~uddy Garc~a, Chazrrnan REL:?--j:;Eb .- eiJbI,- Larry R Soward, CornrnzsszonelBryan W Shaw, Ph.D., Cornrnl~slollel- AIR PLANPliW6 .i;~;, 

Glenn Shankle, Exec~ltzve Dzrectol- 08 JAN29 PH 6: 30 

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

Protecting Texas by Reducing and Preventing Pollzition 

January 24,2008 Docket No. 2007-0953-RUL 

Richard E. Greene, Regional Administrator 

U.S. Environmental Protection Agency - Region 6 

1445 Ross Avenue 

Dallas, Texas 75202-2733 

Dear Mayor Greene: 

On December 19, 2007, the Texas Commission on Environmental Quality (Commission) adopted a 

revision to the State Implementation Plan (SIP). 

The Commission adopted an amendment to 5 116.1 14 in Title 30 Texas Administrative Code Chapter 116, 

Control of Air Pollution by Permits for New Construction or Modification, Subchapter B, New Source 

Review Permits; and a corresponding revision to the SIP. The rulemaking implements the requirements 

of House Bill 3732, 8oth Legislature (2007), and Texas Health and Safety Code, 5 382.0566, concerning 

specific deadlines for review and issuance of air permits for Advanced Clean Energy Projects. 

Enclosed is the proposed revision to the SIP, a public hearing certification, a complete record of the 

public hearing, and the accompanying order. I look forward to your expeditious approval of this SIP 

revision. 

Sincerely, 

Buddy Garcia 1 

Chairman I 

Enclosures 

cc: The Honorable Rick Peny, Governor of Texas 

Mr. Auburn Mitchell, Office of Budget, Planning and Policy, Office of the Governor 

Mr. Glenn Shankle, Executive Director, Texas Commission on Environmental Quality 

P.O. Box 13087 Austin, Texas 7871 1-3087 * 5121239-1000 Internet address: www.tceq.state.tx.us 

pnmed on recycled paper using soy-based ~nk 
THE STATE OF TEXAS 

COUNTY OF TRAVIS 

This is to certify that the attached are true and correct copies of documents for a revision to the 

Texas State Implementation Plan, adopted on December 19, 2007, pursuant to Title 40 Code of Federal 

Regulations (C.F.R.) tj 5 1.104. I am the records administrator for the Air Permits Division of the Texas 

Commission on Environmental Quality (Commission). 

~ichard Hyde, P.E. / 1 

Director, Air Permits Division 

Texas Commission on Environmental Quality 
Texas Commission on Environmental Quality 

Public Hearing 

September 24,2007 

Concerning Revisions to 

30 TAC Chapter 116, Control of Air Pollution by Permits 

for New Construction or Modification 

and the State Implementation Plan 

Rule Project No. 2007-023-1 16-PR 

HB 3732: Advanced Clean Energy Project Permitting 
IN'CRODUCTION 

The Texas Commission on Environmental Quality (commission) held a public 

hearing in Austin on September 24, 2007 to receive testimony regarding a 

revision to 30 TAC Chapter 1 16, Control of Air Pollution by Permits for New 

Construction or Modification; and corresponding revisions to the Texas state 

implementation plan (SIP). 

The amendment to 5 1 16.1 14 establishes deadlines for the review and issuance of 

permits for Advanced Clean Energy Projects (ACEP) as required by House Bill 

3732,80th Legislature, and Texas Health and Safety Code, 5382.0566. The rule 

specifies that the executive director shall complete the technical review of an 

eligible ACEP permit application not later than nine months after the date the 

executive director determines the application is administratively complete. The 

rule also requires that the commission issue or deny the permit no later than nine 

months after 'the executive director determines that the permit application is 

technically complete. The commission may extend this deadline by an 

additional three months in cases where meeting the deadline would create an 

extraordinary burden on commission resources. 

The comment period closed on September 26,2007. All testimony and 

comments have been reviewed and seriously considered. This hearing record 

contains a complete record of the public hearings and is divided into the 

following four sections: 
Public Noti,Fication and Proposal 

Written and Oral Testimony 

Evaluation of Testimony 

Staff Recommendations (includes order and Texas Register publication) 

Additional copies of this hearing record are maintained in the TCEQ central 

office at 121 00 Park 35 Circle, Austin, Texas 78753. For further information, 

contact Michael Wilhoit at (51 2) 239-1 222. 
PUBLIC

NOTIFICATION AND

PROPOSAL
PUBI.IC NOTIFICATION 

Notification to the public of the proposed revisions was conducted by the 

following procedures: 

1. Publication of the notice of public hearing in the following newspapers on 

the dates listed: 

Austin American-Statesman August 23,2007 

Fort Worth Star-Telegram August 24,2007 

Houston Chronicle August 24,2007 

2. Publication of the public hearing notice in the Texas Register on 

September 7,2007 (32 TexReg 6055). 

3. Publication of the proposed rules in the Texas Register on September 7, 

2007 (32 TexReg 6056). 

4. Correspondence forwarding the notice of public hearing to the following 

officials and agencies: 

Speaker of the House 

Lieutenant Governor 

Alamo Area Council of Governments 

Capital Area Planning Council 
City of Dallas Department of Aviation 

City of Dallas Environmental and Health Services 

City of Victoria Planning Department 

East Texas Council of Governments 

El Paso City-County Health and Environmental District 

El Paso Metropolitan Planning Organization 

Federal Highway Administration 

Fort Worth Environmental Management Department 

Galveston County Health District 

Harris County Public Health and Environmental Services 

Houston Department of Health and Human Services 

Houston-Galveston Area Council 

North Central Texas Council of Governments 

South East Texas Regional Planning Commission 

Texas Department of Transportation 

Texas Transportation Institute 

Arkansas Department of Pollution Control and Ecology 

Louisiana Department of Environmental Quality 

New Mexico Air Quality Bureau 

Oklahoma Department of Environmental Quality 

U. S. Environmental Protection Agency 
LegalNotice Ads EXAMPLE OF NEWSPAPER CLASSIFIED AD Page 1 of 2 

Austin American-Statesman 

August 23,2007 

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SPORTS LIFE 1 OPINION WEATHER I BLOGS MULTIMEDIA 

NOTICE OF PUBLIC HEARING BY THE TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY ON PROPOSED REVISIONS TO 30 TAC 

CHAPTER 116 AND TO THE STATE IMPLEMENTATION PLAN The Texas 

Commission on Environmental Quality (commission) will conduct a public 

hearing to receive testimony concerning proposed revisions to 30 TAC Chapter 

116. Control of Air Pollution by Permits for New Construction or Modification, 

and to the state implementation plan (SIP), under the requirements of Texas 

Health and Safety Code, 382.017; Texas Government Code, Chapter 2001, 

Subchapter 6; and 40 Code of Federal Regulations 51.102, of the United 

States Environmental Protection Agency (EPA) regulations concerning SIPS. 

The proposed mlemaking would revise 11 6.1 14(a) to add deadlines associated 

with the review of Advanced Clean Energy Projects (ACEP) permit 

applications. The commission will hold a public hearing on this proposal in 

Austin on September 24,2007 at 2:00 p.m. at the Texas Commission on 

Environmental Quality Complex located a? 12100 Park 35 Circle in Building F, 

Room 2210. The hearing will be structured for the receipt of oral or written 

comments by interested persons. Registration will begin 30 minutes prior to the 

hearing. Individuals may present oral statements when called upon in order of 

registration. There will be no open discussion during the hearing; however, 

commission staff members will be available to informally discuss the proposal 

30 minutes before the hearing. Persons who have special communication or 

other accommodation needs who are planning to attend the hearing should 

contact Kristin Smith, Office of Legal Services, at (512) 239-0177. Comments 

may be submitted to Kristin Smith, MC 205, Office of Legal Services, Texas 

Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 7871 1- 

3087, or faxed to (512) 239-4808. Electronic comments may be submitted at 

http:// www5.tceq.state.b.usIruledecomments. File size restrictions may apply 

to comments submitted through the ecomments system. All comments should 

reference Rule Project Number 2007-02%116-PR. The comment period closes 

September 26,2007. Copies of the proposed rule can be obtained from the 

commission's Web site at 

htt~://www.tceq.state.b.~dnav/ruleslproposeadopt.html. For further 

information, please contad Michael Wilhoit, Air Permits Division, (512) 239- 

1222. Issued in Austin, Texas on August 22,2007 

First Date Published: 23-Aug-07 Source: Statesman Ciassifieds 

24 hours Place an Ad Online! 
- 

cant -- shallqubhsh~he-nofice of declarat~on~o~adm~n~~ra&v~completeness_asgrov~ded~nJ39707 of thls t~tle (reJaKnGo Pubhshed-No~cel - 

$39.703. Notice of Completion of Technical Review 

(a) When the executive director has completed the technical 

review ofan application for a license, major amendment, or renewal of 

a license issued under Chapter 336 of this title (relating to Radioactive 

Substance Rules) [or Fer a minor amendmentissued under Chapter 336; 

Subchapter H of this rirle eelaring +o kenstng ReqttiremeRts fer NearSurface Land Dis@ ef Lew-tevel bdioaetive %We)], notice must 

be mailed by the Office of the Chief Clerk and published under this 

subchapter. The deadline to file public comment, protests, or hearing 

requests is 30 days after publication. 

(b) For [any o#w] application for a minor amendment to a license issued under Chapter 336 of this title[, Maptef F ef+& title 

~to~ef~~ef~ef~ 

&eM~~GeF~rirle~te%~ 

smAfd+er-ICeF**fFelactRgte&d& 

~ef~~~RaateFialWaste6reR1~ 

+VatmSystems)], notice must be mailed by theoffice ofthe Chiefclerk 

under this subchapter. The deadline to file public comment, protests, 

or hearing requests is ten days after mailing. 

$39.707. Published Notice. 

(a) For applications under Chapter 336, Subchapter F of this 

title (relating to Licensing of Alternative Methods of Disposal of Radioactive Material), Subchapter G of this title (relating to Decommissioning Standards), [e~] Subchapleer K of this title (relating to Commercial Disposal ofNaturally Occumng Radioactive Material Waste From 

Public Water Systems), Subchapter L of this title (relatingto Liccen 

of Uranium Recovery and By-product Material Disesal Facilities), or 

Subchapter M of this title (relating to Licensing of Radioactive Substances Processing and Storage Facilities), when notice is required to 

be published under this subchapter, the applicant shall publish notice 

at least once in a newspaper of largest general circulat~on in the county 

in which the facility is located. 

(b) (No change.) 

(c) In addition to published notice requirements in subsection 

(b) of this section, for an initial notice of draft license and opportunity 

to comment and for any subsequent license amendment of a license 

under Chapter 336, Subchapter H of this title or Subchapter M of this 

- 

title, the chief clerk shall publish notice once in the Texas Register. 

$39.709. Notice of Contested Caw Hearing on Application. 

(a) (No change.) 

(b) EsepTPTas provided in subsection (d) of this section, for 

[Fer] applications under Chapter 336, Subchapter F of this title (relating to Licensing of Alternative Methods of Disposal of Radioactive Material), Subchapter G of this title (relating to Decommissioning 

Standards), [or] Subchapter K of this title (relating to Commercial Disposal of Naturally Occumng Radioactive Material Waste From Public 

Water Systems), or Subchapter L of this title (relating to Licensing of 

Uranium Recovey and By-product Material Disposal Facilities), notice must be mailed no later than 30 days before the hearing. For ap 

plications under Chapter 336, Subchapter H of this title (relating to Licensing Requirements for Near-Surface Land Disposal of Low-Level 

Radioactive Waste) or Subchapter M of this title (relating to Licensing 

of Radioactjve Substances Processing and Storage Facilit~es], notice 

must be mailed no later than 3 1 days before the hearing. 

(c) (No change.) 

(d) For an appl~cat~on for> newkense to_dlspose of by-prod- 

- 

uct matergunder Chapter 336, Subchapter L of th~s t~tle that was filed 

~hthe-D~partment of State Health Serv~ces onmorr&fore-Januad 

~07,no~ce_under~h~s~sec~on~mus~beprov~dedohappl~cant, the 

office~ofpub~~eres~counse~he~execu&ve~~rec~or,and~an~rs~n 

-- 

who tlmelysubm~tted a request for a contested_cas&eann~ at least 10 

days In advance-ofthe-heanng -- -- 

This agency hereby cert~fies that the proposal has been rev~ewed 

by legal counsel and found to be w~thln the agency's legal author- 

~ty to adopt. 

Filed with the Office of the Secretary of State on August 23,2007. 

TRD-200703834 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Eatliest possible date of adoption: October 7. 2007 

For further information. please call: (512) 239-6087 

CHAPTER 1 16. CONTROL OF AIR 

POLLUTION BY PERMITS FOR NEW 

CONSTRUCTION OR MODIFICATION 

SUBCHAPTER B. NEW SOLRCE REVIEW 

PERMITS 

DIVISION 1. PERMIT APPLICATION 

30 TAC 8116.114 

The Texas Commission on Environmental Qualty (TCEQ or 

commission) proposes amendments to $116.114. 

If adopted, the proposed amended section will be submitted to 

the United States Environmental Protection Agency (EPA) as a 

revision to the state implementation plan (SIP). 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE PROPOSED RULE 

House Bill (HB) 3732, passed by the 80th Legislature (2007), 

requires that the commission adopt rules relating to permitting of 

Advanced Clean Energy Projects (ACEP). House Bill 3732 and 

the associated proposed rule changes are intended to provide 

an incentive for the development of advanced, clean power 

projects in Texas. The legislation established new Texas Health 

and Safety Code (THSC), $382.0566. Advanced Clean Energy 

Project Permitting Procedure, which specifies certain deadlines 

for TCEQ's air permit review for qualifying projects and directs 

TCEQ to incorporate those deadlines into commission rules. 

The deadlines are intended to ensure that permit applications 

for ACEP are processed in an expedited manner. 

