a minimum, include for participation in the strategically directed regulatory structure. These items include a narrative summary of the proposal or project, including the specific statutes or commission rules under which participation is being sought; reference to the specific permit provision or regulation the person requests to modify; and a detailed explanation, including a demonstration as appropriate, that the proposal or project is more protective of the environment and the public health than the method or standard prescribed by the statute or commission rules that would otherwise apply; and that the proposal or project is not inconsistent with federal law, including any requirement for a federally approved or authorized program. Additional application requirements include a description of a public participation component associated with the proposed project; where appropriate, a project monitoring schedule which includes a proposal for monitoring, recordkeeping, and/or reporting of environmental performance and compliance; any documented results from the project demonstrating that the project produces a measurable environmental outcome that enhances environmental performance; an explanation of how the project will be consistent with the needed environmental outcome/regional plan if the applicant chooses a project that will address a regional environmental issue identified in the commission's strategic plan, as amended; and any information requested from the person by the executive director. The commission developed this subsection by adapting similar provisions in Chapter 90, Subchapters B and C.

Proposed new §90.62(e) requires the application to be signed, certifying that all information is true, accurate, and complete to the best of the signatory's knowledge. The commission developed this subsection by adapting similar provisions in Chapter 90, Subchapters B and C.

Proposed new §90.62(f) requires the person to submit an original and two copies of the signed application to the executive director for review, and to send one additional copy to the commission's regional office for the region in which the site is located. A list of the commission's regional offices can be found at http://www.tceq.state.tx.us/admin/directory/region/reglist.html . The commission developed this subsection by adapting similar provisions in Chapter 90, Subchapters B and C.

Proposed new §90.62(g) requires a person whose application is approved by the executive director to maintain records and other supporting information which shows that voluntary environmental measures associated with incentives approved by the executive director are being carried out and are resulting in enhanced environmental performance. Access to the site and all records and data must be retained at the site and/or must be readily available for review by a commission representative for a period of three years after the date of any record or sample, measurement, report, application, or certification. This period must be extended at the request of the executive director. The commission adapted this section from similar provisions regarding environmental management systems in Chapter 90, Subchapter C.

Proposed new §90.64, Requests for Modification of State or Federal Regulatory Requirements, outlines the requirements a person must meet when requesting modifications of state or federal regulatory requirements.

Proposed new §90.64(a) requires persons who request modifications of state or federal regulatory requirements which cannot be authorized by any other approval method except a commission order to follow the requirements of §90.62. The commission adapted this section from similar provisions regarding regulatory flexibility in Chapter 90, Subchapter B.

Proposed §90.64(b) requires persons who request modification of federal regulatory requirements under this subchapter also meet the requirements of agreements between the EPA and the commission to receive federal regulatory incentives. This section implements TWC, §5.755(c), which requires that any innovative programs offered as part of the strategically directed regulatory structure be consistent with other laws and requirements necessary to maintain federal program authorization.

Proposed new §90.64(c) requires persons who request modification of federal regulatory requirements under this chapter to include a public participation component in the project proposal. This section implements Management Action, 3.5, Sunset Commission Staff Report, 2000, to expand opportunities for public participation within innovative regulatory programs.

Proposed new §90.66, Review by Executive Director Required, specifies that the incentives the executive director grants must be terminated if a person's or site's compliance history classification has declined to a lower classification than the person had assigned at the time the incentives were approved.

Proposed new §90.66(a) requires any person who receives incentives under this subchapter to submit a progress report every two years documenting the enhanced environmental performance of the project and specifies what the report must include. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C and Chapter 60.

Proposed new §90.66(b) specifies that at least once every two years, the executive director must review the latest compliance history classification available for the person and the site receiving incentives under this chapter, as determined under §60.2. This subsection also requires the executive director to review the latest progress reports required to be submitted under this chapter and any voluntary measures undertaken by the person and site receiving incentives under this chapter to enhance environmental performance since any previous biennial review. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C and Chapter 60.

Proposed new §90.66(c) requires the executive director to begin termination proceedings under §90.68 if the biennial review indicates that a person's or site's compliance history classification has declined to a lower classification, and the incentives were only available for the previous classification. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C.

