TCEQ Proposes Important Changes to Its Compliance History Rules

Pillsbury Winthrop Shaw Pittman LLP


  • The Texas Commission on Environmental Quality (TCEQ) has proposed changes to compliance history rules that would authorize the Executive Director to unilaterally “reclassify” a facility’s compliance history in the wake of an emergency event.
  • If adopted, this proposed rule could significantly affect permitting, reporting and enforcement for sites that experience such an emergency event.
  • The TCEQ has scheduled a virtual public hearing on the proposed rule for January 27, 2022, and written comments will be accepted until February 1, 2022.

On December 15, 2021, the Texas Commission on Environmental Quality (TCEQ) proposed significant changes to its compliance history rules. Specifically, TCEQ intends to add a new section to its rules that would authorize the agency’s Executive Director (ED) to “reclassify” a site’s compliance history if an emergency event results in significant impact to the public and the environment.

Currently, TCEQ annually calculates a compliance history score for regulated entities based on the preceding five years. The current classifications are unsatisfactory, satisfactory or high performers—or unclassified if no compliance information is available for the site. But annual compliance history calculations may not timely reflect emergency events.

The new rule, to be included under 30 Texas Administrative Code Chapter 60, would give the ED the power to immediately designate the site’s compliance history classification as “under review” in the wake of an emergency event. The ED can then reclassify the history as “suspended” between 30 and 90 days from the “under review” designation. A “suspended” designation can be assigned if the ED determines that “exigent circumstances” exist due to the occurrence of a significant emergency event such as a major explosion or fire. Such circumstances include:

  • An event that significantly impacts the surrounding community and environment;
  • An event that causes emergency response efforts by federal or state authorities to address pollutants, contaminants, or other materials regulated by the respective agency; and
  • An event that results in certain urgent or grave consequences.

A “suspended” designation would mean that that site would be treated as an “unsatisfactory performer” for purposes of relevant agency decisions, and would remain in place for a minimum of one and maximum of three years. This proposal outlines an appeals process by motion for Commission review.

TCEQ’s reasoning for the rulemaking is that “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.”

This proposal, if adopted, could have a significant impact on facilities that experience emergency incidents, subjecting them to increased scrutiny from the agency. A designation of “suspended” or “unsatisfactory performer” could lead to harsher enforcement by the TCEQ, additional oversight on environmental compliance, and a potential for increased administrative penalties. The proposed rules notes, however, that TCEQ does not intend for reclassification to change underlying compliance history numerical points associated with the site.

The proposed rule could also impact facilities beyond the subject emergency event. (See 30 TAC § 60.3(a)(3)(B)(i), authorizing the agency’s use of compliance histories in regulatory actions). Additionally, TCEQ can perform investigations without prior notice at “unsatisfactory performer” sites and may require additional environmental compliance reporting. This kind of designation also has the potential to negatively affect a facility’s permitting activities, which are subject to compliance history reviews. Therefore, pending applications or those submitted during the period in which the facility is designated as “suspended” or “unsatisfactory performer,” be it for issuance, renewal, modification, or amendment, could be affected.

The rule was published in the December 31, 2021, issue of the Texas Register at 46 Tex. Reg. 9183. The TCEQ has scheduled a virtual public hearing on the proposed rule for January 27, 2022, and written comments will be accepted until February 1, 2022.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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