House Bill 3732 established a definition of ACEP under THSC, 

6382.003. Definitions. Under this definition. an ACEP must meet 

ihe following criteria: (1) an application fors permit is filed on or 

after January I. 2008 and before January I, 2020; (2) the project 

involves the use of coal, biomass, petroleum coke, solid waste, 

or fuel cells using hydrogen derived from such fuels, in the generation of electricity, or the creation of liquid fuels outside of the 

existing fuel production infrastructure while co-generating eleo 

tricity; (3) the project is capable of achieving on an annual basis 

a 99 percent or greater reduction of sulfur dioxide emissions, a 

95 percent or greater reduction in mercury emissions, and a nitrogen oxides emission rate of 0.05 pounds or less per million 

British thermal units; and (4) the project renders carbon dioxide 

WED RULES September 7,2007 32 TexReg 6053 
capable of capture, sequestration, or abatement if any carbon 

dioxide is produced. 

As required by THSC, S382.0566, the proposed rule amendment 

specifies that the executive director shall complete the technical 

review of an ACEP permit application no later than nine months 

after the application is declared to be administratively complete 

and shall issue a final order issuing or denying the permit no later 

than nine months after the application is declared to be technically complete. The proposed rule amendment allows an extension of up to three months if the number of pending applications 

will prevent the commission from meeting the specified deadlines without creating an extraordinary burden on the resources 

of the commission. The proposed rule amendment does not exempt ACEP permit applications from applicable requirements relating to contested case hearings. 

The commission specifically invites comment on whether or not 

the executive director should directly refer all ACEP air permit. 

applications to the State Office of Administrative Hearings in order to ensure that hearings and permit issuance or denial can be 

completed within the deadlines specified in THSC, 5382.0566. 

SECTION DISCUSSION 

$1 16.114. Application Review Schedule. 

The commission proposes to amend §116.114 to implement 

provisions of HB 3732 and THSC, 5382.0566. The proposed 

amendment would revise §116.114(a) to add deadlines associated with the review of ACEP permit applications. These new 

deadlines would only apply to the processing of permit applications for ACEP as defined in THSC, §382.003(1-a). However, 

the processing of ACEP permit applications would also be subject to existing applicable requirements and deadlines specified 

elsewhere in §116.114, in cases where those requirements or 

deadlines are more stringent than the proposed amendment. 

ACEP permit applications remain subject to applicable requirements relating to contested case hearings. 

Proposed §116.114(a)(3)(A) states that the executive director 

shall complete the technical review of an ACEP permit application no later than nine months after the application is declared 

to be administratively complete. Proposed §116.114(a)(3)(B) 

states that the commission shall issue a final order issuing or 

denying the permit no later than nine months after the application is declared to be technically complete. The proposed rule 

amendment allows an extension of up to three months if the num 

ber of pending applications will prevent the commission from 

meeting the specified deadlines without creating an extraordinary burden on the resources of the commission. 

Existing §116.114(a)(3), relating to refunds of permit fees, is proposed to be renumbered as 511 6.11 4(a)(4). 

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT 

Nina Chamness, Analyst. Strategic Planning and Assessment, 

has determined that, for the first five-year period the proposed 

rule amendment is in effect, no significant fiscal implications 

are anticipated for the agency or other units of state or local 

governments as a result of administration or enforcement of 

the proposed rule amendment. The proposal implements legislative mandates regarding the agency's review of air permit 

applications for ACEP and streamlines the process so that the 

agency could issue the permit within shorter legislated time 

frames. These shorter time frames will require the agency 

to prioritize ACEP permit applications and allocate existing 

staff resources to meet required deadlines. The State Office 

of Administrative Hearings may also be required to schedule 

ACEP permit hearings sooner in order to help the agency meet 

rule deadlines. The actual number and timing of ACEP permit 

applications TCEQ will receive is not known, but the volume is 

expected to be light (less than 3 per year). The effects most 

likely will not vary greatly over the next five years. 

The proposed rule amendment is required by HB 3732, passed 

by the 80th Legislature, Regular Session, which sets the deadlines and directed TCEQ to adopt corresponding rules no later 

than January 1,2008. The intent of HB 3732 and the associated 

rules is to provide an incentive to encourage the development 

of certain types of electric power projects that meet stringent 

emission limits. The proposed rule amendment would establish 

deadlines for the agency's review of air permit applications for 

ACEP, in order to ensure that those permits are issued in an expedited manner. The rule proposal would require that the executive director complete the technical review of an ACEP permit 

application within nine months of determining the application is 

administratively complete. The rule proposal also requires the 

commission to issue a final order issuing or denying the permit 

within nine months of the date the executive director determines 

the application is technically complete. The commission has discretion to extend this deadline by up to three months, if meeting 

the deadline would create an extraordinary burden on cornmission resources. 

It is possible that local governments may elect to initiate advanced clean energy projects and could benefit from the shorter 

permit deadlines. The number of government entities who will 

elect to begin advanced clean energy projects is not known, but 

is expected to be less than three per year. The shorter permit 

deadlines in the proposed rule amendment may allow government-owned or government-operated utilities to achieve a somewhat faster return on their investment in new power projects. 

Quantifying this benefit is very difficult, as it would depend heavily on circumstances unique to each individual project. 

PUBLIC BENEFITS AND COSTS 

Ms. Chamness also determined that, for each year of the first 

five years the proposed rule amendment is in effect, the public 

benefit anticipated from the changes seen in the rule proposal 

will be compliance with state law and the encouragement of permit applicants to use low-emission technology more stringent 

than otherwise required in electric power projects. Use of this 

technology is expected to result in cleaner air and greater protection of public health and safety. 

The number of facilities or businesses that may elect to initiate 

ACEP projects is unknown, but is most likely less than three 

new units per year. The type of facilities that would benefit from 

the rule proposal are new electric generating units that use coal, 

biomass, petroleum coke, solid waste, or fuel cells to make electricity. and meet the low-emission profile specified in HB 3732. 

The shorter permit deadlines in the proposed rule amendment 

may allow a large business that owns or operates utilities to 

achieve a somewhat faster return on their investment in new 

power projects. Quantifying this benefit is very difficult, as it 

would depend heavily on circumstances unique to each individual project. 

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT 

No adverse fiscal implications are anticipated for small or micro-businesses as a result of the proposed rule amendment. 

Small or micro-businesses are not likely to initiate large, ad32 TexReg 6054 September 7, 2007 Texas Registe 
vanced electric utility projects; and the expedited permit process 

for ACEPs is not expected to have an impact on them. 

LOCAL EMPLOYMENT IMPACT STATEMENT 

The commission has reviewed this proposed rulemaking and 

determined that a local employment impact statement is not 

required because the proposed rule amendment does not 

adversely affect a local economy in a material way for the first 

five years that the rule proposal is in effect. 

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION 

The commission has reviewed the proposed rulemaking in light 

of the regulatory impact analysis requirements of Texas Govemment Code, §2001.0225, and has determined that the rulemaking is not subject to 52001.0225 because it does not meet 

the definition of a "major environmental rule." Furthermore, it 

does not meet any of the four applicability requirements listed 

in 52001.0225(a). "Major environmental rule" means a rule the 

specific intent of which is to protect the environment or reduce 

risks to human health from environmental exposure and that may 

adversely affect in a material way the economy, a sector of the 

economy, productivity, competition, jobs, the environment, or the 

public health and safety of the state. The proposed rulemaking is not a major environmental rule because it is procedural 

in nature. The rule proposal does not prescribe control requirements or any other requirements that would normally be ass@ 

ciated with a commission environmental rulemaking. House Bill 

3732 and THSC, 5382.0566, address processing ACEP applications in an expedited manner. The proposed amendment to 

5116.114 merely implements the deadlines for TCEQ's review 

of ACEP applications. Further, the rule proposal does not add 

any requirements that would adversely affect in a material way 

the economy, a sector of the economy, productivity, competition, 

jobs, the environment, orthe public health and safety of the state. 

In addition, a draft regulatory impact analysis is not required because the rule does not meet any of the four applicability criteria for requiring a regulatory impact analysis of a major environmental rule as defined in the Texas Governrnent Code. Section 

2001.0225 applies only to a major environmental rule, the result of which is to: (1) exceed a standard set by federal law, unless the rule is specifically required by state law; (2) exceed an 

express requirement of state law, unless the rule is specifically 

required by federal law; (3) exceed a requirement of a delegation agreement or contract between the state and an agency or 

representative of the federal government to implement a state 

and federal program; or (4) adopt a rule solely under the general 

powers of the agency instead of under a specific state law. This 

rulemaking proposal does not exceed a standard set by federal 

law, and the pro~osed reauirements are consistent with ao~licable federal standards. In addition, this proposal does not exceed 

an express requirement of state law and is not adopted solely 

under the general powers of the agency, but is specifically authorized by the provisions cited in the STATUTORY AUTHORITY 

section of this preamble. Finally, this proposed rulemaking does 

not exceed a requirement of a delegation agreement or contract 

to implement a state and federal program. 

The commission invites- public comment on the draft regulatory 

impact analysis determination. 

TAKINGS IMPACT ASSESSMENT 

The commission evaluated this rulemaking action and performed 

an analysis of whether the proposed rule amendment is subject to Texas Governrnent Code, Chapter 2007. The primary 

purpose of the proposed rulemaking is to implement deadlines 

created by HB 3732 and THSC, 5382.0566, relating to TCEQ's 

air permit review for ACEP applications so that the applications 

are processed in an expedited manner. This amendment does 

not affect private property in a manner that restricts or limits an 

owner's right to the property that would otherwise exist in the 

absence of the governmental action. Promulgation and enforcement of this proposed rule amendment is neither a statutory nor a 

constitutional taking because it does not affect private real property. Therefore, this rule proposal does not constitute a taking 

under Texas Government Code, Chapter 2007. 

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM 

The commission determined that this rulemaking action relates 

to an action or actions subject to the Texas Coastal Management 

Program (CMP) in accordance with the Coastal Coordination Act 

of 1991, as amended (Texas Natural Resources Code, 5533.201 

et seq.), and the cornmission rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the CMP. As required by 

5281.45(a)(3) and 31 TAC §505.11(b)(2), relating to Actions and 

Rules Subject to the Coastal Management Program, commission rules governing air pollutant emissions must be consistent 

with the applicable goals and policies of the CMP. 

The commission reviewed this rulemaking proposal for consistency with the CMP goals and policies in accordance with the 

regulations of the Coastal Coordination Council and determined 

that the proposed amendment is consistent wlh CMP goals 

and policies because the rulemaking proposal is a procedural 

rule that will not have direct or signiticant adverse effect on any 

coastal natural resource areas; will not have a substantive effect 

on commission actions subject to the CMP; and promulgation 

and enforcement of the proposed amendment will not violate or 

exceed any standards identified in the applicable CMP goals 

and policies. The proposed rule amendment ensures that air 

permit applications for ACEP are reviewed by the TCEQ in an 

expedited manner. The proposed rule amendment would not 

affect the technical criteria that are used to evaluate such permit 

applications and would not change applicable public participation requirements for the permit application. The proposed 

rule amendment would not affect the type of emission control 

technology required by the perml and would not affect the 

authorized emission rates from permitted facilities. 

The commission solicits comments on the consistency of the proposed rulemaking with the CMP during the public comment period. 

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING 

PERMITS PROGRAM 

The proposed amendment relates to timeframes and deadlines 

associated with the review of new source review permit applications. The proposed amendment affects all sites equally and 

has no specific effect on sites subject to the Federal Operating 

Permits Program. 

ANNOUNCEMENT OF HEARING 

A public hearing on this proposal will be held in Austin on 

September 24, 2007, at 2:00 p.m. at the Texas Commission on 

Environmental Quality complex located at 12100 Park 35 Circle, 

in Building F, Room 2210. The hearing will be structured for 

the receipt of oral or written comments by interested persons. 

Individuals may present oral statements when called upon in 

order of registration. There will be no open discussion during 

PROPOSED RULES September 7,2007 32 TexReg 6055 
the hearing; however, an agency staff member will be available 

to discuss the proposal 30 minutes prior to the hearing. 

Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact 

Kristin Smith, Office of Legal Services, at (512) 239-0177. Requests should be made as far in advance as possible. 

SUBMllTAL OF COMMENTS 

Written comments may be submitted to Kristin Smith, MC 205, 

Office of Legal Services, Texas Commission on Environmental 

Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed 

to (512) 239-4808. Electronic comments may be submitted at 

http://www5.tceq.state.tx.us/ruledecommentd. All comments 

should reference Rule Project Number 2007-023-116-PR. The 

comment period closes September 26, 2007. For further information, please contact Michael Wilhoit, Air Permits Division, 

(51 2) 239-1 222. 

STATUTORY AUTHORITY 

The amendment is proposed under Texas Water Code (TWC), 

95.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under 

the Texas Water Code; TWC, 95.103, concerning Rules, that 

authorizes the comrnission to propose rules necessary to carry 

out its powers and duties under the Texas Water Code; TWC 

55.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the 

commission; and under Texas Health and Safety Code (THSC), 

9382.017, conceming Rubs, that authorizes the commission 

to adopt rules consistent with the policy and purposes of the 

Texas Clean Air Act. The amended section is also proposed 

under THSC, 9382.002, concerning Policy and Purpose, that 

establishes the commission's purpose to safeguard the state's 

air resources. consistent with the ~rotection of ~ublic health. 

general welfaie, and physical 5382.0131, concerning 

General Powers and Duties. that authorizes the commission 

to control the quality of the site's air; and $382.012, concern 

ing State Air Control Plan, that authorizes the commission to 

prepare and develop a general, comprehensive plan for the 

proper control of the state's air. The amended section is also 

proposed under 5382.051, concerning Permitting Authority of 

Commission; Rules, that authorizes the commission to issue 

permits and adopt rules necessary for permits issued under 

THSC, Chapter 382; 9382.0513. concerning Permit Conditions, 

which authorizes the comrnission to establish and enforce permit conditions; 9382.0515, concerning Application for Permit, 

which authorizes the comrnission to require a permit application 

with plans and specifications necessary for the commission to 

determine if the facility will comply with applicable state and 

federal regulations and the intent of the TCAA; 9382.0517, 

concerning Determination of Administrative Completion of Application, which authorizes the commission to determine when 

an application is administratively complete; and 9382.0518, 

concerning Preconstruction Permit, which requires persons 

planning the construction or modification of a facility to obtain 

a permit from the commission. The amended section is also 

proposed under House Bill 3732, passed by the 80th Legislature (2007) and THSC, $382.0566. Advanced Clean Energy 

Project Permitting Procedure, which specify certain deadlines 

for TCEQ's air permit review for ACEP applications. 

