~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 

## 5 116.114 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 OFTRAVIS

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 QualityTexas Commission on Environmental Quality Public Hearing September 24,2007 Concerning Revisionsto 30 TAC Chapter 116, Control of Air Pollution by Permits for New Construction or Modification

andthe State ImplementationPlan

Rule Project No. 2007-023-116-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 revisionto 30 TAC Chapter 1 

### 16, 

### Control of Air Pollution by Permits for New Constructionor Modification;and corresponding revisions to the Texas state implementation plan (SIP).

The amendment to 

## 5 1 

### 16.1 14 

### establishes deadlinesfor 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 determinesthe application 

### is administrativelycomplete. 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 additionalthree 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 reviewedand seriously considered. This hearing record contains a complete recordof 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 (includesorder 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 (32TexReg 6055).

3. Publication of the proposed rules in the 

### Texas Register on September 7, 2007 (32TexReg 6056).

4. Correspondence forwardingthe notice of public hearingto 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 Environmentaland 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 EnvironmentalManagement Department Galveston County Health District Harris County Public Healthand Environmental Services Houston Departmentof Health and HumanServices Houston-Galveston Area Council North CentralTexas Council of Governments South East Texas Regional Planning Commission Texas Department of Transportation Texas Transportation Institute Arkansas Department of Pollution Control and Ecology Louisiana Departmentof EnvironmentalQuality 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 NELfi!S ASSlFlEDS CARS

More about. IWireless 

### j Search 6 SlteNJeb 

### C Yellow Pages Archwe 

# 1 3 

# -

E-mail tinis page Print this page Most popular ,

Classiheds > Legal Notice >'search Results > Details

NRNS BUSINESS



### Details SPORTS LIFE 

# 1 OPINION WEATHER 

# I BLOGS MULTIMEDIA

NOTICE OF PUBLIC HEARING BY THETEXAS COMMISSIONON ENVIRONMENTALQUALITY ON PROPOSED REVISIONSTO 30TAC CHAPTER 116AND TO THE STATE IMPLEMENTATION PLAN The Texas Commission on Environmental Quality (commission) will conduct a public hearingto receivetestimony concerning proposed revisionsto 30TAC 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 Regulations51.102, of the United States Environmental ProtectionAgency (EPA) regulations concerning SIPS. The proposed mlemakingwould revise 11 6.114(a)to add deadlines associated with the review of Advanced Clean Energy Projects (ACEP) permit applications. The commission will hold a public hearingon this proposal in Austin on September24,2007 at 2:00 p.m. at the Texas Commission on EnvironmentalQuality Complex located a? 12100 Park 35 Circle in Building F, Room 2210. The hearingwill be structuredfor the receipt of oral orwritten comments by interested persons. Registrationwill begin 30 minutes priorto the hearing. Individuals may present oral statements when called upon in order of registration.There will be no open discussion duringthe hearing; however, commission staff memberswill be availableto informally discussthe proposal 30 minutes before the hearing. Personswho have special communication or other accommodation needswho are planning to attend the hearingshould contact Kristin Smith, Office of Legal Services, at (512) 239-0177. Comments may be submittedto KristinSmith, 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 commentsmay be submitted at http:// www5.tceq.state.b.usIruledecomments. File size restrictions may apply to comments submitted throughthe ecomments system.All comments should reference Rule Project Number2007-02%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 MichaelWilhoit, 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 ofdeclarat~on~o~adm~n~~ra&v~complete- -- ness_asgrov~ded~nJ39707 of thls t~tle (reJaKnGo Pubhshed-No~cel

- $39.703. Notice of Completion of TechnicalReview (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) [orFer a minoramendmentissued under Chapter 336; Subchapter Hofthisrirle eelaring+o kenstngReqttiremeRtsferNearSurfaceLand Dis@ efLew-tevelbdioaetive %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 [anyo#w] application for a minor amendmentto a license issued under Chapter 336 of this title[, MaptefFef+& title ~to~ef~~ef~ef~ &eM~~GeF~rirle~te%~ smAfd+er-ICeF**fFelactRgte&d& ~ef~~~RaateFialWaste6reR1~ +VatmSystems)], notice must bemailedby theofficeoftheChiefclerk 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~] SubchapleerK ofthis title (relating toCommercial DisposalofNaturallyOccumngRadioactive Material Waste From PublicWater Systems), Subchapter L of this title (relatingto 