Proposed new §90.66(d) requires the executive director to begin termination proceedings under §90.68 if the executive director finds that a person's voluntary environmental measures no longer provide enhanced environmental performance. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C; and TWC, §5.755, Strategically Directed Regulatory Structure.

Proposed new §90.66(e) specifies that a person who suspends or terminates voluntary environmental measures associated with incentives granted by the executive director must notify the executive director within ten calendar days after the occurrence. The commission proposes this subsection to clarify that it is the person's responsibility to inform the commission when the person has ceased the voluntary activity that was used to determine eligibility for incentives and to be consistent with the reporting requirements for participants in other innovative and voluntary programs of the agency.

Proposed new §90.68, Termination of Regulatory Incentives Under the Strategically Directed Regulatory Structure, allows either the recipient of the incentives or the executive director to terminate the incentives.

Proposed new §90.68(a) outlines the requirements for termination of incentives by the recipient. This subsection allows a person who receives regulatory incentives for a site under this subchapter to terminate the regulatory incentives at any time by sending a notice of termination to the executive director by certified mail and requires the site for which a person received incentives to be in compliance with all applicable legal requirements affected by the regulatory incentives granted within 30 days after the date the incentive is terminated. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C. This subsection implements TWC, §5.755, Strategically Directed Regulatory Structure.

Proposed new §90.70, Public Notice and Comment, specifies the requirements for public notice, comment, and hearing. The commission proposes these provisions to address the Sunset Advisory Commission's recommendation that the commission "expand opportunities for public participation within innovative regulatory programs." (Sunset Advisory Commission Staff Report, Texas Natural Resource Conservation Commission, 2000, page 38.) The commission proposes this section to implement the Sunset Commission's Management Recommendation.

Proposed new §90.70(a) requires that applicants for participation in innovative programs with specific notice, comment, and hearing requirements must follow the requirements under those programs notwithstanding the requirements of this subchapter, unless the applicant is requesting additional incentives under this subchapter. The commission proposes this subsection to be consistent with TWC, §5.112, Public Testimony Policy; and existing statutory provisions regarding public notice.

Proposed new §90.70(b) specifies that if an applicant for incentives under this subchapter requests an exemption from a statute or commission rule, the applicant must comply with all public notice, comment, and hearing requirements associated with the statute or commission rule for which the applicant is seeking an exemption, except as provided in subsection (c) of this section. The commission proposes this subsection to be consistent with TWC, §5.112, and with the Sunset Commission's Management Recommendation regarding public participation in innovative programs, and existing statutory provisions regarding public participation.

Proposed new §90.70(c) requires that if the specific innovative program or statute or commission rule for which an applicant is seeking an exemption does not require public notice, or an opportunity for comment, the applicant must follow the requirements in §90.70(c)(1) and (2). The commission proposes this subsection to be consistent with TWC, §5.112, the Sunset Commission Management Recommendation regarding public participation in innovative programs, and existing statutory provisions regarding public notice.

Proposed new §90.70(c)(1) requires the applicant to publish notice at least once in a newspaper of general circulation in the county where the facility or site requesting incentives is located or proposed to be located. The notice must be published within 30 days after submittal of the application and not be smaller than that normally used in the newspaper's classified advertising section. The commission proposes this paragraph to be consistent with TWC, §5.112, and the Sunset Commission Management Recommendation regarding public participation in innovative programs.

Proposed new §90.70(c)(2) requires that the commission accept public comment for 30 days after the last publication of the notice of application. The commission proposes this paragraph to be consistent with TWC, §5.112, and the Sunset Commission Management Recommendation regarding public participation in innovative programs.

Proposed new §90.70(d) lists the items that must be in the notice, including a brief description of the proposal and of the business conducted at the facility or activity described in the application; a brief description of the incentive(s) requested; the name and address of the applicant and, if different, the location of the facility for which incentives under this subchapter are sought; the name and address of the commission; the name, address, and telephone number of a commission contact person from whom interested persons may obtain further information; the applicant or applicant's designated representative; a brief description of the public comment procedures; and the date by which comments must be received by the commission. The commission proposes this paragraph to be consistent with TWC, §5.112, and the Sunset Commission Management Recommendation regarding public participation in innovative programs.