The proposed amendment implements THSC, 99382.002, 

382.011, 382.012, 382.017, 382.051, 382.051 3, 382.0515, 

382.0517, 382.0518. and 382.0566 and House Bill 3732, 

passed by the 80th Legislature (2007). 

$116.114. Application Review Schedule. 

(a) Review schedule. The executive director shall review permit applications in accordance with the following. 

(1) - (2) (No change.) 

(3) Re~~ew~schedu~for~Advanced CIeann.EnergygyPro~c& 

In addition to the applicable requirements and deadlines specified in 

subsections (a) - (c) of this section, the following deadlines apply to 

per-it applicationsfpr advanced clean energy projects as definedin 

Texas Health 

@lJ 

and Safety Code, 9382.003, Definitions: 

As authorized by federal law, not later thannine 

months after the executivedirgctor declares an application for ape& 

under this chapter for an advanced cIean energy project to beHnistratively complete, the executive dir*hall complete its technicaJ 

review of the application. 

Qj3J The commission shall issue a final order issuingor 

denying thepermit not later than nine months after the executive director declares thgplication technically comnge. The commission may 

- extend this deadline up to thze months if it determines that the numher of complex pendingapplications for permits under this chapter will 

prevent the commission from meeting this deadline without creating an 

extraordinary burden on the resources of the commission. 

(4J [@I Refund of permit fee. 

(A) If the time limits provided in this section to process 

an application are exceeded, the applicant may appeal in writing to the 

executive director for a refund of the permit fee. 

(B) The permit fee shall be reimbursed if it is determined by the executive director that the specified period was exceeded 

without good cause, as provided in Texas Civil Statutes, Article 6252- 

13b.1, 93. 

(b) - (c) (No change.) 

This agency hereby certifies that the proposal has been reviewed 

by legal counsel and found to be within the agency's legal authority to adopt. 

Filed with the Office of the Secretary of State on August 24,2007. 

TRD-200703865 

Robert Martinez 

Director, Environmental Law Division 

Texas Commission on Environmental Quality 

Earliest possible date of adoption: October 7. 2007 

For further information, please call: (512) 239-0177 

CHAPTER 28 1. APPLICATIONS PROCESSING 

SUBCHAPTER A. APPLICATIONS 

PROCESSING 

30 TAC 5281.19 

The Texas Commission on Environmental Quality (TCEQ, 

agency or commission) proposes amendments to 5281.19. 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE PROPOSED RULE 

The changes proposed to this chapter are part of a larger proposal to revise the commission's radiation control rules. The 

32 TaReg 6056 September 7, 2007 Taus Register 
Kathleen Hartnett White, Chairman 

Larry R. Soward, Commissioner 

Glenn Shankle, Executive Director 

Protecting Texas by Reducing and Preventing Pollution 

NOTICE OF PLIBLIC HEARING BY THE TEXAS 

COMMISSION ON ENVIRONMENTAL QUALITY ON PROPOSED REVISIONS 

TO 30 TAC CHAPTER 116 AND TO THE STATE IMPLEMENTATION PLAN 

The Texas Commission on Environmental Quality (commission) will conduct a public hearing to 

receive testimony concerning proposed revisions to 30 TAC Chapter 116, Control of Air Pollution by 

Permits for New Construction or Modification, and to the state implementation plan (SIP), under the 

requirements of Texas Health and Safety Code, 5382.017; Texas Government Code, Chapter 2001, 

Subchapter B; and 40 Code of Federal Regulations 551.102, of the United States Environmental 

Protection Agency (EPA) regulations concerning SIPS. 

The proposed rulemaking would revise $1 16.114(a) to add deadlines associated with the review of 

Advanced Clean Energy Projects (ACEP) permit applications. 

The commission will hold a public hearing on this proposal in Austin on September 24, 2007 at 2:00 

p.m. at the Texas Commission on Environmental Quality Complex located at 12100 Park 35 Circle in 

Building F, Room 2210. The hearing will be structured for the receipt of oral or written comments by 

interested persons. Registration will begin 30 minutes prior to the hearing. Individuals may present 

oral statements when called upon in order of registration. There will be no open discussion during the 

hearing; however, commission staff members will be available to informally discuss the proposal 30 

minutes before the hearing. 

Persons who have special communication or other accommodation needs who are planning to attend the 

hearing should contact Kristin Smith, Office of Legal Services, at (512) 239-0177. 

Comments may be submitted to Kristin Smith, MC 205, Office of Legal Services, Texas Commission 

on Environmental Quality, P.O. Box 13087, Austin, Texas 7871 1-3087, or faxed to (512) 239-4808. 

Electronic comments may be submitted at http://www5.tceq.state.ar.us/mles/ecomments. File size 

restrictions may apply to comments submitted through the ecomments system. All comments should 

reference Rule Project Number 2007-023-1 16-PR. The comment period closes September 26, 2007. 

Copies of the proposed rule can be obtained from the commission's Web site at 

http://www. tceq.state. ar. us/nav/mles/propose adopt. html. For further information, please contact 

Michael Wilhoit, Air Permits Division, (5 121339-1222. 

Issued in Austin, Tm on August 22, 2007 

P.O. Box 13087 Austin, Texas 78711-3087 5121239-1000 Internet address: www.tceq.state.tx.us 

I 
WRITTEN AND 

ORAL TESTIMONY
Reference Number 

INDEX OF WRITTEN TESTIMONY 

Submitted By 

City of Dallas and City of Houston 

Clean Coal Technology Foundation of Texas 

Jackson Walker, L.L.P. on behalf of the Gulf Coast 

Lignite Coalition 

Texas Commission on Environmental Quality Office of 

Public Interest Counsel 

Texas Mining and Reclamation Association 

United States Environmental Protection Agency 

Region 6 
ENVIRONfdENTAL RUAL I TPAGE 01/02 

CITY OF DALLAS 

September 26,2007 

Ms. Kristm Smith 

MC 205 

0,ffice of Legal Services 

Texas Commi.ssion on Environmental Quality 

P.O. Box 13087 

Austin, TX 7871 1 

Dear Ms. Smith: 

FE: Comments on Proposed Rulmaking, Chapter 116, control of Aii Pollution by Pmits for 

New Construction or: Modification, HB 3732: Adwnccd Clem Energy Projcct Permining 

(ACEP) 

Thc Cities of Dallas and Houston wodd like to jointly ,rm&nit comments on the proposed 

rulemaking for HB3732 which would. establish dcadljnes for the permitting of Advanced Clean 

Energy Pro.iects (ACET") air permi.t applications as wen d.s provide an incentive for the 

development of cl.ean electric power in. Texas. 

While we support legislation such as HB 3732 which acourhges clcctric. utility companies to 

consider cleaner mmgy projecls by providing incmtiues, we have some concerns related to thectiteria that a project must meet in order to qualify as an ACEP. Specifically the d.efmiti.on 

establishes that an ACEP project is capable of achieving on 'an annual basis a 99 percent or 

greater reduction of sulfur dioxide emissions, a 95 paceit 'or greaier reducti,on in mercury . ' 

emissions, and a .nitrogen. oxide emission rate of 0.05 pounds ot less pa milIion British Thermal 

Units (l3'IZT's). However, . several power plants that meet oi excced the 0.05 threshold for 

nitroen oxide have been issued permits in the past. Wc are therefore questioning if the criteria 

set in this de is indicative of "clean energy." Further, we remmrnend that project certified, 

under this program result in NOx emissions below -05. 

Last spring in response to the unprecedented amount of penflit applications for coal powered 

power plants, the Mayors of Dallas and Houston formed a coalition of 36 Texas cities, counties 

and school districts (Texas Clean Air Cities Coalition). Giwn that the Houston-GalvestonBra7-oria (AGB) and Dallas-Fort Worth (DPW) arcas an, currently classified as non-attai.omeni 

for ozone3 we arc very concemcd about the air quality impacts associated with coal powcred 

plants. 

OFFICE OF ENVIRONMENTAL QWW la00 MARILUL. UFS DW6, TEXN 75201 lELEPHONE 214&70.\400 
ENVIRONMENTAL QUALIT PAGE 02/02 

Ms. Kristen Smith 

Septembe.r 26,2007 

Page 2 

We Iook forward to our continued involvement in clean air issues across the region and firturc 

discussions Ween the Cities of Dallas and Houston and TCEQ. If you hwc any questions 

concerning our impacts please fa1 free to contact the City of Dallas at 214-670-1200 or the City 

of Houston at 7.13-247-3394. 

Sincerely, 

Office of ~n~ir&mnaal Quality 

City of DaUas 

Elena Marks, kctor 

I-icdtb and Environme~tal Policy 

City of Houston 
September 26,2007 

Via Facsimile and Hand-Delivery 

RECEIVED 

SEP 2 6 2007 

TEXAS REGISTER TEAM 

Ms. Kristin Smith, MC-205 

Texas Commission on Environmental Quality 

Office of Legal Services 

121 00 Park 35 Circle 

Austin TX 78753 

Re: Comments to Rule Project Number 2007-023-1 16-PR 

Dear Ms. Smith: 

Enclosed please find comments to Rule Project Number 2007-023-1 16-PR regarding 

proposed revisions to 30 TAC Chapter 116 and to the State Implementation Plan. These 

comments are submitted on behalf of the Clean Coal Technology Foundation of Texas. 

The Clean Coal Technology Foundation of Texas (hereinafter "CCTFT" or 

"Foundation") is a non-profit entity to support the mission of the Governor's Clean Coal 

Technology Council and exists to promote the use and development of clean coal technologies 

that will result in reliable, low cost and environmentally responsible energy for Texas. The 

Foundation consists of leaders in the Texas energy sector that are dedicated to bringing state of 

the art technologies to Texas' electric power sector. 

The Foundation actively supported passage of HB 3732 earlier this year and applauds the 

leadership of Chairman Hardcastle (the House author) and Chairman Averitt (the Senate 

sponsor) as they work to ensure that Texas maintains an affordable and reliable supply of clean 

energy. The Foundation appreciates the TCEQ's efforts to timely implement this important 

legislation and supports the proposed rule as written. 

The Foundation's only additional comment is in response to the invitation for comment 

on the direct referral issue which was contained within the Background and Summary section of 

the preamble to the proposed rule.' Specifically, the Commission solicited comment on whether 

' 32 TEX. REG. 6053 (2007) (to be codified at 30 TEX. ADMIN. CODE $1 16.1 14) (proposed September 7, 

2007) (Texas Commission on Environmental Quality). 

807 Brazos Street Suite 710 Austin Texas 78701 

1-800-965-4689 www.cctfi.org 
Ms. Kristin Smith 

September 26, 2007 

Page 2 

the Executive Director of the Commission should refer all Advanced Clean Energy Project 

("ACEP") permit applications directly to the State Office of Administrative Hearings ("SOAH"). 

In 1999, the Legislature passed House Bill (HB) 801 establishing procedures for 

providing public notice and participation in the permitting process. It authorizes the Commission 

to grant a request for reconsideration or contested case hearing if the Commission determines 

that the request was made by an "affected person"2 and involves a disputed fact question that was 

raised during the public comment period and is relevant and material to the decision on the 

application.3 This HB 801 process serves an important "gatekeeper" function enabling the 

Commission to limit the scope of hearings to relevant issues to maintain efficiency in the 

permitting process while allowing legitimately affected parties to be heard. 

Commission rules provide applicants the right and the Executive Director the discretion 

to bypass the HB 801 gatekeeper function and "direct refer" cases to SO AH.^ It has been the 

longstanding and consistent practice of the Executive Director, however, not to direct refer 

HE3 801 cases unless the applicant requests such a referral. In fact, the Foundation is not aware 

of a single instance in which the Executive Director requested a direct referral of an HB 801 case 

to SOAH over an applicant's objection. The Foundation respectfully submits that neither the 

letter nor the intent of HB 3732 provide a basis for the Commission to change policies and deny 

the appIicant input on whether an ACEP application should bypass the protections of the HB 801. 

gatekeeper fimction. 

It is also clear from the legislative record that the authors of the bill gave ample 

consideration to the timelines they were imposing on the Commission. HB 3732, as filed, 

required that a permit be issued or denied within 12 months after the executive director declares 

the application administratively complete and did not provide any opportunity to extend that 

timeline.' The final bill extended this timeline by six months, along with an opportunity for an 

additional three month e~tension.~ These changes were made after the authors of the bill worked 

with TCEQ staff and stakeholders fiom environmental interest groups to address their concerns 

that the initially proposed timeline was too short. Representatives fiom the Foundation 

participated in the discussions and recall the discussions accounting for the time it would take an 

application to be sent to the Commissioners before referral to SOAH. 

Although the HB 3732 timeline is shorter than the permit processing timeline sometimes 

experienced at the Commission, the Foundation is confident that the Commission and its staff are 

TEX. WATER CODE ANN. $5.1 15 (Vernon 1999). 

TEX. WATER CODE ANN. 45.556 (Vernon 1999). 

Clarifying direct referral provisions were added to the HI3 801 process in 200 1. See Tex. S.B. 688, 

80th Leg., R.S., 2007 Tex. Gen. Laws 935. 

Act of March 9,2007,80th Leg., H.B. 3732, 5 2 (to be codified at TEX. HEALTH & SAFETY CODE ANN. 

$382.0566). 

TEX. HEALTH & SAFETY CODE ANN. $382.0566 (Vernon 2007). 

Clean Coal Technology Foundation of Texas 

807 Brazos Street Suite 7 10 Austin Texas 7870 1 

1-800-965-4689 www.cctfi.org 
Ms. Kristin Smith 

September 26, 2007 

Page 3 

capable of processing ACEP applications within the 18 month timeline efficiently and effectively 

without eliminating an applicant's option to invoke the HB 801 gatekeeper function discussed 

above. Implementing the bill, as written, provides an appropriate balance between the due 

process rights of both applicants and protestants alike. 

For the foregoing reasons, the Clean Coal Technology Foundation of Texas requests that 

the Commission adopt, as written, the rules proposed under Rule Project 2007-023-1 16-PR and 

not include a mandate that ACEP air permit applications be directly referred to SOAH. Again, 

we appreciate your efforts to timely implement HB 3732 and are available at your convenience 

to further discuss the enclosed comments or any other related issues. 

