2022 or “2020 Too?” TCEQ Resumes Major Rulemaking To Revise Compliance History Rules Affecting Industrial Companies in Texas

In October 2020, we shared proposed changes by the Texas Commission on Environmental Quality (TCEQ) that signaled increased enforcement and penalty amounts for Texas businesses. One of those changes was TCEQ’s stated intent to revise 30 Texas Administrative Code (TAC) Chapter 60, Compliance History (the “Compliance History Rules”). (Archived copy of the 2020 press release is available here.) After some slight delays, it appears TCEQ is moving forward with the proposed rulemaking, with the executive director proposing to revise Chapter 60 by adding a new section, 30 TAC §60.4. This new section would establish a provision allowing the TCEQ executive director to reclassify a site’s compliance history classification, if appropriate, following an industrial incident. Companies potentially affected by this change may wish to participate in the upcoming virtual public hearing at 2:00 p.m. CT on Jan. 27 and/or submit written public comments until Feb. 1.

Background

In its proposal for the new rulemaking, TCEQ discussed how several large emergency incidents at industrial facilities in the past few years have caused “significant impacts to public health and the environment, which have resulted in scrutiny of the compliance histories of the regulated entities involved in these incidents.” In 2017, for example, an explosion of organic peroxides occurred at the Arkema Crosby plant following flooding due to Hurricane Harvey. This type of major explosion, like other industrial incidents, can have significant ramifications on the surrounding community, environment, and resources (e.g., emergency response services). Under the current Compliance History Rules, however, a site’s compliance history score is calculated annually, and so, if a site is involved in an emergency event, the ramifications of that event would not be immediately taken into account nor accurately reflected in the site’s compliance history classification. So, the site of an industrial incident could remain classified as “a satisfactory performer” or even a “high performer” for months after a major violation.

Proposed Rulemaking

The purpose of this proposed rulemaking is to communicate to the regulated entity and the public that a review of such a site’s performance is underway, provide a more immediate and accurate measure of a site’s performance in light of such an event, and make compliance history a more effective tool to provide oversight and ensure regulatory consistency. Adding 30 TAC §60.4 would provide a process for the executive director to designate a site’s compliance history classification as “under review” and to reclassify it to “suspended” if the executive director determines that exigent circumstances exist due to an event at a site (e.g., a major explosion or fire) that significantly impacts the surrounding community and environment; causes emergency response efforts by federal or state authorities to address pollutants, contaminants, or other materials regulated by the agency; and results in certain urgent or grave consequences.

A “suspended” status would be the functional equivalent of the currently-available “unsatisfactory” status for the purposes of relevant agency decisions. For example, TCEQ would be required to evaluate proposed permit applications related to a “suspended” site in light of the emergency event that caused or resulted in the exigent circumstances. Under the proposed rule, the reclassification of a site to “suspended” would be effective for at least one year from the effective date of reclassification. The site reclassification would end once the executive director is satisfied that the site owner or operator has resolved and addressed the significant emergency event. TCEQ intends for this decision to be at the sole discretion of the executive director. Alternatively, if that does not occur, the site reclassification would end three years after the effective date of the reclassification.

Participation Opportunities

TCEQ will hold a virtual public hearing on this proposal at 2:00 p.m on Jan. 27. Those who plan to attend the hearing and would like to provide oral comments and/or want their attendance on record must register by Tuesday, Jan. 25 by emailing Rules@tceq.texas.gov and providing their name, affiliation, phone number, and whether or not they plan to provide oral comments during the hearing. Those who wish to just attend, without providing oral comments, may join the meeting at the scheduled time via this link.

Those wishing to submit written public comments may do by submitting comments to Ms. Lee Bellware, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087 or via fax to fax4808@tceq.texas.gov. Alternatively, electronic comments may be submitted at: https://www6.tceq.texas.gov/rules/ecomments/. All comments should reference Rule Project Number 2020-049-060-CE. The comment period closes on Feb. 1.

If you have any questions about the proposed rulemaking or your Texas operations, please contact Patrick J. Larkin, Ashley T. Kisner, Tobias Smith, or our other Clark Hill’s Environmental & Natural Resources attorneys.

The views and opinions expressed in the article represent the view of the author and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is intended to be a substitute for professional legal advice.