Proposed new §90.72, Notice of Proposed Final Action, specifies the actions the executive director will follow if comments are received and describes the requirements for a motion to overturn.

Proposed new §90.72(a) requires that after the public comment period, the executive director must send notice by first-class mail of the proposed final action on the application to any person who commented during the public comment period and to the applicant. The commission proposes this subsection to be consistent with TWC, §5.112, and with the Sunset Commission's Management Recommendation regarding public participation in innovative programs.

Proposed new §90.72(b) specifies that the notice must include the executive director's decision on the application, the response to any comments submitted during the public comment period, and a statement that any person may file a motion to overturn the executive director's decision under subsection (c) of this section. The commission proposes this subsection to be consistent with TWC, §5.112, and with the Sunset Commission's Management Recommendation regarding public participation in innovative programs.

Proposed new §90.72(c) specifies that the applicant, the executive director, the public interest counsel, or any other person may file with the chief clerk a motion to overturn the executive director's decision to grant or deny incentives. A motion must be filed within 23 days after the date the commission mails notice of the executive director's decision to the applicant and persons who submitted timely comment. Timely motions are subject to 30 TAC §50.139(e) - (g). The provision specifies that a person whose incentives have been terminated by the executive director may continue to receive those incentives pending final disposition of any motion to overturn the executive director's decision filed by the person. The commission adapted this section from similar provisions in Chapter 90, Subchapters B and C; Chapter 60; and TWC, §5.755.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

Yia Hang, Analyst in the Strategic Planning and Appropriations Section, has determined that, for 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 government as a result of administration or enforcement of the proposed rules. The proposed rules would establish a framework for providing persons regulated by the TCEQ with incentives for enhanced environmental performance and for encouraging participation in the TCEQ's innovative programs. Eligibility for incentives is related to compliance performance and voluntary activities. These proposed rules reference the agency's existing compliance history requirements and do not create a new evaluation process to assess a person's compliance history classification. Eligibility is accorded to all persons regulated by the TCEQ; however, participation is entirely voluntary and there will be no significant impact to the agency from enrollment.

PUBLIC BENEFITS AND COSTS

Ms. Hang also determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated from the enforcement of and compliance with the proposed rules will be potentially improved environmental performance by persons regulated by the TCEQ. The proposed rules would establish a systematic approach for using innovative programs to achieve maximum environmental benefit and to reward compliance performance. Anticipated improvements include improvements in compliance history classification by persons regulated by the TCEQ and increased participation in the agency's innovative programs, which will lead to new projects that could demonstrate improvements in protecting the environment. No significant fiscal implications are anticipated for any individual or business due to implementation of the proposed rules.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

There will be no adverse fiscal implications for small or micro-businesses as a result of implementation of the proposed rules, which would establish a systematic approach for using innovative programs to achieve maximum environmental benefit and to reward compliance performance. While eligibility for incentives is accorded to all persons regulated by the TCEQ under these rules, participation by small and micro-businesses is entirely voluntary. No significant fiscal implications are anticipated for any small or micro-business due to implementation of the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect. The proposed rules impose no compliance costs, and participation by regulated persons is voluntary.

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 that section because it does not meet the definition of a "major environmental rule." "Major environmental rule" means a rule developed with the specific intent of protecting the environment or reducing 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 specific intent of these rules is to implement TWC, §5.755 and §5.757, which require the commission to adopt rules to develop a strategically directed regulatory structure to provide incentives for enhanced regulatory performance, and to adopt rules to designate a single point of contact within the commission to coordinate all innovative programs. Although the intent of the strategically directed regulatory structure rules is to encourage additional protection of the environment and human health resulting from environmental exposure, participation in the program is voluntary and therefore should not 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. Since eligibility for participation in the program depends on verifiable environmental enhancements, the environment and the public health and safety of the state should be improved with implementation of the rules.