Sincerely, 

Gary Gibbs 

Chairman 

Clean Coal Technology Foundation of Texas 

cc: Clean Coal Technology Foundation of Texas 

Clean Coal Technology Foundation of Texas 

807 Brazos Street Suite 710 Austin Texas 78701 

1-800-965-4689 www.cctft.org 
JACICSON WALKER L.L.P. 

ATTORNEYS & COUNSELUKS 

September 26, 2007 

Via Facsimile and Hand-Delivery 

Michael J. Nasi 

(5 12) 236-22 16 (Direct Dial) 

(5 12) 391 -2194 (Direct Fax) 

mnasi@jw.com 

RECEIVED 

SEP 2 6 2007 

TEXAS REGISTER TEAM 

Ms. Kristin Smith, MC-205 

Texas Commission on Environmental Quality 

Office of Legal Services 

12 100 Park 35 Circle 

Austin TX 78753 

Re: Comments to Rule Project Number 2007-023-1 16-PR 

Dear Ms. Smith: 

Enclosed please find comments to Rule Project Number 2007-023-1 16-PR regarding 

proposed revisions to 30 TAC Chapter 1 16 and to the State Implementation Plan. These 

comments are submitted on behalf of the Gulf Coast Lignite Coalition. 

The Gulf Coast Lignite Coalition (hereinafter "Coalition") is a coalition of entities that 

own or operate lignite and coal-based power plants and surface mines within the states of Texas, 

Louisiana and Mississippi. Coalition membership represents a vast majority of the lignite 

mining and lignite-fired generation industry in Texas, Louisiana and Mississippi. The 

Coalition's charter statement and purpose is to identify threats to the continued viability of the 

lignite industry and foster opportunities for the continued combustion and/or gasification of 

lignite to generate electricity. 

The time-certain permitting provisions of HB 3732 are a critical component of the set of 

incentives offered by HB 3732, which are designed to attract Advanced Clean Energy Projects to 

Texas. The Coalition applauds the efforts of the bill authors to develop these incentives and 

appreciates the Commission's efforts to timely implement this component of HB 3732. 

The Coalition supports the rules, as proposed. In addition, the Coalition offers its input 

on the direct referral 'issue raised in the preamble to the proposed rule. Specifically, the preamble 

to the proposed rule includes the following request for comment: 

The Commission specrfically invites comment on whether or not the executive director 

should directly refer all ACEP air permit applications to the State Office of 

4889758~. 1 

100 Congress Avenue, Suite 1100 Austin, Texas 78701 (512) 236-2000 fax (512) 236-2002 

www.iw.com . Austln . Dallas . Fort Worth Houston . Sal? kneelo . San Antonio . Mernhn. nf GI ORAl AWSM 
Ms. Kristin Smith 

September 26,2007 

Page 2 

Administrative Hearings in order to ensure that hearings and permit issuance or denial 

can be completed within the deadlines spec fled in THSC, $382.0566. 

32 Tex. Reg. 6053 (September 7,2007). 

In response to this request, the Coalition respectfully submits that no automatic direct 

referral of ACEP applications should occur. Put simply, there is no legal mandate in HB 3732 to 

strip applicants of their involvement in the decision whether to directly refer cases to SOAH. 

There are also several policy reasons why an applicant should always retain the right to trigger 

the HI3 801 issuelparty gatekeeper provisions. The policy reasons in support of this position are 

fully described in the comments of the Clean Coal Technology Foundation of Texas. The 

Coalition fully incorporates herein for all purposes the Foundation's comments on this issue. 

We appreciate your efforts to implement the time-certain permitting provisions of 

HB 3732. I am available at your convenience to further discuss the enclosed comments or any 

other issues relating to the implementation of HB 3732. 

Sincerely, 

Michael J. Nasi, Counsel 

Gulf Coast Lignite Coalition 

cc: Gulf Coast Lignite Coalition 

MJN:LRK:ljj 
Kathleen Hartnett White. Chairman 

Larv R. Sowarcl, Cornn~issio~zelH. S. Budd~r Garcia. Colnmissionel- Bias I. Coy, Jr., Public h7tcrcst Lonnsel 

Pi'otecfing Texas I)!/ Reducing and Prevcntiny Pollution 

September 26,2007 

Ms. Knstin Smith 

Office of Legal Services 

Texas Commission on Environmental Quality 

MC 205, P.O. Box 13087 

Austin, Texas 7871 1-3087 

Re: Rule Project Number 2007-023-116-PR. 

Via Hand Delivery 

Dear Ms. Smith: 

The Office of Public Interest Counsel (OPIC) of the Texas Commission on 

Environmental Quality (TCEQ or Commission) submits the following comments on the 

proposed amendments to 30 TEXAS ADMMISTRATIVE CODE ("TAC"), 5 1 16.1 14. The proposed 

changes are in response to House Bill No. 3732, which requires new application review 

schedules for qualifying proposed sources defined as "Advanced Clean Energy Projects." 

Since the new application review process only allows 9 months from completion of 

technical review to a final decision by the Commission, any potential contested case hearing 

which occurs within those 9 months will be greatly expedited from the typical contested case 

hearing on an application for a proposed source such as a coal-fired power plant. It is important 

to OPIC that public participation in contested case hearings is protected and that there remains an 

accessible mechanism for affected persons to participate in the permitting process. To that end, 

OPIC submits the following recommendations related to the narrow topic of creating a notice 

REPL1.TO: PUBLIC INTEREST COUNSEL. flc 103 P.0. BOX 13087 * AUSTIN, TEXAS 78711-3087 * 512-239-6363 

P.0 Box 13087 * Austln. Texas 78'71 1-:<OK7 * 517-9~C1.lnfrri a Tnt,rn,t >r~rlrocc ..nlnll =t,to t.. ..r 
procedure and hearing schedule that allows the public the greatest amount of time under the new 

requirements to participate in the hearing process. 

Direct Referral of Subiect Applications to the State Office of Administrative Hearings 

OPIC recommends requiring the Executive Director (ED) to refer all applications for 

Advanced Clean Energy Projects to the State Office of Administrative Hearings (SOAH). 30 

TAC 5550.210 (a) allows the Executive Director to "file a request with the chief clerk that the 

application be sent directly to SOAH for a hearing on the application." OPIC finds requiring the 

ED to refer the application directly would be the most efficient method of ensuring that little time 

for public participation is lost during this comparatively expedited hearing review process. 

Publication of a Dual Notice and Expedited Scheduling; of the Preliminan, Hearing 

OPIC recommends that the ED require publication of a dual Notice of Application and 

Preliminary Decision (NAPD) and Notice of Contested Case Hearing within one week after 

declaring the application technically complete. 30 TAC $55.210 (e) describes the content of the 

NAPD required when the direct refmal is before or concurrent with the NAPD, which would be 

anticipated. The hearing should take place no later than 30 days from the date of publication of 

the NAPD. 

Requirement for a Proposal for Decision to be issued no later than one month followink the close 

of the record in a contested case hearing. 

OPIC recommends requiring the Administrative Law Judge@) to issue a proposal for 

decision (PFD) on an application processed under House Bill No. 3732 requirements within one 

month, rather than the customary two months, fiom the close of the record. This will allow all 

parties more time to fully develop the record through discovery, the hearing on the merits, and 

closing briefing. 
Requirement for a Proposal for Decision to be issued be no later than six weeks before the date 

of a final decision on the avplicatjon by the Commission. 

OPIC recommends that the Commission require the PFD be issued six weeks before the 

required date of a final decision. The Commission must issue a final order, no later than 9 

months fiom the conclusion of technical review, therefore once technical review is completed, a 

final order date is established. To assure adequate time for public participation during the 

hearing, filing of exceptions and Commission review, OPIC recommends requiring SOAH to 

issue the PFD no later than six weeks ahead of the final order date. 

Su.ggested Language to Add to the Proposed Amendments to 30 TAC 6 1 16.1 14 

OPIC recommends creating the following subsections -to add to the proposed 

amendments, with no other changes: 

30 TAC 6116.114 (a)(3)(C) The Executive Director shall refer the application to the State 

Office of Administrative Hearings before or concurrent with the conclusion of technical 

review, as authorized by 30 TAC 655.210 (a). The notice of the hearing shall be issued and 

published within one week after declaring. the application technically complete as a dual 

notice with the Notice of A~plication and Preliminary Decision. The hearing must take 

place no later than 30 days from the date of publication of the NAPD. 

30 TAC 61 16.1 14 (a)(3)(D) To facilitate adequate opportunity for public ~articipation 

during the contested case hearing. portion of the review of the application, the State Office 

of Administrative Hearings is required to issue a proposal for decision no later than one 

month following the close of the evidentiary record in a contested case hearing. To facilitate 

timely Commission review of the Application, the issuance of the proposal for decision 

should be no later than 6 weeks before the date for which a final order from the 

Commission is due. 
OPIC respectfully submits these comments for your consideration and recommends that 

the Commission includes the above additions to the proposed rule amendment. 

Respectfully submitted, 

Blas J. Coy, Jr. 

Public Intergst Counsel 

Christina Mann 

Assistant Public Interest Counsel 

State Bar No. 24041 388 

(5 12).239:6363 PHONE 

(5 12).239.6377 FAX 

CERTIFICATE OF SERVICE 

I hereby certify that on September 26,2007 a true and correct copy of the Public Interest 

Counsel's Comments on Rule Project Number 2007-023-1 16-PR was served on Ms. Kristin 

Smith and delivered to the TCEQ Docket Clerk via hand delivery, telefax transmission, InterAgency Mail or U.S. Mail. 

Christina Mann I 
816 Congress Avenue, Suite 1900, Austin, Texas 78701 

-Gt- (51 2) 344-6429. Fax (51 2) 472-0532, E-mail: director@tmra.cck 

SEP 2 6 m7 

September 26, 2007 

Via Facsimile and Hand-Delivery 

TEXAS REGISTER TEAM 

Ms. Kristin Smith 

Office of Legal Services, MC 205 

Texas Commission on Environmental Quality 

121 00 Park 35 Circle 

Austin TX 78753 

Re: Comments to Rule Project Number 2007-023-1 16-PR 

Dear Ms. Smith: 

Enclosed please find comments to Rule Project Number 2007-023-1 16-PR regarding proposed 

revisions to 30 TAC Chapter 116 and to the State Implementation Plan. These comments are 

submitted on behalf of the Texas Mining and Reclamation Association. 

The Texas Mining and Reclamation Association (hereinafter "TMRA") is an industry trade 

association of approximately 100 mining, electric utility and supplier companies supporting the longterm growth and well being of an environmentally sound mining industry in Texas. The Association 

supports coordinated, rational and consistent federal, state and local policies to assure the economic 

recovery of the state's mineable resources in an environmentally sound manner. 

We support the rules, as proposed, as well as the comments of the Clean Coal Technology 

Foundation of Texas. We agree with the Foundation that no automatic direct referral of Advanced 

Clean Energy Project applications should occur because HB 3732 does not call for such a procedure 

and the timeiines provided by HB 3732 allow for suacient rime to process applications and conduct 

hearings. 

We appreciate your efforts to implement HB 3732 in a timely fashion. I am available at your 

convenience to further discuss the enclosed comments or any other issues relating to the 

implementation of HB 3732. 

Respectfully submitted, 

Executive Director 

Texas Mining and Reclamation Association 

cc: Sid Stroud 

TMRAITCEQ Work Group 

Ches Blevins 
sep 26 2007 10:30flH HP LASERJET FflX 

&%098r 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGiON 6 

1445 WSS AVENUE, SUITE f 200 

DALLAS, TX 73202-2733 

Ms. Kristin Smith 

MC 205 

Office of Legal Services 

Texas Commission on Envimnrnental Qudity 

P.O. Box 13087 

Austin. TX 7871 2-3087 

RE: Comments on Proposed Amendments to 30 Texas Administrative Code (TAC) 

Chapter 116, Control of Air Pollution by Permits for New Construction or 

~odification and to the State Implemen~ation Plan (SIP); Rule Project Number 

2005-03 8-1 16-PR 

51~ a007 - 023- 11i- PE 

Dear Ms. Smiik 

Thank you for the opportunity to provide comments on this proposed revision to 

30 TAC Chapter 116 and the SIP. In this action, the Texas Commission on 

Environmental Qudity (TCEQ) proposed to amend 30 TAC 4 116.114(a) to add 

deadlines associated with the =view of Advanced Clean Energy Projects ( ACEP) penni t 

applications. This revision adopts these provisions as required under House Bill 3732, 

passed by the 8orn Legislature, (2007). It applies to ACZPs pennit applications which 

meet the following criteria: 1) an application for a permit must be filed on or after 

January 1,2008, and before January 1,2020; 2) the project involves the use of coal, 

biomass, petroleum cob, solid waste, of fuel cells using hydrogen derived from such 

fuels, in the generation of electricity, or the creation of liquid fuels outside of the existing 

fueI production infrastructure wbile co-generating electricity; 3) the project is capable of 

achj eving on an annual basis a 99 percent or greater reduction of sulfur dioxide 

enzissions, a 95 percent Or greater reduction in mercury emissions, and a nitrogen oxidcs 

emission rate of 0.05 pounds or less per million British thermal units; and 4) the project 

renders carbon dioxide capable of capture, sequeseation, or abatement if any carbon 

dioxide is produced. 

Generally, we support the adoption of the timelines for processing the ACEP 

permit applications. However, we offer thc following comments far your c onsidcmtion 

prior to final adoption of these changes. 

~c~eoycMI* +Phted wHh Vepstable OU bod hls on 1~0% Re-d Paper f40% pgaawumerj 
Sep 26 2007 10:30AM HP LRSERJET FRX 

1. Definition of Advanced Clean Enernv Proiects (ACEP). The 

proposed revision to the introductory paragraph in 3 116.1 14(a) 

refers to the definition of ACEP in Texas Health and Safety Code 

§ 382.003, Definitions. Although the Texas HeaIth and Safety 

Code includes a definition of ACEP and the term ACEP. is 

described in the preamble to the proposal, it would be helpful to 

include a definition of ACEP in 30 TAC Chapter 116. 