### Liccen of Uranium Recoveryand By-product Material DisesalFacilities), 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 additiontopublished notice requirements in subsection (b) ofthis 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 TexasRegister. - $39.709. Notice ofContested CawHearing 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), SubchapterG of this title (relating toDecommissioning Standards), [or]SubchapterK ofthis title (relating to Commercial Disposal of NaturallyOccumng 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 Requirementsfor Near-Surface Land Disposal of Low-Level RadioactiveWaste) 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> newkenseto_dlsposeofby-prod- uct matergunderChapter336, Subchapter L ofth~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 agencyhereby cert~fies thattheproposal hasbeen rev~ewed by legal counsel andfound tobew~thln theagency'slegal author- ~ty to adopt. Filed with theOffice ofthe Secretaryof StateonAugust 23,2007. TRD-200703834 Robert Martinez Director, Environmental Law Division Texas Commissionon 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 tothe 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), requiresthatthecommission adoptrules relating topermitting 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. Underthis definition. anACEPmust meet ihefollowing criteria: (1) an application forspermit is filed onor afterJanuary I.2008 andbefore January I,2020; (2)the project involvesthe use of coal, biomass, petroleum coke, solid waste, or fuel cells using hydrogen derived from suchfuels, in the generation of electricity, orthe creation of liquid fuels outside of the existing fuel production infrastructure while co-generating eleo tricity; (3)the project is capable of achieving on anannual basis a 99 percent or greater reduction of sulfur dioxide emissions, a 95percent orgreater 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 6053capable of capture, sequestration, or abatement if any carbon dioxide is produced. As required byTHSC, S382.0566,the proposed ruleamendment specifies that the executive director shall complete the technical reviewof anACEP permit application no later than nine months after the application is declared to be administratively complete and shall issueafinal 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 burdenon the resources of the commission. The proposed rule amendment does not exemptACEP permitapplicationsfrom applicablerequirements 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 orderto ensurethat hearings and permit issuance or denial can be completed within the deadlines specified inTHSC, 5382.0566. SECTION DISCUSSION $116.114. 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 processingof permit applications for ACEP as defined in THSC, §382.003(1-a). However, the processingof ACEP permit applicationswould 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 allowsan extensionof uptothree months ifthe 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), relatingto refundsof permitfees, is proposed to be renumbered as 5116.114(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 likelywill 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 orderto ensure that those permits are issued in an expedited manner. The rule proposal would requirethat 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 commissionto issue a final order issuing or denying the permit within nine months of the date the executive director determines the application istechnically complete. The commission has discretionto extendthis deadline by up tothree months, if meeting the deadline would create an extraordinary burden on cornmission resources. It is possible that local governments may elect to initiate advanced cleanenergy projectsand 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-ownedor government-operatedutilitiesto achieve a somewhat faster return on their investment in new power projects. Quantifyingthis benefit isvery difficult, as itwould depend heavily on circumstances uniqueto each individualproject. 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 compliancewith 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 peryear. The type of facilitiesthat would benefit from the rule proposalare new electric generating unitsthat use coal, biomass, petroleumcoke, solidwaste, or fuel cellsto 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 uniqueto 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, ad

### 32 TexReg 6054 September 7,2007 TexasRegistevanced 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 risksto human health from environmental exposureandthat may adversely affect in a materialway the economy, a sector of the economy, productivity, competition,jobs, the environment,orthe 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 healthand 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 requirementof 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 underthe general powers of the agency insteadof undera specificstate 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. Inaddition, 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 authorizedbythe provisionscited inthe STATUTORYAUTHORITY section of this preamble. Finally, this proposed rulemaking does not exceeda requirementof a delegationagreementor contract to implement a state and federal program. The commission invites- public comment on the draft regulatory impact analysis determination. TAKINGS IMPACTASSESSMENT Thecommission evaluatedthis rulemakingactionand 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. Promulgationand enforcement of this proposed rule amendment is neitherastatutory nora constitutionaltaking 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 subjecttothe Texas CoastalManagement Program (CMP) in accordance withthe CoastalCoordinationAct of 1991, as amended(Texas Natural Resources Code, 5533.201 et seq.),and the cornmission rules in 30 TAC Chapter 281, Subchapter B, concerning Consistencywiththe CMP. As required by 5281.45(a)(3) and 31 TAC §505.11(b)(2), relatingto Actions and Rules Subject to the Coastal Management Program, commission rules governing air pollutantemissions 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 substantiveeffect 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 criteriathat are usedto 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. Thecommissionsolicitscommentson the consistencyofthe proposed rulemakingwith the CMP during the public comment period. EFFECT ON SITES SUBJECTTO THE FEDERAL OPERATING PERMITS PROGRAM The proposed amendment relatesto 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 Commissionon 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 6055the hearing; however, an agency staff member will be available to discuss the proposal30 minutes prior to the hearing. Persons who have special communicationor other accommodation needswho are planningto attendthe 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 submittedto 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) 239-1222. 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 necessaryto carry out its powers and duties under the Texas Water Code; TWC 55.105, concerningGeneral 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 purposeto 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 comrnissionto establish and enforce permit conditions; 9382.0515, concerning Application for Permit, which authorizesthe comrnission to requirea 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, 382.0513, 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) Reviewschedule. The executive director shall review permit applications in accordancewith 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) ofthis section, the following deadlines apply to per-it applicationsfpradvanced clean energy projects as definedin Texas Healthand Safety Code, 9382.003, Definitions: @lJ As authorized by federal law, not later thannine monthsafterthe executivedirgctordeclares an application for ape& under this chapter for an advanced cIean energy project to beHnistrativelycomplete, the executivedir*hall complete itstechnicaJ review ofthe application. Qj3J The commission shall issue afinal order issuingor denying thepermit not laterthan ninemonthsafterthe executivedirectordeclaresthgplicationtechnicallycomnge. The commissionmay extend this deadline up to thze months ifitdetermines that the num- her ofcomplex pendingapplicationsfor permitsunderthis chapterwill preventthe commissionfrom meeting this deadline without creatingan extraordinaryburden on the resourcesofthe commission. (4J 

### [@I Refund ofpermit fee. (A) If the time limitsprovidedinthis sectionto process an application are exceeded, the applicant may appeal inwriting to the executive director for a refund ofthe permitfee. (B) The permit fee shall be reimbursed if it is determined bythe executivedirector that the specifiedperiodwas exceeded without good cause, as provided inTexas Civil Statutes, Article 6252- 13b.1, 93. (b)

### - (c) (No change.) Thisagency hereby certifiesthat the proposalhasbeenreviewed by legalcounsel and foundto be within the agency's legalauthority to adopt. Filed with the Officeof the Secretaryof StateonAugust24,2007. TRD-200703865 Robert Martinez Director, Environmental Law Division Texas Commissionon Environmental Quality Earliestpossibledate of adoption: October 7. 2007 For further information,please call: (512)239-0177


### CHAPTER 281. 

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



### 32 

### TaReg 6056 

### September 7, 2007 

### Taus

### RegisterKathleen Hartnett White, Chairman Larry R. Soward, Commissioner Glenn Shankle, Executive Director

Protecting TexasbyReducing 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 ProtectionAgency (EPA) regulationsconcerning 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, (5121339-1222. 

