Bryan W. Shaw, Ph.D., P.E., Chairman Toby Baker, Commissioner Zak Covar, Commissioner Richard A Hyde, P.E., Executive Director

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### TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventing Pollution

Mr. Ron Curry Regional Administrator May30, 2014

United States Environmental Protection Agency, Region 6 1445 Ross Avenue, Suite 1200 Dallas, Texas 75202-2733 Dear Mr. Curry: As part ofU.S. Environmental Protection Agency's (EPA) review ofthe rules submitted by the Texas Commission on Environmental Quality (TCEQ) to implement Greenhouse Gas (GHG) Prevention ofSignification Deterioration (PSD) permitting, you requested TCEQ address the administrative andjudicial.review processes for GHG PSD permits issuedbythe executive director or the commissioners thatwill apply upon EPA approval ofthe TCEQ's GHG PSD permittingprogram and rescission ofthe Federal Implementation Plan (FIP). When applicants apply for a GHG PSD permit, theylllay file ,<mapplication seeking authorization onlyfor a GHG PSD permit, orthey may filean**~pplication** that is consolidated' with applications for· certain other authorizations; and notice ofan opportunityfor public comment is provided for both. Therefore, myresponse is organized to address these scenarios. GHG PSD PermitIssuance by the Executive Director Separate GHG PSDApplication Ifno timely comments are received, the executive director may issue the permit. Iftimely comments are submitted, the executive director may issue the permiton or after the date that his Response to Comments is filed? The Texas Clean Air Act exempts GHG PSD applications from the contested case hearing (CCH) process. Therefore, even ifhearing requests are submitted, the executive director may issue the permit, as allowed by TCEQ rule. To appeal a GHG PSD permit issued by the executive director, a person must exhaust the available administrative remedies, specificallyby filing a Motion to Overturn (MT0).3, 4 No affected-person5 determination is necessarybyTCEQ as prerequisite to the filing or the

1 The use ofthe term "consolidated application" in thjs letter means that one application is filed for a GHG PSD permit, together with applicatioris'·fo:f. an·e or more ofthe following types ofpermits: minor-New Source Review (NSR), minor NSR flexible permit, non-GHG PSD, and nonattainment. '30 Tex. Admin. Code§ 50.133. 3fd.

P.0. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • tceq.texas.gov How is our customer service? tceq.texas.govjcustomersurvey printed on recycled paper using vegetable-based inkMr. Ron Curry Regional Administrator U.S. Environmental Protection Agency, Region 6 Page 2 May30, 2014

commissioners' consideration ofan MTO. Ifthe commissioners grantthe MTO, the application wouldbe remanded to the executive director. Ifan MTO is denied bythe commissioners or overruledbyoperation oflaw, the final order maybe appealed to a Travis County District Court.6 Ifappealed to district court, thejudge will, pursuant to statute, determine whether the appellant is a person affected by the decision ofthe TCEQ and thus whether the appellant has standing.' In other words, ifthe legislature has eliminated contested-casehearings as an available administrative remedy (and thus obviated affected-person determinations byTCEQ), an affected person may still obtainjudicial review ifthe person has exhausted the remedies that 

### are available. 

### Consolidated GHG PSDApplication8 The process for consolidated applications will bethe same as it is·for separate applications, unless a request for a CCH is received regarding the non-GHG portions ofthe application. If a CCH request is received, the entire application will be forwarded to the commissioners for consideration, which is discussedbelow. 

### GHGPSD PermitIssued 

### by the Commission Separate GHG PSDApplication Ifthe commissioners issue a GHG PSD permit, a person must exhaust the available administrative remedies, specificallybyfiling a Motion for Rehearing (MFR) on the order issued bythe commissioners, to appeal the decision.9 The commissioners may grantthe MFR in whole or in part; ifthe commissioners grantthe MFR, the decision or order is nullified. 10 Ifthe commissioners deny the MFR or ifthe MFR is overruled by operation oflaw, the final order maybe appealed to a Travis County District Court. n Ifappealed to district court, the judge will, pursuant to statute, determine whether the appellant is a person affected by the decision ofthe TCEQ and thus whether the appellant has standing.' 2 And, as noted above, the absence of an opportunityfor a contested-case hearing and an affected-person determination byTCEQ do not determine whether a person has standingto file suit in district court challenging the issuance ofa GHG PSD permit by the commissioners.