2. Relationship to other endi in^ revisions to 30 TAC 5 3 16.1 14. 

A. Our records show that the current Texas SIP 

fncludes 4 1 16.1 14 as adopted by TCEQ on 

June 17,1998: and was approved 

September 18,2002 (68 Federal Register 58697). - 

Subsequent to the June 17, 1998, adoption, we show 

that Texas submitted revisions to $ f 16.114 on 

October 25,1999, and September 25,2003. At 

present, the Environmental Protection Agency has 

not acted upon the October 25, 1999, and 

September 25.2003. SIP submittals. Because this 

proposed revision to 3 116.114 will also include the 

pending revisions to 5 116.1 14, we cannot process 

subsequent revisions to 8 116.1 14 until TCEQ has 

addressed our outstanding concerns to our 

satisfaction. 

B. Please take note of our concerns with the SIP 

revision submitted October 25,1999. 

I. The October 25,1999, SIP I-evisian 

includes a restructuring of Texas 

procedures for public notice and 

comments on permits for air 

emissions. The revised rules move 

and revise the public' participation 

requirements for air permits from 

Chaptm 116 to Chapter 39. The 

October 25, 1999, SIP submittal 

includes revisions to Chapter 39 and 

revision3 to 9 116.1 14 whicb 

.cross-reference the provisions . . ~f 

.Chapter 39. . . 
Sep 26 2007 10:30flM HP LflSERJET FAX 

ii. On August 14,2006, we forwarded 

comments to TCEQ on our concerns 

with the provisions of Chapter 39. 

To date, TCEQ has not responded to 

our comments. UlitiI TCEQ 

adequately addresses thcse cancerns, 

we cannot process subsequent 

revisions to 5 116.114 which contain 

any cross-reference to Chapter 39. 

iii. We thenfore request that TCEQ 

work with us to address the concerns 

stated our August 14,2006, letter in 

order that we can process the 

pending SIP revisions to 5 116.1 14. 

We appreciate this opportunity to provide these comments on this proposed rule. 

If you have any questions, please call Mr. Stanley M. Spmiell of my staff at 

(214) 665-72 12. 

u 

Jeff Robinson 

Chief 

Air Permits Section 
INDEX OF ORAL TESTIMONY 

Public Hearing 

September 24, 2007, in Austin 

No oral comments were received for the proposed rulemaking. 
Texas Commission on Environmental Quality 

Public Hearing Registration 

Rule Project No.:2007-023-116-PR 

Date: ~e~tember 24,2007 

Time: 2:OOp.m. 

I Short Title: HB 3732: ~dvanced Clean Energy Projects 

Location: TCEQ Bldg F Room 2210 

Concerning: 30 TAC Chapter 116 

Name 

(Piease Print) Representing Presenting Oral Testimony? 

(Circle One) 

Yes No 

Yes No 

Yes No 

Yes No 

Yes No 

Yes No 

/ 

r 610c.k- JAC~J.~ (~)nlk~ L\P yes a 

Yes No 
EVALUATION OF

TESTIMONY
T~as Commission on Environmental Quality INTtROFFlCE MEMORANDUM 

To : Commissioners Date: November 30,2007 

Thru: LaDonna Castaiiuela, Chief Clerk 

Glenn Shankle, Executive Director 

From: Dan Eden, Deputy Director 

Office of Permitting, Remediation, and Registration 

Docket No.: 2007-0953-RUL 

Subject: Commission Approval for Rulemaking Adoption 

Chapter 1 16, Control of Air Pollution by Permits for New Construction or Modification 

House Bill 3732: Advanced Clean Energy Project Permitting 

Rule Project No. 2007-023-1 16-PR 

Scope of the rulemaking: 

The amendment would revise $ 1 16.1 14 to add specific deadlines for processing of Advanced Clean 

Energy Project (ACEP) air permit applications. The amended rule would require that the executive 

director complete the technical review of the air permit application within nine months of the date 

the executive director determines the permit application is administratively complete. The rule also 

requires that the Texas Commission on Environmental Quality (TCEQ or commission) issue a final 

order issuing or denying the permit within nine months of the date the executive director declares the 

application to be technically complete. The commission has the discretion to extend this deadline by 

up to three additional months, if meeting the deadline would create an extraordinary burden on 

commission resources. 

Reasons for the rule package: 

The amendment is necessary to implement provisions of House Bill (HB) 3732, passed by the 

80th Legislature (2007). House Bill 3732 was authored by Representatives Rick Hardcastle, 

Joe Deshotel, Drew Darby, Burt Solomons, and Robby Cook, and sponsored by Senator Kip Averitt. 

The legislation is intended to provide an incentive for the development of advanced, clean power 

projects in Texas. House Bill 3732 requires that the TCEQ adopt rules relating to permitting of 

ACEP. The legislation specifies certain deadlines for TCEQ's review of ACEP air permit 

applications and directs TCEQ to incorporate those deadlines into commission rules. 

House Bill 3732 specifies that the rules must be adopted no later than January 1,2008. 

Statutory Authority: 

Texas Water Code, $5.102, General Powers; $5.103, Rules; and $5.105, General Policy; Texas 

Health and Safety Code (THSC), $382.002, Policy and Purpose; $382.01 1, General Powers and 

Duties; $382.012, State Air Control Plan; $382.017, Rules; 5382.051, Permitting Authority of 

Commission; Rules; 53 82.05 13, Permit Conditions; 5382.05 15, Application for Permit; 5382.05 17, 

Determination of Administrative Completion of Application; 5382.05 18, Preconstruction Permit; and 

5382.0566, Advanced Clean Energy Project Permitting Procedure; and HB 3732, 80th Legislature, 

2007. 
Commissioners 

Page 2 

November 30,2007 

Re: Docket No. 2007-0953-RUL 

Potentially controversial matters: 

The amended rule relates to air permitting of certain ACEPs, which may include coal-fired electric 

generating units. The TCEQ Office of Public Interest Counsel recommended that the rule require the 

executive director to directly refer all ACEP permit applications to the State Office of Administrative 

Hearings (SOAH); commenters from industry groups strongly opposed mandatory direct referral to 

SOAH. House Bill 3732 did not specify any changes to existing rules or practices concerning direct 

referrals. Existing rules at 30 TAC $55.210, Direct Referrals, already allow the executive director 

(or the permit applicant) to directly refer a permit application to SOAH where appropriate. 

Therefore, it does not appear necessary to address direct referrals in this rulemaking, and the rule has 

not been changed fiom the proposal. 

Public comment: 

The commission solicited public comments on this rulemaking through newspaper notices published 

on August 24, 2007, and publication in the Texas Register on September 7, 2007. The comment 

period closed on September 26, 2007. A public hearing on the proposed rule was conducted on 

September 24, 2007, but no persons entered formal comments at the hearing. The commission 

received written comments from the City of Dallas, the City of Houston, the Clean Coal Technology 

Foundation of Texas (CCTFT), Jackson Walker L.L.P. on behalf of the Gulf Coast Lignite Coalition, 

the Texas Mining and Reclamation Association (TMRA), the TCEQ Office of Public Interest 

Counsel, and the U.S. Environmental Protection Agency (EPA) Region 6. 

Commenters from industry groups (CCTFT, TMRA, and Jackson Walker L.L.P.) supported the rule 

as proposed. The TCEQ Office of Public Interest Counsel recommended that the rule require the 

executive director to directly refer all ACEP permit applications to the State Office of Administrative 

Hearings (SOAH). Commenters from industry groups strongly opposed mandatory direct referral to 

SOAH. The City of Dallas and the City of Houston commented that the statutory definition of 

ACEP may not reflect the cleanest energy production possible. The EPA recommended that the rule 

specifically include the definition of ACEP instead of cross-referencing the statutory definition in 

THSC, $382.003, Definitions. The EPA also commented that this rule change could not be 

processed as a SIP revision until other unrelated SIP concerns are resolved. No changes to the rule 

were made in response to these comments. 

Significant changes from proposal: No changes. 

Key points in adoption rulemaking schedule: 

Texas Register proposal publication date: September 7,2007 . Six-month Texas Register filing deadline: March 7,2008 . Anticipated Texas Register publication date: January 4,2008 . Anticipated effective date: January 10,2008 

Agency contacts: 

Michael Wilhoit, Rule Project Manager, 239- 1222, Air Permits Division 

Timothy Eubank, Staff Attorney, 239- 1976 

Kristin Smith, Texas Register Coordinator, 239-01 77 
Commissioners 

Page 3 

November 30,2007 

Re: Docket No. 2007-0953-RUL 

Attachments 

cc: Chief Clerk, 5 copies 

Executive Director's Office 

David C. Schanbacher, P.E. 

Zak Covar 

Ashley K. Wadick 

Daniel Womack 

Office of General Counsel 

Michael Wilhoit 

Kristin Smith 
EVALUATION OF TESTIMONY 

The Texas Commission on Environmental Quality (TCEQ or commission) adopts an amendment to 

5 1 16.1 14. Section 1 16.1 14 is adopted without change to the proposed text as published in the September 

7,2007, issue of the Texas Register (32 TexReg 6056) and will not be republished. 

The amended section will be submitted to the United States Environmental Protection Agency (EPA) as a 

revision to the state implementation plan (SIP). 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULE 

House Bill (HB) 3732, passed by the 80th Legislature (2007), requires that the commission adopt rules 

relating to permitting of Advanced Clean Energy Projects (ACEP). House Bill 3732 and the associated 

rule changes are intended to provide an incentive for the development of advanced, clean power projects 

in Texas. The legislation established new Texas Health and Safety Code (THSC), 5382.0566, Advanced 

Clean Energy Project Permitting Procedure, which specifies certain deadlines for TCEQ's air permit 

review for qualifying projects and directs TCEQ to incorporate those deadlines into commission rules. 

The deadlines are intended to ensure that permit applications for ACEP are processed in an expedited 

manner. 

House Bill 3732 established a definition of ACEP under THSC, 5382.003, Definitions. Under this 

definition, an ACEP must meet the following criteria: 1) an application for a permit is filed on or after 

January 1,2008, and before January 1,2020; 2) the project involves the use of coal, biomass, petroleum 

coke, solid waste, or fuel cells using hydrogen derived from such fuels, in the generation of electricity, or 

the creation of liquid fuels outside of the existing fuel production infrastructure while co-generating 

electricity; 3) the project is capable of achieving on an annual basis a 99 percent or greater reduction of 
sulfur dioxide emissions, a 95 percent or greater reduction in mercury emissions, and a nitrogen oxides 

emission rate of 0.05 pounds or less per million British thermal units; and 4) the project renders carbon 

dioxide capable of capture, sequestration, or abatement if any carbon dioxide is produced. 

As required by THSC, $382.0566, the adopted rule specifies that the executive director shall complete the 

technical review of an ACEP permit application no later than nine months after the application is declared 

to be administratively complete, and shall issue a final order issuing or denying the permit no later than 

nine months after the application is declared to be technically complete. The rule allows an extension of 

up to three months if the number of pending applications will prevent the commission fiom meeting the 

specified deadlines without creating an extraordinary burden on the resources of the commission. The 

rule does not exempt ACEP permit applications fiom applicable requirements relating to contested case 

hearings. 

SECTION DISCUSSION 

$1 16.11 4. Application Review Schedule. 

The commission is amending $1 16.1 14 to implement provisions of HE! 3732 and THSC, $382.0566. The 

amendment revises 9 1 16.1 14(a) to add deadlines associated with the review of ACEP permit applications. 

These new deadlines only apply to the processing of permit applications for ACEP as defined in THSC, 

$382.003(1-a). However, the processing of ACEP permit applications remains subject to existing 

applicable requirements and deadlines specified elsewhere in 9 1 16.1 14, in cases where those 

requirements or deadlines are more stringent. ACEP permit applications remain subject to applicable 

requirements relating to contested case hearings. 

Section 116.1 14(a)(3)(A) states that the executive director shall complete the technical review of an 

ACEP permit application no later than nine months after the application is declared to be administratively 
complete. Section 116.1 14(a)(3)(B) states that the commission shall issue a final order issuing or denying 

the permit no later than nine months after the application is declared to be technically complete. The rule 

allows an extension of up to three months if the number of pending applications will prevent the 

commission from meeting the specified deadlines without creating an extraordinary burden on the 

resources of the comrnission. 

Existing 5 1 16.1 14(a)(3), relating to refunds of permit fees, is renumbered as 5 1 16.1 14(a)(4). 

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION 

The commission reviewed the adopted rulemalung in light of the regulatory impact analysis requirements 

of Texas Government Code, 52001.0225, and has determined that the rulemaking is not subject to 

52001.0225 because it does not meet the definition of a "major environmental rule." Furthermore, it does 

not meet any of the four applicability requirements listed in 52001.0225(a). "Major environmental rule" 

means a rule, the specific intent of which is to protect the environment or reduce risks to human health 

from environmental exposure and that may adversely affect in a material way the economy, a sector of the 

economy, productivity, competition, jobs, the environment, or the public health and safety of the state. 

The rulemaking is not a major environmental rule because it is procedural in nature. The rule does not 

prescribe control requirements or any other requirements that would normally be associated with a 

comrnission environmental rulernaking. House Bill 3732 and THSC, 5382.0566, address processing 

ACEP applications in an expedited manner. The amendment to 5 1 16.1 14 merely implements the 

deadlines for TCEQ's review of ACEP applications. Further, the rule does not add any requirements that 

would adversely affect in a material way the economy, a sector of the economy, productivity, 

competition, jobs, the environment, or the public health and safety of the state. 
In addition, a regulatory impact analysis is not required because the rule does not meet any of the four 

applicability criteria for requiring a regulatory impact analysis of a major environmental rule as defined in 

the Texas Government Code. Section 2001.0225 applies only to a major environmental rule, the result of 

which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 

2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) 

exceed a requirement of a delegation agreement or contract between the state and an agency or 

representative of the federal government to implement a state and federal program; or 4) adopt a rule 

solely under the general powers of the agency instead of under a specific state law. This rulemaking does 

not exceed a standard set by federal law, and the adopted requirements are consistent with applicable 

federal standards. In addition, the adopted rule does not exceed an express requirement of state law and is 

not adopted solely under the general powers of the agency, but is specifically authorized by the provisions 

cited in the STATUTORY AUTHORITY section of ths preamble. Finally, this rulemaking does not 

exceed a requirement of a delegation agreement or contract to implement a state and federal program. 