### 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 Foundationof 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 UnitedStates Environmental Protection Agency Region 6ENVIRONfdENTAL RUAL I T PAGE 01/02

CITY 

### OF DALLAS



### September 26,2007



### Ms. Kristm 

### Smith 

## MC 205 0,ffice 

### of

### Legal Services Texas 

### Commi.ssionon 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.eanelectricpower 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 

### the

### ctiteria 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 

### 'anannual 

### 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 

### ozone3we arc very 

### concemcd 

### about the 

### air quality impacts 

### associated with 

### coal powcred plants.

OFFICEOF ENVIRONMENTAL QWW la00 MARILUL. UFS DW6, TEXN75201 lELEPHONE214&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 

### Weenthe 

## Cities of 

### Dallas 

### and Houston 

### and TCEQ. 

## If you 

### hwc any 

### questions 

### concerning our 

### impacts please 

### fa1 free 

### to 

### contact 

### the City 

### ofDallas at 

### 214-670-1200 or 

### the 

### City of

### Houston at 

### 7.13-247-3394. 

### Sincerely,

Office of

### ~n~ir&mnaal Quality City 

### ofDaUas Elena

## Marks, kctor 

### I-icdtband Environme~tal 

### Policy City ofHouston

### September 26,2007

ViaFacsimile and Hand-Delivery 

## RECEIVED 

# SEP 2 

# 6 2007 TEXAS REGISTERTEAM

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 ofthe Clean Coal Technology Foundation ofTexas. 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 September7, 2007) (Texas Commission on Environmental Quality).

807 Brazos Street Suite 710 Austin Texas 78701 1-800-965-4689 www.cctfi.orgMs. Kristin Smith September 26, 2007 Page 2


### the Executive Director of the Commission should refer all Advanced Clean Energy Project ("ACEP") permit applicationsdirectly to the State Office ofAdministrative Hearings ("SOAH"). In 1999, the Legislature passed House Bill (HB) 801 establishing procedures for providing public notice and participation in the permittingprocess. 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 ofthe 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 discussionsand recall the discussions accounting for the time it would take an applicationto 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 confidentthat the Commission and its staff are
TEX. WATER CODE ANN. $5.1 15 (Vernon 1999). TEX. WATER CODEANN. 45.556 (Vernon 1999). Clarifyingdirectreferralprovisions 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 ofTexas 807Brazos Street Suite 7 10 Austin Texas 78701 1-800-965-4689 www.cctfi.orgMs. Kristin Smith September 26, 2007 Page 3 

### capable ofprocessing ACEP applications within the 18month 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 ofboth 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 ofTexas 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

ViaFacsimile and Hand-Delivery Michael J. Nasi (512) 236-22 16 (Direct Dial) (512) 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 12100Park 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 ofthe 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 appreciatesthe 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 AWSMMs. Kristin Smith September26,2007 Page 2 

### Administrative Hearings in order to ensure that hearings andpermit 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 gatekeeperprovisions. 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 incorporatesherein 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 implementationof HB 3732. Sincerely,

Michael J. Nasi, Counsel Gulf Coast Lignite Coalition

cc: Gulf Coast Lignite Coalition

MJN:LRK:ljjKathleen 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"), 

# 5 116.1 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 isimportant
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 SubiectApplications 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;ofthe 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 onemonth followinkthe close ofthe 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 closingbriefing.

### 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 ofthe final order date. Su.ggestedLanguage to Add to the Proposed Amendments to 30 TAC 

## 61

### 16.114 

### 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 laterthan 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. Tofacilitate 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 additionsto the proposed rule amendment.

Respectfully submitted, Blas J. Coy, Jr. Public Intergst Counsel

ChristinaMann Assistant Public Interest Counsel StateBar No. 24041388 (512).239:6363 PHONE (512).239.6377 

### FAX

CERTIFICATE 

### OFSERVICE I hereby certify that on September26,2007 a true and correct copy of the Public Interest Counsel's Commentson Rule Project Number 2007-023-116-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 

### CongressAvenue, 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 ENVIRONMENTALPROTECTION 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 onProposed 

