TCEQ Work Session

On September 28 a work session was held by the Texas Commission on Environmental Quality (TCEQ).

The meeting was a work session for discussion between Commissioners and staff. The following items were on the agenda for discussion:

Consideration of Sunset Implementation regarding revisions to the Commission’s Penalty Policy

  • HB 2694 of the 82” Legislature requires the Commission to revise its Penalty Policy to increase statutorily authorized penalties and to cap the penalty enhancement attributable to compliance history at 100% of the base penalty for any individual violation.
  • As directed by the Commission during the August 25, 2011 Work Session, the Executive Director (E.D.) solicited public comment on the draft proposed revisions to the Penalty Policy. Six comment letters were received during the public comment period. In addition to the six letters, many of the comment letters submitted in response to the General Enforcement Policy rule proposal contained comments specific to the Penalty Policy. Those comments were taken into consideration as well. In general, comments focused on the following issues related to the Penalty Policy: and methods of calculating penalties: statutorily authorized penalties, good faith efforts to comply, determining the number of violation events, compliance history, economic benefit, and speciation.
  • The commission approved the revisions to the Penalty Policy as presented by the Enforcement Division, indicating there would be continued evaluation and the opportunity to revisit the policy for changes as needed.

Update and Discussion of Sunset Implementation regarding rulemaking for General Enforcement Policies

  • HB 2694 of the 82nd Legislature requires the Commission to adopt a general enforcement policy that describes the commission’s approach to enforcement. Some of the Commission’s general enforcement policies currently exist in 30 Texas Administrative Code Ch. 70.
  • A stakeholder meeting was held August 2, 2011 to receive input from the public and to respond to questions. The meeting was available to watch remotely through webcast on the Texas Admin site and is archived for future viewing. Questions and comments were taken during the meeting and an email was set up to take comments from remote participants. There were approximately 35 persons in attendance representing industry, trade associations, small business, local government, consulting firms, law firms and environmental advocacy groups.
  • Fourteen comment letters were received during the public comment period from members of the public, trade associations, and environmental advocacy groups. The majority of the comments were in response to the questions TCEQ staff posed to the Commission at the July 5, 2011 work session. These comments will be taken into consideration as the draft rule is prepared. Those who provided comments supported the concept of putting a general enforcement philosophy into rule but there were differences of opinion on how much detail should be included beyond this general philosophy. There was no unanimous support for including the tools of enforcement such as Corrective Action Orders, Findings Orders, Referral to the Attorney General, Economic Benefit, Culpability, Compliance History, Good Faith Efforts to Comply, and Other Factors with the exception of deferrals. There were many comments regarding revisions to the penalty policy specifically, which are outside the scope of the General Enforcement Policies rule.
  • No action was taken on this item. Staff will return for the November work session and present a plan for proceeding with the rule project. In addition, the Executive Director intends to present a rule proposal for the Commission’s approval at the March 28, 2012 agenda.

Discussion and Consideration of Supplemental Environmental Projects

  • Prior to the passage of HB 2694 in the 82nd Legislature, Texas Water Code § 7.067 prohibited the use of SEPs to assist bringing respondents into compliance with environmental laws or remediating the harm caused by those violations. HB 2694 creates an exception to this prohibition by authorizing the Commission to exercise discretion in approving a SEP that would bring a respondent into compliance with environmental laws or that is required to remediate the environmental harm caused by the respondent’s alleged violation provided the respondent is a local government (hereinafter referred to as a “compliance SEP”). A local government is defined as a school district, county, municipality, junior college district, river authority, water district or other special district or other political subdivision created under the constitution or a statute of this state.
  • HB 2694 was effective on September 1, 2011.
  • HB 2694 directs the agency to develop a policy to prevent local governments from systematically avoiding compliance through the use of SEPs which includes a requirement for an assessment of (1) the respondent’s financial ability to pay the administrative penalty; (2) the ability of the respondent to remediate the harm or come into compliance; and (3) the need for corrective action.
  • Four questions were posed to the Commission for guidance regarding the SEP policy:

    1) Should all local governments be subject to financial review before they may utilize a compliance SEP to bring them into compliance or remediate the harm caused by the violation(s)?

    • The Commission indicated that yes, it was the intent of the legislature to have all local governments subject to financial review.

    2) If all local government respondents must be reviewed for financial ability to pay, how extensive of a review should be performed?

    • Staff provided two screening options: 1) screens out the financially capable and 2) screens out the financially incapable.
    • The Commission supported Option A and agreed that screens should be used because the financial review process is expedited, which results in  more timely enforcement and implementation of corrective actions. For local governments that fall in the middle of the financial spectrum, a full MUNIPAY review would still be conducted. This option provides staff with needed flexibility for more thorough analysis options.

    3) What should be reviewed in determining whether a local government respondent has “systematically avoided compliance through the use of SEPs”?

    • Staff options included:
      • The local government respondent has been the subject of two or more prior enforcement orders with the penalty offset by a SEP in order to assist a respondent into compliance or remediate the environmental harm caused by the violations during the five year period preceding the enforcement action that is the basis for the compliance SEP application;
      • The local government respondent failed to complete a previously approved SEP, meaning it did not spend the required offset amount or perform the subject project; and
      • An investigation shows evidence that the local government respondent delayed compliance to qualify for this type of SEP.
    • The Commission supported staff developing a combination approach to the options presented so as to not limit themselves to the information that could be considered.

    4) In terms of timing in the enforcement process, with HB 2694 effective Sept. 1, which local government respondents are eligible to apply to perform a compliance SEP?

  • The Commission supported Option A from staff, which provides those eligible are any local government respondent with an enforcement action pending on September 1, 2011, may apply to perform a compliance SEP under the exception of Tex. Water Code § 7.067 (a-l). Members felt this option is most inclusive and supports immediate participation in compliance, but requested staff focus on possible inequities.
  • No action was taken on this item. Staff will revisit questions while considering the Commission’s guidance.

Discussion and Consideration of the Watermaster Evaluation Process

  • HB 2694 of the 82nd Legislature requires the Commission to determine the criteria or risk factors to be considered by the executive director when evaluating river basins without a watermaster to determine whether a watermaster should be appointed. These evaluations must be conducted for each river basin at least once every five years. The findings and recommendations must be included in the commission’s biennial report to the legislature.
  • The Commission approved the criteria and process and recommended the communication strategy for the project include a stakeholder meeting after evaluation of basin before presentations are made to the Commission. This allows input from the Executive Director and stakeholders prior to Commission decision. The Commission suggested going forward with an informal comment process where TCEQ will consider all comments, but not have to respond to them given time constraints. The opportunity for formal process is present in the biennial report.