TAKINGS IMPACT ASSESSMENT 

The commission evaluated this rulemalung action and performed an analysis of whether the adopted rule 

is subject to Texas Government Code, Chapter 2007. The primary purpose of the rulemalung is to 

implement deadlines created by HI3 3732 and THSC, 5382.0566, relating to TCEQ7s air permit review for 

ACEP applications so that the applications are processed in an expedited manner. This amendment does 

not affect private property in a manner that restricts or limits an owner's right to the property that would 

otherwise exist in the absence of the governmental action. Promulgation and enforcement of this rule is 

neither a statutory nor a constitutional taking because it does not affect private real property. Therefore, 

this rule does not constitute a talung under Texas Government Code, Chapter 2007. 

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM 
The commission determined that this rulemaking action relates to an action or actions subject to the Texas 

Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as 

amended (Texas Natural Resources Code, $$33.201 et seq.), and the commission rules in 30 TAC 

Chapter 281, Subchapter B, concerning Consistency with the CMP. As required by $281.45(a)(3) and 31 

TAC $505.1 1(b)(2), relating to Actions and Rules Subject to the CMP, commission rules governing air 

pollutant emissions must be consistent with the applicable goals and policies of the CMP. 

The commission reviewed this rulemalung for consistency with the CMP goals and policies in accordance 

with the regulations of the Coastal Coordination Council and determined that the amendment is consistent 

with CMP goals and policies because the rulemalung is a procedural rule that will not have direct or 

significant adverse effect on any coastal natural resource areas; will not have a substantive effect on 

commission actions subject to the CMP; and promulgation and enforcement of the amendment will not 

violate or exceed any standards identified in the applicable CMP goals and policies. The adopted rule . 

ensures that air permit applications for ACEP are reviewed by the TCEQ in an expedited manner. The 

adopted rule does not affect the technical criteria that are used to evaluate such permit applications and 

does not change applicable public participation requirements for the permit application. The adopted rule 

does not affect the type of emission control technology required by the permit and does not affect the 

authorized emission rates from permitted facilities. Therefore, in accordance with 3 1 TAC $505.22(e), 

the commission affirms that this rulemalung is consistent with CMP goals and policies. 

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM 

The amendment relates to time frames and deadlines associated with the review of new source review 

permit applications. The adopted rule affects all sites equally and has no specific effect on sites subject to 

the Federal Operating Permits Program. 
PUBLIC COMMENT 

The proposed revisions were published in the September 7,2007, issue of the Texas Register. A public 

hearing for this rulemalung was held on September 24,2007, and the comment period closed on 

September 26,2007. The commission received comments on the proposed rule from the City of Dallas, 

the City of Houston, the Clean Coal Technology Foundation of Texas (CCTFT), Jackson Walker L.L.P. 

on behalf of the Gulf Coast Lignite Coalition, the TCEQ Office of Public Interest Counsel (OPIC), the 

Texas Mining and Reclamation Association (TMRA), and the EPA Region 6. 

RESPONSE TO COMMENTS 

The Cities of Dallas and Houston indicated general support for HB 3732, but expressed concern that the 

emission specifications in the definition of ACEP, particularly the NOx emission rate of 0.05 Ib/MM 

BTU, may not be representative of the cleanest energy production possible. The City of Dallas and the 

City of Houston commented that several existing power plants meet or exceed the NOx criteria, and 

recommended that any project certified under this program result in NOx emissions below 0.05 lb/MM 

BTU. 

The emission specifications in the definition of ACEP were established by HB 3732 and 

incorporated into THSC, 8382.003, Definitions. Commission rules implementing HB 3732 must be 

consistent with the statutory definition of ACEP and the associated emission specifications. The 

commission is not changing the rule in response to this comment. 

The Cities of Dallas and Houston expressed general concern about the air quality impacts associated with 

coal power plants. 
The commission is required to adopt rules to implement HB 3732 and THSC, 5382.0566. The 

commission does not have the authority to reject projects that meet the eligibility requirements of 

the legislation and associated statutes, regardless of the type of fuel used. The commission is not 

changing the rule in response to this comment. 

CCTFT, TMRA, and Jackson Walker, L.L.P. expressed support for the rules as proposed. 

The commission appreciates the support. 

OPIC recommended requiring that the executive director directly refer all ACEP permit applications to 

the State Office of Administrative Hearings (SOAH). OPIC commented that this direct referral of all 

ACEP permit applications would be the most efficient method of ensuring that the public has the greatest 

amount of time to participate in the hearing process. CCTFT, TMRA, and Jackson Walker L.L.P. 

commented that the rule should not provide for the mandatory direct referral of ACEP permit applications 

to SOAH. Jackson Walker L.L.P. incorporated the comments submitted by CCTFT into its comments, 

and TMRA supported the comments submitted by CCTFT. CCTFT commented that neither the language 

nor the intent of HB 3732 provide a basis for such a direct referral to SOAH. CCTFT commented that 

such a direct referral would not be fully consistent with the public notice and participation process 

established by HB 801. CCTFT also commented that the authors of HB 3732 gave ample consideration 

to the timelines contained in the legislation. CCTFT stated that the introduced version of the bill required 

that the permit be issued or denied within 12 months of the date the executive director determined the 

application was administratively complete, and did not provide for any extension. CCTFT stated that the 

bill was later modified to extend the overall permitting timeline by six months, and include a provision 

for an additional three-month extension, which is in the adopted version. CCTFT commented that these 

changes to the bill were made after consultation with TCEQ staff and stakeholders from environmental 
groups to address their concerns that the initial timeline was too short. CCTFT expressed confidence that 

the commission would be capable of processing ACEP permit applications within the 1 &month timeline. 

Existing rules at 30 TAC 555.210, Direct Referrals, already allow the executive director (or the 

permit applicant) to directly refer a permit application to SOAH where appropriate. House Bill 

3732 did not specify any changes to existing rules or practices concerning direct referrals. 

Therefore, it does not appear necessary to address direct referrals in this rulemaking. The 

commission is not changing the rule in response to these comments. 

OPIC recommended that the executive director require publication of a dual Notice of Application and 

Preliminary Decision (NAPD) and Notice of Contested Case Hearing within one week of determining that 

the application is technically complete. OPIC commented that the hearing should take place no later than 

30 days from the date of publication of the NAPD. 

The recommended change is not necessary, as the rule will not include the mandatory direct 

referral of ACEP permit applications to SOAH. In cases where a hearing request is received, the 

NAPD and Notice of Contested Case Hearing will be published according to the processes and 

deadlines specified in existing rules. The date of any hearing must be at least 30 days after 

publication of the newspaper hearing notice in order to comply *ith the provisions of 30 TAC 

§39.603(e). 

OPIC recommended that the rule require the Administrative Law Judge(s) to issue a proposal for decision 

(PFD) on HB 3732 applications within one month, rather than the customary two months, from the close 

of the record. OPIC stated that this would allow all parties more time to fully develop the record through 

discovery, the hearing on the merits, and closing briefing. OPIC also recommended that the rules require 
that SOAH issue the PFD no later than six weeks before the date when a final order from the commission 

is due. 

Although the commission acknowledges that it would generally be desirable for the PFD to be 

issued more quickly for HB 3732 applications, the commission does not consider it appropriate to 

set formal deadlines for SOAH's process within Chapter 116. No changes were made in response to 

this comment. 

The EPA indicated general support for the proposed amendment concerning the deadlines for ACEP 

permit applications. 

The commission appreciates the support. 

The EPA commented that, although the term ACEP is defined in the Texas Health and Safety Code, it 

would be helpful to include a definition of ACEP in the proposed rules. 

The commission agrees that it would generally be preferable to include relevant definitions in 

commission rules. However, the commission did not propose to open the applicable definitions 

section of Chapter 116. The general practice is to include definitions applicable to Chapter 116 in 

Subchapter A. Therefore, the commission is not changing the rule in response to this comment. 

The EPA commented that the current Texas SIP includes 5 1 16.1 14 as adopted by TCEQ on June 17, 

1998, which was approved by the EPA on September 18,2002. The EPA stated that subsequent revisions 

to 5 1 16.1 14 were submitted to the EPA as part of the October 25, 1999, and September 25,2003, SIP 
submittals. The EPA commented that the proposed revision to $1 16.1 14 cannot be processed until the 

TCEQ has addressed the EPA's concerns with the October 25, 1999, SIP revision. 

Commission staff is reviewing the EPA's concerns with the October 25,1999, SIP revision as 

expressed in the EPA's August 14,2006, letter. While this amendment adds language to $116.114 

concerning the review of ACEP permit applications, this amendment does not change the existing 

rule language that was submitted to the EPA in previous SIP revisions. The commission is not 

changing the rule in response to this comment. 
STAFF

RECOMMENDATIONS
SUBCHAPTER B: NEW SOURCE REVIEW PERMITS 

DIVISION 1 : PERMIT APPLICATION 

$1 16.1 14 

STATUTORY AUTHORITY 

The amendment is adopted under Texas Water Code (TWC), $5.102, concerning General Powers, that 

provides the commission with the general powers to carry out its duties under the Texas Water Code; 

TWC, $5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its 

powers and duties under the Texas Water Code; TWC, $5.105, concerning General Policy, that authorizes 

the commission by rule to establish and approve all general policy of the commission; and under Texas 

Health and Safety Code (THSC), $382.017, concerning Rules, that authorizes the commission to adopt 

rules consistent with the policy and purposes of the Texas Clean Air Act. The amended section is also 

adopted under THSC, $382.002, concerning Policy and Purpose, that establishes the commission's 

purpose to safeguard the state's air resources, consistent with the protection of public health, general 

welfare, and physical property; $382.01 1, concerning General Powers and Duties, that authorizes the 

commission to control the quality of the state's air; and $382.012, concerning State Air Control Plan, that 

authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of 

the state's air. The amended section is also adopted under $382.05 1, concerning Permitting Authority of 

Commission; Rules, that authorizes the commission to issue permits and adopt rules necessary for permits 

issued under THSC, Chapter 382; $382.05 13, concerning Permit Conditions, which authorizes the 

commission to establish and enforce permit conditions; $382.05 15, concerning Application for Permit, 

which authorizes the commission to require a permit application with plans and specifications necessary 

for the commission to determine if the facility will comply with applicable state and federal regulations 

and the intent of the TCAA; $382.05 17, concerning Determination of Administrative Completion of 

Application, which authorizes the commission to determine when an application is administratively 
complete; and $382.05 18, concerning Preconstruction Permit, which requires persons planning the 

construction or modification of a facility to obtain a permit from the commission. The amended section is 

also adopted under House Bill 3732, passed by the 80th Legislature (2007) and THSC, $382.0566, 

Advanced Clean Energy Project Permitting Procedure, which specify certain deadlines for TCEQ's air 

pennit review for ACEP applications. 

The amendment implements THSC, ~~382.002,382.011,382.012,382.017,382.051,382.0513, 

382.0515,382.0517, 382.05 18, 382.0566, and House Bill 3732, passed by the 80th Legislature (2007). 

$1 16.1 14. Application Review Schedule. 

(a) Review schedule. The executive director shall review permit applications in accordance with 

the following. 

(1) Notice of completion or deficiency. The executive director shall mail written 

notification informing the applicant that the application is complete or that it is deficient within 90 days of 

receipt of the application for a new permit, or amendment to a permit or special permit. 

(A) If the application is deficient, the notification must state: 

(i) the additional information required; and 
(ii) the intent of the executive director to void the application if 

information for a complete application is not submitted. 

(B) Additional information may be requested within 60 days of receipt of the 

information provided in response to the deficiency notification. 

(2) Preliminary decision to approve or disapprove the application. The executive 

director shall conduct a technical review and send written notice to the applicant of the preliminary 

decision to approve or not approve the application within 180 days from receipt of a completed permit 

application or 150 days from receipt of a completed permit amendment. If the applicant has provided 

Notice of Receipt of Application and Intent to Obtain Permit public notification as required by the 

executive director under Chapter 39 of this title (relating to Public Notice), one of the following shall 

apply: 

(A) if comments are received on the proposed facility and replied to by the 

executive director in accordance with $39.420 of this title (relating to Transmittal of the Executive 

Director's Response to Comments and Decision) and $55.156 of this title (relating to Public Comment 

Processing); and 

(B) if no requests for public hearing or public meeting on the proposed facility 

have been received or the application is otherwise exempt under $39.419(e) of this title (relating to Notice 

of Application and Preliminary Decision), the executive director shall send a copy of the Preliminary 

Decision to the applicant; or 
(C) if Notice of Application and Preliminary Decision is required under 

§39.419(d) of this title (relating to Notice of Application and Preliminary Decision), the executive 

director shall authorize this notice and send copies to the applicant and all other persons are required 

under $39.602 of this title (relating to Mailed Notice). 

(3) Review schedule for Advanced Clean Energv Proiects. In addition to the apulicable 

requirements and deadlines svecified in subsections (a) - (c) of this section, the following deadlines apuly 

to permit a~~lications foradvanced clean energy proiects as defined in Texas Health and Safetv Code, 

$3 82.003. Definitions: 

(A) As authorized bv federal law. not later than nine months after the executive 

director declares an application for a permit under this chapter for an advanced clean energy proiect to be 

administrativelv complete, the executive director shall complete its technical review of the avplication. 

/B) The commission shall issue a final order issuing or denving the permit not 

later than nine months after the executive director declares the application technicallv complete. The 

commission mav extend this deadline up to three months if it determines that the number of complex 

pending applications for permits under this chavter will prevent the commission from meeting this 

deadline without creating an extraordinarv burden on the resources of the commission. 

@ [(3)] Refund of permit fee. 
(A) If the time limits provided in this section to process an application are 

exceeded, the applicant may appeal in writing to the executive director for a refund of the permit fee. 

(B) The permit fee shall be reimbursed if it is determined by the executive 

director that the specified period was exceeded without good cause, as provided in Texas Civil Statutes, 

Article 6252-13b.1, $3. 

(b) Voiding of deficient application. 

(1) An applicant shall make a good faith effort to submit, in a timely manner, adequate 

information which demonstrates that the requirements for obtaining a permit or permit amendment are 

met in response to any deficiency notification issued by the executive director under the provisions of this 

section, or Chapter 39 of this title (relating to Public Notice). 