### 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 

### 30TAC Chapter 

### 116 and the 

### SIP. 

## Inthis 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) 

### pennit 

### applications. This revision adopts these provisions as 

### required

### under

### House Bill 3732, passed 

### by the 8orn 

### Legislature,

### (2007).It applies to ACZPs 

### pennit applicationswhich meet the

### following criteria: 1) an 

### application for

### a permit 

### must be 

### filed 

### on or after 

### January 

### 1,2008, andbefore

### 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 infrastructurewbile 

### co-generating electricity; 3)

### the project 

### is capable 

### of achjeving 

### on an 

### annual 

### basis a

### 99

### percent 

### or greater reduction 

### of sulfurdioxide enzissions, a 

### 95 percent Or 

### greaterreduction 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 abatementif 

### any carbon dioxide 

### is produced. 

### Generally, we 

### support the 

### adoption 

### ofthe 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 Paperf40% pgaawumerjSep 26 2007 10:30AM HP LRSERJET FRX



### 1. 

### Definition of

### Advanced Clean 

### Enernv Proiects 

### (ACEP). 

### The proposed revision to 

### the

### introductoryparagraph 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 

### Codeincludes a definition 

### ofACEP and the 

### term 

### ACEP. is 

### described 

### in the 

### preambleto 

### 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 

### 16.114. 

### A. 

### Our records 

### show that 

### the current Texas SIP 

### fncludes 

### 4 1

### 16.114 

### as adopted by 

### TCEQ 

### on June 

### 17,1998: 

### and was approved 

### September 18,2002 

### (68Federal Register 58697). - 

### Subsequent to 

### the June 

### 17, 1998, adoption, we 

### show that 

### Texas submitted revisions to $ 

### f 

### 16.114on 

### October 25,1999, and September

### 25,2003. At 

### present,the 

### Environmental Protection Agency 

### has not acted 

### upon 

### the October25, 

### 1999, 

### and September 

### 25.2003.

### SIP submittals. 

### Because 

### this proposedrevision 

### to 

## 3 116.114 

### will also include 

### the pending revisions to 

### 5 116.1 

### 14,wecannotprocess 

### subsequentrevisions 

### to 

### 8 116.114 

### until 

### TCEQ 

### has addressed

### our outstanding

### concerns to 

### our satisfaction. 

### B. Pleasetake note

### of our concerns 

### with the 

### SIP 

### revision submitted 

### October25,1999. 

### I. The 

### October 25,1999,

### SIP

### I-evisian 

### includes a 

### restructuring 

### of

### Texas procedures for

### public 

### notice and comments 

### on permits 

### for air 

### emissions. 

### Therevised 

### rulesmove and revise the 

### public' 

### participation 

### requirements for air permits 

### from 

### Chaptm 116 

### to 

### Chapter39. 

### The October 25, 

### 1999, 

### SIP submittal includes revisions 

### to 

### Chapter 39 

### and revision3 

### to 

### 9 116.114whicb 

### .cross-referencethe

### 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 Chapter39. 

### To date, 

### TCEQ has not 

### responded to our 

### comments. 

### UlitiI 

### TCEQ adequately addresses 

### thcse cancerns, we cannot process 

### subsequent 

### revisions to 

### 5 116.114which 

### contain any cross-reference to 

### Chapter39. iii. 

### We thenfore 

### request that 

### TCEQ work with 

### us to address 

### the 

### concerns stated 

### ourAugust 

### 14,2006, letter 

### in order that 

### we

### can process the 

### pending 

### SIP revisions to 

### 5 116.1 14.


### Weappreciate 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 AirPermits 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: 30TAC Chapter 116

Name (Piease Print) Representing PresentingOralTestimony? (Circle One)

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# EVALUATION OF

TESTIMONY

# T~as Commission on Environmental Quality INTtROFFlCEMEMORANDUM
To : Commissioners Date: November 30,2007 Thru: LaDonna Castaiiuela, ChiefClerk 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 116,Control ofAir Pollutionby Permits for New Construction or Modification House Bill 3732: Advanced Clean Energy Project Permitting Rule Project No. 2007-023-116-PR
Scope of the rulemaking: The amendment would revise $ 116.1 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 deadlineby 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; 5382.05 13, Permit Conditions; 5382.0515, 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 directorto directly refer all ACEP permit applicationstothe 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 ofHouston, the Clean Coal Technology Foundation of Texas (CCTFT), Jackson Walker L.L.P. on behalf ofthe 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 directorto 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 changesfrom proposal: No changes. Key points in adoption rulemaking schedule: Texas Register proposal publication date: September 7,2007



# . Six-month TexasRegister filing deadline: March 7,2008



# . Anticipated TexasRegister 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 77Commissioners Page 3 November 30,2007 Re: Docket No. 2007-0953-RUL

Attachments

cc: ChiefClerk, 5 copies Executive Director's Office David C. Schanbacher, P.E. Zak Covar Ashley 

### K. Wadick Daniel Womack Office ofGeneral Counsel Michael Wilhoit Kristin Smith

### EVALUATION OFTESTIMONY

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

## 5 116.114. Section 116.114is adopted 

### without change to the proposed text as published in the September 7,2007, issue of the 

### TexasRegister (32 TexReg 6056) and will not be republished.

The amended section will be submitted to the United States EnvironmentalProtection 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 developmentof 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 TCEQto 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 followingcriteria: 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 existingfuel production infrastructure while co-generating electricity; 3) the project is capable of achievingon an annual basis a 99 

### percent or greaterreduction 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. Therule allows an extension of
up to three months if the number ofpending applications will prevent the commission fiom meeting the specified deadlines without creating an extraordinary burden on the resources ofthe commission. The rule doesnot exempt ACEP permit applications fiom applicable requirements relating to contested case hearings.