In addition, the specific intent of this rulemaking does not meet the applicability criteria for a major environmental rule found in Texas Government Code, §2001.0225(a). That section defines a major environmental rule as one that: 1) exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement of state law, unless the rule is specifically required by federal law; 3) exceeds a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopts a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements of a "major environmental rule." The proposed rules do not require regulated entities to meet a standard that exceeds a federal standard, an express requirement of state law, or a requirement contained in a delegation agreement. The proposed rules were not developed solely under the commission's general powers, but rather were developed to implement the specific requirements of HB 2912, §4.01, which added TWC, §5.755 and §5.757.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact assessment for this rulemaking action. The specific purpose of this rulemaking is to implement HB 2912, §4.01, which added TWC, §5.755 and 5.757. These sections require the commission to develop a strategically directed regulatory structure to provide incentives for enhanced environmental performance, and to promulgate rules designating a single point of contact within the commission to coordinate all innovative programs. Promulgation and enforcement of the proposed rules would be neither a statutory nor a constitutional taking because they do not adversely affect private real property. Private property will not be adversely affected because participation in the program is voluntary, and participation will not prohibit activities that would otherwise be allowed on private property. The rulemaking does not affect private property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of a governmental action. Therefore, these rules do not constitute a takings under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

This rulemaking is subject to the Coastal Coordination Act, Texas Natural Resources Code, §§33.201 et seq . and the Texas Coastal Management Program (CMP) and, therefore, must be consistent with CMP goals and policies. The commission reviewed this rulemaking for consistency with the CMP goals and policies in accordance with the regulations of the Coastal Coordination Council, and determined that the rulemaking establishes procedural processes and will have no substantive effect on commission actions subject to the CMP and is therefore consistent with CMP goals and policies.

The commission seeks public comment on the consistency of the proposed rulemaking with CMP goals and policies.

ANNOUNCEMENT OF HEARING

A public hearing on this proposal will be held in Austin on March 27, 2003 at 2:00 p.m., 12100 Park 35 Circle, Building F, Room 2210. Individuals may present oral or written statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes 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 Joyce Spencer, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2001-072-090-AD. Comments must be received by 5:00 p.m., April 7, 2003. For further information, please contact Kathy Ramirez, Regulation Development Section, at (512) 239-6757.

STATUTORY AUTHORITY

The new rules are proposed under TWC, §5.103 and §5.105, which provide the commission the authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state; and TWC, §5.112, which requires the commission to develop and implement policies that will provide the public with a reasonable opportunity to appear before the commission and speak on any issue under the jurisdiction of the commission. Specific statutory authorization derives from HB 2912, §4.01, 77th Legislature, 2001, which amended TWC by adding §5.755. This section requires the commission to promulgate rules to develop a strategically directed regulatory structure to provide incentives for enhanced regulatory performance. Further specific statutory authorization derives from HB 2912, §4.01, 77th Legislature, 2001, which amended TWC by adding §5.757. This section requires the commission to promulgate rules designating a single point of contact within the commission to coordinate all innovative programs.

The proposed new sections implement TWC, §5.755 and §5.757, as added by HB 2912.

§90.50.Purpose.

The purpose of this subchapter is to implement Texas Water Code, §5.755, Strategically Directed Regulatory Structure, to establish a framework for innovative programs to provide for enhanced environmental performance and to reward compliance performance.

§90.52.Applicability.

(a) The provisions of this subchapter are applicable to all persons subject to the requirements of Texas Water Code (TWC), Chapters 26 and 27, and Texas Health and Safety Code (THSC), Chapters 361, 382, and 401. The applicable regulatory activities include:

(1) management and disposal of industrial solid waste, hazardous waste, or municipal solid waste (including composting, sewage sludge, and water treatment sludge) regulated under the Texas Solid Waste Disposal Act, THSC, Chapter 361;

(2) discharges to surface water and groundwater regulated under TWC, Chapter 26;

(3) petroleum storage tanks regulated under TWC, Chapter 26;

(4) disposal of waste by underground injection regulated under TWC, Chapter 27;

(5) emission sources of air contaminants regulated under THSC, Chapter 382; and

(6) management and disposal of radioactive material waste regulated under THSC, Chapter 401.

