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January 12, 2022
TCEQ proposes changes to compliance history reporting

The Texas Commission on Environmental Quality (TCEQ) approved publication of proposed changes to compliance history reporting for regulated entities on December 15, 2021. The agency proposes adding a new section (§60.4) to Chapter 60 of the Texas Administrative Code (TAC), which 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, such as 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.”

According to the TCEQ, the reason for the proposed change is due to “[s]everal large emergency incidents at industrial facilities in the past few years” that “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.”

The purpose of the 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.”

If the rules are adopted, regulated entities experiencing significant emergency incidents can expect to face heightened scrutiny from the agency for regulatory decisions.

“TCEQ currently calculates compliance history scores annually for covered regulated entities based on a five-year look back period and classifies sites as unsatisfactory, satisfactory, or high performers, or as unclassified if no compliance information is available for the site,” states a Lexology article by Hunton Andrews Kurth analyzing the proposed changes. “The agency is authorized to take compliance history classification into consideration in its regulatory decisions including those related to permitting and enforcement matters. For example, if a site is classified as an unsatisfactory performer, the agency may deny or amend a solid waste management permit. Because compliance history scores are calculated annually, however, it is possible that, under the current compliance history rule framework, a site’s compliance history classification may not accurately or promptly take into account the occurrence of the emergency incident.”

One of the keys to the agency’s decision to place a site’s history classification as “under review” and the possible reclassification status as “suspended” is the TCEQ’s executive director’s determination that “exigent circumstances” exist due to a significant emergency event. “Exigent circumstances must include those that significantly impact the surrounding community, result in significant emergency response efforts by federal or state authorities to address an actual, unauthorized release of pollutants, contaminants, or other materials regulated by the agency, and result in certain urgent consequences.”

Under the proposed rulemaking, once the executive director makes an “exigent circumstances” determination, “the ‘under review’ designation would be effective immediately and the site owner and operator would be notified of this first step in the reclassification process,” reports Hunton Andrews Kurth. “As a second step in the process and no later than 90 days after a site’s classification as ‘under review,’ TCEQ’s executive director would then determine, after consideration of available information concerning whether the incident was caused through any fault of the site’s owner or operator, whether a ‘suspended’ classification was warranted and if so determined, would provide notice of the reclassification. If a site was reclassified to ‘suspended’ status, then the site would be treated as an unsatisfactory performer for purposes of relevant agency decisions. A site’s reclassification to ‘suspended’ status would remain for at least one year but potentially up to three years.”

The TCEQ has scheduled a virtual public hearing on the proposed rule for January 27, 2022, and written comments will be accepted via the TCEQ’s eComments system until February 1, 2022.  

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