SECTION DISCUSSION $1 

### 16.11 4. 

### ApplicationReview Schedule. The commission is amending $116.114to implement provisions of 

### HE! 3732 and THSC, $382.0566. The amendment revises 

## 9 116.114(a)to add deadlines associated with the review of ACEP permit applications. These new deadlines only apply to the processing ofpermit applications for ACEP asdefined in THSC, $382.003(1-a). However, the processing of ACEP permit applications remains subject to existing applicable requirements and deadlines specified elsewhere in 

## 9 116.1 14,in cases where those requirements or deadlines are more stringent. ACEP permit applications remain subjectto applicable requirements relating to contested case hearings.

Section 116.114(a)(3)(A)statesthat 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 116.114(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 declaredto be technically complete. The rule allows an extension of up to three months if the number of pending applicationswill prevent the commission from meeting the specified deadlineswithout creating an extraordinary burden on the

resources of the comrnission.

Existing 

## 5 116.114(a)(3),relatingto refunds ofpermit fees, is renumbered as 

## 51 16.1 14(a)(4).

FINAL REGULATORY IMPACTANALYSIS DETERMINATION The commissionreviewed the adopted rulemalungin light ofthe regulatoryimpact analysis requirements of Texas Government Code, 52001.0225, and has determinedthat the rulemaking is not subjectto 52001.0225 because it does not meet the definition of a "major environmental rule." Furthermore,it does
not meet any ofthe four applicability requirements listed in 52001.0225(a). "Major environmentalrule"

means a rule, the specific intent of which is toprotect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector ofthe economy, productivity, competition, jobs, the environment, or the public health and safety ofthe 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 normallybe associated with a comrnission environmentalrulernaking. House Bill 3732 and THSC, 5382.0566, address processing ACEP applications in an expedited manner. The amendment to 

## 5 116.114merely implements the deadlines for TCEQ's review of ACEP applications. Further,the rule does not add any requirementsthat would adversely affect in a material way the economy, a sector ofthe 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 applicabilitycriteria forrequiring a regulatory impact analysisof a major environmental rule as defined in the Texas Government Code. Section 

### 2001.0225applies 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 requiredby state law; 

### 2) exceed an expressrequirement of state law, unless the rule is specificallyrequired by federal law; 

### 3) exceed arequirement of a delegation agreementor contract between the state and an agency or representative ofthe federal government to implement a state and federal program; or 4) 

### adopt a rule solelyunder the generalpowers of the agency instead of under a specific state law. This rulemaking does
not exceed a standard setby federal law, and the adoptedrequirements are consistentwith applicable federal standards. 

### In addition, the adopted rule doesnot exceed an express requirement of state law and is
not adopted solely under the general powers ofthe agency, but is specifically authorizedby theprovisions cited in the STATUTORY AUTHORITY section of thspreamble. Finally, this rulemakingdoes not exceed a requirement of a delegation agreement or contractto implement a state and federal program.

TAKINGS IMPACT ASSESSMENT The commission evaluated this rulemalung action and performed 

### an analysis ofwhether the adopted rule is subjectto Texas Government Code, Chapter 

### 2007. Theprimary purpose of the rulemalungis to implementdeadlinescreated by 

### HI3 3732 and THSC, 

### 5382.0566,relating to TCEQ7s air permit review for ACEP applications sothat the applications are processed in an expedited manner. This amendment does
not affectprivate 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 enforcementofthis rule is neither a statutorynor a constitutional taking because it does not affectprivate real property. Therefore, this rule does not constitute a talung under Texas Government Code, Chapter 

### 2007.

CONSISTENCY WITH THE COASTALMANAGEMENT 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 (TexasNatural 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 $505.11(b)(2),relating to Actions and Rules Subjectto the CMP, commission rules governing air pollutant emissions must be consistent with the applicable goals and policies ofthe 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 ofthe 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 doesnot change applicable public participation requirements for the permit application. The adopted rule doesnot affect the type of emission control technology required by the permit and does not affect the authorized emissionrates 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 SUBJECTTOTHE 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 revisionswere published in the September 7,2007, issue of the TexasRegister. 

### A public hearing for this rulemalung was held on September24,2007, and the commentperiod closed on September 26,2007. The commission received commentson the proposed rule from the City ofDallas, the City ofHouston, the Clean Coal Technology Foundation ofTexas (CCTFT),Jackson Walker L.L.P.

on behalf ofthe Gulf Coast Lignite Coalition, the TCEQ Officeof Public InterestCounsel (OPIC),the Texas Mining and ReclamationAssociation 

### (TMRA), and the EPA Region 6.

RESPONSE TO COMMENTS The CitiesofDallas and Houston indicated general support for HB 3732, but expressed concern that the emission specifications in the definition of ACEP, particularlythe NOx emission rate of 0.05 Ib/MM BTU, may not be representative ofthe cleanest energy production possible. The City ofDallas and the City ofHouston commentedthat several existing power plants meet or exceed the NOx criteria,and recommended that any project certified under this programresult in NOx emissions below 0.05 lb/MM BTU.



### The emission specifications in the definition ofACEP were established by 

### HB 3732 and incorporatedinto THSC, 8382.003, Definitions. Commission rules implementing 

### HB 3732 must be consistentwith the statutory definitionofACEP and the associated emission specifications. The commission is not changingthe rulein responseto this comment.

The Cities ofDallas and Houston expressed general concern aboutthe 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 applicationswould be the most efficientmethod 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 directreferral 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 submittedby 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 directreferral 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 12months ofthe date the executive directordetermined the application was administratively complete, and did not provide for any extension. CCTFT stated that the bill was latermodified to extend the overall permittingtimelineby 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 consultationwith TCEQ staff and stakeholdersfrom environmental

### groups to address their concerns that the initial timeline was too short. CCTFT expressed confidence that the commission would be capable ofprocessing ACEP permit applications within the 1 &month timeline.

