To: Commissioners Date: September 1, 2006 Thru: Dan Eden, Deputy Director Office of Permitting, Remediation, and Registration

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1 To: Commissioners Date: Thru: From: LaDonna Castañuela, Chief Clerk Glenn Shankle, Executive Director Dan Eden, Deputy Director Office of Permitting, Remediation, and Registration Docket No.: Subject: RUL Commission Approval for Rulemaking Adoption Chapter 116, Control of Air Pollution by Permits for New Construction or Modification Standard Permit Public Notice Revision Rule Project No PR Reasons for the rule package: Under what authority are we adopting these changes? The amendment is adopted under Texas Water Code (TWC), 5.102, which provides the commission with the general powers to carry out its duties under the TWC; 5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC and other laws of this state; and 5.105, which authorizes the commission, by rule, to establish and approve all general policy of the commission. The amendment is adopted under Texas Health and Safety Code, Texas Clean Air Act (TCAA), , which authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA; , which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; , which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and , which authorizes the commission to issue a standard permit. Is this rulemaking required by federal rule or state statute? No. Are there any legal deadlines by which the rule must be adopted or effective? No. What issue(s) or problem(s) are we trying to solve? This change would increase notification with select state and local officials and will save up to $4,500 per standard permit notice at a time that an increase in the number of new standard permits may be expected. The current regulation requires publication in 11 newspapers. Reviewing the comments received, more than 80% of the comments originated from the Austin, Dallas, and Houston areas. The amendment would require publication of newspaper notices in Austin, Dallas, Houston, and any other regional newspapers designated by the commission on a case-by-case basis for proposed standard permits with statewide applicability. In addition to publication of notice, the commission would use press releases to news organizations, which may provide an opportunity for more statewide newspaper coverage, and electronic communications to local and state officials. Section , Public Participation in Issuance of Standard Permits, currently requires notice of proposed standard permits in 11 areas. Texas Health and Safety Code, (b), requires

2 Page 2 the commission to publish notice of a standard permit in one or more statewide or regional newspapers designated by rule, that will, in the commission s judgement, provide reasonable notice throughout the state. Stakeholder meetings will also be conducted, as appropriate, in the issuance of any standard permit. Publishing notice in Austin, Dallas, Houston, and any other regional newspapers designated by the commission on a case-by-case basis, along with the required Texas Register publication and posting on the agency Web site, will provide reasonable notice of proposed standard permits and would give the commission discretion to target the specific areas affected. Why is it important that we do this rule package? This change would increase notification with state and local officials and will save up to $4,500 per standard permit notice at a time that an increase in the number of new standard permits may be expected. It would also make the air standard permit issuance consistent with other permitting requirements. This includes the Water Quality General Permits, which require publication in at least one statewide or regional circulation. Also, air standard permit amendments and revocations, permits by rule, and Title V general operating permits with statewide applicability are required to be published in newspapers in Austin, Dallas, and Houston. Other important background or historical information. None. Scope of the rulemaking: Changes required by federal rule: None. Changes required by state statute: None. Staff recommendations that are not expressly required by federal rule or state statute: The amendment would revise by requiring newspaper notice of proposed air standard permits with statewide applicability in Austin, Dallas, Houston, and any other regional newspapers designated by the commission on a case-by-case basis. As part of the standard permit briefing procedures, staff would recommend which newspapers should be selected for publication. Also, the commission would use press releases and appropriate electronic means as determined by the commission to notify state and local officials. The rule would no longer require newspaper notice for each standard permit proposal in Amarillo, Corpus Christi, El Paso, the Lower Rio Grande Valley, Lubbock, the Permian Basin, San Antonio, or Tyler. Impact on the regulated community: Who will be affected? Members of the regulated community would no longer be notified for each proposed standard permit through 11 newspapers. However, notice of proposed standard permits will be published in the Texas Register, on the commission s Web site, through press releases, electronic means to notify state and local officials, and in newspapers in Austin, Dallas, Houston, and any other regional newspapers designated by the executive director on a case-by-case basis. In addition, stakeholder meetings will be held as needed. Does it create a group of affected persons who were not affected previously? No. Will there be a fiscal impact? No.

3 Page 3 Impact on the public: Who will be affected? Members of the public would no longer be notified for each proposed standard permit through 11 newspapers. However, notice of proposed standard permits will be published in the Texas Register, on the commission s Web site, through press releases, electronic means to notify state and local officials, and in newspapers in Austin, Dallas, Houston, and any other regional newspapers designated by the executive director on a case-by-case basis. In addition, stakeholder meetings will be held as needed. Does it create a group of affected persons who were not affected previously? No. Will there be a fiscal impact? No. Impact on agency programs: The amendment would save up to $4,500 per standard permit notice at a time that an increase in the number of new standard permits may be expected and simplify the procedures for publications. Stakeholder meetings: Have any stakeholder meetings been held? Yes, January 20, With whom? With representatives of county associations and industry associations. What were the general sentiments? The participants were very supportive and expressed a willingness to work with the commission. Were any changes made in response to stakeholder concerns? Yes, the language was changed to state that the commission would use electronic means instead of electronic mail. This would give the executive director a broader use of interested organizations Web sites, journals, and s. Policy issues: What policy issues are affected? None. Are any policies that are not currently based on rule being made into a rule? No. What are the consequences if this rulemaking is not approved to go forward? The standard permit public notice requirement would remain unchanged. Are there alternatives? Make no changes. Potentially controversial matters: The public may perceive that notification is being decreased by reducing the number of areas that the notice must be published.

4 Page 4 Key points in adoption rulemaking schedule: Texas Register proposal publication date: May 12, 2006 Anticipated effective date: October 10, 2006 Six-month Texas Register filing date: November 13, 2006 Public Comment: A public hearing on this proposal was held on June 12, 2006, and the public comment period closed on June 14, No comments were received at the public hearing. The commission received written comments on the rule proposal from the Houston Regional Group of the Sierra Club, Lone Star Chapter (Sierra Club) and the United States Environmental Protection Agency, Region 6 (EPA). The Sierra Club did not support removing the requirement to publish public notices in the largest general circulation newspapers in Amarillo, Corpus Christi, El Paso, the Lower Rio Grande Valley, Lubbock, the Permian Basin, San Antonio, and Tyler. The Sierra Club commented that this would provide less opportunity for the public to become aware of and participate in decisions concerning rulemaking for standard permits. The Sierra Club does support notification of state and local officials electronically and the use of press releases to widen distribution of the notice of rulemaking for standard permits. The EPA recommended that the TCEQ review prior comments for significance from outside of Austin, Dallas, and Houston regarding standard permits and develop criteria for determining when to publish notice in other newspapers. Significant changes from proposal: None. Agency contacts: Phil Harwell, Rule Project Manager, , Air Permits Division Brad Paterson, Staff Attorney, Patricia Durón, Texas Register Coordinator, Attachments cc: Chief Clerk, 5 copies Executive Director s Office David C. Schanbacher, P.E. Jason Skaggs Ashley K. Wadick Office of General Counsel Phil Harwell Patricia Durón

5 Page 5 cc: (without attachments) Brad Patterson, Staff Attorney Debi Dyer, OPRR Liaison Tara Capobianco, APD Liaison Booker Harrison, OLS Liaison Russ Kimble, OLS

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