4 Information regarding MTOs was previously submitted to EPA witb the amendments to thepublic participation rules for air quality permit applications at 35 Tex. Reg. 5198, 5201 (June 18, 2010). 'Asthatterm is defined in Tex. Water Code§ 5.115(a) andTCEQ rule 30 Tex. Admin. Code§ 55.103. 'Tex. Health & Safety Code§ 382.032, Tex. Water Code§ 5.351. 'I

d. 8 See Footnote 1. '30 Tex. Admin. Code §50.119. w 30 Tex. Admin. Code§ 8o.272(d)(2). "Tex. Health & Safety Code§ 382.032, Tex. Water Code§ 5.351. 12Jd.Mr. Ron Curry Regional Administrator U.S. Environmental Protection Agency, Region 6 Page 3 May3o, 2014

An administrative agency may establish a rehearing process byrule'3 which the TCEQ has done in § 50.119. In § 50.119, the commission incorporatedbyreference the process found in § 80.272.'• Itis importantto note thatthe reference to § 80.272 in § 50.119 is included as a matter ofdrafting convenience only. When adopting both ofthese new rules in 1999, the commission elected to use the cross reference rather than repeating the requirements specified in § 80.272. Therefore, the procedural aspects offiling an MFR, such as the deadline and contents, are the same regardless ofwhether an application is subject to a CCH. Consolidated GHG PSDApplication Unless the application is directly referred to the State Office ofAdministrative Hearings (SOAH) for a CCH at the request ofthe applicant or the executive director, anyhearing requests for the non-GHG portion ofthe application will be consideredbythe commissioners. Ifthe commissioners deny the hearing requests, they may approve the application and issue all ofthe permits, 's which will be contained in a consolidated permit document. 16 Ifthe commissioners grant any hearing requests, the application and draftpermit will be referred to the SOAH for a CCH on issues related to the non-GHG portion ofthe application and draftpermit as allowed by statute and commission rules.'' If a CCH is held, SOAH will conduct an evidentiaryhearing and prepare a Proposal for Decision (PFD) regarding the contested portion ofthe application and draft permit for considerationbythe commissioners. When the PFD is consideredby the commissioners in an open meeting, the commissioners will also consider the GHG PSD portion ofthe application and draft permit, and action will be taken on the entire application at one time. After consideration ofthe PFD, the commissioners may approve the consolidated application and issue a consolidated GHG PSD permit document, or deny the application for such permits. Each ofthese final actions by the commissioners on a consolidated application is subject to the MFR requirement.'8 To appeal a final order ofthecommissioners, a person must first file an MFR. Ifthe commissioners deny the MFR or ifthe MFR is overruled by operation oflaw, the final order maybe appealed to a Travis County District Court.'' Ifappealed to district court, the

"Tex.Air Control Bd. v. Travis Cnty, 502 S.W.zd 213, 215 (Tex. Civ. App.-Austin 1973, no writ); see also Sproles Motor Freight Line, Inc. v. Smith, 130 S.W.zd 1087, 1088 (Tex. Civ. App.-Austin 1939, writ refd) (requiring plaintiff to exhaust administrative remedy created by rule; because writ was refused, opinion has precedential value of opinion byTexas Supreme Court). '4 30 Tex. Admin. Code § 80.272. "30 Tex. Admin. Code§ 50.113(c)(2). ''For example, thepermit document will be for Air Quality Permit No. 12345 and GHG PSD TX Permit No. 101. '' 30 Tex. Admin. Code§ 50.115. See also 30 Tex. Admin. Code§ 50.113(b), which provides thatrules regarding action ofthe commission do not create a rightto a CCH wherethe opportunity for a CCH does not exist under other law. '' 30 Tex. Admin. Code § 50.119. ''Tex. Health & Safety Code§ 382.032, Tex. Water Code§ 5.351.Mr. Ron Curry Regional Administrator U.S. Environmental Protection Agency, Region 6 Page4 May30, 2014 judge will, pursuant to statute, determine whether the appellant is a person affected bythe decision ofthe TCEQ and thus whether the appellant has standing.20 

### Conclusion I am confident that the proposed rule changes together with the information submitted in this correspondence will ensure SIP approval ofthe rules adopted to implement GHG PSD permitting. Ifyou have any questions or need further information, please contact me orJanis Hudson, Attorney in our Environmental Law Division at 512-239-0466. Sincerely,

# ~A;,~.a_ Executive Director Texas Commission on Environmental Quality RAH/jbh

cc: Steve Hagle, P.E., Deputy Director, Office ofAir

2o Id. Mike Wilson, P.E., Director, Air Permits Division, Office ofAir Caroline Sweeney, Deputy Director, Office ofLegal Services Booker Harrison, Senior Attorney, Environmental Law Division, Office ofLegal Services Janis Boyd Hudson, Attorney, Environmental Law Division, Office ofLegal Services