(2) If an applicant fails to make such good faith effort after two written notices of 

deficiency, the executive director shall void the application and notify the applicant of the voidance and 

the remaining deficiencies in the voided application. If a new application is submitted within six months 

of the voidance, it shall meet the requirements of $1 16.1 1 1 of this title (relating to General Application) 

but will be exempt from the requirements of $1 16.140 of this title (relating to Applicability). 

(c) Notification of executive director's decision. 
(1) Notification to applicant. The executive director or the chief clerk shall send to the 

applicant the decision to approve or not approve the application if 

(A) no timely requests for reconsideration, contested case hearing, or public 

meeting on the proposed facility have been received; or 

(B) if hearing requests have been received and withdrawn before the executive 

director's Preliminary Decision; or 

(C) the application is for any amendment, modification, or renewal application 

that would not result in an increase in allowable emissions and would not result in the emission of an air 

contaminant not previously emitted; and 

(D) the applicant has satisfied all public notification requirements of Chapter 39 

of this title. 

(2) Notification to commenters. Except for initial issuance of voluntary emission 

reduction permits and electric generating facility permits, persons submitting written comments under 

Chapter 39 of this title shall be sent the executive director's final action and given an explanation of the 

opportunity to file a motion under 950.139 of this title (relating to Motion to Overhlrn Executive 

Director's Decision) at the same time that the applicant is notified. If the number of interested persons 

who have requested notification makes it impracticable for the commission to notify those persons by 
mail, the commission shall notify those persons by publication using the method prescribed by 

9382.03 l (a) of the Texas Health and Safety Code. 

(3) Time limits. The executive director shall send notification of final action within: 

(A) one year after receipt of a complete prevention of significant deterioration or 

nonattainment permit application, or a complete permit application for an action under Subchapter C of 

this chapter; 

(B) 180 days of receipt of a completed permit or permit renewal application; or 

(C) 150 days of receipt of a permit amendment or special permit amendment 

application. 
ORDER ADOPTING AMENDED RULE 

08 

REVISION TO THE STATE IMPLEMENTATI~~~~~~,C~Y clerk 

Tern CanmLedm on Envlronmeml QualW 

Docket No. 2007-0953-RUL 

On December 19, 2007, the Texas Commission on Environmental Quality (Commission), during 

a public meeting, considered adoption of amended 5 116.114. The Cominission adopts this amendment, 

in Chapter 1 16, Control of Air Pollution by Permits for New Construction or Modification, Subchapter B, 

New Source Review Permits; and a corresponding revision to the state implementation plan (SIP). The 

amended section $ 116.1 14 will be submitted to the U.S. Environmental Protection Agency (EPA) as a 

revision to the Texas State Implementation Plan (SIP). The rulemaking implements the requirements of 

House Bill 3732, 80"' Legislature (2007), and Texas Health and Safety Code, $ 382.0566, concerning 

specific deadlines for review and issuance of air permits for Advanced Clean Energy Projects. Under 

Tex. Health & Safety Code Ann. $5 382.01 1, 382.012, and 382.023 (Vernon 2001), the Commission has 

the author& to control the quality of thestate's air and to issue orders consistent with the policies and 

purposes of the Texas Clean Air Act, Chapter 382 of the Tex. Health & Safety Code. The proposed rule 

was published for comment in the September 7,2007, issue of the Texas RegLter (32 TexReg 6056). 

Pursuant to Tex. Health & Safety Code Ann. 5 382.017 (Vernon 2001), Tex. Gov't Code 

Chapter 2001 (Vernon 2000 & Vernon Supp. 2005), and 40 Code of Federal Regulations $ 5 1.102, and 

after proper notice, the Commission conducted a public hearing to consider the amended rule and revision 

to the s@. Proper notice included prominent advertisement in the areas affected at least 30 days prior to 

the date of the hearing. A public hearing was held in Austin on September 24, 2007. 

The Commission circulated hearing notices of its intended action to the public, including 

interested persons, the Regional Administrator of the EPA, and all applicable local air pollution control 

agencies. The public was invited to submit data, views, and recommendations on the proposed amended 

rule and SIP revision, either orally or in writing, at the hearing or during the comment period. Prior to the 

scheduled hearing, copies of the proposed amended rule and SIP revision were available for public 

inspection at the Commission's central office and on the Comn~ission's Web site. 

Data, views, and recomn~endations of interested persons regarding the proposed amended rule 

and SIP revision were submitted to the Commission during the comment period, and were considered by 

the Commission as reflected in the analysis of testimony incorporated by reference to this Order. The 

Commission finds that the analysis of testimony includes the names of all interested groups or 

associations offering conlment on the proposed amended rule and the SIP revision and their position 

concerning the same. 

IT IS THEREFORE ORDERED BY THE COMMISSION that the amended rule and revision to 

the SIP incorporated by reference to this Order are hereby adopted. The Commission further authorizes 

staff to make any non-substantive revisions to the rule necessary to comply with Texas Register 

requirements. The adopted rule and the preamble to the adopted rule and the revision to the SIP are 

incorporated by reference in this Order as if set forth at length verbatim in this Order. 
IT IS THEREFORE ORDERED BY THE COMMISSION that the amended rule and revision to 

the SIP incorporated by reference to this Order are hereby adopted. The Commission further authorizes 

staff to make any non-substantive revisions to the rule necessary to comply with Texas Registelrequirements. The adopted rule and the preamble to the adopted rule and the revision to the SIP are 

incorporated by reference in this Order as if set forth at length verbatim in this Order. 

,..it,n . . IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the Commission, the 

.: -.. . .Chairman should transmit a copy of this Order, together with the adopted rule and revision to the SIP, to 

the Regional Administrator of EPA as a proposed revision to the Texas SIP pursuant to the Federal Clean 

Air Act, $ 110, codified at 42 U.S. Code Ann. $8 7401 - 7671q, as amended. 

This Order constitutes the Order of the Commission required by the Administrative Procedure 

Act, Tex. Gov't Code, $ 2001.033 (Vernon 2000 & Vernon Supp. 2005). 

If any portion of this Order is for any reason held to be invalid by a court of competent 

jurisdiction, the invalidity of any portion shall not affect the validity of the remaining portions. 

Date issued: JAN 0 4 2000 TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 
AGENCY RESPONSE: 'The Division disagrees. This comment 

is outside the scope of this repeal. However, the Division clarifies 

that the Labor Code at 9413.014 requires preauthorization of 

physical and occupational therapy services. 

For: Insurance Council of Texas and Zenith Insurance Company. 

Neither For or Against: One individual. 

The repeal is adopted pursuant to Labor Code 99406.010, 

406.031, 408.004, 408.021, 408.025, 413.013, 413.018, and 

41 3.055, 402.011 1, and 402.061. Section 406.01 0 authorizes 

the Commissioner to adopt rules regarding claims service. 

Section 406.031 holds an insurance carrier liable for compensation for an eligible employee's injury arising out of and 

in the course and scope of employment. Section 408.004 

allows the Commissioner to require injured employees to submit to medical examinations to resolve questions regarding 

appropriate medical care and similar issues. Section 408.021 

provides that the injured employee is entitled to all health care 

reasonably required by the nature of the injury as and when 

needed. Section 408.025 authorizes the Commissioner to adopt 

requirements for reports and records that are required to be 

filed with the Division by health care providers. Section 41 3.01 3 

allows the Commissioner to establish programs for prospective, 

concurrent, and retrospective review and resolution of a dispute 

regarding health care treatments and services. Section 413.018 

provides that the Division shall review the medical treatment 

provided in a daim that exceeds the guidelines and may take 

appropriate action to ensure that necessary and reasonable 

care is provided. Furthermore, the Commissioner may adopt 

rules and forms as necessary to implement w13.018. Section 

41 3.055 allows the Commissioner to issue medical interlocutory 

orders requiring carriers to be liable for specific future medical 

care. Section 402.00111 provides that the Commissioner of 

Workers' Compensation shall exercise all executive authority, 

including rulemaking authority, under the Labor Code and 

other laws of this state. Section 402.061 provides that the 

Commissioner of Workers' Compensation has the authority to 

adopt rules as necessary to implement and enforce the Texas 

Workers' Compensation Act. 

This agency hereby certifies that the adoption has been reviewed 

by legal counsel and found to be a valid exercise of the agency's 

legal authority. 

Filed with the Office of the Secretary of State on December 20. 

2007. 

TRD-200706515 

Norma Garcia 

General Counsel 

Texas Department of Insurance. Division of Workers' Compensation 

Effective date: January 9. 2008 

Proposal publication date: November 2. 2007 

For further information, please call: (512) 8044288 

+ 4 + 

TITLE 30. ENVIRONMENTAL QUALITY 

PART 1. TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 

CHAPTER 1 16. CONTROL OF AIR 

POLLUTION BY PERMITS FOR NEW 

CONSTRUCTION OR MODIFICATION 

SUBCHAPTER B. NEW SOURCE REVIEW 

PERMITS 

DIVISION 1. PERMIT APPLICATION 

30 TAC 5116.114 

The Texas Commission on Environmental Quality (TCEQ or 

commission) adopts an amendment to $116.114. Section 

116.114 is adopted without changes to the proposed text as 

published in the September 7, 2007, issue of the Texas Register 

(32 TexReg 6053) and will not be republished. 

The amended section will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state 

implementation plan (SIP). 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE ADOPTED RULE 

House Bill (HB) 3732, passed by the 80th Legislature (2007). requires that the commission adopt rules relating to permitting of 

Advanced Clean Energy Projects (ACEP). House Bill 3732 and 

the associated rule changes are intended to provide an incentive for the development of advanced, clean power projects in 

Texas. The leaislation established new Texas Health and Safetv 

Code (~~~~):§382.0566, Advanced Clean Energy Project permitting Procedure, which specifies certain deadlines for TCEQ's 

air permit review for qualifying projects and directs TCEQ to incorporate those deadlines into commission rules. The deadlines 

are intended to ensure that permit applications for ACEP are processed in an expedited manner. 

House Bill 3732 established a definition of ACEP under THSC, 

9382.003, Definitions. Under this definlion, an ACEP must meet 

the following criteria: 1) an application for a perml is filed on or 

after January 1,2008, and before January 1,2020; 2) the project 

involves the use of coal, biomass, petroleum coke, solid waste, 

or fuel cells using hydrogen derived from such fuels, in the generation of electricity, or the creation of liquid fuels outside of the 

existing fuel production infrastructure while co-generating eleo 

tricity; 3) the project is capable of achieving on an annual basis 

a 99 peknt or greater reduction of sulfurdioxide emissions, a 

95 percent or greater reduction in mercury emissions, and a nitrogen oxides emission rate of 0.05 pounds or less per million 

British thermal units; and 4) the project renders carbon dioxide 

capable of capture, sequestration, or abatement if any carbon 

dioxide is produced. 

As required by THSC. 5382.0566, the adopted rule specifies that 

the executive director shall complete the technical review of an 

ACEP permit application no later than nine months after the application is declared to be administratively complete, and shall 

issue a final order issuing or denying the permit no later than 

nine months after the application is declared to be technically 

complete. The rule allows an extension of up to three months if 

the number of pending applications will prevent the commission 

from meeting the specified deadlines without creating an extraordinary burden on the resources of the commission. The rule 

does not exempt ACEP permit applications from applicable requirements relating to contested case hearings. 

SECTION DISCUSSION 

33 TexReg 190 January 4, 2008 Texas Register 
9 11 6.114. Application Review Schedule. 

The commission is amending $1 16.114 to implement provisions 

of HB 3732 and THSC. $382.0566. The amendment revises 

~116.114(a) to add deadlines associated with the review of 

ACEP permit applications. These new deadlines only apply to 

the processing of permit applications for ACEP as defined in 

THSC, §382.003(1 -a). However, the processing of ACEP permit 

applications remains subject to existing applicable requirements 

and deadlines specified elsewhere in 5116.114, in cases where 

those requirements or deadlines are- more stringent. ACEP 

permit applications remain subject to applicable requirements 

relating to contested case hearings. 

Section 116.114(a)(3)(A) states that the executive director shall 

complete the technical review of an ACEP permit application no 

later than nine months after the application is declared to be administratively complete. Section 116.1 14(a)(3)(B) states that the 

commission shall issue a final order issuing or denying the permit 

no later than nine months after the application is declared to be 

technically complete. The rule allows an extension of up to three 

months if the number of pending applications will prevent the 

commission from meeting the specified deadlines without creating an extraordinary burden on the resources of the commission. 

Existing §116.114(a)(3), relating to refunds of permit fees, is 

renumbered as g116.114(a)(4). 

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION 

The commission reviewed the adopted rulemaking in light of the 

regulatory impact analysis requirements of Texas Government 

Code. 92001.0225, and has determined that the rulernaking is 

not subject to 92001.0225 because it does not meet the definition 

of a "major environmental rule." Furthermore, it does not meet 

any of the four applicability requirements listed in 92001.0225(a). 

"Major environmental rule' means a rule, the specific intent of 

which is to protect the environment or reduce risks to human 

health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, 

productivity, competition, jobs, the environment, or the public 

health and safety of the state. The rulemaking is not a major 

environmental rule because it is procedural in nature. The rule 

does not prescribe control requirements or any other require 

ments that would normally be associated with a commission environmental rulemaking. House Bill 3732 and THSC, 9382.0566, 

address processing ACEP applications in an expedited manner. 

The amendment to 9116.114 merely implements the deadlines 

for TCEQ's review of ACEP applications. Further, the rule does 

not add any requirements that would adversely affect in a mate 

rial way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of 

the state. 

rulemaking does not exceed a standard set by federal law, and 

the adopted requirements are consistent with applicable federal 

standards. In addition, the adopted rule does not exceed an 

express requirement of state law and is not adopted solely under 

the general powers of the agency, but is specifically authorized 

by the provisions cited in the STATUTORY AUTHORITY section 

of this preamble. Finally, this rulemaking does not exceed a 

requirement of a delegation agreement or contract to implement 

a state and federal program. 

