When it Rains, It Pours: Proposed Texas Commission on Environmental Quality Rule Could Make Compliance Harder After a Catastrophe

Foley & Lardner LLP

Foley & Lardner LLPOn December 15, 2021, the Texas Commission on Environmental Quality (TCEQ) proposed sweeping changes in response to several high profile emergency incidents that occurred at industrial facilities in the past few years.1 TCEQ has proposed adding a new section to Chapter 30 of the Texas Administrative Code (to be titled Section 30 TAC § 60.4), which would allow TCEQ to immediately re-designate a site’s compliance history classification as “under review,” and then to reclassify it to "suspended" 30 to 90 days later under certain circumstances. To do this, TCEQ would need to determine that exigent circumstances exist. This could include an incident like a major explosion or fire that significantly impacts the surrounding community and environment, triggers emergency response efforts by federal or state authorities to address materials regulated by the agency, and which ultimately results in certain urgent or grave consequences.

Dates to Know:

  • Public hearing date: January 27, 2022, 2:00 p.m. CT (virtual).
    • You must register by January 25, 2022 to provide oral comments and/or note your attendance for the record.
  • Public comment period ends: February 1, 2022
  • Anticipated adoption date: June 1, 2022

How the Changes Would Work:

  1. Under the proposed rule, TCEQ may immediately designate a site’s compliance status as “under review” if: (1) circumstances result in a significant disruption to one or more local communities; (2) the circumstances caused significant commitment of emergency response resources; and (3) the circumstances are “exigent”.
  2. After 91 days, the “under review” designation expires unless TCEQ initiates the process to reclassify.
  3. Once TCEQ starts the process to reclassify, TCEQ may change a facility’s compliance history classification to “suspended.” This decision must be made no sooner than 30 days and no later than 90 days after the site’s compliance history classification is designated as “under review.”
  4. TCEQ could then treat a “suspended” site consistent with a facility with an “unsatisfactory” 5 year compliance history.
  5. Once a site is classified as “suspended,” it must remain so for a year, and then until the earliest of when: (1) TCEQ provides a written determination that reclassification is no longer warranted; (2) an enforcement action arising from the event has been resolved; or (3) three years.

What These Changes Mean for the Industry:

  • If a facility experiencing an emergency event has a pending permit application, TCEQ will not take any action to issue, renew, amend, or modify your permit until it has evaluated the event and determined whether the facility’s status should be changed to suspended. After consideration, TCEQ may approve, deny, or amend the permit with additional protective requirements.
  • A facility designated as suspended can appeal TCEQ’s decision to reclassify the site, but must follow prescribed deadlines and filing requirements. The reclassification remains in effect during the appeal.
  • If the site is reclassified to suspended, then the site is treated as an Unsatisfactory Performer. This means that TCEQ may deny or suspend certain permits.
  • Compliance History is also considered by TCEQ when making enforcement decisions. For Unsatisfactory Performers, including presumably facilities with a suspended classification, TCEQ may require additional oversight to improve environmental compliance. This classification may also result in increased administrative penalties. However, TCEQ noted in the proposed rule that it does not intend for a site’s reclassification to suspended, by itself, to change the underlying compliance history numerical points associated with the site.
  • For Unsatisfactory Performers, including presumably facilities with a suspended classification, TCEQ may increase the number of investigations it performs at the facility, and perform any investigations without prior notice.
  • For Unsatisfactory Performers, TCEQ may require specific additional environmental reporting to TCEQ.

What Can You Do?

Participate in the rulemakings. Contact Foley for information as to how to submit comments to TCEQ to in order to make sure your interests are represented. Foley’s Environmental Practice Group can assist you in preparing comments and in preparing remarks for the January 27 public hearing.

Meet with Decision Makers. You can also contact your local legislative representative and discuss the potential impacts the proposed rules could have on your operations, and how these rules could shape business models and operating procedures. Foley’s Government Solutions Practice Group can assist in these connections as needed.

Expect the Unexpected. If the rule passes as proposed, it will be more important than ever to be sure that your facility’s emergency plans account for any possible contingency. This includes preparedness for the increasingly frequent extreme weather events that have been a trigger for some of the incidents giving rise to this proposed rule.

1 https://www.tceq.texas.gov/rules/prop.html

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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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