Existing rules at30 TAC 555.210, Direct Referrals, already allow the executivedirector (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 orpractices concerning direct referrals. Therefore, it does not appear necessary to address direct referralsin 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 ofdetermining that the application istechnically complete. OPIC commented that the hearing should take place no later than 

### 30 days from the date ofpublication ofthe NAPD.

Therecommended change is not necessary, asthe 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. Thedateof any hearing must be atleast 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 acknowledgesthat it would generally be desirable for the 

### PFD to be issued more quickly for 

### HB 3732 applications, the commission does not consider it appropriateto
set formal deadlinesfor 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 agreesthat 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 generalpractice is to include definitions applicableto Chapter 116in Subchapter A. Therefore, the commission is not changingthe 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 approvedby the EPA on September 18,2002. The EPA stated that subsequent revisions
to 

## 5 1 16.1 14 were submitted to the EPA aspart 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 reviewingthe EPA's concerns with the October 25,1999, 

### SIPrevision 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 SIPrevisions. 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 TexasWater Code; TWC, $5.103, concerning Rules,that authorizes the commission to adoptrules necessary to carry out its powers and dutiesunder the Texas Water Code; TWC, $5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy ofthe commission; and under Texas Health and Safety Code (THSC), $382.017, concerningRules, that authorizes the commissionto adopt rules consistentwith the policy and purposes ofthe Texas Clean Air Act. The amended section is also adopted under THSC, $382.002, concerning Policy and Purpose,that establishesthe 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, concerningGeneral Powers and Duties, that authorizesthe commissionto control the quality ofthe state's air; and $382.012, concerning State Air Control Plan, that authorizes the commissionto 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 authorizesthe commissionto issue permits and adoptrulesnecessary forpermits issued under THSC, Chapter 382; $382.05 13,concerning Permit Conditions, which authorizesthe commissionto establish and enforce permit conditions; $382.05 15,concerning Application for Permit, which authorizes the commissionto require a permit applicationwith plans and specificationsnecessary for the commissionto determine ifthe facility will comply with applicable state and federal regulations and the intent ofthe TCAA; $382.05 17, concerning Determination ofAdministrative Completion of Application, which authorizesthe commission to determine when an application is administratively

### complete; and $382.0518, 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 HouseBill 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

### 16.114. 

### Application Review Schedule.

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

(1) Notice of completion or deficiency. The executive director shall mail written notification informingthe applicant that the application is complete or that it is deficient within 

### 90 days of receipt ofthe application for a new permit, or amendmentto a permit or specialpermit.

(A) 

### Ifthe application is deficient, the notification must state:

(i) the additional information required; and

### (ii) the intent of the executive director to void the applicationif information for a complete application is not submitted.

(B) Additional informationmay be requested within 60 days of receipt ofthe information provided in responseto the deficiency notification.

(2) Preliminary decision to approve or disapprove the application. The executive director shall conduct a technicalreview and send written notice to the applicantofthe preliminary decision to approve or not approvethe application within 180days fromreceipt of a completed permit application or 150days from receipt of a completed permit amendment. If the applicant has provided Notice of Receipt of Application and Intent to Obtain Permit public notification asrequired by the executive directorunder Chapter 39 ofthis 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 accordancewith $39.420 ofthis 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) ifno requests for public hearing or public meeting on the proposed facility have been received or the applicationis otherwiseexempt under $39.419(e)ofthis 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) ifNotice of Application and PreliminaryDecision is required under §39.419(d)ofthis title (relating to Notice of Application and Preliminary Decision), the executive director shall authorize this notice and send copies to the applicantand all otherpersons are required under $39.602 ofthis title (relatingto 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 energyproiects as defined in Texas Health and SafetvCode, $382.003. Definitions:

(A) As authorized bv federal law. not later than nine months after the executive director declares an applicationfor a permit under this chapter for an advanced clean energyproiect to be administrativelvcomplete, the executive director shall completeits technical review of the avplication.



### /B) The commission shallissue a final order issuing or denving the permit not later than nine months after the executive director declaresthe application technicallv complete. The commission mav extend this deadline up to three months if it determinesthat the number ofcomplex pending applicationsfor permitsunder this chavterwill prevent the commission from meeting this deadlinewithout creating an 

### extraordinarv burden on the resourcesofthe commission.

@ 

### [(3)] Refund ofpermit 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 ofthe permit fee.



### (B) The permit fee shallbe reimbursed if it is determined by the executive director that the specifiedperiod 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 failsto 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 ofthe voidance, it shall meet the requirements of $116.11 1 ofthis title (relating to General Application) but will be exempt from the requirements of $116.140 ofthis title (relating to Applicability).

(c) Notification of executive director's decision.