(b) This subchapter does not apply to occupational licensing programs or other programs specifically exempted by statute.

§90.54.Single Point of Contact.

The executive director or the executive director's designee shall serve as the single point of contact within the agency to coordinate all innovative programs. The executive director, or the executive director's designee, acting as the coordinator, shall:

(1) inventory, coordinate, and market and evaluate all innovative programs;

(2) provide information and technical assistance to persons participating in or interested in participating in those programs; and

(3) work with the Pollution Prevention Advisory Committee to assist the commission in integrating the innovative programs into the commission's operations, including:

(A) program administration;

(B) strategic planning; and

§90.56.Eligibility.

(a) Except as provided in subsection (b) or (c) of this section, a person whose application to participate in an innovative program or whose application for an incentive meets the minimum standards of §90.62 of this title (relating to Application) shall be eligible to receive regulatory incentives under this chapter.

(b) A person who has incurred a judgment in a suit brought by the Texas or United States attorney general against the site for which the person is requesting regulatory incentives, is ineligible to participate in an innovative program or to receive regulatory incentives at that site for a period of five years after the date the judgment was final.

(c) A person who has been convicted of willfully or knowingly committing an environmental crime regarding the site for which the person is requesting to participate in an innovative program or requesting regulatory incentives is ineligible to receive regulatory incentives through participation in an innovative program under this chapter for a period of three years after the date of the conviction.

(d) A person shall be accepted into a strategically directed regulatory structure by meeting the criteria and standards for the following:

(1) regulatory flexibility under Subchapter B of this title (relating to General Provisions);

(2) incentives for using an environmental management system under Subchapter C of this chapter (relating to Regulatory Incentives for Using Environmental Management Systems);

(3) programs authorized as innovative by the executive director;

(4) flexible permits under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification); or

(5) other programs set forth under this subchapter.

(e) Incentives granted under one innovative program do not guarantee incentives offered under another innovative program, except where those incentives are equivalent.

§90.58.Definitions.

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

(1) Applicable legal requirement--An environmental law, regulation, permit, order, consent, decree, or other requirement.

(2) Enhanced environmental performance--An activity by a person, including any measurable voluntary action undertaken by a person to improve environmental quality, which:

(A) reduces or eliminates discharges or emissions of pollutants to an extent that is greater than required by applicable legal requirements;

(B) provides an overall reduction of discharges or emissions of pollutants from a site to an extent that is greater than required by applicable legal requirements;

(C) reduces a negative impact on air, water, land, natural resources, or human health to an extent that is greater than required by applicable legal requirements; or

(D) is otherwise determined by the executive director to improve environmental quality to an extent greater than required by applicable legal requirements.

(3) Environmental outcome--A measurable or discernable improvement in the quality of air, water, land, or natural resources or in the protection of the environment as determined by the executive director.

(4) Innovative program--

(A) a program developed by the commission under Texas Water Code (TWC), Subchapter Q, Performance Based Regulation, TWC, Chapter 26 or 27; or Texas Health and Safety Code (THSC), Chapter 361, 382, or 401; that provides incentives to a person in return for benefits to the environment that exceed benefits that would result from compliance with applicable legal requirements under the commission's jurisdiction;

(B) the flexible permit program administered by the commission under THSC, Chapter 382, and defined in Chapter 116, Subchapter G of this title (relating to Flexible Permits);

(D) the environmental management systems program defined in Subchapter C of this chapter (relating to Regulatory Incentives for Using Environmental Management Systems); or

(E) other voluntary programs administered by the commission's Small Business and Environmental Assistance Division or that division's successor.

(5) Maximum environmental benefit--The overall long-term goal of the commission for environmental improvement which is accomplished by enhanced environmental performance over time from individual reductions in discharges or emissions of pollutants by persons who reduce the negative impacts on water, air, land, natural resources, or human health to an extent that is greater than required by applicable legal requirements.