TAKINGS IMPACT ASSESSMENT 

The commission evaluated this rulemaking action and performed an analysis of whether the adopted rule is subject to 

Texas Government Code. Chapter 2007. The primary purpose 

of the rulemaking is to implement deadlines created by HB 3732 

and THSC, S382.0566, relating to TCEQ's air permit review for 

ACEP applications so that the applications are processed in 

an expedited manner. This amendment does not affect private 

property in a manner that restricts or limits an owner's right to 

the property that would otherwise exist in the absence of the 

governmental action. Promulgation and enforcement of this 

rule is neither a statutory nor a constitutional taking because it 

does not affect private real property. Therefore, this rule does 

not constitute a taking under Texas Government Code, Chapter 

2007. 

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM 

The commission determined that this rulemaking action relates 

to an action or actions subject to the Texas Coastal Management 

Program (CMP) in accordance with the Coastal Coordination Act 

of 1991, as amended (Texas Natural Resources Code, 9933.201 

et seq.), and the commission rules in 30 TAC Chapter 281, Sub 

chapter B, concerning Consistency with the CMP. As required 

by 9281.45(a)(3) and 31 TAC 9505.11 (b)(2), relating to Actions 

and Rules Subject to the CMP, commission rules governing air 

pollutant emissions must be consistent with the applicable goals 

and policies of the CMP. 

The commission reviewed this rulernaking for consistency with 

the CMP goals and policies in accordance with the regulations 

of the Coastal Coordination Council and determined that the 

amendment is consistent with CMP goals and policies because 

the rulemaking is a procedural rule that will not have direct or sip 

nificant adverse effect on any coastal natural resource areas; will 

not have a substantive effect on commission actions subject to 

the CMP; and promulgation and enforcement of the amendment 

will not violate or exceed any standards identified in the applicable CMP goals and policies. The adopted rule ensures that air 

permit applications for ACEP are reviewed by the TCEQ in an 

. - ex~edited manner. The ado~ted rule does not affect the technicai criteria that are used toevaluate such permit applications and In addition, a regulatory impact analysis is not required because does not change applicable public participation requirements for the rule not meet any of the four a~~licabilit~ criteria for the application, The adopted rule does not affect the type requiring a regulatory impact analysis of a major envimnmen- of emission control technology required by the permit and does tal rule as defined in the Texas Government Code. Section not affect the authorized emission rates from permitted facilities. 2001.0225 applies only to a major environmental rule, the result Therefore in accordance with 31 TAC §505.22(e), the of which is to: 1) exceed a standard set by federal law, unless sion affirr;ls that this rulemaking is consistent with CMP goals the rule is specifically required by state law; 2) exceed an and policies, express requirement of state law, unless the rule is specifically 

required by federal law; 3) exceed a requirement of a delegation EFFECTON SITES SUBJECTTO THE FEDERAL OPERATING 

agreement or contract between the state and an agency or PERMITS PROGRAM 

representatrve the federal government to a state The amendment relates to time frames and deadlines associated and federal program; or 4) adopt a rule solely under the general with the review of new review permit applications. The 

powers of the agency instead of under a specific state law. This 

ADOPTED RULES January 4,2008 33 TpxReg 191 
adopted rule affects all sites equally and has no specific effect 

on sites subject to the Federal Operating Permits Program. 

PUBLIC COMMENT 

The proposed revisions were published in the September 7, 

2007. issue of the Texas Register. A public hearing for this 

rulemaking was held on September 24, 2007, and the comment 

period closed on September 26, 2007. The commission received comments on the proposed rule from the City of Dallas, 

the City of Houston, the Clean Coal Technology Foundation of 

Texas (CCTFT), Jackson Walker L.L.P. on behalf of the Gulf 

Coast Lignite Coalition, the TCEQ Office of Public Interest 

Counsel (OPIC), the Texas Mining and Reclamation Association 

(TMRA), and the EPA Region 6. 

RESPONSE TO COMMENTS 

The Cities of Dallas and Houston indicated general support for 

HB 3732, but expressed concern that the emission specifications in the definition of ACEP, particularly the NO. emission rate 

of 0.05 IblMM BTU, may not be representative of the cleanest 

energy production possible. The City of Dallas and the City of 

Houston commented that several existing power plants meet or 

exceed the NO, criteria, and recommended that any project certified under this program result in NOx emissions below 0.05 IblMM 

BTU. 

The emission specifications in the definition of ACEP were established by HB 3732 and incorporated into THSC, 5382.003, 

Definitions. Commission rules implementing HB 3732 must be 

consistent with the statutory definition of ACEP and the associated emission specifications. The commission is not changing 

the rule in response to this comment. 

The Cities of Dallas and Houston expressed general concern 

about the air quality impacts associated with coal power plants. 

The commission is required to adopt rules to implement HB 3732 

and THSC, 5382.0566. The commission does not have the authority to reject projects that meet the eligibility requirements of 

the legislation and associated statutes, regardless of the type of 

fuel used. The commission is not changing the rule in response 

to this comment. 

CCTFT. TMRA, and Jackson Walker. L.L.P. expressed support 

for the rules as proposed. 

The cornrnission appreciates the support. 

OPlC recommended requiring that the executive director directly 

refer all ACEP permit applications to the State Office of Administrative Hearings (SOAH). OPlC commented that this direct referral of all ACEP permit applications would be the most efficient 

method of ensuring that the public has the greatest amount of 

time to participate in the hearing process. CCTFT. TMRA, and 

Jackson Walker L.L.P. commented that the rule should not provide for the mandatory direct referral of ACEP permit applications to SOAH. Jackson Walker L.L.P. incorporated the comments submitted by CCTFT into its comments, and TMRA supported the comments submitted by CCTFT. CCTFT commented 

that neither the language nor the intent of HB 3732 provide a basis for such a direct referral to SOAH. CCTFT commented that 

such a direct referral would not be fully consistent with the public 

notice and participation process established by HB 801. CCTFT 

also commented that the authors of HB 3732 gave ample consideration to the timelines contained in the legislation. CCTFT 

stated that the introduced version of the bill required that the 

permit be issued or denied within 12 months of the date the executive director determined the application was administratively 

complete, and did not provide for any extension. CCTFT stated 

that the bill was later modified to extend the overall permitting 

timeline by six months, and include a provision for an additional 

three-month extension, which is in the adopted version. CCTFT 

commented that these changes to the bill were made after consultation with TCEQ staff and stakeholders from environmental 

groups to address their concerns that the initial timdine was too 

short. CCTFT expressed confidence that the commission would 

be capable of processing ACEP permit applications within the 

18-month timeline. 

Existing rules at 30 TAC 555.21 0, Direct Referrals, already allow 

the executive director (or the permit applicant) to directly refer a 

permit application to SOAH where appropriate. House Bill 3732 

did not specify any changes to existing rules or practices concerning direct referrals. Therefore, it does not appear necessary 

to address direct referrals in this rulemaking. The commission is 

not changing the rule in response to these comments. 

OPlC recommended that the executive director require publication of a dual Notice of Application and Preliminary Decision 

(NAPD) and Notice of Contested Case Hearing within one week 

of determining that the application is technically complete. OPlC 

commented that the hearing should take place no later than 30 

days from the date of publication of the NAPD. 

The recommended change is not necessary, as the rule will not 

include the mandatory direct referral of ACEP permit applications to SOAH. In cases where a hearing request is received, the 

NAPD and Notice of Contested Case Hearing will be published 

according to the processes and deadlines specified in existing 

rules. The date of any hearing must be at least 30 days after 

publication of the newspaper hearing notice in order to comply 

with the provisions of 30 TAC §39.603(e). 

OPlC recommended that the rule require the Administrative Law 

Judge@) to issue a proposal for decision (PFD) on HB 3732 

applications within one month, rather than the customary two 

months, from the close of the record. OPlC stated that this would 

allow all parties more time to fully develop the record through 

discovery, the hearing on the merits, and closing briefing. OPlC 

also recommended that the rules require that SOAH issue the 

PFD no later than six weeks before the date when a final order 

from the commission is due. 

Although the cornrnission acknowledges that it would generally 

be desirable for the PFD to be issued more quickly for HB 3732 

applications, the cornrnission does not consider it appropriate to 

set formal deadlines for SOAH's process within Chapter 116. No 

changes were made in response to this comment. 

The EPA indicated general support for the proposed amendment 

concerning the deadlines for ACEP permit applications. 

The commission appreciates the support. 

The EPA commented that, although the term ACEP is defined in 

the Texas Health and Safety Code, it would be helpful to include 

a definition of ACEP in the proposed rules. 

The commission agrees that it would generally be preferable to 

include relevant definitions in commission rules. However, the 

commission did not propose to open the applicable definitions 

section of Chapter 116. The general practice is to include definitions applicable to Chapter 116 in Subchapter A. Therefore, 

the commission is not changing the rule in response to this comment. 

33 TexReg 192 January 4,2008 Texas Register 
The EPA commented that the current Texas SIP includes 

s116.114 as adopted by TCEQ on June 17, 1998, which was 

approved by the EPA on September 18, 2002. The EPA stated 

that subsequent revisions to s116.114 were submitted to the 

EPA as part of the October 25, 1999, and September 25,2003, 

SIP submittals. The EPA commented that the proposed revision 

to s116.114 cannot be processed until the TCEQ has addressed 

the EPA's concerns with the October 25, 1999. SIP revision. 

Commission staff is reviewing the EPA's concerns with the Octe 

ber 25, 1999, SIP revision as expressed in the EPA's August 14, 

2006, letter. While this amendment adds language to $116.114 

conceming the review of ACEP permit applications, this amendment does not change the existing rule language that was sub 

mitted to the EPA in previous SIP revisions. The commission is 

not changing the rule in response to this comment. 

STATUTORY AUTHORITY 

The amendment is adopted under Texas Water Code (TWC), 

95.102. concerning General Powers, that provides the commission with the general powers to carry out its duties under 

the Texas Water Code; TWC, 95.103, conceming Rules, that 

authorizes the commission to adopt rules necessary to carry 

out its powers and duties under the Texas Water Code; TWC. 

s5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the 

commission; and under Texas Health and Safety Code (THSC), 

s382.017, concerning Rules, that authorizes the commission 

to adopt rules consistent with the policy and purposes of the 

Texas Clean Air Act. The amended section is also adopted 

under THSC, $382.002, conceming Policy and Purpose, that 

establishes the commission's purpose to safeguard the state's 

air resources, consistent with the protection of public health, 

general welfare, and physical property; s382.011, concerning 

General Powers and Duties, that authorizes the commission 

to control the quality of the state's air; and g82.012, concerning State Air Control Plan, that authorizes the commission to 

prepare and develop a general, comprehensive plan for the 

proper control of the state's air. The amended section is also 

adopted under 3382.051, conceming Permitting Authority of 

Commission; Rules, that authorizes the commission to issue 

permits and adopt rules necessary for permits issued under 

THSC, Chapter 382; 5382.051 3, concerning Permit Conditions, 

which authorizes the commission to establish and enforce permit conditions; 9382.0515, concerning Application for Permit, 

which authorizes the commission to require a permit application 

with plans and specifications necessary for the commission to 

determine if the facillty will comply with applicable state and 

federal regulations and the intent of the TCAA; 9382.0517, 

conceming Determination of Administrative Completion of Ap 

plication, which authorizes the commission to determine when 

an application is administratively complete; and 9382.0518, 

concerning Preconstruction Permit, which requires persons 

planning the construction or modification of a facility to obtain 

a permit from the commission. 'The amended section is also 

adopted under House Bill 3732, passed by the 80th Legislature (2007) and THSC. s382.0566, Advanced Clean Energy 

Project Permitting Procedure, which specify certain deadlines 

for TCEQ's air permit review for ACEP applications. 

The amendment implements THSC, §§382.002, 382.011, 

382.012, 382.017, 382.051, 382.0513. 382.0515, 382.0517, 

382.0518, 382.0566, and House Bill 3732, passed by the 80th 

Legislature (2007). 

This agency hereby certifies that the adoption has been reviewed 

by legal counsel and found to be a valid exercise of the agency's 

legal authority. 

Filed with the Office of the Secretary of State on December 21, 

Robert Martinez 

Director. Environmental Law Division 

Texas Commission on Environmental Quality 

Effective date: January 10, 2008 

Proposal publication date: September 7. 2007 

For further information, please call: (512) 239-0177 

CHAPTER 288. WATER CONSERVATION 

PLANS, DROUGHT CONTINGENCY PLANS, 

GUIDELINES AND REQUIREMENTS 

The Texas Commission on Environmental Quality (TCEQ or 

commission) adopts amendments to s288.1 and s288.30. 

Section 288.30 is adopted with changes to the proposed text as 

published in the September 7,2007, issue of the Texas Register 

(32 TexReg 6060). Section 288.1 is adopted without changes 

and will not be republished. 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS 

FOR THE ADOPTED RULES 

In 2007, the 80th Legislature passed Senate Bill (SB) 3 and 

House Bill (HB) 4. Sections 2.04.2.06 and 2.18 of SB 3 and Sections 4, 6 and 8 of HB 4 create new Texas Water Code (TWC) 

provisions related to water conservation plans. Currentty, the 

requirements relating to water conservation plans and the commission are in TWC. §11.1271. The commission's rules related 

to water conservation plans are in Chapter 288. 

Applicants for a new or amended water right and the holder of 

an existing permit, certified filing, or certificate of adjudication for 

the appropriation of surface water in the amount of 1,000 acrefeet a year or more for municipal, industrial, and other uses, and 

10,000 acre-feet a year or more for irrigation uses must submit 

a water conservation plan to the commission. These plans must 

include 5-year and 10-year targets established by the entity that 

submits the plan. 

The new provisions passed by the legislature in 2007 include 

new submittal requirements for water conservation plans and 

that the commission provide for the enforcement of these requirements. 

Section 2.04 of SB3 and Section 4 of HB 4 amend TWC, 311.002, 

by adding a definition for Sest management practices." 

Section 2.06 of SB 3 and Section 6 of HB 4 amend TWC, Subchapter E, Chapter 13, by adding $13.146 that requires the commission to require retail public utilities that provide potable water 

service to 3,300 or more connections to submit a water conservation plan to the executive administrator of the Texas Water Development Board (Board). The plan must be based on specific 

targets and goals developed by the retail public utility and use 

appropriate best management practices. 

Section 2.18 of Sf3 3 and Section 8 of HB 4 amend TWC. Chapter 

16, by adding Subchapter K, 916.401 and 916.402, Water ConADOPTED RULES January 4,2008 33 TexReg 193