### (1) Notification to applicant. The executive directoror the chiefclerk shall send to the applicantthe 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) ifhearing requestshave been received and withdrawn before the executive director's Preliminary Decision; or

(C) the application is for any amendment, modification, orrenewal application that would not result in an increase in allowable emissions and would not result in the emission of an air contaminantnot 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 issuanceof voluntary emission reduction permits and electric generating facility permits, persons submittingwritten comments under Chapter 39 ofthis title shall be sentthe executivedirector's final action and given an explanationofthe opportunityto file a motion under 950.139 of this title (relatingto Motion to Overhlrn Executive Director's Decision) at the same time that the applicantis notified. If the number of interestedpersons who have requested notification makes it impracticablefor the commission to notify those persons by

### mail, the commission shall notify those persons by publication using the method prescribed by 

### 9382.03l (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 TOTHE STATEIMPLEMENTATI~~~~~~,C~Y clerk TernCanmLedmon 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 $ 116.114 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 

# 04 

# 2000 TEXAS COMMISSION ON ENVIRONMENTAL 

### QUALITYAGENCY RESPONSE: 'The Divisiondisagrees. This comment isoutside the scope of this repeal. However,the Divisionclarifies that the Labor Code at 9413.014 requires preauthorization of physicaland occupational therapy services. For: InsuranceCouncilof Texas and Zenith InsuranceCompany. 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 413.055, 402.011 1, and 402.061. Section 406.010 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 providesthat the injured employee is entitled to all health care reasonably required by the nature of the injury as and when needed. Section408.025 authorizesthe Commissioner to adopt requirements for reports and records that are required to be filedwith the Division by health care providers. Section 413.01 3 allowsthe Commissioner to establish programs for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatmentsand services. Section413.018 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 implementw13.018. Section 41 3.055 allows the Commissionerto 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. Thisagency herebycertifies that the adoptionhas been reviewed by legalcounsel and found to bea valid exerciseof the agency's legal authority. Filed with the Office of the Secretary of State on December20. 2007. TRD-200706515 Norma Garcia General Counsel Texas Department of Insurance. Division of Workers' Compensation Effective date: January 9. 2008 Proposal publication date: November2. 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 inthe September 7, 2007, issueof the Texas Register (32 TexReg 6053) and will not be republished. The amended section will be submittedto 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 bythe 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 developmentof advanced, clean power projects in Texas. The leaislationestablishednewTexas Healthand Safetv Code (~~~~):§382.0566, Advanced Clean Energy Project permitting Procedure, which specifies certain deadlines for TCEQ's air permit review for qualifying projectsand directsTCEQ to incorporatethose deadlines intocommission rules. The deadlines are intendedto ensurethat permit applicationsforACEP are processed in an expedited manner. House Bill 3732 established a definition of ACEP under THSC, 9382.003, Definitions. Under thisdefinlion, anACEP must meet the following criteria: 1) an application for a perml is filed on or afterJanuary 1,2008, and beforeJanuary 1,2020;2) the project involves the use of coal, biomass, petroleum coke, solid waste, or fuel cells using hydrogen derived from suchfuels, inthe generationof electricity, or the creationof liquid fuels outside of the existing fuel production infrastructurewhile co-generating eleo tricity; 3) the project is capable of achieving on an annual basis a 99pekntor 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 Britishthermal units; and 4) the project renders carbon dioxide capable of capture, sequestration, or abatement if any carbon dioxide is produced. As requiredbyTHSC. 5382.0566, the adopted rule specifies that the executive director shall complete the technical reviewof an ACEP permit application no laterthan nine monthsafterthe 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 numberof pendingapplications will prevent the commission from meetingthe specified deadlineswithout creating an extraordinary burden on the resources of the commission. The rule does not exempt ACEP permit applicationsfrom applicable requirements relating to contested case hearings. SECTION DISCUSSION



### 33 TexReg 190 

### January 4, 2008 TexasRegister

### 911 6.114. Application Review Schedule. The commission is amending $116.114 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 subjectto 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 relatingto contested case hearings. Section 116.114(a)(3)(A)states that the executive director shall completethe technical reviewof an ACEP permit application no later than nine months after the application is declaredto be administrativelycomplete. Section 116.1 14(a)(3)(B)statesthatthe commissionshall issuea finalorder issuingordenyingthe permit no later than nine months after the application is declared to be technically complete. The rule allowsan extension of up tothree months if the number of pending applications will prevent the commission from meetingthe specified deadlineswithout creating an extraordinary burdenon the resourcesof the commission. Existing §116.114(a)(3), relating to refunds of permit fees, is renumbered as g116.114(a)(4). FINAL REGULATORY IMPACTANALYSIS DETERMINATION The commission reviewedthe adopted rulemakingin lightof the regulatory impact analysis requirements of Texas Government Code. 92001.0225, and has determined that the rulernaking is not subject to 92001.0225 because itdoes not meet the definition of a "major environmental rule." Furthermore, it does not meet any ofthefour applicability requirements listed in92001.0225(a). "Major environmental rule' means a rule, the specific intent of which is to protect the environment or reduce risks to human healthfrom environmentalexposure 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 mentsthat would normally be associatedwith a commissionenvironmental rulemaking. House Bill3732 andTHSC, 9382.0566, address processingACEP applications inan 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 ina mate rialwaythe economy, a sector of the economy, productivity, competition,jobs, the environment, or the public health and safety of the state. rulemakingdoes 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 requirementof state law and is not adopted solely under the general powers of the agency, but is specifically authorized by the provisions cited inthe STATUTORY AUTHORITY section of this preamble. Finally, this rulemaking does not exceed a requirementof a delegation agreementor contract to implement a state and federal program. TAKINGS IMPACTASSESSMENT 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 isto implement deadlines created by HB 3732 and THSC, S382.0566, relatingto 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 constitutionaltaking 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 subjecttothe Texas Coastal Management Program(CMP) inaccordancewiththe CoastalCoordinationAct of 1991,as amended (Texas NaturalResourcesCode, 9933.201 etseq.), 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 pollutantemissions must be consistentwith the applicable goals and policiesof the CMP. The commission reviewed this rulernaking for consistencywith 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 rulethatwill not havedirect or sip nificantadverseeffecton any coastal natural resourceareas; 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 inthe applicable CMP goals and policies. The adopted rule ensures that air permit applicationsfor ACEP are reviewed by the TCEQ in an ex~edited manner. The ado~ted rule does not affect the techni. - caicriteriathat are usedtoevaluatesuch permit applicationsand 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 affectthe 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 affectthe 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) exceeda requirementof a delegation EFFECTONSITES SUBJECTTOTHE FEDERAL OPERATING agreement or contract between the state and an agency or PERMITS PROGRAM representatrve the federal governmentto a state The amendmentrelates totimeframesanddeadlinesassociated and federal program; or 4) adopt a rule solely under the general with the review of new review permit applications. The powersof the agency insteadof under a specific state law. This