(6) Permit--A license, certificate, registration, approval, permit by rule, standard permit, or other form of authorization issued by the agency under TWC or THSC.

(7) Public participation--Activities by a person under this subchapter intended to enhance public input that are not otherwise required by law or by commission rules.

(8) Region--A region of the commission's Field Operations Division or that division's successor.

(9) Site--Except with regard to portable units, all regulated units, facilities, equipment, structures, or sources at one street address or location that are owned or operated by the same person. Site includes any property identified in the permit or used in connection with the regulated activity at the same street address or location. A site for a portable regulated unit or facility is any location where the unit or facility is or has operated.

(10) Strategically directed regulatory structure--A program that is designed to use innovative programs to provide maximum environmental benefit and to reward compliance performance.

(11) Voluntary measure--A program with specific performance measures undertaken by a person to improve environmental quality that is not required by rule or law.

§90.60.Incentives.

(a) In providing incentives for enhanced environmental performance, the executive director shall offer incentives based on:

(1) a person's and/or site's compliance history classification under §60.2 of this title (relating to Classification); and

(2) a person's voluntary measures, including participation in innovative programs, to improve environmental quality. The executive director may weigh more favorably voluntary measures that are related to the specific media for which a person is requesting incentives or participation in an innovative program.

(b) In granting incentives, the executive director may also consider any other factor that the executive director finds relevant that leads to enhanced environmental performance.

(c) The incentives the executive director may offer for participation in innovative programs include, but are not limited to:

(1) one point of contact for coordinating innovative programs;

(2) technical assistance provided by the commission;

(3) accelerated access to commission program information;

(4) modification of state or federal regulatory requirements that do not increase existing emission or discharge limits or decrease public involvement;

(5) flexibility in commission regulatory processes that do not require modification of regulatory requirements; and

(6) public recognition.

(d) An innovative program offered as part of the strategically directed regulatory structure must be consistent with other law and any requirement necessary to maintain federal program authorization, including the provisions of any agreements between the commission and the federal government.

§90.62.Application.

(a) A person who applies to the executive director for a regulatory flexibility project or to use an environmental management system under this chapter, or for a flexible permit under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) or another program designated as innovative under Texas Water Code (TWC), §5.752(2), does not need to submit another application under this section's requirements, unless the person requests an additional incentive not available to the person in the program in which the person is already participating or applying to participate. Compliance with this requirement does not relieve the person from complying with all other applicable legal requirements.

(b) If a person seeks incentives under this section that are not available under specific innovative programs designated in this chapter, Chapter 116 of this title, or other programs designated as innovative under TWC, §5.752(2), the person must submit an application to the executive director to receive incentives available under this section. Within 30 days after receipt of an application to use an innovative program or to request an incentive under this section, the executive director shall mail written notification informing the person that the application is administratively complete or that it is deficient.

(1) If the application is deficient, the notification shall specify the deficiencies, and allow the person 30 days from the date of receipt of the notice to provide the requested information. If the person does not submit an adequate response within the allotted time, the application will be sent back to the person without further action by the executive director.

(2) Additional technical information may be requested within 60 days after issuance of an administrative completeness letter. If the person does not provide the requested technical information within 33 days from the date of the request, the application will be sent back to the person without further action by the executive director.

(3) If an application is sent back to the person under paragraph (1) or (2) of this subsection, the person may refile the application at any time.

(4) The applicant may request that the executive director allow additional time for a person to submit information regarding the person's application to use an innovative program or to request an incentive.

(c) In making a determination of eligibility, the executive director shall review the application as well as the person's and site's compliance history classification as defined by Chapter 60 of this title (relating to Compliance History).

(d) An application for participation in the strategically directed regulatory structure must, at a minimum, include:

(1) a narrative summary of the proposal or project, including the specific statutes or commission rules under which participation is being sought;

(2) a specific reference to the appropriate permit provision or citation to a regulation if the person's request is to modify an existing state or federal regulatory requirement;

(3) a detailed explanation, including a demonstration as appropriate, that the proposal or project is:

(A) more protective of the environment and the public health than the method or standard prescribed by the statute or commission rules that would otherwise apply; and

(B) not inconsistent with federal law, including any requirement for a federally approved or authorized program;

(4) a description of any public participation component associated with the proposal or project;

(5) where appropriate, a project monitoring schedule which includes a proposal for monitoring, recordkeeping, and/or reporting of environmental performance and compliance;

(6) any documented results from the project or estimates of future project outcomes demonstrating that the project produces a measurable environmental outcome that enhances environmental performance;

(7) an explanation of how the project will be consistent with the needed outcome/regional plan if the applicant chooses a project that will address a regional environmental issue identified in the commission's strategic plan, as amended; and

(8) any necessary additional information as determined by the executive director.

(e) The application must be signed and must certify that all information is true, accurate, and complete to the best of the signatory's knowledge.

(f) An original and two copies of the signed application shall be submitted to the executive director for review, and one additional copy shall be submitted to the appropriate commission regional office for the region in which the site is located.

(g) A person whose application is approved by the executive director must maintain records and other supporting information which shows that voluntary environmental measures associated with incentives approved by the executive director are being carried out and are resulting in enhanced environmental performance. All records and data shall be retained at the site and/or shall be readily available for review by a commission representative or any local air pollution control program with jurisdiction for a period of three years after the date of any record or sample, measurement, report, application, or certification. This period shall be extended at the written direction of the executive director.

§90.64.Requests for Modification of State or Federal Regulatory Requirements.

(a) Persons who request a modification of a state or federal regulatory requirement which requires approval by commission order must follow the requirements of §90.62 of this title (relating to Application).

(b) Persons who request modification of federal regulatory requirements under this subchapter must also meet the requirements of agreements between the EPA and the commission in order to receive federal regulatory incentives.

(c) Persons who request modification of federal regulatory requirements under this chapter must include a public participation component in the project proposal.

§90.66.Review by Executive Director Required.

(a) Any person who is receiving incentives under this subchapter shall submit a progress report every two years from the date of written approval from the executive director documenting the enhanced environmental performance of the project, including:

(1) a demonstration that the results are more protective of the environment than the method or standard prescribed by the statute or commission rule that would otherwise apply;

(2) specific measurable results of the project and how these contribute toward environmental outcomes;

(3) documentation of any public participation component; and

(4) how the results achieved compare to the results projected in the application.

(b) At least once every two years from the date of written approval from the executive director, the executive director shall review the latest compliance history classification available for the person and the site receiving incentives under this chapter, as determined under §60.2 of this title (relating to Classification). The executive director shall also review the latest progress reports required to be submitted under this chapter and any voluntary measures by the person and the site receiving an incentive under this chapter to enhance environmental performance undertaken since any previous biennial review.

(c) If the biennial review indicates that a person's or site's compliance history classification has declined to a lower classification than the person or site held at the time the incentives were approved, the executive director shall begin termination proceedings under §90.68 of this title (relating to Termination of Regulatory Incentives Under the Strategically Directed Regulatory Structure) for any incentives granted that were only available to the person and/or site under the previous compliance classification.

(d) If the executive director finds that a person's voluntary environmental measures no longer provide for enhanced environmental performance, the executive director shall begin termination proceedings under §90.68 of this title.

(e) If a person suspends or terminates voluntary environmental measures associated with incentives granted by the executive director, that person must notify the executive director within ten calendar days after the occurrence.

§90.68.Termination of Regulatory Incentives Under the Strategically Directed Regulatory Structure.

(a) Termination by the recipient.

(1) A person who receives regulatory incentives for a site under this subchapter may terminate the regulatory incentives at any time by sending a notice of termination to the executive director by certified mail.

(2) If the incentives received by the person or site included exemptions from state or federal requirements, the person or site must be in full compliance with all requirements for which exemptions were granted within 30 days after notice of termination is mailed to the commission. If a new permit, permit amendment, or other authorization is necessary in order for the person to achieve compliance, an administratively complete application for such authorization shall be submitted to the commission within 30 days after notice of termination is mailed to the commission.