### ADOPTED RULES January 4,2008 

### 33 TpxReg 191adopted rule affects all sites equally and has no specific effect on sites subject to the FederalOperating Permits Program. PUBLIC COMMENT The proposed revisions were published in the September 7, 2007. issue of the Texas Register. A public hearing for this rulemakingwas heldon 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 Miningand 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 inthe 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 Houstoncommentedthat several existing power plants meet or exceedthe NO, criteria, and recommendedthat any projectcertified underthis programresultinNOx emissionsbelow0.05IblMM 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 definitionof ACEP and the associated emission specifications. The commission is not changing the rule in responseto this comment. The Cities of Dallas and Houston expressed general concern about the air quality impacts associated with coal power plants. The commission is requiredtoadopt rulesto implementHB 3732 and THSC, 5382.0566.The commission does not have the authority to reject projects that meet the eligibility requirementsof the legislation andassociated statutes, regardlessof 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 appreciatesthe support. OPlC recommendedrequiringthatthe executivedirector directly refer all ACEP permit applications to the State Office of Administrative Hearings (SOAH). OPlC commented that this direct referral of allACEP permitapplicationswould bethe mostefficient 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. commentedthat 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 neitherthe languagenorthe intentof 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 processestablished 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 issuedor 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 inthe adoptedversion. CCTFT commented that these changesto the bill were made after consultation with TCEQ staff and stakeholders from environmental groupsto addresstheir concerns that the initialtimdine was too short. CCTFT expressed confidence that the commission would be capable of processing ACEP permit applicationswithin the 18-month timeline. Existing rulesat 30 TAC 555.210, Direct Referrals,already allow the executive director (or the permit applicant)to directly refer a permit applicationto 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 referralsinthis rulemaking. The commission is not changingthe rule in responseto these comments. OPlC recommended that the executive director require publication of a dual Noticeof Application and Preliminary Decision (NAPD) and Noticeof Contested Case Hearingwithin one week of determiningthat the applicationistechnicallycomplete. 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, asthe rule will not include the mandatory direct referral of ACEP permit applications to SOAH. Incases where a hearing request is received,the NAPD and Notice of Contested Case Hearingwill 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 ofthe record. OPlC stated that thiswould allow all parties more time to fully develop the record through discovery, the hearingon the merits, and closing briefing. OPlC also recommended that the rules require that SOAH issue the PFD no later than six weeks beforethe date when a final order from the commissionis due. Although the cornrnission acknowledges that it would generally be desirablefor the PFDto be issued more quicklyfor HB 3732 applications,the cornrnission does not consider it appropriateto set formal deadlines for SOAH's process within Chapter 116. No changes were made in responsetothis comment. The EPA indicated general support for the proposedamendment concerningthe deadlines for ACEP permit applications. The commission appreciates the support. The EPA commentedthat, although the term ACEP is definedin theTexas Health and Safety Code, itwould be helpfulto include a definition of ACEP inthe 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 responsetothis comment.



### 33 TexReg 

### 192 January 

### 4,2008 TexasRegisterThe 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 untilthe TCEQ has addressed the EPA's concerns with the October 25, 1999. SIP revision. Commissionstaff is reviewing the EPA's concernswith the Octe ber 25, 1999, SIP revisionas expressed inthe 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 underTexas 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; 5382.0513, concerning Permit Conditions, which authorizes the commission to establish and enforce permit conditions; 9382.0515, concerning Application for Permit, which authorizesthe 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 Determinationof Administrative Completionof 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 herebycertifiesthat the adoption has been reviewed by legal counsel and found to be avalid 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 changestothe proposedtext as published inthe September7,2007, issueof 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. Sections2.04.2.06 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 conservationplans are in Chapter 288. Applicants for a new or amended water right and the holder of an existing permit, certified filing, or certificateof adjudicationfor the appropriation of surface water inthe 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 include5-year and 10-yeartargets established by the entitythat 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. Section2.04 of SB3 and Section4 of HB 4 amendTWC, 311.002, by adding a definitionfor 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 requiresthe commissionto require retail public utilities that provide potablewater service to 3,300 or more connections to submit a water conservation planto the executive administratoroftheTexas 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. Section2.18 of Sf3 3and Section8of HB4 amendTWC. Chapter 16, by adding Subchapter K, 916.401 and 916.402, Water Con

### ADOPTED RULES January 

### 4,2008 33 TexReg

### 193