(b) Termination by the executive director.

(1) Noncompliance with the terms and conditions of regulatory incentives, an environmental management system approved under Chapter 90, Subchapter B of this chapter (relating to General Provisions), or this chapter, shall result in termination of the regulatory incentives.

(2) The executive director may also terminate incentives under this chapter if the executive director finds that the person or site receiving incentives is not complying with other applicable legal requirements, even if the site's or person's compliance history classification has not changed.

(3) If the executive director determines that a person who is granted regulatory incentives under this subchapter no longer meets the requirements of this subchapter, the executive director shall notify the person in writing within 90 days after the deficiencies are documented.

(4) If the noted deficiencies are not corrected and supporting documentation submitted within 90 days after receipt of the notification, regulatory incentives shall be terminated.

(5) If the incentives received by the person or site included exemptions from state or federal requirements, the person or site must be in full compliance with all requirements for which exemptions were granted within 30 days after termination by the executive director. If a new permit, permit amendment, or other authorization is necessary in order for the person to achieve compliance, an administratively complete application for such permit or authorization shall be submitted within 33 days after termination by the executive director. Upon written request, the executive director may allow an additional amount of time not to exceed 90 days from the date the incentive is terminated for a person to achieve compliance with applicable legal requirements or apply for proper authorization.

§90.70.Public Notice and Comment.

(a) Applicants for participation in innovative programs with specific notice, comment, and hearing requirements shall follow the requirements under those programs notwithstanding the requirements of this subchapter, unless the applicant is requesting additional incentives under this subchapter.

(b) If an applicant for incentives under this subchapter requests an exemption from a statute or commission rule, the applicant shall comply with all public notice, comment, and hearing requirements associated with the statute or commission rule for which the applicant is seeking an exemption, except as provided in subsection (c) of this section.

(c) If the specific innovative program or statute or commission rule for which an applicant is seeking an exemption does not require public notice or an opportunity for comment, the following requirements shall apply.

(1) The applicant shall publish notice of the application at least once in a newspaper of general circulation in the county where the facility or site requesting incentives is located or proposed to be located. The notice shall be published within 30 days after the application is determined to be administratively complete. Notice under this section shall not be published in a font size smaller than that normally used in the newspaper's classified advertising section.

(2) The commission shall accept public comment for 30 days after the last publication of the notice of application.

(d) Notice under this section shall include, at a minimum:

(1) a brief description of the proposal and of the business conducted at the facility or activity described in the application;

(2) a brief description of the incentive(s) requested;

(3) the name and address of the applicant and, if different, the location of the facility for which incentives under this subchapter are sought;

(4) the name and address of the commission;

(5) the name, address, and telephone number of a commission contact person from whom interested persons may obtain further information;

(6) the applicant or applicant's designated representative;

(7) a brief description of the public comment procedures; and

(8) the date by which comments must be received by the commission.

§90.72.Notice of Proposed Final Action.

(a) After the public comment period, the executive director shall send notice by first-class mail to any person who commented during the public comment period and to the applicant of the proposed final action on the application.

(b) The notice shall include the executive director's decision on the application, the response to any comments submitted during the public comment period, and a statement that any person may file a motion to overturn the executive director's decision under subsection (c) of this section.

(c) The applicant, the executive director, the public interest counsel, or any other person may file with the chief clerk a motion to overturn the executive director's decision to grant or deny incentives. A motion must be filed within 23 days after the date the commission mails notice of the executive director's decision to the applicant and persons who submitted timely comment. Timely motions are subject to §50.139(e) - (g) of this title (relating to Motion to Overturn Executive Director's Decision). If a person who received a final notice from the executive director terminating incentives received under this section files a motion to overturn the executive director's decision, the person will continue to receive the incentives pending final disposition of the motion to overturn under the procedures in §50.139(e) - (g) of this title. If the motion to overturn is denied or overruled by operation of law, the provisions of §90.68(b)(5) of this title apply on the date the motion is denied or overruled by operation of law.

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 February 21, 2003.

TRD-200301353

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: April 6, 2003

For further information, please call: (512) 239-5017